Bulgaria’s Victoria Bank reopens for business

Bulgarian lender Victoria Bank, the subsidiary of the Corporate Commercial Bank (CCB) that was put under central bank administration in June, resumed customer operations on December 12.

Unlike its parent bank, which had its licence stripped last month and faces insolvency proceedings, Victoria Bank remains fully solvent. Victoria Bank currently has 160 million leva worth of liquidity and was expecting more inflows in the coming days, the Bulgarian National Bank (BNB) said.

CCB acquired Victoria Bank, then Credit Agricole Bulgaria, in May for 92 million leva. The central bank approved the deal just weeks before CCB itself asked on June 20 to be put under BNB’s special supervision following a bank run, with Victoria Bank following its parent bank into conservatorship on June 22.

Last month, BNB authorised the piecemeal sale of Victoria Bank’s loan portfolio to raise enough funds to meet full repayment of deposits in Victoria Bank (including those higher than the 196 000 leva amount guaranteed by the state).

Until the central bank’s special supervision period ends on December 23, the lender will have some restrictions on its customer operations, including limits on how much cash the bank’s clients can withdraw on the spot, but holders of Victoria Bank cards will be able to use them again, BNB said.

In the meantime, the bank’s administrators have been mandated to meet on December 15 to make changes to the lender’s statute, changing the management structure and to appoint a new five-member board of directors. The new board will then be tasked with “implementing the necessary measures to optimise operations, with a goal of improving the prospects of attracting appropriate investor interest,” BNB said.

Radoslav Milenkov, head of Bulgaria’s state deposit guarantee fund, said on December 11 that he did not expect Victoria Bank to see the same rush of depositors withdrawing their money as was the case with its parent bank, CCB.

At CCB, which began payout of depositor claims on December 4, the banks picked by the fund to handle the payouts had processed about 60 000 claims, out of a total of 255 000, by December 11, Milenkov said. The value of the payouts was two billion leva (out of 3.6 billion leva total), he said.

Very few deposits were cashed out, which was proof that Bulgarians retained their faith in the banking sector as a while, Milenkov said. He also said that the process went on smoothly, with only a very small percentage of CCB customers required to visit CCB’s headquarters to fix errors in their account details, which prevented their claims from being processed.

(For full coverage of the CCB situation from The Sofia Globe, click here. Logo of Victoria bank from tbvictoria.bg)




The Sofia Globe staff

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