KBC Group: KBC acquires Bulgarian operations of Raiffeisen Bank
International
Press Release
Outside trading hours - Regulated information*
Brussels, Sofia, 15 November 2021 (7.45 a.m.
CET)
KBC acquires Bulgarian operations of
Raiffeisen Bank International
This morning, Belgium-based KBC Bank
(‘KBC’) and Austria-based
Raiffeisen Bank International (‘RBI’) reached an agreement for KBC
to acquire 100% of the shares of Raiffeisenbank (Bulgaria) EAD,
comprising RBI’s Bulgarian banking operations.
The transaction also includes
Raiffeisenbank Bulgaria’s fully-owned subsidiaries Raiffeisen
Leasing Bulgaria, Raiffeisen Asset Management (Bulgaria),
Raiffeisen Insurance Broker (serving Raiffeisenbank Bulgaria’s
leasing and corporate clients) and Raiffeisen Service.
The
deal, involving
a total consideration of
1 015 million
euros paid in cash,
reflects the quality of the
Raiffeisen franchise and the synergies
potential.
The transaction will be EPS accretive
from year one onwards, whereby the purchase price represents a
1.64x multiple of the 2022E Tangible Book Value of the target and a
13 x P/E (based on 2022E Earnings). Leveraging on the combined
entity and KBC’s expertise, benefits from synergies are expected to
quickly ramp up from ~12m EUR in 2022 to ~29m EUR in 2024 and
remaining above ~25m EUR from 2025-2031 (pre-tax
numbers).
The transaction will have a capital
impact of around -1pp on KBC Group’s CET1 (3Q21: 16.4% fully
loaded, Danish Compromise) upon closing.
Completion of the transaction is subject
to regulatory approval and is expected by mid-2022.
Raiffeisenbank (Bulgaria), an
established and trusted nationwide universal banking franchise in
Bulgaria with a proven track record
Raiffeisenbank (Bulgaria) has developed its
banking business since entering the market in 1994. It is a leading
universal bank in Bulgaria, offering a full range of banking, asset
management, leasing and insurance brokerage services to retail, SME
and corporate customers.
It ranks 6th in the market with a market share
of 7.9% in assets and 8.4% in loans. Raiffeisenbank (Bulgaria)
operates a network of 122 bank branches across the country,
complemented with an agent network of mobile banking consultants,
external partners and credit intermediaries. Raiffeisenbank
(Bulgaria) employs 2,500 staff servicing 635,000 customers.
At the end of 1H2021, the entity had a 3.3 bn
EUR loan portfolio (o/w 36% corporate and 64% retail incl.
SME/micro), 4.2 bn EUR deposits and 5.2bn EUR assets and boasted
net profit of 27m EUR. Its CET1 ratio at 1H2021 amounted to
16.4%.
Raiffeisenbank (Bulgaria) enjoys strong customer
satisfaction/NPS across all segments and is focused on innovation
and digital banking.
The transaction also includes Raiffeisen Leasing
Bulgaria, the number 4 leasing company in Bulgaria (10.5% market
share), Raiffeisen Asset Management (Bulgaria), the number 3 asset
management company in Bulgaria (9.7% market share and 106m EUR
AUM), Raiffeisen Insurance Broker (distributes products from 12
insurance companies; 1% market share) and Raiffeisen Service. These
four companies are 100% owned by RBI Bulgaria.
Raiffeisenbank’s risk appetite / profile and
compliance governance is similar to KBC Group’s.
KBC Group has been present in the Bulgarian
financial sector since 2007. In 2009, KBC Group defined Bulgaria as
one of its core markets. Today, KBC Group is present in Bulgaria
through United Bulgarian Bank (UBB), DZI (Insurance), UBB
Interlease, UBB Pension Insurance, UBB Asset Management, UBB
Factoring, UBB Insurance Broker and KBC Branch Bulgaria. On 30 July
2021, KBC acquired NN’s Bulgarian life insurance and pension fund
activities.
UBB is a top 3 bank in Bulgaria
in terms of assets whereas DZI retains the number
one market share position in the insurance market. UBB
Interlease has a leading position in Bulgaria. UBB
Asset Management is the local asset management entity of
the group now dominating the domestic market with over a quarter of
the total assets held by Bulgarian funds.
