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Greek Banks in Bulgaria are not Threatened by the Deposit Panic

28 June 2014 / 15:06:39  GRReporter
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Representatives of the banking sector brought reassurance about the situation of Greek bank subsidiaries in Bulgaria, stating that the withdrawal of deposits observed is not affecting foreign banks but Bulgarian ones only.
Apart from the assurance that the Bank of Greece is following the banking system development in Bulgaria and that Greek banks are not facing any problems there, another statement was made yesterday by the new head of the Greek Central Bank, Yiannis Stournaras, which is his first statement since he has assumed his new institutional role.

It was noted that the subsidiaries of the Greek National Bank, Alpha Bank, Eurobank and Piraeus Bank in Bulgaria have a share of 30% regarding the total number of banking assets in the country, with 20% of total loans and 30% of total deposits. The banking crisis that erupted in Bulgaria in recent weeks combined with the distrust of depositors towards banks has resulted in many Bulgarians withdrawing their money from entirely Bulgarian banks and deposited it into Greek bank subsidiaries.
The crisis started 8 days ago, when on 20th June the Bulgarian National Bank placed Corporate Commercial Bank (CCB) under special supervision. On the very same day, a formal request was issued by the management of the financial institution to the Central Bank asking for support due to lack of liquidity.
It was noted too that CCB is among the five largest Bulgarian banks, and it had recently acquired Credit Agricole Bulgaria (which in turn bought Emporiki Bank Bulgaria), the latter also being placed under supervision.
The majority of CCB shares are in the possession of Bromak Company associated with Tsvetan Vasilev, and part of them (around 9%) is owned by the Russian Vneshtorg Bank (VTB). Estimates of the latter were rather controversial because, although there were publications in the Bulgarian press initially according to which a Russian bank would help CCB, VTB’s representatives said that the bank was not planning to increase its stake in the share capital of CCB.
Although BNB’s head Ivan Iskrov stated that CCB is not bankrupt and its depositors would not lose their savings, many depositors withdrew their money, something  which affected yesterday First Investment Bank too.

 

Tags: Greek Banks in Bulgaria withdrawal of deposits Bank of Greece Corporate Commercial Bank First Investment Bank
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