Bulgarian Banks Go Hard on Loan Applicants

Sofia – Bulgarian banks put up loan rates and fees, pulled consumer lending products and ended promotions in February as the global financial meltdown raged on, data from personal finance website moitepari.bg shows.

DSK Bank, Raiffeisenbank and Emporiki Bank dropped unsecured consumer loan offers from their portfolios. Additionally, Emporiki now requires guarantors for consumer loans above 5000 leva (€2,500), as opposed to its previous 15,000 leva (€7,500) threshold.

Increasingly, lenders have started asking loan applicants to have their salaries wired into accounts at their respective banks as a pre-condition for receiving loans.

UniCredit Bulbank added 1.75 percentage points to interest rates for its euro-denominated consumer loans. Municipal Bank raised the bottom rate on all of its local-currency and euro loans to 14 per cent from 12 per cent and hiked fees, including the one-off service fee. Similar increases were seen at the United Bulgarian Bank and MKB Unionbank.

Allianz Bank Bulgaria has stopped offering preferential consumer loans to public employees.

Mortgages followed the same trend as consumer loans, albeit at a slower pace. Moitepari.bg, an online service that compares the offers of Bulgarian lenders, said that the mortgage sector was “sluggish” in February.

EIBank actually lowered the interest rates on its leva-denominated and euro-denominated mortages by 0.5 percentage points and 0.35 percentage points, respectively.

Interest on ProCredit Bank’s mortgages in leva went down 0.65 percentage points because of fluctuations in the Sofibor, the reference rate at which Bulgarian banks lend to each other, but the bank has also set a minimum threshold of 9 per cent for mortgage interest rates.

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