Further to its announcement on 7 March 2018, the Bulgarian Commission for Protection of Competition (CPC) has initiated a procedure for carrying out a sectorial market analysis for the provision of services by banks. The banks subject to the review include 21 members of the Association of Banks in Bulgaria (ABB).

Because the last analysis of the retail-banking sector covered the period between 2006 and the first half of 2008, the CPC concluded there is a need to update the information on the competitive environment in the sector. The CPC carried out a preliminary overview of publicly available information on current interest rates, fees and commissions applied by ABB members, which also indicated the need for an in-depth review of the market.

This analysis was also triggered by the sector’s ongoing consolidation process:

  • The takeover of the Bulgarian branch of the Greek Alpha Bank by Postbank, owned by Eurobank Ergasias, announced in the summer of 2015 and finalized in March 2016
  • The sale of United Bulgarian Bank by the National Bank of Greece to the Belgian financial group KBC in 2016
  • The ongoing tender process for the sale of Bank Victoria, and
  • The recently announced sale of the majority-state owned Municipal Bank.

In addition, other consolidation and legislative changes are in the works: In 2017, the First Investment Bank announced that it is looking for strategic investors. By early 2018, BNP Paribas had expanded its mandate from being a payment institution to performing all services offered by credit institutions though its local branch.

These developments prompted the CPC to consider further action. Consequently, it will perform an in-depth study of the competition and transparency conditions in the banking market, and the terms offered by banks in the provision of their services for the period between 2015 and 2017. In addition, the CPC will investigate whether there are additional barriers for customers when switching between banks, including the existence of packaged or bundle sales, etc.