UPDATE 1-Bulgarian parliament votes in new banking manager

SOFIA, March 22 (Reuters) – The Bulgarian parliament on Friday appointed a brand new banking supervisor because the Balkan usa prepares to sign up for Europe’s banking union and the euro area’s waiting room this yr.

Radoslav Milenkov, 46, will take over one of the four pinnacle jobs on the Bulgarian critical bank and might be in charge of overseeing banks for a six-12 months term after the sudden resignation of his predecessor this month.

Bulgaria has applied to get into near cooperation with the Single Supervisory Mechanism, one of the two pillars of the EU banking union, as a part of its aspiration to undertake the euro forex.


As part of the process, the European Central Bank is wearing out health exams at six of Bulgaria’s 20 banks. Results are anticipated in July.

Sofia expects to sign up for both the banking union and the ERM-2 mechanism, the 2-12 months compulsory precursor to the euro sector this summer.

Bulgaria meets the nominal standards to adopt the euro with its low debt and sound public finances, but it is also the European Union’s poorest member nation and one in all its most corrupt.

Mexico – Monthly Report on Banking and the Financial System

In December 2018, the once a year nominal growth fee inside the balance of the current portfolio of loans granted by using business banks to the personal area became 10.Zero% (4.Nine% in actual terms). Furthermore, the standard nominal annual increase rate in 2018 for the current portfolio of loans granted by using industrial banks to the non-monetary private area was 12.0% (6.7% in real phrases). This was beneath the nominal boom charge of 12.8% recorded in 2017. The 12.0% contribution to real annual growth of loans granted to the personal quarter in 2018, damaged down into its three additives, become eight. Five percent points (pp) from business loans; 1.7 pp from mortgages; and 1.Eight pp from patron loans.

The dynamism located in 2018 changed into in line with the moderate growth in the financial hobby, as GDP grew by using 2.1% in 2017 and preliminary information shows that this identical parent was slightly decreasing in 2018 (2.0%). A 2d component that could have restrained a progressed credit score overall performance in 2018 (compared to the dynamism discovered in 2017) turned into the growth in benchmark hobby fees. For instance, the TIIE 28 (Tasa de Interés Interbancaria de Equilibrio — Mexican 28-day Equilibrium Interbank Interest Rate) accelerated from 6.15% in January 2017 to 7.62% in December of that year and had risen to 8.Fifty nine% by December 2018. A 0.33 thing that could have limited credit score boom is the lower annual increase in the range of workers registered by using the IMSS (Instituto Mexicano del Seguro Social — Mexican Social Security Institute).



Examples of precise elements that had a fine influence on credit overall performance in 2018, in particular on commercial enterprise and mortagages, consist of: i) the substitute of overseas company financing with domestic bank loans, which boosted the increase of enterprise loans, particularly the ones of larger businesses; and ii) the expectation that mortgage hobby rates should increase at a higher rate than over the course of 2018, which also raised the demand for this type of credit score because, for a certain sort of customer, suspending taking away a loan may want to involve improved price within the destiny if the hobby fee on these loans were also to increase through a higher percent. Finally, there had been no factors beneficial to the boom rate of client loans, which, to a massive extent, explains its modest average increase in 2018.

Traditional deposits reverse the downward fashion, albeit at a moderate tempo

In December 2018, the nominal annual increase charge of conventional deposits in business banks (sight deposits + term deposits) became 7.Nine% (2.Nine% in real terms). This supposed that, in 2018, the common nominal annual growth fee of traditional deposits become 10.0%, 1.5 pp decrease than the 2017 average. The first 8 months of 2018 saw a reversal of the downward trend in nominal boom fees for traditional deposits that became determined within the 2nd half of of 2017. Nevertheless, a slowdown become once again determined from the begin of September 2018, meditated inside the slow recovery of real wages, a tempo of economic pastime that has remained fantastically stable, and the draw of better interest rates on term deposits.

By deposit kind, sight and time period deposits showed a differentiated performance. In precise, over the course of 2018, an multiplied increase price of term deposits turned into determined, favored by an environment of better hobby costs that made savings on this type of tool extra attractive. In truth, for the first time inside the ultimate five years, the dynamism of time period deposits has driven growth in traditional deposits, not like in preceding years, in the course of which the momentum got here mainly from sight deposits. Thus, the contribution of term deposits (39.Three% of conventional deposits) to the nominal boom rate of traditional deposits improved in 2018; making up 5.6 pp of the 10% overall deposit increase in 2018, better than the four.Zero pp contribution to nominal increase in 2017. Sight deposits (60.7% of the whole) confirmed reduced dynamism, with their common contribution to the growth of conventional deposits falling from 7.5 pp in 2017 to four.4 pp in 2018. The decrease call for for this sort of device might be linked to two results: first, the moderate restoration of household purchasing energy, which confined more potent consumer increase and reduced the use of sight deposits for transactional functions, and, 2d, the dealers’ extra choice for longer-time period deposits incentivized by way of higher interest fees.

