The 28 banks in Bulgaria traditionally register some of the highest profits in this country’s economy. Few companies from the non-banking sector can boast of profits to the tune of several dozens of millions of euros.

Banks used to fill in their vaults mainly from asset revenues before the sudden drop of interests to practically zero levels and the sensitive reducing of credits. However, latest data of the Central Bank show the difference now – banks tend to rely more and more on their customers to pay for the huge expenses on salaries, bonuses and maintenance of luxurious offices. At the end, fees and commissions are being constantly increased with the purpose of pure profit. At one point nearly half of the astronomic high profits of the banks were paid by payments on their services. The latter however haven’t changed that much, in order to justify the constant increase of fees. On the contrary, besides e-banking, mostly paid and contactless bank cards /with fees included too, of course/, the customer is offered nothing new. At the same time profits are on the rise and those reached EUR 100 mln. over the first couple of months of 2016. It is easy to be explained – any payment of a EUR 20 tax to the state is charged with EUR 2, or 10% of clear profit. None of the other sectors of the economy sees that.

Banks win the other half of their net profits from the huge differences in interests on the loans given and the funds attracted. Bank deposits bring in almost no revenues to their owners now, as the official interest rate for the country is 0%. At the same time there might be higher interests, even reaching 10%, hence the profit that we see nowhere else.

It is true that banks carry huge risks and should be very careful with other people’s money that they keep. And security and risk reduction are expensive pleasures. Those probably explain the salaries of bank managers, exceeding the one of the premier 5 – 6 times.

This all causes certain negative attitude within the society against banks and bankers – people love them no more than lawyers. Furthermore, a large-scale inspection is going on right now, concerning the quality of their assets, i.e. of the loans granted. The results are due in August. The nearly EUR 500 mln. distributed to the state budget for support of eventually stolen or bankruptcy-endangered banks testify that bad loans might turn out to be much more than officially declared data. This makes financial institutions even more requiring and careful with the granting of new loans, which of course makes business and citizens quite unhappy. In such a situation it is good to recall the case with the Corporate Commercial Bank, bankrupted two years ago with assets stolen by its owner and his circle, while the price was paid by everyone with billions of euros in the form of state debt.

English version: Zhivko Stanchev