Nationwide protests against domestic violence
Hundreds of thousands of people across Bulgaria protested against violence against women this past week. The unprecedented demonstrations were prompted by the case of an 18-year-old woman from Stara Zagora who had been beaten, stabbed and shaved by her 25-year-old partner but who did not get justice in court.
Underlying the outrage were the stories of hundreds of women who have been raped, tortured and humiliated and whose cases frequently ended with negligible punishment for their attackers.
Sensing the growing anger, the police and prosecutors took action. The judge who had freed the alleged attacker gave a press conference, the hospital released the medical examiner's report on the woman's injuries, and deputies initiated changes to the Criminal Code and the Law on Protection from domestic violence. All this managed to appease the public to some extent but the topic looks set to run and run.
US-based Acrisure buys broker SDI
The American Acrisure has gradually become a significant factor in the Bulgarian insurance market via the step-by-step purchase of the two largest brokers with a total of 14.15% market share. Following its April announcement that it would take a controlling stake in "I&G Insurance Brokers" (I&G), it is now buying the sectoral leader "SDI Group" (SDI).
Neither deal has yet been finalized, but within months the insurance brokerage market could change dramatically. At this stage, almost no financial or other details are being disclosed, and it is not even clear whether it is a 100% stake or less. But there are no indications that the two companies plan to merge. "Following the transaction, SDI will retain its management team and development strategy while benefiting from Acrisure's global presence and international expertise," it said.
Yettel and the biggest deal of the year
The much touted biggest deal in Bulgaria this year is now reality after the owner of the leading mobile operator in terms of revenue Yettel Bulgaria (part of PPF) announced a "partnership" with the conglomerate from the United Arab Emirates Emirates Telecommunications Group Company (known formerly as Etisalat and currently as e&).
Under the terms of the agreement, e& will pay 2.15 billion euros for 50% plus one share in the telecom's business in Bulgaria, Hungary, Serbia and Slovakia.
The deal also includes a clause for an additional 350 million euros over the next three years, subject to the fulfillment of certain conditions by PPF Telecom. The transaction includes all operators under the Yettel brand, as well as a stake in the Slovak telecommunications business, but not that of the domestic Czech market. It is expected to close before the first quarter of 2024, subject to regulatory approval and corporate restructuring.
"The purchase price, which could reach 2.5 billion euros, represents one of the largest deals to date for PPF. I am proud of how we have been able to increase the value of these assets," PPF CEO Jiri Schmeitz said in an official statement.
Bank profits jump by 66%
If you believe the cliché that the banking sector is a mirror of the real economy, then you shouldn't fear a slowdown, much less a recession. By the middle of the year, the profit of credit institutions grew by 66% compared to last year's record and reached an impressive BGN 1.69 billion. For a comparison for the whole of 2022, the result was just over BGN 2 billion - a value that will probably be surpassed in August. If the momentum is maintained, 2023 should end with a profit of at least BGN 3 billion.
The banks did so handsomely not because of any economic boom, although 2022 will have reaped many records on this front as well. In reality, the gain was driven by the widening of the interest rate spread as a side effect of monetary tightening by the ECB. Thanks to the unusual combination of super-liquidity, high inflation, labor shortages and still generous state aid, a golden window has temporarily opened for bankers - interest rates on loans (especially for businesses, which are massively tied to Euribor) are rising, until there is no market pressure to raise those on deposits.
State budget has half a billion BGN surplus
The state budget reached a surplus of half a billion BGN at the end of July, which is approximately 0.2% of the estimated GDP. This is the second month in a row with a surplus, and it even expanded by about BGN 0.3 billion compared to June, according to the Ministry of Finance. As the end of the year approaches, however, the trend is likely to reverse, as the budget is scheduled to end with a deficit of 2.5% of GDP on a cash basis.
July was effectively the last month in which the state was still working "on momentum" with the financial estimates from 2022. With a delay of more than half a year, from August 1, the 2023 budget officially came into force, as it was finally adopted by the deputies last week. Its final version included salary increases for some public sector employees that were not originally foreseen. This includes police officers, military personnel, employees of the National Revenue Agency, customs, and Emergency Services, etc. The higher current costs will be financed at the expense of a cut of BGN 300 million from the capital program.