Bulgaria's Fibank plans to raise $113 mln to boost capital

First Investment Bank AD

22/12/2019 13:26

* Capital increase needed to help Bulgaria on path to euro 
    * Fibank says placed 30 mln euro bond privately
    * Sold bad loans with nominal value of more than $305 mln

    SOFIA, Dec 22 (Reuters) - Bulgaria's fourth largest lender
First Investment Bank (Fibank) 5F4.BB  plans to raise 200
million levs ($113.3 million) to help cover a capital shortfall
found by the European Central Bank as the country moves towards
adopting the euro.
    The bank needs to increase its capital buffers after a
comprehensive assessment of six Bulgarian lenders by the ECB
found a capital shortfall at Fibank of 262.9 million euros 
($291.2 million).  urn:newsml:reuters.com:*:nL8N24R5MC
    The lender plans to offer 40 million new shares at 5 levs
per share, it said in a statement on its website late on Friday,
adding it would consider the issue a success if as few as 4
million shares were sold at the offer price.
    The ECB also found a capital shortfall of 51.8 million euros
at smaller lender Investbank. 
    Finance Minister Vladislav Goranov has said boosting capital
at the two lenders will allow Bulgaria to enter the so-called
ERM-2, a "waiting room" for the euro zone, which he expects to
happen by the end of April. 
    Fibank, whose shares traded at 2.94 levs on the Sofia bourse
on Friday, said the issue price may change prior to the
offering, which would affect the number of shares sold and the
threshold at which it would be considered successful. 
     The bank will prepare a prospectus for the capital increase
 which has to be approved by the country's financial regulator.
It did not provide a timeline.
    Fibank, which has already secured 130 million euros ($144
million) in additional capital, said it had also privately
placed a 30 million euro bond and offloaded bad loans with a
nominal value of about 538 million levs ($304.8 million).
    It said its overall capital adequacy ratio stood at 17.65%
at the end of September, while its CET1 capital ratio was
14.79%, above regulatory requirements.
    Bulgarian businessmen Tseko Minev and Ivaylo Mutafchiev each
own 42.5% of the lender, which had total assets of 9.6 billion
levs at the end of September. The remaining 15% has been floated
on the Bulgarian Stock Exchange.
    Investbank has said it also plans an initial public offering
(IPO) on the Sofia bourse but has not given any details.
($1 = 1.7649 leva)
($1 = 0.9027 euros)

 (Reporting by Tsvetelia Tsolova; Editing by Kirsten Donovan)
 ((tsvetelia.tsolova@thomsonreuters.com; +359-2-93-99-731;))