KTB To Stay Closed Beyond September 21

Business » FINANCE | August 1, 2014, Friday // 10:02
Bulgaria: KTB To Stay Closed Beyond September 21 Corporate Commercial Bank's (KTB) HQ in Sofia, photo by BGNES

Bulgaria’s troubled Corporate Commercial Bank (KTB) will not open on September 21 as initially expected, the central bank has decided.

The Bulgarian National Bank (BNB) on Thursday released the findings of the administrators of KTB, or Corpbank, who it appointed on June 20 for a period of three months following a bank run that saw depositors withdraw more than one-fifth of total deposits in a week from KTB.

Under Bulgarian law, BNB can keep a bank under special supervision for a period of up to six months.

The findings of the administrators showed that based on the unaudited financial statements, the bank’s overall capital adequacy as of end-June had been 10.54%, and the Tier 1 capital adequacy 7.86%.

The bank financial result as of June 30, 2014 was a loss of BGN 65.3 M, “which is fully accounted for by the loan portfolio impairment costs incurred during the month,” the BNB said in a statement.

The findings showed that the bank’s assets amounted to BGN 6,896 M at end-June, down by BGN 741 M from a month earlier. The deposits of individuals and companies as of end-June amounted to BGN 5,620 M, down BGN 630.7 M compared to end-May.

Based on the administrators’ findings, the BNB Board has drafted an action plan for rescuing KTB.

Under the plan, the administrators must must invite KTB’s current shareholders “to declare their interest in, and the possibility of, providing both capital and liquidity support to KTB”.

The initial three-month period of special supervision will be extended beyond September 21 with the acting Deputy Governor in charge of the Banking Supervision Department Neli Kordovska due to submit to the BNB Board a proposal on the required extension of that period.

The administrators must also sign  additional contracts with the auditing companies, which already performed the initial audit - Ernst and Young Audit, Deloitte Audit, and AFA - for a comprehensive evaluation of the KTB’s assets. The evaluation must be completed by  October 20, which means the bank will not exit the period of special supervision before November.

We need your support so Novinite.com can keep delivering news and information about Bulgaria! Thank you!

Finance » Be a reporter: Write and send your article
Tags: Corporate Commercial Bank, KTB, Bulgarian National Bank, special supervision, administrators, audit, Corpbank
Bulgaria news Novinite.com (Sofia News Agency - www.sofianewsagency.com) is unique with being a real time news provider in English that informs its readers about the latest Bulgarian news. The editorial staff also publishes a daily online newspaper "Sofia Morning News." Novinite.com (Sofia News Agency - www.sofianewsagency.com) and Sofia Morning News publish the latest economic, political and cultural news that take place in Bulgaria. Foreign media analysis on Bulgaria and World News in Brief are also part of the web site and the online newspaper. News Bulgaria