Financing furnished to the non-economic non-public region slowed in the 2d half of-of 2018

In its record corresponding to 4Q18, the Bank of Mexico highlighted the fact that there was a marked slowdown inside the economic system’s assets of financing at some stage in that area, meaning that in phrases of the yr as a whole, the annual waft of those assets became equivalent to four.9% of GDP, lower than the figure of seven.Nine% located in 2017. The annual waft of overseas financing in 2018 amounted to zero.8%, the lowest percent located because the global economic disaster. The Bank of Mexico underlined the reality that this reflects the restrict—that may have end up tougher—on overseas financing confronted by way of Mexico. Growth in terms of home sources of financing continued to slow, averaging 4.1% in 2018, which turned into underneath the 6.5% discovered the preceding 12 months. The slower increase with regard to sources of financing is a reflection of the reduced availability of foreign financing considering the fact that 2014 inside the wake of numerous adverse shocks that have affected the u . S . A ., which consist of: the fall in global oil expenses; the reduction of the oil production potential; the uncertainty across the renegotiation of exchange agreements with the US and Canada; the effect of the normalization of US economic policy; and, locally, the 2018 electoral technique and the uncertainty surrounding the general public policy time table of the incoming government.

In phrases of the utilization of the economy’s financial resources in 4Q18, public sector financing accounted for 2.3% of GDP—above the 1.1% pronounced for 2017, but beneath the four.Zero% common located from 2013–2016. The reduced dynamism of economic pastime become contemplated through a slowdown in financing provided to the non-financial non-public region inside the 2d 1/2 of 2018, with the boom price in this regard falling from 7.1% in 1H18 to six.4% in 2H18. In unique, there may be a persevering with downward trend in terms of gross constant investment, which might explain the reduced demand from groups for credit for investment initiatives. There changed into additionally a slowdown with regard to customer loans, constant with the slower increase discovered in phrases of private consumption. Moreover, the overall performance of company and client financing became also adversely laid low with the increase in financing fees. There become a recovery with regard to housing loans, which may be attributed to the strong interest fees for this kind of financing.

The record highlights the truth that the credit score risk for Mexican banks fell slightly, and that its capitalization index is stable at a stage that displays the fact that it has sufficient ability to soak up capacity losses springing up from borrower defaults. Furthermore, the document underlines the truth that there was an usual fall in phrases of non-appearing loans (NPLs) in 4Q18. On the opposite hand, there had been sizeable falls in fairness markets and depreciation of the peso, creating excessive levels of volatility that had a moderate impact available on the market danger for banks. The existing regulations regarding the insurance of belongings and liabilities in overseas forex meant that this effect mitigated the unfavourable impact of the depreciation of the peso. Finally, commercial banks had enough degrees of liquidity, although some establishments deviated barely from the required ratios and must enhance their controls. The Bank of Mexico signaled that those deviations are not a demonstration that the state of affairs for the system is worsening as they were small, isolated and temporary.

Housing prices rose through 7.Nine% in the first sector of 2018

At the close of 4Q18, the SHF’s (Sociedad Hipotecaria Federal — Federal Mortgage Company) housing price index had increased by way of 7.9% as compared to the identical period in 2017. Our document from ultimate January said that housing prices may also have skilled their maximum fees of appreciation in 2018 and that, within the future, boom in phrases of housing expenses can be extra moderate. Whilst at the close of 2018 both low-cost social housing and middle-profits residential housing costs rose at a similar rate of 8.1% in annual terms, a assessment between formerly owned and new housing demonstrates that the former generated extra capital advantage all through 2018 than the latter, which turned into much less dynamic within the market compared to 2017. According to this indicator, the cost of present housing accelerated via eight.3% in annual terms at the same time as the price of latest gadgets rose through 7.6%.

The reduced demand for housing all through 2H18 turned into additionally contemplated by stable creation quotes and lower call for for creation substances. 1H18 saw the general manufacturer rate index for the development zone increase by using 7.3% on common, pushed particularly by using the 7.Nine% growth of the materials sub-index over the same period, at the same time as the machinery and device-apartment aspect, showed mild growth of 2.Three%. This moderation of creation prices might also be pondered by means of a stabilization of final housing costs.

