FIB excluded from servicing Sofia Municipality

First Investment Bank (FIB), the fourth largest bank in Bulgaria in terms of assets and the only Bulgarian financial institution in the Top 5, has been excluded from the opportunity to become the new servicing bank of the Sofia Municipality. A working group of municipal councilors, led by Chairman Tsvetomir Petrov (PP-DB), presented the criteria for selecting the candidates who will receive official invitations.

One of the criteria is that the servicing bank must be included in the first group of banks classified by the Bulgarian National Bank's Banking Supervision Department based on their total assets. These include United Bulgarian Bank, DSK Bank, UniCredit Bulbank, Post Bank, and First Investment Bank (PIB). However, another criterion is that the selected financial institution must have a “valid banking license and a high credit rating (not lower than ”BBB-“ by Fitch/S&P/BCRA or ‘Baa3’ by Moody's),” which only PIB does not have. It has been awarded a long-term rating of only “B” by Fitch.

The Sofia Municipal Council will hold an extraordinary meeting on August 25, at which it will authorize Sofia Mayor Vassil Terziev to select a new bank to service municipal funds.

The situation arose after Municipal Bank requested that its contract with the municipality be terminated because its name was used by politicians with negative connotations.

I would like to thank my fellow municipal councilors from the PP-DB, Boyko Dimitrov and Blagovesta Kenarova, Vili Lilkov from “Blue Sofia” and Emilia Angelova from “Save Sofia,” who took an active part in this process. I call on all councilors to support the decision to ensure the stability and security of public funds and the normal functioning of Sofia," commented City Council Chairman Tsvetomir Petrov.

The other criteria used to select candidates are:

• No supervisory measures imposed and no state aid received in the last 3 years;
• At least 3 years of experience in servicing budgetary organizations and payments through SEBRA;
• Compliance with capital requirements under European and national legislation.

Translated with DeepL.