The Commission for Protection of Competition adopted a sectoral analysis of the competitive environment on the market of banking services provided by the banks - members of the Association of Banks in Bulgaria

With Decision № 1351/12.12.2019 The Commission for Protection of Competition (The Commission, the CPC) adopted a sectoral analysis of the competitive environment on the market of banking services provided by the banks - members of the Association of Banks in Bulgaria (ABB).

The market study presents an overall picture of the retail banking market in terms of competitiveness, transparency and contractual terms offered by banks in the provision of services, barriers to entry into the retail banking market, the effect of tying / bundling on customer mobility, the commercial policy of the banks regarding the formation of fees and commissions.

The subject of the study is the retail banking sector in the country and in particular two market segments: 1) bank accounts services (current, deposit and savings); 2) household loan services (consumer, residential and mortgage) from 2016 until the first half of 2019.

Economic and market information was collected and processed for the relevant period, characterizing the structure of the relevant market segments, as well as the evolving market processes and the up to date consolidation that determines the state of the competitive market environment.

As a result of the analysis the Commission concluded that the banking sector was highly fragmented and retains its business model, mainly represented by foreign institutions. There is a trend towards a decrease in the number of banks active on the retail banking market, as a result of the consolidation processes that took place in recent years.

The CPC reached conclusions about the current regulatory framework, the contractual terms of the credit products offered by the banks, incl. bank cards and bank accounts for individuals, barriers to entry, consumer choice and mobility, bundle sales, banks' revenues, especially in terms of interest income, fees and commissions, etc.

In light of the observed trends and developments in the retail banking sector in the country, the CPC considered it appropriate to extend the following recommendations to the Bulgarian National Bank concerning the improvement of the competitive environment:

1) To create a "Single Consumer Credit Comparison Portal" and possibly maintain it on the its website;

2) To promote the opportunity to open a current account for basic operations (created as a part of the initiative introduced by the BNB on October 31, 2018 to compare fees for services related to current accounts)

3) To introduce a unified statistics on the dynamics and condition of the card market in the country.

The CPC has timely informed the BNB for the results of the sector inquiry, in accordance with its competence to undertake appropriate regulatory and organizational measures to improve the competitive environment on the market of banking services provided by the banks - members of the ABB.

The full text of the decisions is available in Bulgarian on the public electronic register of the CPC at http://reg.cpc.bg/.