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First Investment Bank AD Sofia: Licensing of a Branch

As the leading bank in Bulgaria, First Investment Bank AD Sofia is pleased to provide an overview of the licensing process for foreign banks seeking to establish a branch in our country.

Licensing Requirements

To obtain a license for a branch, applicants must submit a written application accompanied by a set of required documents. These include:

  • A certified copy of the registration extract containing information about the registered address, scope of business, capital amount, management system, and persons representing the bank.
  • A certified copy of the relevant authorization for the conduct of banking activities.
  • A detailed business plan outlining the branch’s operations and financial projections.

In addition to these documents, applicants must also demonstrate a strong reputation, stable financial situation, and adequate risk management practices. The Bulgarian National Bank (BNB) will assess the applicant’s shareholders as part of its overall evaluation, considering factors such as their financial stability, reputation, and potential impact on the bank’s operations.

Regulatory Capital and Liquidity

As a leading bank in Bulgaria, First Investment Bank AD Sofia is committed to maintaining robust regulatory capital and liquidity standards. Our funding model is primarily deposit-based, with 83% of our liabilities consisting of deposits as of 2017. We also maintain liquid funds to cater for mismatches between cash inflows and outflows, and we have a system in place for monitoring interest rate risk.

  • In accordance with European Union regulations, we are required to adopt funding and liquidity plans, maintain minimum liquid assets, and adjust our asset and liability structure promptly in response to changes in market conditions.
  • We believe that these measures help ensure the stability of our operations and support economic growth in Bulgaria.

Acquisitions and Holding Requirements

The BNB requires prior approval for any person or group of persons acting in concert to acquire a qualifying holding (10% or more) in a Bulgarian bank. This applies whether the acquisition is made directly or indirectly, including through transactions on the stock exchange or other regulated markets. The regulator considers various factors when evaluating applications for approval, including the reputation and financial stability of the applicant, as well as potential risks related to money laundering or terrorist financing.

At First Investment Bank AD Sofia, we are committed to maintaining a strong and stable banking system in Bulgaria. We believe that our robust regulatory capital and liquidity standards, combined with our expertise in serving corporate and individual clients, make us an attractive partner for foreign banks seeking to establish a presence in our market.