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“Get used to low interest rates on deposits” – So on Sunday, former UniCredit Bulbank CEO Levon Hampartzoumian, who is also chairman of the Bulgarian Business Leaders Forum, commented on the news that two of Bulgaria’s largest banks have cut interest rates for several months. of your deposits at 0%.
“There is a distorted understanding of the previous crisis period, when there were several banks that gave incredibly high deposits. And just because you have a deposit you can generate a serious income. This is not natural. The natural thing is that money brings money. money when investing in something, that is, otherwise, what is the incentive for an entrepreneur to invest his money, take a risk, do not sleep, develop after he can make a deposit and live on it, from the simple interest?, Hampartzoumian was motivated in front of bTV.
“The natural thing is that money does not generate much income and they cannot even deal with inflation all the time if they are in a simple deposit.”he added.
However, the banker stressed that he expects zero and negative interest rates to be a temporary solution because “in the long run they are also harmful”.
On September 8 it became clear that in the largest bank in our country, UniCredit Bulbank, for example, standard time deposits in BGN and EUR have an interest rate of 0.00%, regardless of whether their maturity is 1 , 3, 6, 12 or 24 months. The same is the interest on a bunch of other savings products, temporarily suspended from sale: “Flexi” deposit, “Multifactorial deposit”, “Fan” deposit, “Nine and a half months” deposit and others.
According to the bank’s fee, maintaining a standard savings account in BGN costs 2.50 BGN per month and in EUR – 2 EUR. However, the children’s account and the term deposit are free.
DSK Bank also does not offer any refunds to depositors on renewed or newly opened deposits for 1, 3, 6 or 12 months in BGN, EUR, British Pounds and Swiss francs.
At the third largest bank, UBB, there are still deposits for people with minimal positive returns. In BGN for terms of 1 or 3 months it is 0.01%, for a period of 6 months – 0.05% and for 1 year – 0.08%. The “Extra” deposit in the amount of BGN 10,000 to BGN 49,999 offers an interest rate of 0.1%.
Interest rates on loans remain unchanged
For now, we shouldn’t expect an increase in loan interest rates, but it depends on the economic situation, said Levon Hampartzoumian.
“If the economy is deteriorating or there is some kind of long-term instability, then we could expect an increase in overall risk and consequently more expensive loans.”, the expert specified.
In terms of savings, he advised Bulgarians not to wait “all eggs in one basket”.
“Let’s not spend all our money, that is, let’s have some mattresses and make a reasonable expense. However, we must not stop spending because life does not end, our economy needs those who can spend because they believe There is no universal advice to respect, but it is important to be cautious. “added.
The expert added that due to the pandemic there is an increase in bad loans, but that is expected. He recalled that both Bulgarian and Hungarian banks have extended the moratorium on loan payments.
“This does not mean that everyone will stop paying their loans, but those who cannot can reschedule and this will not have a regulatory effect on the capital of the banks as before the crisis. have increased the ability of banks to be flexible “Hampartzoumian added.
The expert insisted that banks in this period of pandemic and its recovery will play a positive role “in a network of distribution and support distribution.”
It is important to spend money wisely on new debt
Regarding the news from the previous week that the Bulgarian government retired a foreign debt of BGN 5 billion, Hampartzoumian commented that it is important to spend the money wisely.
“Technically we have done a good job, it is important how the money will be spent. Until now they have not been spent, they have been used to create shock absorbers in an uncertain time. possibly to participate as a society and experts in prudent spending. If this money, in this period of 30 years, is multiplied two, three, five, ten times, its payment will not be a problem ”.He concluded.
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