December 23, 2019 / 9:43 AM / a month ago

Bulgaria's Fibank shares up after announcing plan for capital increase

SOFIA, Dec 23 (Reuters) - Shares in Bulgaria’s First Investment Bank’s (Fibank) gained early on Monday, a day after the bank announced it would raise 200 million levs ($113.39 million) to help cover a capital shortfall found by the European Central Bank.

The stock rose 10.88% to 3.26 levs at 0847 GMT after opening at 2.94 levs.

Bulgaria’s fourth-largest bank needs to increase its capital buffers after an ECB assessment of six banks found a capital shortfall at Fibank of 262.9 million euros ($291.37 million).

Fibank plans to offer 40 million new shares at 5 levs per share. It would consider the issue a success if as few as 4 million shares were sold at the offer price. The ECB also found a capital shortfall of 51.8 million euros at a smaller bank, Investbank.

Bulgaria, a member of the European Union, hopes to adopt the euro on Jan. 1 2023.

Fibank, which has already secured 130 million euros in additional capital, said it had also privately placed a 30 million-euro bond and offloaded bad loans with a nominal value of about 538 million levs.

It said its overall capital adequacy ratio stood at 17.65% at the end of September. Its CET1 capital ratio was 14.79%, above regulatory requirements.

Bulgarian businessmen Tseko Minev and Ivaylo Mutafchiev each own 42.5% of the lender, which had total assets of 9.6 billion levs at the end of September. The remaining 15% has been floated on the Bulgarian Stock Exchange. ($1 = 1.7639 leva) ($1 = 0.9023 euros) (Reporting by Angel Krasimirov)

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