At regional stage, the metropolitan regions with the best appreciation quotes on the near of 2018 were: Guadalajara and Monterrey, with will increase of 10.7% and 8.8%, respectively, and Puebla-Tlaxcala, in which a capital gain of eight.Four% turned into registered. On the alternative hand, the Valle de México metropolitan region experienced a slowdown, with appreciation of five.8% as compared to the near of 2017.

1.2. Financial Markets

Market gamers recognition on concerns across the economic state of affairs of Pemex and the “affected person” stance of the FED

The increased issue regarding Pemex’s economic state of affairs and the fluctuations of rising property given the FED’s anticipated cycle of monetary normalization have been the principle elements behind moves in economic markets. The first few weeks of the year saw growing subject concerning the financial state of affairs of Pemex, given the dangers related to the exchange to its business version in opposition to a backdrop of reduced output and debt exceeding USD 100 billion. The aforementioned hard surroundings, the little confidence that Pemex’s directors had been capable of generate among investors and the organization’s trouble obtaining substantial assist from the federal government led to Fitch Ratings downgrading its Pemex score from BBB+ to BBB-. At global level, marketplace players have reacted directly to economic facts suggesting a slowdown of the US financial system given the near relationship among such information and the stance of the FED.

At the identical time, there was a 0.92% depreciation within the exchange rate, consistent with the depreciation of rising marketplace (EM) currencies (1.07%), with some figures being higher than predicted for the United States financial system. It is really worth noting that, in phrases of the exchange fee, the nice impact of the FED’s stance in regards to EM belongings has been extra impactful than the issues surrounding Pemex.

A fall of 24 basis points inside the yield to adulthood (YTM) on 10-12 months bonds changed into recorded in fixed earnings markets in February, taking it right down to underneath eight.2%. This considerable fall was motivated by using the positive surprises in phrases of inflation that caused the Bank of Mexico thinking about beginning a cycle of discounts whilst long-term fees have been strong within the US, given the predicted slowdown.

With recognize to sovereign hazard, worries around Pemex’s price range and its ties to public finances have led to Mexico being indexed in monetary markets at tiers steady with a BBB- rating rather than the BBB+ score that it actually holds. This is contemplated now not only employing the united states of America threat but also inside the dollar debt marketplace. The Mexican curve is at stages similarly excessive to those of nations consisting of Russia and Colombia (BBB-), and a ways from the tiers of nations inclusive of the Philippines (BBB).

NBFCs borrow greater from banks on liquidity crunch

Non-banking finance corporations’ (NBFC) dependence on financial institution credit has grown via a massive forty eight% 12 months-on-12 months till January, reflecting a shift in focus from cash markets to banks for finances amid tighter liquidity circumstance.

This is the very best increase in any mortgage segment stated by banks, at the same time as credit score to manufacturing fell 0.7%, in step with the Reserve Bank of India information. Personal loans to buy consumer durables suffered a seventy-five % plunge. Overall financial institution lending has grown 14.6% year-on-year.

“The recent liquidity problems have extended the cost of raising a budget for NBFCs from the marketplace. This has also been cited as one of the reasons for NBFCs moving from the corporate bond marketplace to banks for their financing needs,” Care Ratings said in a report.

At the stop of January 18, bank loans to NBFCs stood at?Five,57,600 crore as in opposition to ?3,76,000 crore a year ago. On April-to-January basis, the boom changed into recorded at 12%, compared to a three.8% fall 12 months in the past.


This was in spite of the reality that lending to NBFCs slowed down in October as numerous banks had gone right into a shell following the IL&FS crisis. Banks had, however, provided aid to the shadow-banking entities by way of shopping their mortgage portfolio in securitization deals to assist them tide over in liquidity mismatches after the disaster. Securitization of loans is not taken into consideration as publicity to NBFCs, however to the specific sectors in which the unique loans belong.

Care Ratings said that even though the price of borrowing dipped between October 2018 and February 2019, there was an increase in borrowing costs across all categories (barring housing finance organizations) in February visà-vis January 2019.

The 10-year average G-sec yields rose to 7.37% in February from a median of 7.35% in the previous month.

“This might be one of the reasons for the price of borrowings now not coming down for the corporates because the G-sec rates have remained more or much less unchanged at quality,” the score corporation said.

Indian Bank – wearing “Your Own Bank” tag with utmost delight!

