Banking

With its accession to the European Union on January 1 2007, Bulgaria entered a period of fine-tuned transition. As experts noted, the banking sector underwent a period of large-scale restructuring, through privatisations and subsequent buy-outs, and now it can well be likened to any of its peers in developed economies. Now, as elsewhere in Europe, the bulk of the largest banks in the country are in the hands of big European banking giants and have a strong financial backbone through their parent companies.

As such, Bulgaria’s banking sector became an inalienable part of developments elsewhere in Europe. Thus, the remoulding of Bulgaria’s banking sector in 2007 was marked by the merger of UniCredit, Hebros Bank and HVB Bank Biochim in what was part of the perennial pan-European merger of Italy’s UniCredit and HVB of Germany. Locally, the merger created the largest bank in the country by assets and business network.

The other event in the 2007 merger and acquisition timetable of note was the purchase by Greece’s Eurobank EFG, the owner of Bulgarian Postbank, of DZI Bank in what was to form another banking conglomerate in the country.

Another European-type development at hand was the entry of Belgium’s second-largest financial group, KBC, on the Bulgarian market. After years of futile attempts, KBC struck a double purchase in Bulgaria; Economic and Investment Bank and the largest insurer in the country, DZI. The Belgian group set out an ambitious plan to enter the top-three ranking in both sectors in the medium term.

The entry of the Belgian giant was interpreted as a trend-setter. In Bulgaria’s maiden year in the EU, it did what a number of other European financial players are expected to do in the years to come. Data showed that a number of finance entities with a registration in the EU sent notifications to Bulgarian National Bank (BNB) and the Commission for Financial Supervision, the local financial watchdogs, informing about plans to start operations in Bulgaria in the near term.

To recall, now that Bulgaria is a member of the EU, all EU-registered entities can begin operations through a single notification to the relevant financial watchdog, under the single-passport mechanism. This means that the sector, despite its maturity, is set to welcome new and experienced players. Their entry is expected to bring about a sift-out through the offer of new and sophisticated products, among which figure investment products, opportunities for clients to invest in equity and pension and mutual funds.

The anticipation of impending fierce competition, to be posed by the new entrants, put a number of banks in Bulgarian ownership onto the path of forward-looking busy product portfolio re-jigging. The need to finance those initiatives, while retaining their independence from foreign financial players, prompted a number of banks to seek large-scale financing and set the pace for the flotation of initial public offerings (IPOs). In 2007, the floor of the Bulgarian Stock Exchange tested First Investment Bank, Corporate Commercial Bank and EIBank, among others. This not only gave a new push to the local bourse, the IPOs being many times oversubscribed, but also showed that local banks had discovered a new successful tool to finance future expansion.

The reverse trend was also in place by players whose foreign parent companies believed that a single listing by the parent company itself was enough. An example of this trend was KBC, whose subsidiary DZI Insurance was about to be taken in to private hands after the completion of the mandatory buy-out procedure toward DZI insurers.

Fine-tuning also had its other facet. As Levon Hampartzoumian, CEO of UniCredit Bulbank, put it at the annual business-Government meeting organised by media group Handelsblatt and the newspaper Kapital, the banking sector was in need of a mini-reform that would discipline it. Referring to banks and other financial entities, which in 2007 continued to expand the share of loans in their portfolios – consumer and corporate alike – he spoke of the need of safeguarding against a splurge in the bad loans’ share. Noting that the sector’s stability at present was not under threat, he said that it might be in the future if no measures to check on both loan takers and borrowers’ trustworthiness were taken.

He urged for the set-up of credit bureaus, both public and private, that would run alongside the measures undertaken by the local central bank to rein in credit expansion.
In the latter half of 2007, BNB also identified that credit expansion, through faster and simpler loan-issue procedures, was the main risk to the stability of the banking sector. After relaxing restrictions on commercial banks in Bulgaria, it decided on restoring them as of September 2007. Commercial banks were again expected to file with BNB 12 per cent of their assets as mandatory reserves in case of default.
On the watch in 2008: loan expansion and the entry of foreign financial players.

VOIP: A Basic, Basic Intro

Most people are familiar w/ NetMeeting and other software that let you talk to others over the internet. VOIP is similar. However, it also uses your phone - the interface we're all familiar with.

Instead of connecting your phone to the wall, you connect it to a box either the VOIP company provides or you buy on your own. This is the modem. You need highspeed/broadband internet for this. Your modem plugs into your cable/dsl modem and now it can 'talk' btwn your phone and the internet.

Your phone lines already do pretty much what VOIP does, just w/ different/older technology (well, some of it's new w/ optics and such, but...).

How hard is it to setup?

It's actually very easy. Assuming you have the company send you a modem or you buy a kit at the store, you simply plug the modem btwn your current cable/dsl modem and your computer (e.g., the out from your cable modem now goes to the new box and the out from that to your computer). It also has a phone jack for your regular phone.

Once it is on, it will boot up and configure itself.

What are the benefits?

There are many benefits depending on the company you go w/, but here are a few I have (all of these are free w/ the monthly fee- $14.99 for my setup):

1. Features like caller id, call waiting, call waiting caller id, call forwarding, etc.
2. Voicemail
3. Email alerts for new voicemail.
4. Web access to voicemail - you can play your messages on your computer.
5. Auto-forward - if the phone is ever down or isn't answered, it's auto-routed to another number
6. Online management of all features, settings, account, etc.
7. Computer dialing - highlight any number on your computer, hit F6 and it sets up the call from your phone to theirs - very convinient!
8. Keep your regular phone (you don't need a voip phone)

There are some other cool features available for extra $ like the softphone which lets you use your computer as a phone w/o the modem - this means you can take your laptop w/ you wherever and you have your phone w/ the same phone number everywhere too (you can do this w/o the softphone, but you have to take your VOIP modem around w/ you - not bad if you're going somewhere for a longer trip).

Another really cool thing is the virtual phone numbers. You can get extra numbers that ring the same phone, but they are local numbers to any area code you want. So if I live in Dallas and have family in New York, I can get a local phone number here and there. That way my family in New York can call a local number (free) and talk to me! Vonage charges $4.99/month for that. I'm not sure about the others.

And the biggest benefit - IT'S CHEAP! I pay $14.99 plus some tax and such, but not the ump-teen taxes, charges, fees, etc. like the phone company charges.

Also, if you do a little research/reading, you can set it up to where every phone jack in your house is wired for VOIP. It's little more than plugging the output of your VOIP modem into the wall jack you already have. Very little more.

Bottom Line

You get lots of good, free features and options for doing/managing a lot more including a lot over the web and it's SO much cheaper (at least it is for me!). Being the 'average guy' I am, I don't really use all the features. Fortunately, it's pretty much a 'set it up and forget about it' type thing except that I save $40+/month w/ it!

I use Vonage b/c that's what I was told about first and it was one of the first. There are others and I'm sure they have their strengths, but Vonage has the cheapest base option at the time I did my research.

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