Research on financial wealth and financial liabilities of the households in the New Europe counties, provided by UniCredit and Pioneer Investments

Bulbank, UniCredit Group and Pioneer Investments presented today to the financial community the results of the long lasting study of the financial wealth in New Europe towards EU. The research departments of seven New Europe Division banks made the effort to compare financial wealth of households in EU-15, New Europe countries and Bulgaria, outlining future development trends.

The capability of savings in Bulgaria is slow process in an environment where the most of the accumulated assets are used to finance the industrial growth of the respective country, the Research outlines.

As of end of 2003 total financial assets of individuals in Bulgaria account for 34% of GDP. They have been steadily increasing since the financial crisis in 1996-1997. Currently, gradual recovery of wealth accumulation is under way, with the pre-crisis level of households financial assets is expected to be reached around 2007.

Looking forward, bank deposits are likely to remain the preferred retail savings form, due to slow evolution of the households? assets selection behaviour and the limited role of local capital market in intermediating savings and investments. The trend of diversification, including other financial assets like mutual funds and life insurance, is expected to accelerate. Mutual funds represent a new product and, therefore, exhibit low market penetration. Nevertheless, this type of investment long-tem potential is considerable, especially for younger generation and for customers with higher risk-propensity.

People will grow richer in the next decade. We expect the stock of household wealth in the New Europe countries to increase, the "Financial Wealth in New Europe: Towards EU" research of UniCredit New Europe Division and Pioneer Investments, reported.