Bulgaria’s central bank governor Ivan Iskrov has warned that the country’s banking system may see further turbulence in 2015.
Speaking at a formal dinner ahead of traditional “banker’s day’ – which Bulgaria’s banking sector marks on December 6, the feast day of St Nicholas, patron saint of bankers – Iskrov said that the banking sector did well in 2014, with the obvious exception of the Corporate Commercial Bank (CCB) and its subsidiary Victoria Bank.
CCB was Bulgaria’s fourth-largest bank by assets when it asked to be put under central bank’s special supervision in June, only weeks after acquiring Victoria Bank. After the lender was put into administration, audits found that most of its assets were impaired, prompting the central bank to strip the lender of its licence last month. (For full coverage of the CCB situation from The Sofia Globe, click here.)
“No one should have any illusions that the difficulties and challenges faced by Bulgarian banks are over. The banking sector will work in a difficult business environment in 2015 and I would not rule out new attempts of attacks against the industry, motivated by intertwining economic, political and media interests, not unlike those actions against the banking sector that we saw after CCB and Victoria Bank were put under special administration,” Iskrov said.
Iskrov, who has been under near-constant political pressure to resign as governor for his handling of the CCB crisis, also used the opportunity to throw barbs at politicians.
“This past year, we have seen statements by political leaders making negative assessments and offering dire forecasts about Bulgarian banks. The atmosphere of political uncertainty contributed to all forms of populism, including unwise legislative bills concerning both banks and the Bulgarian National Bank,” Iskrov said.
He said he was hoping that in 2015 there would be a “drastic change in the thinking and actions of politicians and media circles towards more prudence and understanding that the banking sector plays a key role in the financial stability, economic growth and material well-being of the society.”
(Bulgarian National Bank governor Ivan Iskrov. Photo: BBCC)