Image by Nikolai Karaneschev, via Wikimedia Commons.  Accessed 03.04.2018


As a follow-up to our analysis published on the 19th of February 2018, “Bulgarian Banking Sector: A Review of Integrity Trends”, this piece focuses on political exposure. Although approximately 90% of the banking sector is dominated by non-indigenous entities, those that remain domestic-owned are open to varying degrees of exposure to the political elite.

This political exposure has, in some instances, been responsible for the emergence of informal schemes that secure loans to politically exposed persons (PEPs), or to individuals with direct ties to the Banks’ ownership. While the regulatory agencies appear to have had their wings clipped as a result of certain government decisions made over the years, observers suggest that these questionable practices have benefited from a level of political protection. If true, this undermines the credibility of part of the country’s banking system.