Majority Owner Says Being Close to KTB Rescue Plan

Business » FINANCE | August 25, 2014, Monday // 11:55
Bulgaria: Majority Owner Says Being Close to KTB Rescue Plan Tsvetan Vasilev. Photo:

Corpbank’s majority owner on Monday said he was working hard to restructure the lender jointly with the State General Reserve Fund of Oman and other interested investors.

“I believe we are close to unveiling a decision in principle for the bank’s rehabilitation that will fully comply with the legal requirements for capital adequacy and liquidity,” Tsvetan Vasilev said in a statement posted on his personal website.

Vasilev also blasted what he called yet another attempt by the central bank to evade responsibility for its handling of the bank’s case in the period of special supervision.

Action and inaction by the Bulgarian National Bank (BNB) have contributed to a considerable extent to the crisis at Corporate Commercial Bank, or KTB, and for putting at risk Bulgaria’s financial stability, Vasilev said.

Referring to a BNB statement issued on Friday, in which the central bank invited Vasilev, through his company Bromak, and the second biggest shareholder, the State General Reserve Fund of Oman, to submit rescue options for KTB, Vasilev described as cynical the BNB’s claim that the majority owner had shown no initiative to support KTB and had sought no discussions with BNB on the bank’s financial state and the financial resources needed for its recovery.

Just the opposite, Vasilev said, on July 11 the BNB Governor Ivan Iskrov had clearly stated that KTB’s banking licence will be revoked due to the situation the bank was in.

The blame for siphoning the bank has been laid upon the majority owner “possibly with the aim of liquidating KTB easier and faster” and seizing its assets, Vasilev said.

“Against the backdrop of this [Iskrov’s] statement any suggestion of my participation in the bank’s re-capitalisation was ruled out,” he added.

The BNB’s often conflicting messages and actions in the period of special supervision have eroded the trust of the public “in one of the few symbols of statehood still untarnished in Bulgaria.”

Describing the BNB’s behaviour in the KTB case inadequate, Vasilev said that it creates the risk of plunging the country into an extremely grave financial crisis.

The BNB put KTB under special supervision on June 20, freezing all of its operations and ordering an audit of its books following a bank run that saw nearly one-fifth of deposits at KTB withdrawn in a week.

Since then KTB has been closed with depositors – individuals and companies alike - having no access to their accounts, which has prompted a wave of protest rallies in several Bulgarian cities.

Earlier this month the BNB unblocked part of KTB’s operations to allow the bank’s borrowers to repay loans but deposits remain frozen.

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Tags: KTB, Corpbank, Vasilev, Tsvetan Vasilev, BNB, State General Reserve Fund of Oman, SGRF
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