Amidst the present day challenging duration for the banking region in India, there may be a Public Sector Bank that has outshined its friends. It is the Chennai-headquartered Indian Bank. Indian Bank nowadays, with over 9400 touch factors throughout the country, has crossed the milestone commercial enterprise level of Rs 4.00 lakh crore The Bank has featured inside the Most trusted brands in the Public Sector Bank category and has been acknowledged as India’s Best Bank (supply: Economic Times, Magazine).

A 111-year vintage Bank, Indian Bank, has been continuously proving that it has the potential to adapt to the changing environments at distinguishing factors of time. It has many ‘firsts’ to its credit score in terms of merging banking and generation for higher, more secure and more convenient solutions. The Bank becomes the primary to migrate from Total Bank Computerization (TBC) to a hundred% Core Banking Solutions (CBS). Installing the primary ATM through any public zone bank in 1989, putting in the first force-in ATM of the USA at some stage in 1990, introducing the first ever voice-guided biometric ATM in 2007 to name a few. The Bank launched an enterprise-first mobile app to block and manage limits of debit card and credit card, the ‘IB Smart Remote.’ Indian bank has been continuously reinventing with a futuristic vision to meet the hard and dynamic needs in this era-pushed era. While doing so, the bank pays serious attention to the protection and safety of clients’ transactions.


Like any other monetary organization, Indian Bank too needed to stave off many challenges in its long history, the maximum ambitious one being during the late 1990s and early 2000s. The sheer commitment of personnel and unflinching loyalty of clients are the Bank’s middle strengths, and the Bank should script a successful, historical turnaround of its fortunes in particular because of those elements. Carrying the tag ‘Your Own Bank,’ the Bank is looked upon with delight in India.

Indian Bank has by no means regarded back ever when you consider that its historical revival, continuously posting earnings for over one and 1/2 a long time. The Bank’s pre-eminent function is indicated with the aid of the fact that once the infusion of Capital via Government of India during its turnaround, Indian Bank is the handiest exception among nationalized Banks that has in no way sought recapitalization support from Government. Harnessing its robust technological backbone and widespread revel in, the financial institution has undertaken a properly-planned and nicely-done credit disbursal route, balancing growth and exceptional.

Indian Bank has been a forerunner in serving the unbanked and under-banked centers via tech-based initiatives, thereby enjoyable its task to be a Common Man’s Bank. The Bank’s pioneering efforts in helping SHG motion and promoting Financial Inclusion has earned for it the coveted reputation continuously for 18 years from Government of Tamil Nadu, besides others. It will not be a real understatement if one says that Indian Bank has been the life-changer for lots socially and economically deprived and susceptible sections of the society.

Having been born out of the human beings movement, Indian Bank is a responsible corporate citizen. The Bank has primarily based its CSR coverage on five pillars, viz., inclusive boom, deepening financial literacy, making sure a worth life surroundings via green projects, empowerment of ladies to bring in gender equality and fostering financial independence to the downtrodden and economically weaker sections, women and poor thru vocational ability development. On ninth March 2019, the Bank celebrated “International Women’s Day” and felicitated twelve girls achievers. On that day, the Bank additionally launched “IB- Surabhi,” a Savings financial institution Account solely for ladies. The product gives a bouquet of facilities like the concessional hire for locker and hobby on loans, insurance, buy protection, customized cards, and free services.

As a step closer to getting towards the agricultural people, various developmental activities such as literacy and counseling packages on credit score, deposit merchandise, social protection schemes, and digitization have been undertaken through facilities set up for the said reason beneath “Indian Bank Trust for Rural Development” (IBTRD). To create opportunities for marketers to pursue diverse self-employment alternatives, Rural Self Employment Training Institutes of the Bank (INDSETIs) were providing essential training for skill building. Both these projects of the Bank have acquired due recognition and praise from NABARD & Ministry of Rural Development.

Creating a healthful society has been essential inside the agenda and a number of initiatives for the bad and the marginalized were undertaken via diverse health care and blood donation camps. Envisioning a comfortable and hygienic surroundings for the next generation, Bank is an lively recommend of “Swachh Bharat Mission” and numerous activities in this regard had been finished across the united states of America like production of bathrooms in girls’ schools, donation of sanitary napkin merchandising system and incinerator in girls’ schools, cleanliness drive at numerous locations and many others.

With the presence of nicely-matured components, Indian Bank has re-positioned itself to cater to the converting desires of its purchasers with the primary cognizance on attuning itself to offer purchaser-centric offerings across the Banking panorama and attaining profit-enhancing improved enterprise increase via improved operational efficiency.

