Depositors at troubled Corpbank protest across Bulgaria

Tue Aug 19, 2014 12:01pm EDT

Related Topics

* Angry depositors demand their money back

* No solution yet on bank closed after run on deposits

* Caused Bulgaria's biggest banking crisis since 1990s

By Angel Krasimirov

SOFIA, Aug 19 (Reuters) - Hundreds of angry depositors at Bulgaria's Corporate Commercial Bank (Corpbank) staged protests in Sofia and several other cities on Tuesday, demanding access to their accounts that have been frozen since the bank was shut down in June.

Bulgaria's fourth-largest lender was hit by a run on deposits that led to the country's biggest banking crisis since the 1990s. There is still no solution in sight on what the Balkan state - currently run by a caretaker government until elections in October - will do with the bank or to what extent its depositors and bondholders will be protected.

Protesters chanting "mafia" and "give us our money" rallied in front of the central bank's headquarters in the Bulgarian capital on Tuesday. Protests were also held in the second-largest city of Plovdiv, the Black Sea cities of Varna and Burgas and several smaller towns.

A rescue package put together by the central bank and the previous Socialist-led government was derailed by a lack of political consensus in July. Corpbank was placed under control of the central bank following the run and has remained shut pending an audit into its books, due to be completed by October.

The banking crisis has put renewed scrutiny on the investment climate in Bulgaria. Standard & Poor's rating agency downgraded Bulgaria's credit rating in June and the country has struggled to revive economic growth and foreign investment.

Bulgarian authorities had originally planned to reopen Corpbank in July.

"I paid a deposit to buy a home and signed a contract to pay the remaining sum after (the planned) opening of the bank in July," pensioner Violeta Dimitrova, 66, told national radio. "I cannot take out a loan from another bank because of my age ... And there are people who are seriously ill and they are in dire need of money."

Clients unnerved by reports of alleged shady deals involving Tsvetan Vassilev, Corpbank's main owner, withdrew more than a fifth of deposits in the week-long bank run in June. Vassilev, who was locked in a public feud with a rival at the time of the run, has repeatedly denied any wrongdoing and said the run was a plot hatched by his competitors.

Corpbank's deposits have been frozen even though Bulgarian law provides for a deposit guarantee of up to 100,000 euros ($133,510). On Friday, the central bank allowed some banking activities to resume at Corpbank so borrowers can repay loans to the lender. (1 US dollar = 0.7490 euro) (Editing by Matthias Williams and Susan Fenton)

FILED UNDER: