The offices of Corporate Commercial Bank in Sofia are now a silent testimony to the unstable finances of the European Union’s biggest poorhouse.
Bulgaria’s fourth-largest bank has been closed ever since June, when a mass rush of customers tried to withdraw their cash.
The Corporate Commercial Bank collapsed after a power struggle between two of its biggest shareholders, oligarchs Tzvetan Vassilev and Deylan Peevski. Now, the bankruptcy has become an explosive political issue in Sofia, and people's anger and desperation is being expressed in conspiracy theories.
“Government institutions are deliberately ruining one of Bulgaria’s biggest banks to destabilize the country,” said one of many clients unable to access their savings.
“The empty branch offices are like the dead eyes of our financial system,” said another depositor.
Massive protests by the bank's customers who have been barred from their money since summer are now showing results. This week, the Bulgarian National Bank announced that Corporate Commercial Bank clients can withdraw up to 196,000 leva, the equivalent of €100,000 or $125,000, from one of nine other Bulgarian banks, starting next month.
According to the Bulgarian central bank, Corporate Commercial Bank had a shortfall of 3.7 billion leva ($2.4 billion).
It remains unclear what will happen to the assets of companies or municipalities that run into the millions.
According to the Bulgarian National Bank, an investigation by independent auditors showed a shortfall of 3.7 billion leva ($2.4 billion). Speculation is rife about where the money has gone.
Interpol has issued a warrant for the arrest of Mr. Vassilev, the largest shareholder, who fled from Vienna to Belgrade where he has been under house arrest for several weeks. Mr. Vassilev, a former billionaire banker and businessman, did not respond to a request from Handelsblatt for comment.
Bulgaria is demanding Mr. Vassilev's extradition but sources said this could take months and might also be costly. Unlike Bulgaria, Serbia does not belong to the European Union. Mr. Vassilev ran several businesses in Serbia and is said to have a good relationship with Aleksandar Vučić, the country's prime minister.
Many people believe the bank’s collapse followed a dispute between Mr. Vassilev and his former partner, Mr. Peevski. But media controlled by Mr. Peevski, who is also a member of parliament in Sofia, reported rumors of the problems at the bank. Insiders, meanwhile, said he paid off debts by liquidating the Corporate Commercial Bank, which had lent him hundreds of millions of euros.
The Corporate Commercial Bank was bank to many state-owned companies in Bulgaria, especially in the energy industry.
Mr. Vassilev had excellent contacts to Moscow. He attempted to become more firmly anchored in Germany but talks with government leaders there did not lead to the support he hoped for.
The Bulgarian National Bank is expected to send Corporate Commercial Bank into bankruptcy. Its banking license was withdrawn in July because the institution provided regulators with false information and did not insure loans correctly, a statement said.
The new government, under Prime Minister Boyko Borisov, is keen to move on from the most severe banking crisis since the 1990s. “The price of saving the bank would plunge the country into recession for the next five years,” said Mr. Borisov, whose party is called "Citizens for European Development of Bulgaria."
Hans-Peter Siebenhaar is Handelsblatt's Vienna correspondent. To contact the author: [email protected].