Bulgarian central bank to act on banks' capital positions after ECB assessment (updated)
25/07/2019 16:32
(Adds details and context)
SOFIA, July 25 (Reuters) - Bulgaria's central bank will take
action to boost banks' capital position after a health check on
six lenders by the European Central Bank (ECB), it said on
Thursday.
The Bulgarian National Bank (BNB) said its estimate from the
health checks and developments after their cut-off date showed
that all six banks met the EU's prudential requirements. It said
the assessment showed the resilience of the Bulgarian banking
sector overall.
"Follow-up actions related to further strengthening of the
capital position will be conducted in strict compliance with the
BNB mandate and the relevant regulatory framework," it said.
The ECB's asset quality review (AQR) and stress tests on the
Balkan country's three biggest lenders and three locally-owned
banks are part of Sofia's efforts to join the banking union and
the "waiting room" for euro zone membership this year.
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The ECB will publish detailed results from its comprehensive
assessment on the lenders on Friday.
It has assessed UniCredit Bulbank CRDI.MI , DSK Bank,
controlled by Hungary's OTP OTPP.BU and UBB, part of KBC Group
KBC.BR as well as three locally held banks: First Investment
Bank 5F4.BB , Central Cooperative Bank 4CF.BB and Investbank.
Under EU rules, banks are required to hold total capital
equal to 8% of their risk-weighted assets, while the CET 1
capital ratio should be at least 4.5%.
Bulgaria's central bank has also activated several capital
buffers that bring the requirements for overall capital adequacy
to 14% and the CET 1 ratio to 10.5%.
Some analysts said some of the lenders might have met the
minimum requirements but still need to raise capital to fulfil
the buffer requirements.
Others believe some of the lenders might have fallen below
the requirements during the AQR, whose reference date was the
end of 2018, but have taken steps since then to boost their
capital positions.
(Reporting by Tsvetelia Tsolova;
Editing by Kevin Liffey)
((tsvetelia.tsolova@thomsonreuters.com; +359-2-93-99-731;))