The Belgian KBC Bank and Raiffeisen Bank International have finalized the transaction, which was announced on November 15, 2021, regarding the acquisition of 100% of the shares of Raiffeisenbank (Bulgaria) EAD, which represents Raiffeisen Bank International’s banking operations in Bulgaria.
The transaction also includes 100% of Raiffeisenbank’s (Bulgaria) subsidiaries: Raiffeisen Leasing Bulgaria, Raiffeisen Asset Management (Bulgaria), Raiffeisen Insurance Broker and Raiffeisen Service, KVS explained.
The acquisition, for a total of €1.009 billion in cash, reflects the quality of Raiffeisen’s franchise and the potential to achieve synergies. The estimated effect of the transaction is 1 percentage point on KBC Group’s Common Equity Tier 1 (CET1) – for the third quarter, at full load, according to the Danish Compromise method.
Raiffeisenbank (Bulgaria) has systematically developed its banking activities since entering the market in 1994 until now. It is a leading universal bank in Bulgaria, offering the full range of banking services, as well as asset management services, leasing and brokerage insurance services to individuals, small and medium-sized enterprises and corporate clients.
The bank is in sixth place with a local market share of 7.9% in terms of assets and 8.4% in terms of loans. Raiffeisenbank (Bulgaria) has a network of 122 bank branches throughout the country, supplemented by a network of mobile banking consultants, external partners and credit intermediaries. Raiffeisenbank (Bulgaria) has 2,500 employees serving 635,000 customers.
More specifically, the transaction also includes the subsidiaries:
Raiffeisen Leasing Bulgaria, the fourth largest leasing company in Bulgaria (10.5% market share);
Raiffeisen Asset Management (Bulgaria), the third largest asset management company in Bulgaria (9.7% market share and EUR 106 million in assets under management);
Raiffeisen Insurance Broker, which serves the leasing and corporate clients of Raiffeisenbank (Bulgaria) and distributes products to 12 insurance companies (1% market share);
Raiffeisen Service.
The credit rating of UBB is the highest among banks in Bulgaria and 2 points above that of Bulgaria as a country, according to data from the Fitch rating agency, the bank reminds.
Raiffeisenbank (Bulgaria) and UBB will merge their activities, which will allow KVS to further strengthen its position on the banking market in Bulgaria. According to forecasts, a combined entity (OBB and Raiffeisenbank (Bulgaria) will achieve a 19.3% market share in terms of assets (compared to 11.4% for UBB to date), making KBC the largest bank in Bulgaria.
Peter AndronovCEO of the “International Markets” business line at KBC Group, pointed out: “With this acquisition, we once again want to emphasize our commitment to the Bulgarian market and our support for the Bulgarian economy. The clear focus on innovation and digitalization, combined with high customer satisfaction, will allow us to further expand our activities in Bulgaria and consolidate our leadership position on the Bulgarian financial market together with our employees and management team.“
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