Bulgarian industrial and financial company Alfa Finance Holding and Austria’s Hypo Investmentbank AG have signed a long-term cooperation agreement and will seek regulatory nod to launch a joint bank majority-owned by the Austrian company.

Alfa Finance and Hypo Investmentbank will roll out joint financial services in Bulgaria, Macedonia and other southeast European markets.

The new bank will exclusively focus on public sector funding, infrastructure and real estate projects, mergers and acquisitions as well as corporate banking.

Under the contract, Hypo Investmentbank will acquire through a capital increase a minority stake of some 30% in Alfa Finance’s subsidiary Financia Group.

The Austrian company will acquire a similar portion of Skopje-based Capital Bank, also through a capital hike.

Ivan Nenkov, chief executive director of Financia Group, said the agreement was a good sign at the heat of the global financial turmoil.

Hypo Investmentbank’s total investment under the contract was not disclosed.

The new bank is planned to start off with a capital of BGN 40 million in the second quarter of 2009.

Hypo Investmentbank is focused on public finance projects such as infrastructure and real estate as well as corporate banking in the Austrian, west, central and east European capital markets. The bank’s total assets stood at EUR 8.7 billion in end-2007.

Finansia Group comprises investment broker Bulbrokers, consultancy Bulbrokers Consulting, Alfa Asset Management, real estate investment trust Alfa Credit, insurance broker Broker Ins and Macedonia’s Capital Bank.

A key shareholder in Alfa Finance Holding is Ivo Prokopiev, the publisher of Dnevnik daily and Capital weekly

Earlier in the year, the Bulgarian National Bank refused to license Financia Bank established by Alfa Finance Holding with a 70% stake and Grammercy Financial Group with 30%. However, the central bank said it would consider another application provided that a major EU-licensed bank is attracted as a main shareholder.

(Dnevnik)

Bulgaria’s economy and energy minister Petar Dimitrov verified before Nova Television the authenticity of the gas transit and supply contracts between Bulgargaz and Gazprom published on Capital weekly’s website.

The minister said the memorandum for gas corporation of December 18, 2006 was one of the variants while the contract was smaller in volume and there was no reason for alarm.

According to Dimitrov, the contract of two years ago has nothing to do with Bulgargaz’s price hike demands.

The minister said two contracts were considered in 2006 of a shock price hike by 2010 or switching to market prices by 2012 with Gazprom guaranteeing supplies until 2030.

Gas prices in Bulgaria increase with a nine-month delay, which is in Bulgaria’s interest given the growing cost of oil. Prices should grow faster in order to catch up with international prices, the minister said. The export price is BGN 95 levs higher than consumers’ bills.

A check ordered by the minister found out that transit fees went to Bulgargaz instead of Bulgartransgaz in breach of the gas directive. Thus the fees were used as state subsidy for gas consumers, the minister admitted.

(Dnevnik)

Bulgaria’s anti-trust body has cleared fuel distributor Eko Bulgaria to acquire its rival Opet/Aygaz and cement its top five position on the market.

The watchdog judged that the deal would not create a dominant position for the buyer and will bolster competition and business quality.

Eko, part of Greek Hellenic Petroleum, said in June it would pay EUR 35.25 million to lay hands on Opet/Aygaz Bulgaria, the local unit of Turkish company Koc Holding.

The deal boosted the buyer’s market share by 1.5% and its sales to 6.5% of the market’s total.

The purchase added 17 petrol stations to Eko’s network expanding it to 75 units.

Inside just a few months, Eko grew its retail sales network by 47% after in April it acquired one of the most lucrative small filling station chains, Tempo Petrol, adding seven outlets to its network.

Hellenic Petroleum targets to increase its network to 400 petrol units in the long-term from some 267 at present.

Eko said early in the year it will invest BGN 150 million in the Bulgarian market to double its petrol stations to more than 100 and grow a 10% retail market share.

The acquisition left the market with five major players – Petrol, Lukoil, OMV, Shell and Eko, whose combined sales make over 76% of the total.

(Dnevnik)

The interest rates on deposits for households, individuals and companies continued to increase in August, showed central bank data.

Lenders offered deposits to individuals and households with an average rate of 5.89%, up 1.56 percentage points on the year.

The rates on term corporate deposits grew by 1.20 points to 5.44% on average.

The US mortgage market meltdown that spread to the global financial markets increased borrowing costs for banks, which rolled out massive deposit campaigns to build up fresh cash. The deposit war created double-digit annual rates but bankers warned that the present levels should not be passed.

According to Raiffeisen Zentralbank, the crisis has posed long-lasting obstacles before the provision of fresh resources from the financial markets and so deposits have turned into handy tools for banks with solid customer bases.

(Dnevnik)

The annual percentage rate on Bulgaria’s lev-denominated loans exceeded the 10% level in August picking up 1.32 percentage points year-on-year, central bank data showed.

APR added 1.81 points to 12.74% on consumer loans and hit 8.83% on euro-denominated housing loans.

Consumer loan rates saw the biggest increase gaining 2.33 points to 11.66%.

Local-currency housing mortgages bore an average rate of 9.53%, up 1.18% year-on-year.

The rate of euro-denominates mortgage loans was 7.94%, up 0.46 points from last August.

Bankers forecast rates will continue to crawl and edge up 0.6-1% in the coming months dulling borrowers’ appetite.

Austria’s Raiffeisen Zentralbank projected in its latest analysis that household loan demand will keep up the very high levels in Central and Eastern Europe. Last year southeast European banks outran their central European peers by loan levels growing to 48% of the GDP as consumer loans chopped a bigger portion of their portfolios.

In Bulgaria, the average interest rate of lev-negotiated corporate loans of up to EUR 1.0 million rose by 1.67 points to 10.96% in the year to August.

Euro-denominated business loans grew 0.22 points costlier reaching 8.92%.

Lev-negotiated loans of over EUR 1.0 million came with rates of 11.33%, up 2.32 points against 8.42% for euro-denominated credits.

(Dnevnik)