Post Bank was the first to make it easier for customers before the introduction of the euro, giving them the opportunity to deposit amounts in BGN to their accounts without a fee; Investments in digitalisation, education, upskilling and financial literacy are key on our way to the Eurozone; Postbank was the first to launch a campaign to make it easier for its customers before the introduction of the euro, giving them the opportunity to deposit amounts in BGN to their accounts without a fee; According to the chairman of ABB, there is no reason that interest rates can increase with the introduction of the new currency, even the opposite - the time is coming for their reduction; The Association of Banks in Bulgaria (ABB) is planning an explanatory campaign among citizens to explain to people all the benefits of adopting the euro; Accelerated implementation of digital innovations in the banking sector is multiplying the user experience, and the Phygital model is the future of banking.

Petya Dimitrova, CEO of Postbank and Chairman of the Board of the Association of Banks in Bulgaria (ABB), commented in an interview with "24 Chasa" on the current topics that affect consumers, institutions and the state, in connection with our upcoming accession to the Eurozone and the adoption of the euro as a national currency.

She also reviewed some macroeconomic topics and forecasts, commented on trends in the banking services sector and expressed her expectations for the development of interest rates in the context of Bulgaria's accession to the Eurozone.

THE BENEFITS OF OUR COUNTRY'S JOINING THE EUROZONE

The Chairman of the Association of Banks shared his expectations for the benefits of Bulgaria's admission to the Eurozone. "The accession of Bulgaria to the Eurozone and to the second most used currency in the world is a long-awaited process. It will positively affect the economy of our country and will be an engine for accelerating reforms, increasing well-being and reaching European standards of living. It will bring many benefits to citizens and businesses, not only in terms of reducing transaction costs, but also by improving the investment environment, activating local and foreign investment, with increased investment activity expected to support employment. This will certainly have a positive impact on lending, it will open up many additional opportunities, among them also for the development of the capital markets in Bulgaria".

"With the representatives of the Association of Banks in Bulgaria, we plan to conduct an explanatory campaign among citizens, for which we rely on the assistance of the BNB and the government, in order to explain all the benefits of adopting the euro, which will significantly improve the environment in which we all do business. It is important for us, the banks, to be able to meet all the requirements and prepare our information systems. In addition to being time-consuming, the preparation is also very expensive – the total amount that banks are expected to spend for the introduction of the euro – for the exchange of money in circulation, as well as for the necessary changes in their information systems and awareness campaigns, amounts to between 300 and 400 million. BGN".

There is no danger that people will not be able to change their leva into euros when the time comes, but Petya Dimitrova advises customers not to wait and use the months before the adoption of the euro to deposit the money they have as reserves into their bank accounts . In this regard, Postbank was the first to launch a 3-month campaign to facilitate its customers before the introduction of the euro, giving them the opportunity to deposit amounts in BGN to their accounts without a fee. The free deposit of banknotes in BGN will be applied in the period from April 1 to July 1 for all accounts and deposits in BGN of clients - individuals, will be valid for the following banking channels - at a cash desk in a financial center, through an ATM device with a deposit function or through the digital self-service areas, there will be no limit to the deposited amount, when paying at the cash register, and for amounts over BGN 100,000, a prior written request of 3 working days will be required. When importing an ATM or self-service terminal device, the conditions will apply up to the maximum daily limits for the relevant channel.

THE DEVELOPMENT OF INTEREST RATES IN THE CONTEXT OF THE INTRODUCTION OF THE NEW CURRENCY

"There is no reason to expect that interest rates may rise with the introduction of the new currency. Even the opposite - the time is coming for their reduction," said Mrs. Petya Dimitrova on the subject. "Major central banks such as the ECB and the Federal Reserve have announced that they will soon begin cutting key interest rates." 

Regarding the comments about excessive bank lending to individuals and a "bubble" in real estate prices, Mrs. Dimitrova was categorical that banks in the country lend sensibly and responsibly, giving as an example an analysis of Post Bank with statistics for a 10-year period .

The data shows that "the growth of consumer and mortgage loans is comparable to the growth of incomes, as well as to the growth of GDP. If we look at the data on the size of the average salary, we will see that over the last 10 years it has increased 2.7 times, and the minimum 3 times, which is more than the growth of consumer and mortgage loans - higher household incomes are enough for servicing most of the loans they have taken out. For the same period, nominal GDP increased 2.2 times to BGN 184 billion. 

The data also show that the household debt to GDP in Bulgaria is 23%, while the same ratio for the 27 countries of the European Union is 55% - two and a half times less, which means that we cannot talk about over-indebtedness of population in the country, and vice versa. This is also helped by the drop in unemployment. 

NSI data show that since 2013, unemployment has fallen three times - to 4.3%, which means that in practice, in large cities and among highly educated Bulgarians, it is close to zero. 

"Recently, there has also been a lot of talk about inflation and how it eats away at the real incomes of the population. Let's not forget that food and energy carriers have the largest share in the consumer basket and, accordingly, the increase in their prices is the main "cause" of inflation. For the last 10 years, the real income of the population has increased - even during the last two highly inflationary years, Bulgaria was one of the few countries in the EU in which there was a double-digit growth in average wages and real income growth," adds Ms. Dimitrova.

"Logically, higher incomes and a growing real estate market lead to more savings for the population. In the last year alone, household deposits have increased by a record BGN 8.3 billion, and in December last year alone, the growth was a colossal BGN 2.28 billion," she emphasized in her speech. 

DIGITAL INNOVATION AND IMPLEMENTATION OF HIGH-TECH SOLUTIONS REMAIN LEADING FOR BANKS

"The accelerated implementation of high-tech solutions in the banking sector improves the user experience many times over, and the banks will continue to invest in providing customers with faster and more accurate banking services," stressed Ms. Dimitrova. And he added that the major market participants have an advantage because they have the resources and means to implement various technological solutions and provide even better quality and efficient banking services.

"At Postbank, we are making significant investments in process redesign and human resources to create customer-friendly applications that enhance the pleasure of contacting us. The Phygital model is the future of banking. Hybrid forms of banking, the complex model between digital and physical services, the user experience in different channels and platforms - consistently, in real time - this is what we do at Postbank and what our customers expect", Petya Dimitrova also points out.

The entire interview can be read here.

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