Depositors at Bulgaria's Ailing Corpbank May Get Partial Access to Funds

Bulgaria's caretaker Finance Minister Rumen Porozhanov, photo by BGNES

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...

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