Bulgarian National Bank Places KTB Subsidiary under Conservatorship

Business | June 22, 2014, Sunday // 17:02
Bulgaria: Bulgarian National Bank Places KTB Subsidiary under Conservatorship The Bulgarian National Bank HQ in Sofia, photo by bnr.bg

The Bulgarian National Bank (BNB) has placed under conservatorship Credit Agricole Bulgaria, a subsidiary of the Corporate Commercial Bank (KTB), for 3 months.

BNB has appointed two supervisors, Stanislav Georgiev Lyutov and Elena Zdravkova Kostadinchev, and the members of the supervisory board and management board have been removed, according to a media statement.

The bank is to be refinanced from the Bulgarian Development Bank and the Bulgarian Deposit Insurance Fund (BDIF).

Its offices, as well as those of KTB, are to open on July 21. According to BNB, the decision for the step was based on a detailed analysis of the situation.

The liquidity shortage at KTB and its subsidiary are isolated phenomena in the banking system, the media statement says. In order to preserve the financial stability of the country, BNB will task the conservators with providing a detailed analysis and evaluation of the assets and liabilities of the banking group by an independent external auditing authority in 10 days.

Shareholders’ equity is to be written off and shareholders are to be divested of their rights following the statutory procedures. The capital of the entire banking group is to be increased with state resources from the Bulgarian Development Bank and the BDIF.

“The government and BNB will provide the necessary liquidity support to the banking group in order to meet all of its its obligations to its customers,” the statement says.

KTB and its subsidiary are to open offices on July 21 at 9 am.

BNB placed Corporate Commercial Bank AD (KTB) under conservatorship and appointed conservators at the bank on June 20, following a written notice from the management of the bank that its liquidity had been depleted and the bank had suspended making payments and conducting all types of banking transactions.

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Tags: Bulgarian National Bank, Credit Agricole Bulgaria, Corporate Commercial Bank, liquidity, banking system, Bulgarian Development Bank, Bulgarian Deposit Insurance Fund
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