site.btaCentral Bank Refuses Preliminary Approval of Application by D Commercial Bank to Acquire 100 Per cent of Share Capital of Victoria Commercial Bank

Central Bank Refuses Preliminary Approval of Application by D Commercial Bank to Acquire 100 Per cent of Share Capital of Victoria Commercial Bank

Sofia, March 24 (BTA) - The National Bank of Bulgaria (BNB, the central bank) has refused to issue a preliminary approval required by law of an application by D Commercial Bank to acquire 100 per cent of the share capital of Victoria Commercial Bank - a subsidiary of the now-failed Corporate Commercial Bank, BNB said in a press release Friday.

The decision was made based on the procedure and criteria laid down in the Credit Institutions Act and relevant ordinances.

BNB confirmed that D Commercial Bank is financially stable and meets the regulatory and supervisory requirements.

The reasoning for the refusal of the approval is that the suggested strategy of acquisition and business development plan provide for the development of the Victoria Commercial Bank as a separate institution, and not merge it with the D Commercial Bank, which the central bank argues will create considerable risks in two main aspects: it would not ensure the financial stabilization of the Victoria Commercial Bank, nor create a sustainable business model of management, on the one hand, and on the other, would require constant capital and liquidity support from D Commercial Bank, which in the long run would undermine the latter's financial stability.