Bulgaria's Fibank secures 130 mln euros to prop up capital (updated)
26/07/2019 20:09
(Adds details, background)
SOFIA, July 26 (Reuters) - Bulgaria's fourth largest lender
First Investment Bank 5F4.BB has already secured 130 million
euros ($144.6 million) to prop up its capital buffers after the
European Central Bank found a 262.9 million euro shortfall, it
said on Friday.
The ECB carried out a comprehensive assessment of six
Bulgarian banks, a preliminary step in Sofia's efforts to join
the euro zone, and found capital shortfalls at First Investment
Bank and another small bank, Investbank. urn:newsml:reuters.com:*:nL8N24R5MC
The Balkan country's top three banks - Unicredit Bulbank
CRDI.MI , DSK Bank, a unit of Hungary's OTP OTPB.BU , and UBB,
part of KBC Group KBC.BR - as well as locally held Central
Cooperative Bank 4CF.BB successfully passed the exercise.
Fibank, which has total assets of 9.5 billion levs ($5.41
billion), said in a statement it would address the outstanding
133 million euro shortfall through profits, de-risking of its
credit portfolio, and other measures.
It did not provide a timeline.
The bank's common equity tier-one capital ratio (CET1), a
key measure of financial strength, plunged to 4.5% after the
asset quality review, below the 8% threshold, from an initial
15.7%, ECB data showed.
Under the baseline scenario, its CET1 was 4.1%.
Ratings agency Moody's downgraded Fibank's long-term deposit
ratings to speculative grade B2 in June with a stable outlook,
citing the bank's high level of problem loans and significant
repossessed assets that continued to pose a risk to the bank's
capital base.
Investbank, which was found to have a capital shortfall of
51.8 million euros, said it plans to capitalise its profit and
work to diversify and restructure its assets.
In 2016, following health checks on all Bulgarian banks,
Fibank was asked to increase its capital by 206 million levs
($117.2 million). Investbank has also to bolster its capital
then.
($1 = 0.8990 euros)
($1 = 1.7575 leva)
(Reporting by Tsvetelia Tsolova; Editing by Kirsten Donovan and
Jan Harvey)
((tsvetelia.tsolova@thomsonreuters.com; +359-2-93-99-731;))