site.btaCommercial Bank Victoria to Reopen on December 12, Depositors Will Have Access to their Funds

Commercial Bank Victoria
to Reopen on December 12,
Depositors Will Have Access to their Funds


Sofia, November 19 (BTA) - The Governing Council of the
Bulgarian National Bank (BNB) has given the conservators of
Commercial Bank Victoria mandatory instructions to make the
necessary working arrangements so that the bank would restart
full-scale services on December 12, 2014, the central bank said
in a press release on Wednesday. Effective December 12, the
commercial bank will be able to resume the fulfilment of its
obligations to depositors, and the restrictions on carrying out
banking business will be lifted as from that date as well.

Victoria, a wholly owned subsidiary of Corporate Commercial Bank
(Corpbank), was placed by the BNB under special supervision on
June 22. Corpbank acquired 100 per cent of the voting shares of
Victoria, which was then named Credit Agricole Bulgaria EAD, on
June 12, 2014, a week before suspending all operations on June
20 after a run by depositors left it illiquid.

A review of Victoria's assets and liabilities, performed by AFA
OOD, showed that its credit portfolio is in a good condition,
including its collaterals and the required provisions.

The BNB press release says that the only way to make up the
acute deficit of liquidity of Commercial Bank Victoria is to
auction off self-contained parts of the credit portfolio. To
this end, the bank's credit portfolio was divided into five
groups by type or product. Seven banks submitted bids by the
deadline, November 14, 2014. After Ernst & Young Bulgaria EOOD
made a comparative analysis of the bids, the bids of Tokuda Bank
for "small business" and "consumer loans secured by mortgage",
of SG Expressbank for "mortgage loans" and of the Central
Cooperative Bank for "consumer loans and credit loans" were
selected as the best for Commercial Bank Victoria. These bids
cover almost 100 per cent of the book value of the respective
credit portfolios. Just one bid was submitted for the portfolio
of "large and medium-sized corporate clients", moreover not
covering all loans.

To ensure liquidity for Commercial Bank Victoria, it is
expedient to proceed with the sale of the above types of credit
portfolios excluding the portfolio of large and medium-sized
corporate clients. The sale can be finalized within three weeks
or so, the BNB press release says. The proceeds can be expected
to provide liquid assets totalling some 180 million leva,
sufficient to repay in full the liabilities for deposits
(guaranteed and non-guaranteed), which amount to 160 million
leva in aggregate. The bank's liabilities for deposits and other
creditors amounted to 285,786,000 leva by September 2014.

The BNB Governing Council has given the conservators of Victoria
mandatory instructions to go ahead with the sale of the credit
portfolios and to make the arrangements necessary to start
servicing the bank's depositors using the proceeds from the sale
of the portfolios as from December 12, 2014.

For compliance with these mandatory instructions, the BNB
extended the period of special supervision of Commercial Bank
Victoria until December 22, 2014. The bank's conservators have
until December 12, 2014 to organize the holding of a
Shareholders' General Meeting of the bank.

The liquid assets resulting from the partial sale of the credit
portfolio will be spent on a priority basis for the full
repayment of the funds owed to the bank's depositors,
irrespective of whether their deposits are guaranteed or not.
Servicing obligations to other creditors (including the parent
Corpbank) should be resumed after the end of special supervision
on December 22, 2014.

Corpbank's bankruptcy was petitioned on November 7 after the BNB
Governing Council withdrew its banking licence on November 5.
On June 20, 2014, the BNB placed the bank under special
supervision for a maximum of six months to allow a thorough
audit and possible restructuring. On September 16, the special
supervision was extended until November 20. PK/LG

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