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Bulgaria's Corpbank to close

July 11, 2014

Bulgaria's central bank has announced it will strip the country's fourth-biggest lender of its banking license. The decision came after an audit pointed to shady business deals linked to a top Corpsbank shareholder.

Pepple lining up in front of Bulgaria's Corporate Commercial Bank
Image: Reuters

Bulgarian National Bank Governor Ivan Iskrov announced Friday that Corpbank faces insolvency. Its sound assets and liabilities will be transferred to a recently acquired subsidiary, Credit Agricole Bulgaria.

The announcement came as the EU's poorest country moved to clear up the mess from the nation's worst financial scandal since the 1990s.

The central bank alerted prosecutors that Corpbank's main shareholder probably stole money from the bank just before the central bank took over Corpbank's operations.

Preceding run on bank

The scandal broke last month when Corpbank clients dashed to withdraw their savings, following media reports accusing top shareholder Tsvetan Vassilev of shady business deals.

"The results of the review of Corpbank speak, to put it mildly, about actions incompatible with the law and good banking practices," the central bank said in a statement.

Governor Iskrov said on Friday that key documents for loans worth 1.8 billion euros ($2.44 billion) had likely been destroyed, adding that most of the credits were granted to parties close to Vassilev, who he said was out of the country.

hg/nz (Reuters, AP, dpa)