ProCredit Bank Bulgaria
Bulgaria, situated in the eastern Balkans, has successfully undergone a slow transition to a market economy since 1989. During the last decade it boasted rapid economic development and an expansion in its banking system. Yet, as a small country with a population of 7.3 million (source: National Statistics Institute, 2012) and an export-oriented economy, Bulgaria was seriously affected by the world financial crisis. In 2012, GDP grew by a mere 0.8% compared to 2011 (source: National Statistics Institute). Lending to the non-financial private sector amounts to 73% of GDP, while deposits total 74% of GDP. Despite the economic downturn, the country managed to maintain its international credit rating at BBB- (awarded by Fitch), demonstrating its resilience during the crisis.
Very small businesses and SMEs are considered to be the engine of the Bulgarian economy: they account for 75% of private-sector employment (source: Ministry of Economy, Energy and Tourism). In recent years, many enterprises have grown in size, especially very small and small businesses, many of which have developed into small and medium-sized companies. However, the economic recession in Bulgaria had a negative impact on local enterprises, whose business performance suffered in both 2011 and 2012.
Although 2012 was a challenging year for the banking sector in Bulgaria, there were no significant changes in its structure, with 31 banks operating in the country as of end-2012. As in the rest of South-Eastern Europe, the Bulgarian banking market is dominated by Western European banking groups, in particular from Austria, Italy and Greece.
In response to the economic crisis, most banks adopted more conservative lending policies and increased their loan loss provisions. However, all the banks are well capitalised and highly liquid, and the banking system is stable and trustworthy.
ProCredit Bank Bulgaria was founded in 2001 in order to create a reliable financial partner for small businesses. As of the end of 2012, the bank had total assets under management of EUR 737 million and a country-wide network of 70 branches. In its core market of small business loans of up to EUR 150,000, ProCredit Bank Bulgaria has strengthened its position through the years and is generally considered to be a market leader in this segment.
The bank consistently looks for innovative ways of offering reliable banking services. In line with this approach, in 2012 ProCredit Bank was the first bank in the Bulgarian market to launch fully automated self-service areas, giving clients access to the most frequently used banking services as well as unlimited access to their accounts 24 hours a day, 7 days a week. The bank is also constantly improving its internet service ProB@nking: it recently introduced an online option for opening deposit accounts, as well as an enhanced credit section.
Today ProCredit Bank Bulgaria operates as the house bank for small business and as a savings bank for private clients. In order to provide best possible customer service the bank invested more than EUR 982,000 in staff training in 2012. In addition to its in-house programmes for staff at all levels, the bank sends prospective middle and senior managers to the ProCredit Academies in Veles, Macedonia, and Fürth, Germany, thus ensuring that the ProCredit group’s best practices also benefit clients in Bulgaria.
ProCredit Bank Bulgaria has always been committed to promoting sustainable development, and sustainability is increasingly associated with environmental soundness. In 2012, supported by IPC GmbH, the bank developed its own methodology for analysing and priority-financing investment projects aimed at improving energy efficiency, making use of energy from renewable sources and achieving other beneficial effects on the environment. These “green projects” can now be financed with ProCredit Bank’s “Green Investment Loans”.
In 2012, the bank focused mainly on maintaining the quality of its loan portfolio despite the adverse economic conditions and on advising customers to make more use of its technology-based services. The bank also aims to strengthen its long-term relationships with trusted clients and to help them and their businesses survive the crisis and cope with its effects.