The Group boasts a well-developed distribution
network throughout the country, but has equally proven to be the
digital reference with numerous digital solutions launched over the
course of the past few years.
It is the intention, after regulatory approval,
to proceed with the merger of Raiffeisenbank (Bulgaria) and UBB,
which will allow KBC to strengthen its position in the Bulgarian
banking market. The proforma combined entity (Raiffeisenbank and
UBB) would reach 18.2% market share by assets (versus 10.3% for
UBB), very close to the number 1 (19.8%) and number 2 (18.4%)
players. Additionally, the combined UBB-Raiffeisenbank (Bulgaria)
would become the number 2 player in loans (17.0% proforma market
share).
Raiffeisenbank’s strategy has been very similar
to KBC’s in Bulgaria. Strategic focus points for 2022-2023 include
digital transformation and innovation, smart use of data
(insights), agility, efficiency and E2E process automation and
integration of ESG in the business model.
In addition, this acquisition will significantly
strengthen UBB’s market leadership in the asset management business
and its leading position in the provision of leasing solutions, and
will create significant cross-sales opportunities with DZI in the
insurance area.
KBC will further consolidate its position as the
number 1 integrated financial group in Bulgaria.
Pending closure of the deal and the subsequent
integration of the entities into KBC’s Bulgarian operations,
Raiffeisenbank (Bulgaria) will continue to honour its commitments
to the market while continuing to provide professional service of
the highest quality to its customers.
Johan Thijs, KBC Group CEO,
commented as follows on the deal: “I am really delighted with this
second Bulgarian acquisition in a year. We’ve established ourselves
as a strong local player, offering a full range of high-quality
banking, insurance, asset management and leasing services.
Acquiring Raiffeisenbank (Bulgaria) is another testimony to our
commitment to the Bulgarian market and support to the Bulgarian
economy. We’re extremely happy to acquire a high-quality business
with an excellent reputation and management team. Its clear focus
on innovation and digitalisation, combined with a high customer
satisfaction rating, mirrors our own Digital First strategy and
will allow us to further expand our Bulgarian business, reaffirming
our leading position in the Bulgarian financial market.”
Peter Andronov, CEO of KBC Group’s
International Markets Business Unit added: “We have always
stated our interest in opportunities to grow our business in our
core markets through bolt-on acquisitions, provided they meet our
criteria and are in line with our strategy. The acquisition of
Raiffeisenbank (Bulgaria) is fully in line with this strategy and
further strengthens our already strong position in our Bulgarian
core market. This investment allows us to deploy part of our
group’s capital into a franchise-enhancing, synergetic and value
accretive investment opportunity in a market the group knows
intimately. Ultimately we believe that all Raiffeisenbank’s and
KBC’s stakeholders will benefit from our combined strengths.”
Peter Roebben, country manager for KBC
in Bulgaria concluded: “Expanding our activities in
Bulgaria, integrating Raiffeisenbank’s high-end products while
building on the competence and dynamism of both UBB and DZI, will
help us to achieve our objectives and ensure future success. I look
forward to welcoming Raiffeisenbank’s staff and management team and
am convinced that, together, we will further consolidate our
leading position to the benefit of all our customers and other
stakeholders.”
For more information, please
contact:
Viviane Huybrecht, General Manager, Corporate
Communication/Spokesperson, KBC Group
Tel +32 2 429 85 45 - E-mail:
pressofficekbc@kbc.be
Kurt De Baenst, General Manager, Investor
Relations, KBC Group
Tel. +32 2 429 35 73 - E-mail : IR4U@kbc.be
* This news item contains information that is subject to the
transparency regulations for listed companies. |
KBC Group NV Havenlaan 2 – 1080
Brussels Viviane Huybrecht
General Manager Corporate
Communication /Spokesperson Tel. +32 2 429
85 45 |
Press Office Tel. +32 2 429 65 01 Stef
Leunens Tel. +32 2 429 29 15 Ilse De
Muyer Tel. +32 2 429 32 88 Pieter
Kussé Tel. +32 2 429 85 44 Sofie
Spiessens E-mail:
pressofficekbc@kbc.be |
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