The transaction with SG Group is in full conformity and will generate a profit of BGN 30 million to BDB
The Bulgarian development bank and its team did not do anything wrong under the SG group transaction. This was stated by the CEO of BDB Stoyan Mavrodiev in the “Face to face” BTV show.
Stoyan Mavrodiev explained that the work under the loan has started long before the COVID outbreak and the related crisis, around 6-7 months ago. The 75 million loan was not funded with the additional BGN 700 million capital increase, granted to BDB by the State, but with the institution’s own funds.
“Many colleagues have called me for this transaction and they are puzzled and surprised that BDB is criticized, because we won the deal in competition with some big commercial banks, and it is a very good deal for BDB”, Mavrodiev noted.
He also underlined as false and untrue the thesis that the loan provided by BDB is unsecured.
“75 million are granted to a company to buy a portfolio of NPLs from two commercial banks. The transaction is secured with BGN 500 million of assets. In other words, the false thesis that this is an unsecured and risky transaction, is inadequate and untrue and attacks both the Bank and the Government.”, explained BDB’s CEO.
According to him, BGN 150 million from the provided collateral are in the form of solid tangible assets, mainly in real estate.
“In other words, the deal is secured at over 500%. With this deal, BDB will earn over BGN 3 million a year for the 10 years’ duration of the loan. This will in turn provide the State with BGN 30 million plus an annual interest of about 4%. This money will either stay in the Bank to be further on-lent or will be paid as dividend to the State treasury and will help social programs through the budget.”, said Stoyan Mavrodiev.
It is very important to know that this transaction does two other important things that are beneficial for Bulgaria – it cleans NPLs from the portfolios of two commercial banks and allows them to further lend to SMEs affected from the crisis, he added. In his words, these 75 million are paid directly to the two banks – fresh money that can be directly allocated to small and medium-sized businesses.
Stoyan Mavrodiev explained that the assets under the loan have been evaluated by independent valuators in accordance with the legal requirements.
"In fact BDB is over collateralized. We help directly over 7500 small companies and individuals. By granting this money to the intermediary, it shall not start legal proceedings against the debtors, but renegotiate through agreements how these receivables will be collected in the next 10 years”, Mavrodiev calmed the debtors.
He added that before extending the loan, the agreement has been voted by both the Management board of BDB and the Supervisory board whose Chairman is the Deputy Minister of Economy Luchezar Borisov
The executive director was unequivocal in saying: "The deal has been closed and is absolutely legal. It was approved by the Management board, and any transaction over 5 million leva is also approved by the Supervisory board. Indeed, it has passed all rounds. No one could sign a contract that is not approved at all levels”.
He strongly underlined that in the banking system the moral is quantifiable in figures, and that the results are very important.
"I have been entrusted with the task to run a profitable bank that should contribute to the State treasury. For that reason, I will quote some numbers. When our team came to BDB, the Bank’s assets were at 2.4 billion and now they are 1 billion more. The loan book was 700 million and now it is 1 billion higher – so a total of 1.7 billion extended to businesses. The funds from international financial institutions grew by 400% are have reached 3.5 billion leva. BDB has the highest capital adequacy and one of the best credit ratings. In addition, it is audited by Deloitte and to engage them as our auditor we went through a preliminary audit. It was sent for approval in the United states, from where a confirmation was issued to validate their commitment to work with us” said Stoyan Mavrodiev in addition.
BDB’s CEO is confident that this is a personal vendetta of specific circles against him.
According to him, the reaction of the Prime Minister was emotional, because he had been misled, and as a person “caring for the State”, Borissov’ s reaction was normal.
"I haven’t talked to the Prime Minister yet. I would explain to him each and every detail of the work of the Bank. His decision will not change my respect towards Boyko Borissov or GERB, but my personal appeal to him is to let me take the entire responsibility and not to destroy or let destroy with defamations, intrigues and lies the other members of the team.”, Mavrodiev strongly stated.
The full interview is available hereBack