08.01.2015

"In the first month after the start of the payment of guaranteed deposits of depositors in the bank with revoked licence serious work was done. The Government, the Bank Deposit Insurance Fund (BDIF), together with the nine banks that service the citizens, succeeded in creating the organisation and committing the necessary funds to ensure the normal process of payments", Minister of Finance Vladislav Goranov stated in a briefing at the Ministry of Finance (MoF) after his meeting with the Chairman of the BDIF Board Radoslav Milenkov and the managers of the banks servicing the depositors in the CCB in the payment of their guaranteed deposits. He commented that during the process "it has been seen in practice that the Bulgarian banking system and the deposit insurance scheme are working and could be brought in line with the European standards in this field".

"For 20 days the BDIF has paid 90% of the guaranteed deposits which amounts to BGN 3,250 billion. 91,300 depositors have already disposed of their deposits", Radoslav Milenkov announced. He summarised that in the first day of payment BGN 1,188 billion were disposed of, this being 32% of the total sum. Only in the first three days of the campaign 55% of the sum was disposed of, while for the last three working days that percentage was already 1.8%, i.e. the pace is slowing down. Milenkov emphasized that the nine banks had coped with the logistics; the clients had maximum access to the branches and that was a clear indicator for the professional level of the Bulgarian banking system. The Chairman of the BDIF Board emphasized that "only around 2% have been withdrawn in cash and this is a proof that the Bulgarian depositors have trust in the banking system and continue to rely on it for their deposits". Radoslav Milenkov pointed out that all the money for the payment had been ensured in advance and depositors who had not yet disposed of their funds would have the right to do so up to 5 years after the starting date of the process. Milenkov announced that "the Fund's own resources have been invested in Government Securities and our ambition when ensuring liquidity before the start of the process has been to structure our operations so as to minimize the pressure over the market prices relying basically on the Government which has supported us with the BGN 2 billion loan". Radoslav Milenkov stated that at the moment the BDIF was negotiating with international financial institutions for the provision of stand-by credit lines that would be used if necessary. Negotiations are also taking place for refinancing part of the loan to the Government, the priority idea being to repay the money to the Bulgarian tax payers. In this context Minister Goranov said that "it is quite probable, to the amount of the government guarantee, the Fund to succeed shortly in ensuring such financing whereby to reduce the loan received by the State". When the Fund repays these funds to the State, they will remain in the fiscal reserve, the Finance Minister explained.

In reply to a journalist's question Minister Goranov commented that "the strange practices that the bank with revoked licence has developed are an isolated case and they cannot be attributed to the banking system. The fact that they have been allowed to happen questions the immunity of the banking system and of the State to identify and solve such cases". The Finance Minister was positive that "the lessons have been learned" and stated that in close cooperation with the National Assembly the necessary changes would be made so as to remedy the weaknesses identified in the Bank Bankruptcy Law and the Law on BNB. In respect of the commercial transactions executed at the moment the Minister commented that he relied on the Supreme Administrative Court (SAC) to pronounce on the case as soon as possible. "I have been assured that shortly, and not within the deadlines stated in advance, we will have a resolution on the appeals against the BNB decision to revoke the licence of CCB and we will enter the classical insolvency procedure, the way it is provided for the Bank Bankruptcy Law, with the appointment of trustees because they are the bodies that can control the execution of transactions which affect the bankruptcy estate and favour some creditors on the account of others. And this is something that the Law does not allow", Goranov added. The Minister reminded that the whole resource of the State was engaged, of the revenue administrations and of the Prosecutor's Office, not to allow the CCB bankruptcy estate to be harmed or the link between the credits and the assets acquired thereby to be broken. "If SAC decides that the CCB licence has been revoked wrongfully, we enter the hypothesis that the BDIF is the biggest creditor of the bank", Minister Goranov answered to a journalist's question.

The Chairman of the Board of the Association of Banks in Bulgaria Levon Hampartzoumian stated at the briefing that "in the past month we, the banks, have worked in very good technical coordination with the Government and with the BDIF. The Bulgarian banking system is a well organised industry and it has proven that it can cope with such tasks". Hampartzoumian added that "for 2015 the banks will seek to support a better economic growth and to take the positions that we have as financial intermediaries by supporting the economic and social environment we are living in".

The Minister of Finance added to the topic of the briefing information about the on-going debate on the pension reform. He expressed before the journalists his confidence that "this debate is very useful and will be closed by 31 March this year when we will have a long term and finalised package of decisions to be agreed by all political forces". This will guarantee long term decisions and it will not be necessary at the beginning of the office of every new government to raise the questions about the pension model, the contributory service, the maximum and minimum contributory income, and the pension amount. "Because the today's debate will generate decisions whose parameters will be defined and find their place in the pension system", Vladislav Goranov is positive.