June 30, 2014 / 7:26 AM / 4 years ago

Dozens of Bulgarians queue outside bank branches to withdraw savings

SOFIA, June 30 (Reuters) - Dozens of depositors waited outside branches of Bulgaria’s First Investment Bank on Monday to withdraw savings despite reassurances from the government that their money was safe after a run on the bank and one other lender.

Bulgarian authorities are investigating attempts to destabilise the banking system and say there has been a concerted phone and Internet campaign to spread rumours, creating a crisis that has thrown a spotlight on weak economic governance in the poorest European Union state.

The queues in the centre of the capital Sofia were smaller than on last Friday. At one branch about 30 people were queuing, about half the number seen at midday on Friday. Bulgaria’s No. 3 bank says it has enough capital to meet customers’ demand.

“I am here because I remember what happened nearly 20 years ago,” said a 60-year-old woman, who gave her name only as Gergana, referring to a financial crisis in 1996-7 which sparked hyperinflation and the collapse of 14 banks.

“I trust the president but I think he was misled by the bankers,” she said.

Another customer, Ivan, said he would move his savings to a foreign-owned bank.

About two thirds of Bulgaria’s lenders are now owned by international banks, in sharp contrast to the mid-1990s when there was very little foreign investment in the country.

President Rosen Plevneliev and other senior politicians have been trying to reassure Bulgarians that their savings are safe.

The run on First Investment Bank started days after the central bank took over Corporate Commercial Bank (Corpbank) and shut down its operations following a similar run. (Reporting by Angel Krasimirov; Writing by Gareth Jones; Editing by Louise Ireland)

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