Tsvetan Vassilev, the main owner of Bulgaria's troubled Corporate Commercial Bank (Corpbank) has estimated the market value of the bank's assets at EUR 2.5bn.
The latest official information, made public two months ago by the central bank, put the book value of Corpbank's assets at BGN 6.89bn (EUR 3.5bn) and its equity at BGN 521mn as of end-June. Since then, however, the receivers working at Corpbank have provisioned a considerable amount of the lender's loans, thus reducing its assets and capital.
In the first eight months of 2014, the value of bad loans on Corpbank's balance sheet surged to BGN 493.2mn, widening the bank's Jan-Aug operating loss to BGN 412mn from BGN 258.7mn accumulated in Jan-July. Based on this data, it would take only one more month of a similarly bad financial results to completely wipe off the lender's equity, exhausting shareholders' ability to absorb any more losses.
Corpbank suffered a run on deposits in June and is now under central bank receivership. Independent auditors are currently going through the bank's balance sheet to assess the quality of its assets and should announce the results of their audit by October 20.
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