The state will acquire less than 20% of First Investment Bank capital through Bulgarian Development Bank, “The Banker” has learned from its sources.
The Minister of Economy Emil Karanikolov has publicly confirmed that the state has participated in the partial purchase of the shares rights for the capital increase of First Investment Bank.
„I will not hide the info that the state participates in part of the purchase. I do not know the proportion of it, there will be an official announcement on Friday. Then the prospectuses will be declared,“ Karanikolov told bTV.
As “The Banker” has already written, First Investment Bank sold all 110 million rights to increase its capital on Wednesday. The stock exchange information shows that the rights have been acquired by two investors.
One has acquired 2 million rights and the other – 108 million, which will give him a 26.5% stake in the bank upon successful completion of the transaction.
According to Fibank’s prospectus for the sale of shares, the emission value of each share is BGN 5, and its nominal value is BGN 1. The bank wants to place 40 million shares on the BSE, and the operation will be considered successful if at least 4 million shares are subscribed and fully paid.
In this way, the bank can increase its capital by up to BGN 200 million.
Karanikolov explained that the state’s participation is aimed at meeting the last requirement for membership in the ERM II mechanism, better known as the euro zone waiting room.
Bulgaria is expected to get the „green light“ for ERM II membership in July. Before that our country will probably send a notification to the European Commission for the acquisition of a stake in First Investment Bank.
The economy minister clarified that at an earlier stage he had withheld information about the state’s involvement so as not to „dissuade the private sector“.
„The situation is very difficult. Because of the pandemic, there are not many investors. They are observing the situation on the world markets. The deadlines are pressing us and the state had to participate. We have participated in a qualifying portfolio,“ said Emil Karanikolov.
According to the bank’s report, as of March 31, the regulatory capital reached BGN 1.365 million. The total capital adequacy ratio is 19.09%, the tier 1 capital adequacy ratio is 19.03%, the core tier 1 capital ratio is 15.4%. For the first quarter of 2020 the bank’s profit before impairments was BGN 30.9 million.
The growth in the bank’s loan portfolio in the first quarter of 2020 in the SME segment was BGN 13.8 million or 7.2% on an annual basis, and in the Retail Banking segment it was BGN 47.3 million, or 10.4% on an annual basis.