Bulgaria C-bank Orders Victoria Bank to Start Servicing Depositors from Dec 12

Bulgaria's central bank on Wednesday ordered administrators of Victoria Bank to resume servicing all depositors as of 12 December.

The Bulgarian National Bank (BNB) seized control of Victoria Bank on 22 June, two days after placing Victoria's parent Corporate Commercial Bank, or KTB under special supervision following a deposits run.

In August, the BNB authorised the administrators it had appointed at Victoria to draft measures for the bank's recovery, including through sale of parts of its loan portfolio, to provide liquidity to the cash-strapped lender.

While the BNB revoked KTB's banking licence on 6 November, the BNB-appointed auditors have found that Victoria is in good financial shape.

"Based on the financial and supervisory statements submitted to the BNB by Victoria Bank by 30 September 2014 a conclusion can me made that the bank's financial indicators are within the regulatory parameters but the bank doesn't have enough liquidity to meet its payments on the day they become due," the BNB said in a statement.

Following an analysis by Ernst & Young Bulgaria of offers to acquire parts of Victoria Bank's loan portfolio submitted by seven bidders, Tokuda Bank has been selected as the best buyer of two categories of loans - 'small business credits' and 'mortgage-covered consumer credits', the BNB said.

Societe Generale Expressbank submitted the best offer in the category 'mortgage loans', while Central Cooperative Bank was the best bidder for the 'consumer loans and credit cards' portion of Victoria Bank's loan portfolio.

The BNB expects the sale of those loans to be completed in three weeks and fetch about BGN 180 M, "which will be enough to repay in full both guaranteed and non-guaranteed deposits in the total amount of BGN 160 M".

A single bid was placed for only a portion of Victoria Bank's loans extended to large and medium-sized corporate clients. Therefore, the BNB said, it is not selling that part of the bank's portfolio.

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