site.btaBulgarian Development Bank States It Has Operated in Line with Original Purpose Days after Caretaker Cabinet Proposes Top-Level Reshuffle
Sofia, May 31 (BTA) - In a statement published on its website
Monday, the Bulgarian Development Bank (BDB) says that since
2009, when it was transformed into the BDB, the bank has
supported 18,500 Bulgarian companies. Of these, loans or other
forms of financing of over 2.6 billion leva have been extended
to SMEs. This means that an average of 590 companies a year were
supported by the State-owned bank, the financial institution
has calculated. Another over 12,000 business were granted
guarantees on credits worth over 3 billion leva.
From 2009 until the beginning of the COVID-19 crisis, the BDB
made an annual profit to the total sum of 229 million leva after
taxes, some 30 per cent of which the bank returned back to the
budget in the form of dividend. The BDB capital was not raised
in 2009-2019 and the bank entirely self-financed its operation:
from own capital (752 million leva at March 31, 2020) and from
credit lines negotiated with foreign financial institutions.
At end-May this year, the approved loans for natural persons who
have suffered as a result of the pandemic totalled 48,865 to
the tune of 230.18 million leva. Under the programme for
business support, the BDB has confirmed 1,729 credits for over
254.5 million leva. This makes a total of 484,858,156 leva or
69.27 per cent of the financial resources provided by the State.
The capital increased by the State by 700 million leva is aimed
to undertake guarantees to the commercial banks financing
Bulgarian persons and businesses who have suffered from the
COVID-19 crisis, the bank clarifies. For this reason, the BDB
expects losses as of 2020 when the programmes were launched.
According to the International Financial Reporting Standards,
the first losses were reported in 2020, which was the reason for
the bank to come out with a loss for the first time in 12
years. The maximum amount of expected losses is equal to the
capital deposited by the State through the raise.
The BDB adds that it has been supervised since 2018 by auditing
companies Ernst and Young and Zaharinova Nexia, replaced in 2019
by Deloitte and Grant Thornton. The audit reports are part of
the annual financial statement, they are public and are
accessible on the official website of the bank.
The BDB is supervised by the Bulgarian National Bank which
exercises this capacity both through inspections in situ and by
remote. The reports from the inspections are not public, the
statement also says.
The information released by the BDB comes several days after
caretaker Economy Minister Kiril Petkov proposed to the central
bank to dismiss two members of the three-member Supervisory
Board of the Bulgarian Development Bank, Mitko Simeonov and
Velina Bourska, for refusing to meet with Petkov and discuss
hefty loans BDB has extended to several large companies.
Simeonov and Bourska informed Petkov in writing that they were
not going to meet with him and called the meeting "a circus".
Shortly after he stepped in office as caretaker Economy Minister
in early May, Petkov said he was shocked to find that eight
companies had received a total of 946 million leva in loans from
the BDB. He argued that was at odds with the BDB Act and the
Bank's Statutes. The BDB is supposed to lend to small and
medium-sized businesses./NV/BR
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