After the national banking crisis of the mid-’90s, a Banking Consolidation Company was set up in 1996 to restructure and consolidate Bulgaria’s banking sector. All state-owned banks were privatised in 2000, when smaller commercial banks were either taken over by larger Bulgarian banks or bought out by foreign banks.
Commercial banks provide a full range of banking services. There are currently 28 commercial banks, over 90 per cent of which are foreign-owned, and six branches of foreign banks (see below).
The largest Bulgarian bank is Bulbank, which was taken over in 2000 by Italy’s Unicredito; second-largest is DSK Bank, owned by the Hungarian OTP Bank; and the National Bank of Greece holds a majority stake in United Bulgarian Bank, the country’s third-largest bank.
The Bulgarian National Bank (BNB) is the authority which sets interest rates and regulates other banks; you cannot open an account with the BNB.
As in many countries, the most popular banking facility (and the bank with the most branches) is the Post Bank (www.postbank.bg ), which is jointly owned by the American insurance group AIG and an international private bank, EFG.
The Post Bank has 30 branches and a presence in over 2,300 post offices. In rural areas, where the nearest bank is often many kilometres away, many people use the post office for banking. Another advantage of the post office is that many branches are open for longer hours than banks (although many aren’t!).
Post office accounts provide the same services as bank accounts, including international money transfers (by post and Western Union telegraph) and payment of bills. The Post Bank also offers internet banking (see Internet Banking below).
Foreign banks with a substantial presence in Bulgaria include the French banks Société Générale (through its subsidiary SG Express Bank) and BNP Paribas, the Austrian Raiffeisen Bank, Dutch bank ING and American bank Citibank. There are also a number of Greek banks with branches in Bulgaria, including the National Bank of Greece and Piraeus Bank.
If you do a lot of travelling abroad or carry out international business transactions, you may find that the services provided by a foreign bank are more suited to your needs. They’re also more likely to have staff who speak English and other foreign languages.
Internet banking is growing in popularity in Bulgaria but is still limited by the poor quality of the telecommunications network. A number of banks offer online banking services, but the range of services available and the cost varies from bank to bank. Some banks allow you only to view your account balance. If you register for internet banking, your access details will normally be posted to you around a week later, so you will either need to be in Bulgaria for at least a week or have someone collecting your post.
Normal bank opening hours are from 09.00 to 16.00, Mondays to Fridays, although banks may open any time between 08.00 and 10.00 and close between 15.00 and 17.00.
You can open a bank account in Bulgaria whether you’re a resident or a non-resident. It’s advisable to check which banks have branches nearby and whether they have staff who speak your language. This is unlikely in the smaller towns, so you may want to open an account at a bank’s Bourgas, Plovdiv, Sofia or Varna branch.
To open an account in Bulgaria, all you need is your passport and evidence of your address in Bulgaria (if you have one); a utility bill usually suffices. There’s no charge, but you must make an opening deposit of at least a few lev or euros.
Most banks offer the choice between a lev account and a euro account – or you can open one of each. If you plan to transfer money using a foreign exchange dealer you will need a lev account, as many dealers can deposit money only in the local currency. Euro accounts are often used for paying larger sums such as management fees or building work invoices and for handling rent payments if you’re letting a property.
A euro account is a form of guarantee against currency fluctuation in the unlikely event that the lev is ‘unpegged’ from the euro by the Central Bank. You can transfer money from your lev account into your euro account as necessary.
Bulgarian banks commonly charge for everything – even withdrawing money, so shop around for the best deal, i.e. the lowest fees and an interest-bearing account.
This article is an extract from Buying a Home in Bulgaria
from Survival Books.