Oman Fund Working To Rescue Bulgaria's Corpbank
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Oman Fund Working To Rescue Bulgaria’s Corpbank

Oman Fund Working To Rescue Bulgaria’s Corpbank

A plan is expected to be put together within three months.

Gulf Business

An Omani sovereign wealth fund and other shareholders in Bulgaria’s Corporate Commercial Bank are seeking to stabilise the troubled lender and hope a feasible plan will be put together within three months, a fund source told Reuters on Sunday.

Bulgarian Finance Minister Petar Chobanov spoke to the head of Oman’s State General Reserve Fund (SGRF) last week about the prospect of it helping out after a planned state bailout of the bank ran into opposition in Bulgaria’s parliament.

“The Bulgarians have agreed to work with the shareholders to provide a feasible working plan within a time frame of three months, as a substitute for the nationalisation option,” the source said, declining to be named under briefing rules.

The Omani sovereign wealth fund is potentially a key player in Bulgaria’s banking crisis because it owns 30 per cent of Corpbank, which it bought in 2009.

Corpbank was forced into the control of Bulgaria’s central bank in June after customers, unnerved by reports of shady deals by the bank’s main owner, withdrew more than a fifth of its total deposits.

A subsequent audit showed activities at the bank “incompatible with the law and good banking practices”, according to the central bank.

Corpbank’s biggest shareholder, wealthy Bulgarian businessman Tsvetan Vassiley, has denied the allegations against him.

The SGRF source said any solution to Corpbank’s problems would not necessarily mean Oman investing more money in the bank.

Instead, he said, proposals included diluting Vassiley’s stake with funds from other international investors.

Another proposal is to reinforce Corpbank’s management board with independent experts, the source said, adding that the SGRF wanted to help stabilise Corpbank because of its important role in Bulgaria’s economy.

“Oman sees Bulgaria as a friend, and we are confident that the Bulgarian government and the other shareholders will work toward getting the best out of this delicate situation, and to reopen Corpbank with a more stable situation,” he said.


Bulgarian authorities previously estimated the cost of a public rescue of Corpbank at about 1.5-2 billion levs (around $1.0-1.4 billion).

The SGRF originally paid about $129 million for its stake in Corpbank, according to a statement by the bank at the time. Although Oman is an oil exporter, the fund is not nearly as large as those of wealthier Gulf states.

The SGRF’s assets total about $13 billion, according to an estimate by the Sovereign Wealth Fund Institute, which studies the industry.

If the SGRF does not put more money into Corpbank, it is not clear which other investors might do so. Earlier in the crisis Russia’s VTB bank, which owns just under a tenth of Corpbank, declined to provide more money.

Last Friday, the European Bank for Reconstruction and Development said it was ready to help Bulgaria deal with problems in its banking sector if Sofia first came up with a clear and coordinated plan.

Corpbank’s crisis spread to another Bulgarian lender, First Investment Bank, forcing Sofia to set up a protective $2.3 billion credit line for its banks and look to Europe to help supervise its lenders.


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