Bulgaria's central bank said Friday it has put under its
administration Corporate Commercial Bank AD after a run that
drained the bank of cash to meet client demands.
Corporate Commercial Bank, also known as Corpbank or its
Bulgarian acronym KTB, is the fourth-largest lender by assets in
Bulgaria.
Corpbank suspended all client payments after it ran out of
liquidity, the Bulgarian National Bank said. The central bank,
which regulates the country's financial sector, suspended
shareholders' rights. The bank is partly owned by a unit of
Russia's VTB Bank and the sultanate of Oman.
The central bank will audit Corpbank's books before entering
talks with shareholders on fresh capital injections to shore up the
bank's finances, Bulgaria's central bank governor, Ivan Iskrov,
told a news conference.
"Let's be very clear: Corporate Commercial Bank isn't a bankrupt
bank and we are acting swiftly to avoid a bankruptcy," Mr. Iskrov
said, adding that Corpbank's problems are unlikely to have a
negative impact on the Bulgarian banking sector.
The Bulgarian central bank said that the run on the lender was
sparked by negative reports in local media, centering on alleged
tensions between local business moguls holding equity stakes in
Corpbank.
"There has been a lot of talk about the bank and some of its
shareholders, which triggered the run," Mr. Iskrov said. "It is
very important to be very careful when we talk about banks. Let's
not topple our house unnecessarily."
In a statement published on its website and dated Friday,
Corpbank said: "We have all witnessed the unprecedented campaign
against the bank, which has also involved the judicial
authorities."
Corpbank said it decided to seek the institutional support of
Bulgaria's central bank to protect the interests of its depositors
and customers.
Bulgaria, the poorest European Union member state of more than
seven million people, is in the midst of a political crisis,
augmented by lackluster economic growth and stubbornly high
unemployment.
Earlier this week, Bulgaria's President Rosen Plevneliev said
major political parties agreed to hold early parliamentary
elections sometime between late September and early October, more
than two years ahead of schedule, as a way to resolve the country's
political tensions.
VTB Capital, a unit of the majority state-owned Russian banking
group VTB Bank, is ready to provide aid for Corpbank in which the
Russian company owns a 9.07% stake, the central bank said.
The State General Reserve of the Sultanate of Oman owns 30.35%
of Corpbank through its Bulgarian Acquisition Company II S.a.r.l.,
the Persian Gulf's state investment fund. Bromak EOOD, a Bulgarian
privately-held investment company, owns 50.66% of Corpbank. Neither
Oman nor Bromak officials could be immediately reached to comment
on the situation at Corpbank.
The remaining shares of Corpbank have been traded on the
Bulgarian Stock Exchange in Sofia.
Write to Leos Rousek at leos.rousek@wsj.com
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