First Portugal's Largest Bank Defaults, Now Bulgaria's Fourth Largest Bank to Collapse

(Reuters) - Bulgaria is to allow its fourth-biggest lender to collapse but could spend up to 2 billion levs ($1.39 billion) making sure customers do not lose out, as the Balkan country battles to clean up its worst financial scandal since the 1990s.

The central bank said it was removing Corporate Commercial Bank's (Corpbank) banking licence and would hive off its healthy activities into a separate bank, marking the first banking collapse since a 1996-1997 domestic financial crisis.
The Bulgarian National Bank (BNB) is also alerting prosecutors to the possibility that Corpbank's main shareholder stole almost 206 million levs just before the central bank took over its operations on June 20 after depositors withdrew about 1 billion levs.