Financial news

Banking supervision is not efficient enough to maintain the stability of the banking system and protect depositors' interests, according to the conclusions in a National Audit Office (NAO) report on the performance of the Bulgarian National Bank between 2012 and 2014. The report was submitted to the National Assembly at the end of last week. NAO makes 13 recommendations to the BNB Governing Council to improve its banking supervision performance, setting a one-year deadline for their fulfilment. The report says that almost all banking supervision responsibilities are concentrated in the BNB Deputy Governor in charge of the Banking Supervision Department. The BNB Governing Council and the Governor are not involved in the supervision process, which creates a risk of inefficient supervision. The auditors have detected major problems affecting BNB's administrative capacity for supervision. The share of banks which were inspected on-site decreased considerably during the reporting period, from 68 per cent in 2012 to 43 per cent in 2014. BNB failed to take substantive action to verify the information reported by banks. Such information was verified automatically. The reports of two banks were excluded from this automated verification process without any valid reasons and without observance of the established procedure.

EU Commission Vice-President Kristalina Georgieva plans to run for the job of UN Secretary-General, to replace Ban Ki-moon, whose second term expires on 31 December 2016. Rumours that Georgieva, the Bulgarian Commission member, was interested in the UN job, have been circulating for a while. Margaritis Schinas, spokesperson for Commission President Jean-Claude Juncker, set the record straight. "The President and Ms Georgieva discussed the possibility that this issue may arise, but for the moment, Vice-President Georgieva is focused on her current job. Georgieva is likely to face intense, international competition for the job, and she knows that her compatriot, Irina Bokova, who currently leads the United Nations largest agency UNESCO, the United Nations Educational, Scientific and Cultural Organisation, is the Buglaria's official candidate. And she of course knows that the Bulgarian government cannot nominate both.

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Companies

Bulgarian express delivery company Speedy posted nine-month consolidated net profit of BGN 7.36 million, up from BGN 6.0 million booked a year earlier. Consolidated operating profit rose to BGN 9.4 million in the January-September period from BGN 6.9 million in the year-ago period. Total revenues climbed up to BGN 87.7 million from BGN 53.5 million in the first nine months of 2014. Total assets slightly rose to BGN 81.3 million at the end of September, from BGN 79.3 million a year earlier. Speedy plans to expand its office network in Romania and other neighbouring countries, as well as to develop new services. In July, the company said it plans to invest BGN 3-5 million in Romania - in its fleet and in logistic centres. Set up in 1998, the Sofia-based parcel delivery company handles around 10 million shipments annually and has a market share of around 32%.

Tchaikapharma High-quality Drugs reported a net profit of BGN 6 million in the first nine months of the year, which represents a 4% increase yoy. Revenues from sales increased by 19.3 percent to BGN 22.33 million. Just like in the first nine months of last year the same period of 2015 the company reports higher revenues from sales of medicines in the form of tablets. Their amount is BGN 18.49 million, increasing by 40%. Revenues from sales of ampoules grow by BGN 376 thousand to BGN 1.49 million, while those from the sale of bottles shrink by 40 percent to BGN 2.32 million. The highest revenues are registered from sales of products for the treatment of diseases of the cardiovascular system – BGN 15,92 million, with growth reaching 36% as compared to the same period of last year. In the third quarter of the year the company has received seven authorizations for utilization of new products for the treatment of diabetes and cardiovascular diseases.

Bulgartabac has formally become owner of part of capital of distributor of cigarettes and newspapers named Express Logistic and Distribution (ELD). In the end of September tobacco holding acquired 45% of shares of the company via its subsidiaries Blagoevgrad-BT and Sofia-BT. ELD started operation in March last year. The company holds significant share of distribution of newspapers and cigarettes. In March 2014 it became official distributor of Bulgartabac and took the place in the business of the long standing distributor Tabac logistic group. Blagoevgrad-BT has 30% of ELD’s shares, while Sofia-BT acquired 15% of its capital. Seller of both packages of shares, which price is not disclosed is registered on the British Virgin island company under the name of Lanezal Limited.

Bulgarian online platform for domestic helpers Domestina has attracted EUR 300,000 in investments to expand its services in Bulgaria and Poland and is contemplating more growth options in Eastern Europe (EE). The company's investment project was backed by seed fund Launchub alongside two business angels - Veronica Puncheva, managing director of wholesale group METRO Bulgaria, and Svetozar Georgiev, one of the founders of software company Telerik. "We are still working on our development strategy which includes researching the markets of Croatia and Romania. The results we achieve in Poland will determine whether we continue to grow by adding one country after the other, or we launch operations in several countries simultaneously," the company's owners Vladislav Simov and Nikolay Kazmin said. "They will also determine how we will structure the next investment round," they added. Currently, Domestina operates in the capital Sofia and the second biggest city of Plovdiv. Part of the new financing it has attracted will back the company's expansion in the Bulgarian coastal city of Varna and the launch of trial services in ski resorts.

