Bulgaria in talks with Omani fund for rescue of ailing bank

Sofia: Bulgarian finance ministry officials held talks on Friday with Oman's sovereign wealth fund on the chances of recapitalising the fourth-largest Bulgarian bank, CCB, which is on the brink of collapse.

Finance Minister Petar Chobanov and the head of Oman's fund Abdul Salam Al Murshidi confirmed in a phone call "their readiness to find a working solution for the bank," Chobanov's office said in a statement.

The Omani fund owns 30 per cent of the Corporate Commercial Bank (CCB), which was shut on June 20 after media reports of alleged fraud sparked a three-day run on the bank.

Depositors withdrew about 1.0 billion leva (511 million euros, $691 million) during the panic, which almost sparked a new banking crisis in the EU's poorest country.

CCB's main shareholder is the businessman Tsvetan Vasilev, who owns slightly more than half of the bank's capital and has blamed a former partner for the allegations.

The talks with Oman were the first sign that the bank might be saved.

IMF arrangement
Bulgaria is bound by an arrangement with the International Monetary Fund (IMF) that prevents the central bank from lending money to private banks. Sofia has failed meanwhile to reach a political agreement that would provide state funds for CCB to keep it from becoming the first bank to go bankrupt since a crisis in 1996-7, when 14 went under.

Central bank governor Ivan Iskrov has said that documents related to 3.5 billion leva in loans made by Corporate Commercial Bank  are missing and have "probably been destroyed".

Chobanov's statement said yesterday that "shareholders will be given a chance to provide the necessary resources — capital and liquidity — and state institutions will step in... only if the shareholders fail."


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