Bulgarian Banks See Significant Growth in Deposits

Bulgaria's population managed to put aside regular savings over the last year, leading to a sharp increase in the money stashed in bank deposits, official data shows.

Bulgarian citizens have saved in deposits BGN 2.8 B, while companies – BGN 1.2 B over the last year, according to figures from the central bank.

The figures mark an increase of 11% and 10% respectively, bringing the total amount of money put aside in bank deposits to BGN 28.4 B in personal accounts and another BGN 13 B in corporate ones.

The data comes to confirm a recent trend - in times of crisis people with larger deposits tend to increase the amounts in the bank accounts, while those with smaller savings have them downloaded.

Bulgarians keep over 90% of their savings as bank deposits, which is three times higher than the average for the citizens of other European Union countries, according to a survey of investment company Pioneer Investments, based on data of researches by Cap Gemini and Merrill Lynch.

The remaining 10% of their assets are distributed among pension funds, stocks and other types of financial instruments, the survey says.

Estimates have shown a significant difference in the distribution of savings in Bulgaria and Europe. For comparison, in Europe, people kept below 30% of their money in deposits. About 35% of their investments are in pension and insurance funds and the rest of the savings are directed towards capital markets.

Culturally Bulgarians are very far from the typical Anglo-Saxon high level of indebtedness and are pretty conservative in this respect.

Over the last two years banks have been reporting a significant growth of deposits, a fact, which means that Bulgarians think twice before going for credit.

Bankers, who have been preaching modest conservatism since the crisis set in, say this is a good sign because it shows that clients have adopted a prudent approach as well.