Going ahead the goal might be to continuously pursue the vision to be a competitive and robust financial institution with a dedication to excellence and recognition on including a cost to customers, shareholders, and personnel with adherence to high-quality practices and core institutional values shared at some stage in the Organization.

Lenders bank on non-public loans to develop retail books


Personal loans have end up one of the maximum sought-after products for banks and new-age creditors. These unsecured advances have rolled up to a file Rs 3.5 lakh crore on the ‘lending book’ this monetary, information sourced from pinnacle credit score bureaus confirmed.

Personal loans (PLs) are non-collateralised advances, made available to a borrower at better fees for personal use. These are usually provided to salaried people with a reasonably excellent credit score and compensation abilities.

“Personal loan books have by no means grown to stages as it’s miles now… It’s kind of a file ebook-length presently,” says Ramadasu Bandaru, AGM, CARE RatingsNSE -0.03 %.

“Lenders do now not opt to provide loans to corporates anymore. Every lender is attempting to develop their local book aggressively now – and that is in which PLs come available. Lenders ought to virtually check the credit score history of a prospective borrower earlier than handing out those small, quick-term loans,” he explains.


PLs, help enhance net hobby margins of lenders. These unsecured loans are supplied to borrowers at fees ranging among 12% to 24% in step with annum. A few NBFCs and new-age fintech businesses (that focus on short time period, small-price tag loans) are recognised to charge as much as 26% even as lending cash to borrowers with low credit ratings.

“These are generally consumption-pushed borrowings… People take personal loans for whatever – proper from marriage to obtaining an asset or redoing their homes,” says Ambuj Chandna, who heads the client assets vertical of Kotak Mahindra BankNSE -1.24 %.

Private banks maintain the chunkiest of PL books while PSU banks and NBFCs are trying to increase the section by spreading out to smaller towns and even villages. As of September 2018, non-public banks consisting of Kotak, HDFC, and ICICI collectively keep near `1.Forty five lakh crore worth of PLs, whilst PSU banks and NBFCs nurture a PL pool of over `2 lakh crore.

“Personal loan is one of the quickest growing segments for us too,” Chandna admits.

“A huge part of our e-book accommodates loans given to our present clients. It’s clean for us to give loans to existing clients as we’ve enough facts on their banking habits,” says Chandna.

The use of “in-residence statistics” (to be had with lender in the case of existing clients) and inputs from credit score bureaus have helped creditors ramp up their PL books. Tech-savvy lenders analyse the creditworthiness of a borrower through “fitting” them in device-pushed lending models built the use of data. New-age creditors like Home Credit, an NBFC focusing on client durable loans and personal loans, additionally runs assessments on social networking web sites to acquire “transactional and behavioural” statistics of prospective clients.

“For personal loans, we use a lot of electronic decision-making gear to arrive at the creditworthiness of a borrower… We also eye-ball unique instances,” admits Chandna.

Rising use of tech-pushed, decision-making equipment has reduced the turnaround time (TAT) for personal loans. While PSU banks are able to disburse PLs in 48 hours, private banks and established NBFCs near such deals in about 24 hours. New-age creditors – generally running in online space – are capable of ascertaining the “quality” of borrowers and pay out those loans in four to eight hours. Average price tag sizes of PLs range among Rs 2 lakh to Rs 5 lakh – for a duration of 3 to five years.

“But maximum of the time, borrower repays PLs earlier than term… In majority of the cases, PLs offered for 3 years come lower back in 15 to 18 months,” says Ravi Agarwal, head of wholesale lending at Rattan India Finance, a non-bank lender that commenced enterprise some months in the past.

“Most lenders simplest provide PLs to salaried individuals… In our case, we handiest lend to individuals running with large employers. We use filters to weed out sectors (industries) that are not doing properly… We stay far away from borrowers who work in small companies, which can be going through sectoral headwinds,” Agarwal explains.

Default quotes in personal mortgage books are nicely within potential limits for maximum creditors working. Of the Rs forty seven,500 crore worth PLs disbursed with the aid of NBFCs in FY18, only 2.6% are 90 days beyond the due date (ninety+ DPD). The unit 90+DPD means that the borrower has ignored payments on a mortgage for three months or ninety days. Private banks and PSU banks – which have allotted close to Rs 1.24 lakh crore each in FY18 – logged a little over 1% and four% (ninety+DPD) respectively.

“As of now, we do now not see a bubble in PL books of key lenders,” says Ramadasu of CARE Ratings. “PL pay-outs will come back to lenders as these are frequently given to salaried personnel. There’s no need to fear at the moment,” he affirms.