BULGARIA: KBC acquires UBB and INTERLEASE, becoming the largest bank-insurance group in the country

Belgian-based KBC Group (KBC) and the National Bank of Greece (NBG), the Greek parent company of United Bulgarian Bank (UBB), reached agreement for KBC to acquire ownership of UBB (99.9%) - the fourth-largest bank in Bulgaria in terms of assets and INTERLEASE (100%), the third-largest provider of leasing services in the country, for a total consideration of EUR 610 million.

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

The parties involved in the transaction expect the deal to close during the second quarter of 2017 at the latest.

Before closing of the Transaction, UBB intends to make a EUR 50 million dividend distribution to NBG, following approval of its Annual General Assembly, as NBG announced on its website.

The sale of UBB reaffirms NBG's management commitment to the successful implementation of the Bank's restructuring plan, as the Greek officials' declared: "After almost 15 years of successful presence in Bulgaria, NBG divests from UBB and Interlease to deliver on its commitment to the shareholders and the European Authorities. The Transaction further strengthens NBG's position in terms of capital and liquidity, allowing for the redeployment of resources to support the Greek economic recovery", said Leonidas Fragkiadakis, NBG CEO.

KBC has been present in the Bulgarian banking sector since 2007 through its subsidiary CIBANK. The combination of UBB and CIBANK will result in the creation of the third-largest banking group in Bulgaria in terms of assets, with a market share of approximately 11%.

KBC has also been present in the Bulgarian insurance sector through its subsidiary DZI Insurance, active in both life and non-life insurance.

Together, UBB-CIBANK and DZI will become the largest bank-insurance group in Bulgaria, one of KBC's core markets in the CEE Region.

Johan THIJS, KBC Group CEO, commented: "The acquisition of United Bulgarian Bank constitutes a logical and important step in KBC's expansion in Central and Eastern Europe, which started nearly two decades ago. (...) Together with DZI Insurance, UBB-CIBANK will make KBC the true reference bank-insurance group in Bulgaria, to the benefit of customers, employees and all stakeholders".

Related articles

STATISTICS: BULGARIA: A property insurer - the most profitable market player at the end of September 2016

At the end of September 2016, the Bulgarian insurance market totaled about EUR 781 million, 8% more y-o-y, statistical data published by the FSC - Financial Supervision Commission show. Life insurers ended the first three quarters with an aggregate profit of EUR 16.9 million (vs. EUR 12.3 million in 3Q2015), while the non-life insurers reported an aggregated after tax result of EUR 33.1 million (vs. EUR 29.6 million).

2017-01-12

STATISTICS: BULGARIA, 1H2016: 5.6% up y-o-y, capitalizing on the life and motor insurance lines growth

According to data published by the FSC - Financial Supervision Commission, Bulgarian insurers recorded in 1H2016 a GWP worth EUR 528.15 million, 5.6% up y-o-y. Two were the business segments with a relevant contribution to the market's growth: life insurance, which saw a record high growth in premium volume (~44%) on the Unit-Linked insurance line and the motor insurance lines, the Motor Hull and MTPL lines' contribution, in absolute terms, to the GWP growth being almost equal.

2016-10-20

Bulgarian EIG decided to open its own branch in Greece

In connection with the decision of the Greek Central Bank, which does not approve the acquisition of the life insurance company of CREDIT AGRICOLE Life by EUROINS Insurance Group (EIG), the Bulgarian insurer decided to continue to grow its business in Greece by opening its own branch in the country, as the company announced on its website.

2016-06-30

TOP EVENT