Bulgaria's Central Bank to Reveal Results of KTB Audit This Week

Finance | July 9, 2014, Wednesday // 15:33|  views

Bulgarian National Bank's headquarters in the capital Sofia. File photo

The Bulgarian National Bank (BNB) has announced it is to present the results of an inspection at troubled Corporate Commercial Bank (KTB) by the end of this week.

KTB, Bulgaria's fourth-largest bank, fell under special supervision by BNB upon its own request in mid-June, after rumors about its failure triggered an exhaustion of liquidity.

The central bank then imposed conservatorship on both the financial organization and its subsidiary Credit Agricole Bulgaria, saying it was introducing the measure for a period of one month.

KTB is due to open on July 21, but Wednesday is the deadline for the auditors in charge (Deloitte Audit, Ernst & Young and Afa) to hand their reports to the BNB-appointed members of KTB's Supervisory Board that virtually governs the bank during the conservatorship period.

Independent firms were assigned to evaluate assets, liabilities and the loan and investment portfolio of KTB and Credit Agricole.

No concrete steps have yet been announced about the government or the central bank's next move after KTB opens and is to be recapitalized.

BNB previously sought to boost the presence of some of the minor shareholders, with Russia's VTB bank, which owns 9.9% of KTB, first showing interest and then stepping back.

The EU Commission later approved a government-issued liquidity support scheme for Bulgaria's banks which Sofia adopted after another bank, First Investment Bank (the largest domestically-owned one) was also targeted by rumors and some BGN 800 M (EUR 400 M) of customer assets were withdrawn in a matter of hours.

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Tags: Afa, Ernst & Young, Deloitte Audit, audit, special supervision, conservatorship, supervisory board, Credit Agricole Bulgaria, BNB, KTB, First Investment Bank


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