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SG eyes more organic growth in Bulgaria

In many ways SG Expressbank (SGEB) is a good example of SG’s ability to transform tiny local players into flourishing universal banks.

With just 26 branches to its name when SG acquired it in 1999, SGEB has grown its network to more than 150 outlets. Last year it increased its asset base by 14.3% to Lev3.47 billion ($2.25 billion).

The strength of the SG model, however, is demonstrated by the fact that this expansion has been a product of – rather than at the expense of – a highly conservative approach to risk management.

In the pre-crisis years, SGEB steered clear of fashionable sectors such as real estate and construction in favour of focusing on its traditional customer base among Bulgaria’s larger corporates.

As a result, the bank can now boast a non-performing loan ratio that at less than 5% is a good 10 percentage points lower than those of market leaders UniCredit Bulbank and DSK Bank.

It also puts the bank in a good position to pick up business from the ailing local subsidiaries of Greek parent banks.

SGEB is able to leverage its relationship with its own parent to better serve its corporate base in Bulgaria, as chief executive Philippe Lhotte explains.

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