Bulgarian telecommunications group BTC, operating under the Vivacom brand, said its nine-month adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) edged down 2% to BGN 258 million. The group's total revenue in the nine months through September amounted to BGN 625 million, up by 4% as compared to the year-ago period. The figures refer to the performance of transmission services provider NURTS Bulgaria, which the group acquired in July, and the group's telecommunication services unit which offers fixed-line and mobile voice, Internet access and digital TV services. Telecommunication services EBITDA in the period under review stood at BGN 253.7 million, down from BGN 263.9 million a year earlier. Telecommunication services generated BGN 614 milion in revenue in the period under review, up from BGN 601 million in the same period last year. Revenues from mobile services added up to BGN 355 million in the January-September period, up by 9%, giving the company a 28% market share by the end of September. Users of the company's fixed internet services grew by 9% to 377,000 by September, accounting for a 24% share of that market segment. Transmission services provider NURTS Bulgaria generated BGN 13.7 million of the group's total revenue and BGN 1.7 million of EBITDA. In the January-September period, the BTC group invested BGN 104 million in network upgrades and expansion of its product and services portfolio.

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Europe

Prime Minister Mariano Rajoy’s chief economic adviser said Spain is doing better than Germany when it comes to boosting exports within the strictures of the euro. Spain’s inflation rate has been lower than Germany’s for the past two years leading to a steady increase in competitiveness, Alvaro Nadal said at an event in Madrid Tuesday. As a result, Spain has seen a “spectacular” increase in the range of services it sells abroad and its total exports are now second only to Germany as a percentage of the economy, Nadal said. “It’s necessary to keep playing by the German rules,” Nadal said. “And we are doing better than the Germans at the German game.” Three years after seeking a bank bailout from the rest of the euro area, Spain’s economy is growing at close to the fastest pace since 2007 as Rajoy prepares to fight a general election in December. The prime minister is trying to persuade voters that he’s the only leader who can guarantee the economic recovery. But he’s struggling to convert his economic success into political capital, with unemployment at 21.8 percent, double the European Union average and more than three times the German rate.

America

The Environmental Protection Agency leveled fresh emissions-rigging charges against Volkswagen AG, but the German auto maker disputed the claims, revealing a growing rift between U.S. regulators and the embattled company. The EPA said its recent tests found Volkswagen installed devices aimed at manipulating U.S. pollution tests in some Volkswagen, Audi and Porsche diesel-powered vehicles. The regulator said the vehicles had increased nitrogen-oxide emissions up to nine times the allowable standard. “VW has once again failed its obligation to comply with the law that protects clean air for all Americans,” said Cynthia Giles, the EPA’s associate administrator of enforcement and compliance assurance, in a conference call. A Volkswagen spokesman disputed the EPA’s findings, saying the auto maker didn’t install emissions-test evading software on any of the newly identified vehicles. “It is a permissible software,” he said. An EPA spokeswoman said the agency wants “to make sure all companies play by the same rules, and…ensure a level playing field for responsible businesses.”

Asia

Vertu, the UK-based maker of handcrafted luxury smartphones has been sold by Swedish private equity group EQT to Chinese investors, in the latest sign of the popularity of upmarket brands in Asia. Vertu said that Godin Holdings, a Hong Kong-based fund, had acquired the business alongside “international private investors”. Massimiliano Pogliani, chief executive of Vertu, has also stepped down after three years. He said it was “an appropriate time to pass on the baton of leadership to a new team”. Vertu and EQT did not disclose the terms of the deal. EQT bought Vertu from Nokia for more than €200m in 2012 when the Finnish group was struggling to revive its once dominant smartphone business. Nokia, which founded the company in 1998 as an attempt to create a niche in luxury handsets, retains a small stake in the company. The group shipped its first phone in 2002. By 2015, Vertu had sold about 450,000 devices worldwide, with an average selling price of about £5,000 last year.

The village of Katina

The village of Katina is in the Sofia region, 16 km south-east from Sofia. According to the legend the village is named after the courageous girl Katina, who brought along her fellow-villagers here in the 1st century. For the first time the name of the village was mentioned in the middle of the 15th century, when the Ottomans prepared the tax registers of the town of Sredets and the surrounding villages. The lack of researches led to obscurities about the historical development of the village for long periods of time. The information for the Katina’s history is collected from the local legends and the existing written records. Some of them are the stone crosses around the village. Their inscriptions are typical of the Bulgarian writing in the 17th and the 18th century. It is supposed that they are made as an expression of respect for the ancestors of the old Katina families. The most famous sightseeing are the Pyramids of Katina. These rock formations were formed as a result of the erosion. The most interesting are the pyramids in the valley of Golemia Dol (The Big Glen), which in the past reached more than 30 metres in height. In the last years the natural forestation leads to decreasing of the sizes as well as the number of the pyramids.

On that day:  Kabile national archeological reserve Evgenia Radanova