July 8 (SeeNews) - Belgian financial group KBC said that its unit KBC Bank has completed the acquisition of all operations of Austria's Raiffeisen Bank International in Bulgaria for 1.009 billion euro ($1 billion) in cash, forming the biggest lender in the country.
The deal will reduce KBC Group's Common Equity Tier 1 (CET1) ratio, a measure of financial strength, by one percentage point in the third quarter of 2022, the Belgian group said in a statement outside trading hours on Thursday.
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The acquired bank is Bulgaria's sixth largest lender, holding 7.9% of the local market in assets and 8.4% in loans.
In addition to Raiffeisenbank (Bulgaria), the transaction also gives KBC, the parent of Bulgarian lender United Bulgarian Bank (UBB), ownership of the country's fourth-largest leasing company Raiffeisen Leasing Bulgaria and the third-largest asset manager Raiffeisen Asset Management (Bulgaria) with 106 million of assets under management (AuM). Raiffeisen Insurance Broker and Raiffeisen Service will also be part of the Belgian group.
UBB and Raiffeisenbank Bulgaria will now merge their operations, increasing to 19.3% their combined market share from UBB's current 11.4%. The new entity will serve 2.5 million customers.
"‘The acquisition of Raiffeisenbank (Bulgaria) further strengthens KBC Group’s leading position as the top integrated financial group in the country. We are fully prepared to quickly and decisively proceed with the merger of Raiffeisenbank (Bulgaria) and UBB," Peter Roebben, country CEO for KBC Group in Bulgaria, said.
Earlier this week, Fitch Ratings affirmed UBB's Long-Term Issuer Default Rating (IDRs) at 'A-' with a positive outlook based on projected synergies from the merger, although the bank's Viability Rating (VR) was not upgraded on expected delays in achieving those synergies.
($ = 0.9898 euro)
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