Moody's: Bulgaria's Banking Sector Is on Slow Path to Recovery After 2014 Crisis

Constantinos Kypreos, Vice President - Senior Credit Officer at Moody's Investors Service, argued that the Bulgarian banking system is on a slow path to recovery after the crisis experienced with the collapse of Corporate Commercial Bank (KTB) in 2014.

Marco Zaninelli, a lead analyst for Bulgaria and other countries from Central and Eastern Europe (CEE) at Moody's, added that the reforms initiated by the incumbent Bulgarian government are expected to balance out the negative developments of 2014.

Kypreos and Zaninelli were among the participants at the 6thCredit Risk Management Conference, organized by ICAP Bulgaria in Sofia on Tuesday.

ICAP is one of the most successful Business Services Groups in Southeastern Europe, operating in six countries from the region and is one of the few companies in Europe to have been recognized as a credit rating agency.

Novinite was a media partner of the conference, which gathered specialists in the area of credit risk management representing business associations, banks, Bulgarian and international companies.

According to Kypreos, the operating conditions for banks in Bulgaria remain challenging, especially with the high corporate sector indebtedness reaching 110 % of the country's GDP, which is more than double the level in other CEE countries.

However there are also positive developments, with the Bulgarian economy slowly recovering and improvements being made in the country's banking regulation and supervision.

Kypreos said that the expected economic growth of 1.7 % in 2015 is below the potential of the country's economy, with a slight improvement forecasted in 2016.

According to him, the unemployment rate of 10 % remains relatively high compared to other countries, but there are...