Foreign banks have entered because they see a business opportunity in developing the largely undeveloped retail banking market. The Top 100 Central European banks commentary in our October issue mentioned the large difference in retail lending as a percentage of GDP between five new accession countries from central Europe and the established EU countries.
From Bulgaria’s perspective, it now has a banking sector relatively free of the large non-performing loans and poor corporate governance that prompted the opening of the banking sector to foreign investment in the first place. There is still a need for further consolidation – at the end of 2004 there were 29 banks and six foreign bank branches operating in Bulgaria.
