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SOFIA, March 22 (Reuters) - Bulgaria appointed a new banking supervisor on Friday, as it prepares to join Europe’s banking union and eventually adopt the European Union’s single currency.
Radoslav Milenkov, 46, will take over one of the four top jobs at the Bulgarian central bank, overseeing banks, for a six-year term.
Bulgaria expects to join both the EU’s banking union and the ERM-2 mechanism, the two-year precursor to adopting the euro, this summer.
Its low debt and sound public finances meet the criteria for joining the euro. But it is also the European Union’s poorest member state and one of its most corrupt.
Milenkov has a degree in finance and has been on the management boards of several locally owned banks. Since November 2014 he has been in charge of Bulgaria’s deposit insurance fund.
Bulgaria’s banks, about 70 percent of which are owned by EU banks, are generally well-capitalised, with a CET 1 capital ratio of 19 percent at the end of 2018, central bank data showed.
The Bulgarian central bank has worked to strengthen its supervision over lenders following the collapse of the country’s fourth largest bank in 2014. Milenkov has said he would work to build on that rather than seek sweeping changes.
In a recent report, the European Commission said the health of Bulgaria’s banks had improved but that Sofia needed to strengthen banking supervision, deal with valuation issues and enhance its resolution framework.
Banks have worked to clear their balance sheets, and the total ratio of non-performing loans has dropped to 7.6 percent in 2018 compared with 10.2 percent in 2017. More work remains to bring them in line with EU averages. (Reporting by Tsvetelia Tsolova, editing by Larry King Editing by David Goodman)