Belgium’s KBC buys United Bulgarian Bank and Interlease for €610mn

By bne IntelliNews January 1, 2017

Belgian-based KBC Group said on December 30 that it is acquiring United Bulgarian Bank (UBB) and Bulgarian leasing services provider Interlease for a total consideration of €610mn. The National Bank of Greece (NBG) sold 99.9% of UBB and 100% of Interlease.

With total assets of €3.7bn at end-September, UBB is the fourth-biggest bank in Bulgaria, with a market share of 8%. Interlease is the third-largest provider of leasing services in the country, with a market share of 13%.

KBC will pay the acquisition price in cash using internal sources/available funds. Before the deal is closed, UBB intends to make a €183mn extraordinary dividend payment to NBG that must be authorized by the Bulgarian National Bank.

“The purchase price reflects the 183-million-euro extraordinary dividend and represents a 1.10x multiple of the 2016 expected tangible book value of UBB and Interlease and a 1.29x implied multiple of the 2016 expected tangible book value adjusted for negative net asset value adjustments amounting to €81mn which KBC identified during the due diligence process”, the press release said.

KBC is already present in Bulgaria, after acquiring commercial bank CIBANK and insurer DZI Insurance in 2007. The Belgian group said that collaboration in the field of bank-insurance between the two has grown significantly in recent years. At end-September, CIBANK had total assets of €1.5bn and was the ninth largest Bulgarian bank in terms of this indicator.

The combination of UBB and CIBANK will create the third-largest banking group in the Balkan country with a market share of approximately 11%. Furthermore, UBB-CIBANK and DZI will become the largest bank-insurance group in Bulgaria, one of KBC’s core markets, which has strong macroeconomic fundamentals and significant under penetration of financial services compared to Western European markets, KBC said. After the takeover, KBC will also become active in leasing, asset management and factoring in Bulgaria, offering its customers a full range of banking services.

The acquisition is subject to regulatory approval from the Bulgarian National Bank (BNB) and the Financial Supervision Commission of the Republic of Bulgaria (FSC), authorisation by the National Bank of Belgium (NBB), the European Central Bank (ECB) and anti-trust clearance.

Closing is expected during the second quarter of 2017 at the latest.

In December, it was reported that Hungary’s largest lender OTP Bank had also made an offer to buy UBB.

Related Articles

RBI doubles net profit y/y in Q1 as Russian business recovers

Raiffeisen Bank International (RBI), the second largest bank operating across Central and Eastern Europe by assets, reported that net profit almost doubled year-on-year to €220mn in the first ... more

World Bank forecasts a 0.4% y/y decline in Belarus's GDP for 2017

The Belarusian economy will decline by 0.4% year-on-year in 2017, followed by a modest growth of 0.7% in 2018 and 1.2% in 2019, the World Bank forecasts in its Belarus Economic Update published on ... more

EIB and Belarus sign Framework Cooperation Agreement

The European Investment Bank (EIB) and Belarus inked the Framework Agreement on Cooperation on May 15, which paves the way for the lender to invest up to €200mn in Belarusian projects, the Foreign ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss