Bankers: Interest rate on credits and deposits will fall in 2013

Interest rates on both deposits and loans will continue to decline, Bulgarian bankers predict. According to Levon Hampartzoumian, Chairperson of the Executive Board of the Association of Banks in Bulgaria and CEO of UniCredit Bulbank, next year will be difficult for banks as their clients are characterised by a relative poverty.

“The state of banks in our countries is stable and the introduction of a tax on the interest on term deposits will not affect it. Financial institutions will probably not require a fee for remitting their customers’ tax to the Treasury, or if they introduce one it will be trifling,” Hampartzoumian stated on Darik radio. “There is a downward trend, regarding both interest rates on deposits and credits. We are interested in having lower interest rates,” he specified. According to Hampartzoumian, the so-called “deposit tourism” cannot be expected due to the introduction of a tax on the interest incomes. People are conservative, they estimate the risks. Products must be in compliance with the law,” stated the banker.

“Now, there are no sectors of the economy which are not being credited. The most important thing is for borrowers to persuade banks that they have a good project and will be able to service their loans. I expect a slight decrease in interest rates on both deposits and loans,” predicted the Executive Director of Bulgarian Development Bank Assen Yagodin. The decrease, according to him, will not be more than 1%. “But it is not cheap loans that are most important to businesses,” Yagodin commented on TV and radio Bulgaria ON AIR. According to him, the most important thing is for business people to overcome their fear of accumulating new debt. Another important thing to look for is new markets. Consumption is still shrinking, but it will stir up in a few years because technology becomes outdated and will have to be replaced,” predicted the banker.

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