site.btaCorpbank Assets Stand at Lv 6,896.2 Mln - Conservators' Report

Sofia, July 31 (BTA) - The assets of Corporate Commercial Bank (Corpbank) totalled 6,896.2 million leva as at June 30, 2014, 741.4 million leva less than the amount as at May 31, the Bulgarian National Bank (BNB) said on Thursday.

In a report on Corpbank's current condition drawn up in compliance with the Credit Institutions Act, its conservators presented the bank's unaudited financial statement as at June 30.

Corpbank, which is this country's fourth biggest lender, suspended all operations on June 21 after an SMS-triggered panic run by depositors. The central bank placed Corpbank under special supervision after it announced that it had run out of liquid assets.

The highly liquid assets are 144.3 million leva, down 671.9 million leva on May 31. The bank's securities portfolio stood at 776.9 million leva. The credit portfolio was 5,265.6 million leva. 

Citizens' deposits stood at 5,620.4 million leva as at June 30, 2014, down by 630.7 million leva compared to the end of May. The bank's financial result by the end of June was a loss of 65.3 million leva and was due top the costs on the impairment of the credit portfolio.

At the same time, the conservators note that these impairment costs have been set based on the procedures for the implementation of the Corpbank internal rules, which do not ensure full compliance with the International Financial Reporting Standards (IFRS).

According to the unaudited reports, the total capital adequacy of the bank was 10.54 per cent as at June 30, 2014.

The report on the current condition of the bank points out the conservators' actions in accordance with their law-stipulated obligations.

BNB said they have adopted the conservators' report on the current condition of the bank and have issued instructions. BNB suggests to set up a special team, which should prepare the credit records for the audit by September 15, 2014. The central bank further suggests to sign additional contracts with the audit companies, Ernst&Young Audit OOD, Deloitte Audit OOD and Afa OOD for an overall valuation of the bank's assets that should be carried out by October 20. They should propose the draft of an invitation to the shareholders for the simultaneous provision of capital and liquidity support for Corpbank.

At a Thursday meeting of the BNB Governing Board the Governor said that a letter was sent to the European Banking Authority Chairperson on July 25 with an invitation to this body to conduct an independent review of the quality, capacity, practices and procedures of the BNB Banking Supervision Department.

The acting Deputy Governor in charge of BNB's Banking Supervision Department has until September 10 to present to the Governing Board a proposal for the necessary extension of Corpbank's special supervision.