Belgian-based KBC Group (KBC) said on November 15 that it reached an agreement with Austria’s Raiffeisen Bank International (RBI) to acquire 100 per cent of the shares in Raiffeisenbank Bulgaria for 1.015 billion euro.
The deal also includes Raiffeisenbank Bulgaria’s leasing, asset management, insurance brokerage and service subsidiaries, KBC said in a statement.
KBC said that the price, to be paid in cash, reflected “the quality of the Raiffeisen franchise and the synergies potential.” The deal was subject to regulatory approval and was expected to close by mid-2022.
The Belgian group is already present on the Bulgarian market through United Bulgarian Bank (UBB), the country’s third largest lender, and insurer DZI, the largest in that sector, as well as leasing, pension insurance, asset management, factoring and insurance brokerage divisions.
The acquisition would allow KBC to close the gap to the two largest banks on the Bulgarian market, with the entity resulting from the merger of UBB and Raiffeisenbank Bulgaria expected to have 18.2 per cent market share by assets and 17 per cent market share by loans.
According to Bulgarian National Bank data, UniCredit Bulbank was the country’s largest lender by assets with 25.02 billion leva as of September 30, followed closely by Banka DSK, the subsidiary of Hungary’s OTP Bank, with 24.03 billion leva.
UBB was third with 14.15 billion leva and Raiffeisenbank Bulgaria was sixth with 10.52 billion leva.
With the sale, Raiffeisen exits the Bulgarian market, where it has operated since 1994. In a statement, RBI said that its decision was made “despite the sustained profitability and strength” of Bulgarian operations and was “primarily based on the possibility of using the additional capital in selected RBI markets to take advantage of attractive growth opportunities and gain in size.”
For KBC, which defines Bulgaria as one of its core markets, this is the third major acquisition in the country. It entered the market in 2007, when it bought local lender EIBank and insurer DZI, followed by a deal with National Bank of Greece in 2017 to buy UBB and leasing firm Interlease.
Earlier this year, the Belgian group also announced an agreement to acquire the Bulgarian pension insurance and life insurance businesses of Netherlands-based NN Group for an undisclosed amount.
(UBB logo from kbc.be)
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