Russia’s VTB not interested in Bulgarian bank CCB – report

Written by on June 24, 2014 in Business - Comments Off on Russia’s VTB not interested in Bulgarian bank CCB – report

Russia’s Vneshtorgbank (VTB) banking group is not interested in participating in the recapitalisation of Bulgaria’s Corporate Commercial Bank (CCB), news agency RIA Novosti has reported, quoting an unnamed source at VTB.

CCB was put under the Bulgarian National Bank’s special supervision on June 20, with all banking operations frozen and shareholder rights suspended.

“We have shares worth less than 10 million euro, and the entire amount has been hedged. We have no intention of saving the bank and participate in its recapitalisation,” RIA Novosti quoted its source as saying.

Vneshtorgbank’s investment arm, VTB Capital, held 9.1 per cent in CCB as of May 2013, according to CCB’s website – not subject to the shareholder rights suspension because its stake is less than 10 per cent – having acquired 594 000 shares in CCB from Caribbean-based Dewa International Ltd in April 2013 for 29.7 million euro.

However, CCB’s latest quarterly report, issued last month to the Bulgarian Stock Exchange, where the bank is listed, once again showed Dewa International Ltd as holding the 594 000 shares.

VTB Capital declined to make a comment on CCB, RIA Novosti said.

RIA Novosti’s report, late on June 23, came after Bulgaria’s Finance Minister Petar Chobanov said earlier in the day that CCB shareholders would be given the opportunity to recapitalise the bank before the state-owned Bulgarian Development Bank and the Bulgarian Deposit Insurance Fund step in.

Chobanov’s statement was interpreted by some media as a departure from the plan announced by BNB on June 22 to have the state step in (and potentially nationalise CCB), but the Finance Ministry later said that there was no disagreement between the BNB and the ministry regarding the “BNB’s approach to solve the situation and support the central bank’s actions to stabilise CCB.”

Some reports in Bulgaria said that the Omani government fund, which holds 30.4 per cent in the lender through Luxembourg-based Bulgarian Acquisition Company II, has already shown interest in participating in the recapitalisation of CCB.

But it remains unclear whether the bank’s majority shareholder Tsvetan Vassilev, who holds a stake of 50.7 per cent, will do the same.

CCB requested being put under BNB’s special supervision after suffering a bank run last week, sparked by allegations that Vassilev ordered the murder of Delyan Peevski, the controversial figure to whom Vassilev long has been seen as close in business relations – recent media reports, however, confirmed by Vassilev himself, suggested that the two had fallen out.

The bank also made headlines on June 18, when Bulgarian media published an anonymous letter in which the author claimed that the BNB deputy governor in charge of bank supervision Tsvetan Gounev was the target of a pre-trial investigation, allegedly for failing to exercise proper oversight of a “bank that has become the centre of attention in recent days”.

Although the letter did not name the bank, Bulgarian media interpreted the letter to be referring to CCB, based on the fact that, earlier this month, prosecutors searched and seized documents “at offices of companies in Sofia” in buildings that are home to CCB as well as TV7 and News7 channels. In separate statements, the bank and the media outlet denied being the subject of investigations.

(Bulgarian National Bank. Photo: Clive Leviev-Sawyer)

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