Depositors at Bulgaria's Ailing Corpbank May Get Partial Access to Funds
Caretaker Finance Minister Rumen Porozhanov has said that depositors may get partial access to their funds at Bulgaria's troubled Corporate Commercial Bank (KTB, Corpbank) in September.
In a Friday interview for the morning broadcast of bTV, Porozhanov noted that he had discussed the proposal to permit partial access by depositors to their funds at KTB with senior officials of the Bulgarian National Bank (BNB).
Depositors at KTB, which has been under special supervision (conservatorship) by BNB since late June due to a bank run, are expected to be allowed to withdraw sums of up to BGN 500 or BGN 1000.
KTB, Bulgaria's fourth-largest lender, was forced to close on June 20 after customers withdrew more than a fifth of deposits in the course of a week.
"Only BNB is familiar with the current situation at KTB as it was the body which appointed conservators at the bank and is in charge of the oversight of their activity. We are discussing with BNB the preferable scenarios for solving the case. The decisions have to be based on market solutions without the intervention of public funds," he said.
"We would like for KTB to start working and to prevent a loss of the funds of all companies which have accounts there. The fate of KTB is not decided by the government. At present, the financial situation at KTB is being evaluated, after which audits will be carried out to see if the bank has been decapitalized. The bank has certainly experienced a loss of liquidity but what we recommend is a review of the proposals of investors who can rescue the bank," Porozhanov stated.
Porozhanov also commented on the situation at First Investment Bank (FIB), the country's third-largest financial institution, which was also affected by the bank run at KTB, with depositors rushing to withdraw savings on June 27.
Porozhanov informed that FIB, which had already received liquidity support, had submitted a plan to restructure its loan portfolio over the next 18 months.
He said that the plan had been discussed with BNB representatives at the Finance Ministry, who had carried out an audit of the plan.
Porozhanov made clear that the plan was to be submitted with the Directorate-General for Competition on Friday, adding that that it would undergo a review for two months, after which the European Commission was expected to approve it.
Bulgaria's caretaker Finance Minister explained that the plan envisaged liquidity support for restructuring the bank's loan portfolio and loan policy.
Porozhanov emphasized that Bulgaria's banking system was characterized by very high liquidity.
He said that the country would probably reach a deficit of 2.5-2.7% of the GDP, within the 3% threshold, unless public support to the banking system was necessary.
He explained that the provision of public support to the banking system would push the deficit above the 3% limit, adding that no excessive deficit procedure was opened in such cases.
Porozhanov also noted that a power price hike was inevitable as the inconsistent policy of the Bulgarian State Commission for Energy and Water Regulation (DKEVR) had resulted in the accumulation of deficits which had to be compensated.
He said that the amount of the price hike was to be decided by the watchdog.
We need your support so Novinite.com can keep delivering news and information about Bulgaria! Thank you!
- » Differences Between Manual and Automated Trading
- » French Antitrust Regulator: Google to Pay USD 600 Mln over Neighboring Rights Issue
- » EC Revises Up Economic Growth Forecast for Bulgaria in 2021, Down for 2022
- » Finance Minister: Speculation about Upcoming 50% Rise in Corporate Tax "Sheer Nonsense"
- » Bulgarian Development Bank: New BGN 1.7 Billion for Small and Medium Business
- » World’s Largest Crypto Exchange Binance Banned in UK and Ontario, Canada