- Title: BULGARIA-CORPBANK Bulgaria's Corpbank customers regain access to their savings.
- Date: 4th December 2014
- Summary: SOFIA, BULGARIA (DECEMBER 4, 2014) (REUTERS) STREET IN SOFIA VARIOUS OF QUEUES OF SAVERS AT CORPBANK BANK SECURITY PEOPLE QUEUING AT CORPBANK (SOUNDBITE) (Bulgarian) CORPBANK SAVER WHO DID NOT WISH TO BE NAMED, SAYING: "I have lost my confidence in Bulgarian National Bank and in the whole banking system (in Bulgaria). I do not trust them anymore." PEDESTRIANS IN STREET (SOUNDBITE) (Bulgarian) CORPBANK SAVER, ISKREN AZMANOV, SAYING: "There are cameras everywhere in all banks. They know where the money is, who has stolen it. Our Police and other institutions should have monitored the cash flow, they should know." VARIOUS OF CORPBANK SAVERS AT DIFFERENT BANKS AROUND TOWN MAN READING NEWSPAPER IN STREET BANK SECURITY OFFICER PLACING SIGN "NO PARKING" IN FRONT OF BANK VARIOUS OF ECONOMIC FORUM (SOUNDBITE) (Bulgarian) GEORGI ANGELOV, EXPERT IN ECONOMICS WITH "OPEN SOCIETY BULGARIA", SAYING: "Now with the start of the repayments to Corpbank savers today, we can see the beginning of the end of the Corpbank saga, because the reimbursements put an end to the economic side of the story. Now the judicial part should follow, where the courts should decide about where the money has gone, who is guilty and of what and the bankruptcy procedure that should be followed." ECONOMIC FORUM IN PROGRESS BULGARIAN NATIONAL BANK.
- Embargoed: 19th December 2014 12:00
- Keywords:
- Location: Bulgaria
- Country: Bulgaria
- Topics: General
- Reuters ID: LVAEP34LCHB2P80BNUP7UDNFQ01H
- Story Text: Bulgarians began withdrawing deposits at Corporate Commercial Bank on Thursday (December 4), more than five months after a run on the country's fourth-largest lender triggered a banking crisis that left authorities scrambling to restore trust.
Majority-owned by a local tycoon who was subsequently charged with embezzlement, Corpbank saw more than a fifth of deposits drain away in a week-long bank run in June, prompting the central bank to seize control and shut it down.
As the crisis unraveled, panic spread to another lender and put the spotlight on the quality of banking supervision in one of Europe's poorest countries, which has struggled to revive economic growth and stem a sharp fall in foreign investment.
Unable to get at their money for months, depositors had staged regular protests on the streets of the capital Sofia and other cities. After an audit pointed to a huge capital shortfall and major failings in the way Corpbank was run, the central bank took away its licence, a decision that forced Bulgaria's new government to raise more debt to help pay out deposits.
This time around, there was no panic in front of the branches of nine banks chosen to pay out more than 3.6 billion Bulgarian lev ($2.3 billion) in guaranteed deposits to more than 255,000 depositors -- just anger and frustration.
"I have lost my confidence in Bulgarian National Bank and in the whole banking system (in Bulgaria). I do not trust them anymore," said one saver.
"There are cameras everywhere in all banks. They know where the money is, who has stolen it. Our Police and other institutions should have monitored the cash flow, they should know," Iskren Azmanov added.
That anger could benefit foreign-owned lenders such as Unicredit Bulbank, Raiffeisen Bank and Societe Generale, which are under EU rather than purely local supervision.
Clients had rushed to withdraw money in June after media reports surfaced of murky deals at the lender, and later when news leaked that the central bank deputy governor in charge of banking supervision was being investigated.
"Now with the start of the repayments to Corpbank savers today, we can see the beginning of the end of the Corpbank saga, because the reimbursements put an end to the economic side of the story. Now the judicial part should follow, where the courts should decide about where the money has gone, who is guilty and of what and the bankruptcy procedure that should be followed," said one expert, Georgi Angelov.
Corpbank's main shareholder Tsvetan Vassilev was feuding publicly with a powerful rival at the time. Vassilev denies wrongdoing and says the bank run was a plot hatched by his competitors.
Vassilev is currently in neighbouring Serbia, waiting on a court decision on whether to extradite him to Bulgaria. He has challenged the bankruptcy proceedings against Corpbank, meaning that a final verdict on its insolvency could drag for months. - Copyright Holder: REUTERS
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