UniCredit Bulbank is the first bank in Bulgaria authorized to use the Internal Rating Based (IRB) Approach under Basel II for the calculation of credit risk capital requirements. The scope of application covers exposures to Banking Institutions and Corporate clients. The authorization was granted by the Bank of Italy as UniCredit Bulbank is part of the Italy based European banking group UniCredit.

This approval, given for the first time to a bank in Bulgaria, confirms the bank’s position not only as a local market leader, but also as a best practice bank in the area of financial risk management. “It is an international acknowledgement of the Bank’s capacity to use its internal models and estimates to the calculation of capital requirements and it follows a detailed and rigorous verification of this ability by both the Bank of Italy and the Bulgarian National Bank”, said Alexander Krustev, CRO and Member of the Management Board of UniCredit Bulbank.

As opposed to the Standardised Approach, currently applied across banks in Bulgaria, the IRB Approach relies on high efficiency of the entire credit risk management process. “To achieve this, the Bank devoted considerable time and financial resources to developing, adapting and implementing rules and methodologies, upgrading its rating and IT systems, and setting the stage for an improved senior management oversight and control.”, added Alexander Krustev.