The Bulgarian National Bank (BNB) has said that it approved the merger of First Investment Bank (FIBank) with MKB Unionbank, the smaller lender that FIBank acquired last year. The merger was the natural conclusion of the acquisition and will improve the financial indicators of the lending institution, the central bank said.
FIBank agreed in August 2013 to buy 100 per cent of MKB Unionbank’s stock from Hungary’s MKB Bank, itself a subsidiary of German Bayerische Landesbank (BayernLB). The financial details of the deal were not disclosed, but in its annual report last week, the bank’s investment in Unionbank was 47 million leva (24 million euro).
FIBank is Bulgaria’s third-largest lender by assets, which will rise to 8.5 billion leva (about 4.3 billion euro) after the merger is completed, allowing the bank to close the gap to DSK Bank, FIBank said when announcing the deal.
FIBank was the only bidder for MKB Unionbank, according to reports in Bulgarian media in March 2013. Other potential investors – including Hungary’s OTP Bank, which owns Bulgaria’s second-largest lender DSK Bank – decided against making an offer.
MKB Unionbank was put for sale as part of BayernLB’s restructuring plan, approved by the European Commission in 2012, which required the German lender to sell most of its foreign subsidiaries, as well as repay the state aid received in 2008 and 2009. The group has already sold its Romanian subsidiary, MKB Romexterra Bank, to a group of investors led by PineBridge Investments, the former asset management arm of AIG.