Since one of the banks’ major tasks still is to strengthen their loan portfolios, the slower growth rate of the economy and the slower improvement in the economic profile of some categories of clients would force banks to look for new niches for business. This may lead to greater specialisation in certain types of services and to more intense competition for every new client. I would like to point out that the increased competition does not exclude the need for you to keep up a high level of correctness in your relations with one another and with your clients. While the bank services market is getting saturated, consumers’ awareness is being raised. The stronger competition in the banking sector also promotes new approaches in the dealings with clients1. One possible room for competition between credit institutions is, for instance, the transparency and predictability of structuring, and especially of pricing, their products and services. One should work more for the benefit of clients, adopting a more individual approach to those facing difficulties, summing up and analysing the experience gained and drawing conclusions that could be put to good use in new and better banking practices. The happy client is the cheapest advertising for the bank. The work done in each of the above problematic areas allows for a more active presence – at an expert level and in the public area – both of the individual banks’ representatives and of the ABB as their legitimate and highly reputable association.
Because you are well aware that the BNB makes no compromises with safety. The President of the Republic of Bulgaria is present today, so I am tempted to take advantage and draw the attention of the responsible State institutions to some significant gaps in the commercial legislation. Legal and subjective obstacles get in the way of reducing the share of non-performing loans. Bulgaria is no exception among the countries of Central and Eastern Europe where the winding-up and insolvency proceedings, as well as the sale of the collateral, are relatively more sluggish. Regretfully, in Bulgaria the cases of unethical debtors taking advantage of some weaknesses of the existing insolvency proceedings, which allow them to manipulate the initial date of insolvency and nullify the pieces of collateral  BIS central bankers’ speeches  3  pledged after that date, are becoming more and more frequent. The problems with the insolvency and winding-up court proceedings in the corporate sector inhibit the rehabilitation of banks’ books (i.e. that part of banks’ balance sheet assets which has been hit the hardest during the crisis). This prolongs the procedures and increases the costs for managing the so-called “bad loans”, which negatively affects banks’ capacity to take new credit risk at an acceptable cost. Hampering the lending processes in turn impedes the economic growth in the country, and hence – employment and people’s living standards.