ATHENS: Belgian bank KBC Group on Friday said it was buying United Bulgarian Bank and Interlease in a move that will create the largest bank-insurance group in Bulgaria.
KBC said they were buying the companies for EUR610 million ($637.7 million) from the National Bank of Greece, the Greek parent company of United Bulgarian Bank, or UBB. KBC said they expect the deal to close during the second quarter of 2017 at the latest. KBC has been present in Bulgaria’s banking sector since 2007 through its subsidiary CIBANK. It also has a presence in the Bulgarian insurance market through its DZI Insurance company.
After the acquisition, which still needs the approval of Bulgarian, Belgian and other European regulators, KBC’s current and new units will make it Bulgaria’s largest bank-insurance group. The Belgian firm said it will use available funds and other internal sources to pay for the acquisition in cash.
KBC said that before the acquisition is completed, UBB intends to make a EUR183 million extraordinary dividend payment to the National Bank of Greece. The bank also said the purchase will have a very limited impact on KBC’s capital position, keeping the bank well above the minimum capital standards.
UBB is Bulgaria’s fourth largest bank in terms of assets, with an 8% market share. Interlease is the third-largest provider of leasing services in Bulgaria, with a 13% market share.
