September 30 (SeeNews) - Bulgaria's central bank governor, Dimitar Radev, expects that there will be news about consolidation in the country's banking sector in the coming months, he said on Friday.
"Unlike a year ago, when the interest of foreign strategic investors in Bulgaria's banking sector was close to zero, now this is not the case, prticularly considering the positive results of the stress tests and the review of the banks' assets," Radev said in an interview with Sofia-based broadcaster bTV.
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The central bank governor spoke a day after Belgian newspaper L'Echo reported in its online edition that Belgian lender KBC had expressed interest in acquiring Bulgaria's fourth-largest bank by assets, United Bulgarian Bank (UBB).
Diminishing interest margins have increased pressure not only on Bulgarian banks but on their European peers as well, forcing them to cut costs and optimize operations, Radev noted.
"Our banks are not isolated. It is normal to see consolidation as a result of such pressure," Radev said. He added that interest rates are expected to stay at low levels.
The central bank, BNB, said last month that the asset quality review and the stress tests of Bulgarian banks showed that the capital adequacy of each bank was above the minimum regulatory requirements. However, the BNB recommended capital increases for two banks.
Bulgaria has 22 banks and five branches of foreign banks.
The net profit of the Bulgarian banking sector jumped by 48% year-on-year, reaching 909.1 million levs ($516.8 million/464.3 million euro) for the period January-July, according to BNB data.
(1 euro = 1.95583 levs)