December 23, 2019 / 10:14 AM / a month ago

Bulgaria's Fibank shares close almost 20% higher on capital plan

SOFIA (Reuters) - Shares in Bulgaria’s First Investment Bank (Fibank) 5F4.BB rose by almost a fifth on Monday after it announced it would raise 200 million levs ($113.39 million) to help cover a capital shortfall found by the European Central Bank.

The stock closed at 3.48 levs, up 18.4% from an opening level of 2.94 levs.

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

Ahead of that, an ECB assessment of six of the country’s banks found a capital shortfall at Fibank, Bulgaria’s fourth-largest bank, of 262.9 million euros ($291.37 million).

The ECB also found a capital shortfall of 51.8 million euros at a smaller bank, Investbank.

Fibank said on Sunday it planned to offer 40 million new shares at 5 levs per share, adding it would consider the issue a success if as few as 4 million shares were sold at the offer price.

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.

Reporting by Angel Krasimirov; Editing by Kirsten Donovan

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