SMC in Extraordinary Meeting for Election of New Bank for Sofia

Sofia Municipal Council in an extraordinary meeting to choose a new bank for the capital

Sofia. On Wednesday, August 25, the Sofia Municipal Council (SMC) will convene for an extraordinary meeting to vote on a proposal that will authorize the Mayor of Sofia, Vasil Terziev, to choose a new bank to manage the municipality's finances. The decision comes in response to the termination of contracts by Municipal Bank, which until recently serviced the capital's finances. The announcement of the upcoming meeting was disseminated by the press center of the municipal council.

The need for a quick selection of a new financial partner is critical to ensuring the stability and normal functioning of the municipal structures and services. In this regard, after Municipal Bank officially terminated its relationship with the Sofia Municipality, a working group of experts was formed. This group's task was to develop clear and strict criteria for the selection of the future servicing bank.

Based on the developed criteria, which include a valid license for banking activities and a high credit rating (no lower than "BBB-" by Fitch/S&P/BCRA or "Baa3" by Moody’s), the working group initiated a negotiation procedure without prior announcement.

Among the other requirements are the absence of imposed supervisory measures and no state aid received in the last three years, a minimum of three years of experience in servicing budget organizations and making payments through the System for Electronic Budget Payments (SEBRA). Candidates are also required to be included in the first group of the distribution of banks into groups by the "Bank Supervision" Directorate of the Bulgarian National Bank (BNB) based on their total assets. In addition, the banks must be included in List A of all significant banks under the direct supervision of the European Central Bank (ECB) and comply with the capital requirements set by European and national legislation. These strict requirements aim to ensure that the selected financial institution is not only reliable and stable, but also meets the highest European standards.

As a result of the detailed analysis conducted by the working group, official invitations to participate in the procedure were sent to the four largest and most stable banks in the country that meet the BNB's criteria. These are "Bank DSK" AD, "United Bulgarian Bank" AD, "Unicredit Bulbank" AD, and "Eurobank Bulgaria" AD.

The Chairman of the Sofia Municipal Council, Tsvetomir Petrov, expressed his gratitude to the municipal councilors who actively participated in the process of preparing the new criteria. He emphasized that this process was a joint effort and a result of the work of various political groups. Petrov thanked "the fellow municipal councilors from "We Continue the Change – Democratic Bulgaria" (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." In his statement, he called on all councilors to support the decision made, as it is of key importance for "guaranteeing the stability and security of public funds and the normal functioning of Sofia."

The procedure for selecting a new servicing bank was officially announced on August 13, and the Sofia Municipality announced that they expect proposals from interested financial institutions within a ten-day period. This rapid response was prompted by the notice that Municipal Bank sent to the municipality on July 29 for the termination of the existing contract. Previously, the leadership of the Sofia Municipality had also submitted a report to the SMC for the termination of relations with the bank.

Ultimately, the choice of a new bank is essential for the financial stability of the capital. The upcoming vote of the SMC on August 25 will give Mayor Vasil Terziev the green light to finalize the procedure and ensure uninterrupted financial operations for the Sofia Municipality.