February 21 (BTA) - The Commission for Financial Supervision (CFS) has refused to approve a prospectus by Fibank to increase its capital by an initial public offering of shares. The decision was made on Thursday. In a statement Fibank said that it will take into consideration the recommendations of the regulator and will resubmit the prospectus for approval in the shortest time.

"Fibank continues to implement its plans to raise its capital," the statement said.

Fibank is the largest bank in Bulgaria which operates with Bulgarian capital and is the second largest lender to Bulgarian businesses.

Following an asset quality review by the European Central Bank in 2019 as a result of Bulgaria's application to enter ERM II, Fibank was one of two banks with capital shortfalls. The second bank was Investbank. At the end of 2019 Fibank announced plans to raise up to 200 million leva on the Bulgarian Stock Exchange in order to meet capital requirements.

In the third quarter of 2019 Fibank reviewed its loan portfolio for compliance with the methodology of the European Central Bank and the International Financial Reporting Standards. As a result in September another 66 million leva were impaired compared with June 2019. The bank said that this reflect a more conservative approach to credit risk assessment.

By the end of September 2019 Fibank met all regulatory requirements with a total capital adequacy ratio of 18.01 per cent and a common equity tier 1 ratio of 15.07 per cent. LN/PP

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