SeenewsSeenews
Search
Seenews
AlertsSeenewsSeenews
Searchclose
TOPICS
arrow
COUNTRIES
arrow
INDUSTRY
arrow
Economy
arrow
Browse Economy
Mix and match your focus countries with our advanced search
Investments
arrow
Browse Investments
Mix and match your focus countries with our advanced search
Latest in Investments
Deals
arrow
Browse Deals
Mix and match your focus countries with our advanced search
Tech
arrow
Browse Tech
Mix and match your focus countries with our advanced search
Green
arrow
Browse Green
Mix and match your focus countries with our advanced search
0/5
You have 5 free articles left this month
You have 0/5 free articles
Sign up to get 5 more free articles this month
SIGN UP
arrow
LOGIN
arrow

KBC doubles Q3 after-tax profit in Bulgaria after buying Raiffeisenbank's business

Nov 9, 2022, 11:29:01 AMNews by : Antonia Kokalova-Gray
share
November 9 (SeeNews) - Belgium-based financial services group KBC said on Wednesday that its third-quarter attributable after-tax profit in Bulgaria jumped to 61 million euro ($61.4 million) from 33 million euro a year earlier, of which about a quarter was accounted for by the now-consolidated Bulgarian business of Austria's Raiffeisenbank.

KBC doubles Q3 after-tax profit in Bulgaria after buying Raiffeisenbank's business
Image source: DZI Insurance.

KBC's total income from operations in Bulgaria increased to 131 million euro in the July-September period from 68 million euro in the comparable period of 2021, the group said in an interim financial statement.

"In early July, we finalised the acquisition of Raiffeisenbank Bulgaria. This entity and our existing Bulgarian subsidiary United Bulgarian Bank (UBB) will merge their operations, allowing us to significantly expand our share of our Bulgarian core market to an estimated 19% in terms of assets," group CEO Johan Thijs said. The two banks will legally merge in 2023.

Post-consolidation, the Belgian group's net interest income in Bulgaria more than doubled to 74 million euro in the third quarter from 36 million euro in the same quarter of last year, while net fee and commission income nearly tripled quarter-on-quarter to 32 million euro.

Meanwhile, KBC Group's earned premiums from Bulgarian life insurance operations went up 11% year-on-year to 10 million euro, whereas earned premiums rose about 9% to 37 million euro in the third quarter. Last year, the Belgian group acquired Netherlands-based NN Group's Bulgarian pension and life insurance business, which it merged with its DZI Insurance unit.

Operating expenses in Bulgaria widened to 61 million euro in July-September from 33 million euro in the third quarter of 2021. There was a 3 million euro impairment charge, against an impairment release of 1 million euro in the same quarter last year.

Raiffeisenbank Bulgaria accounted for half of the 3% increase in the consolidated net fee and commission income of the group to some 1.4 billion euro in the first nine months of 2022, according to the statement.

In the January-September period, KCB Group's Bulgarian business booked an after-tax profit increase to 107 million euro from 85 million euro a year earlier, on the back of a 41% annual rise in total income to 277 million euro.

Looking ahead, KBC Group said that it estimated potential bad loan risks at 16 million euro as a result of an analysis of Raiffeisenbank Bulgaria's portfolio for geopolitical and emerging risks. These expected credit losses (ECLs) comprise a potential 10 million euro impairment for emerging risks and 6 million euro charge for direct transfer risk exposure.

KBC Group purchased all operations of Austria's Raiffeisen Bank International in Bulgaria for 1.009 billion euro in cash, creating the country's largest lender, with some 2.5 million customers and combined assets of some 28.6 billion levs ($14.7 billion/14.6 billion euro) according to latest central bank data.

The deal, agreed in November 2021, includes Raiffeisen Leasing Bulgaria, Raiffeisen Asset Management Bulgaria, Raiffeisen Insurance Broker, which serves easing and corporate clients, and Raiffeisen Service.

The acquisition has led to a 0.9 percentage point (pp) decrease in the group's Common Equity Tier 1 (CET1) ratio to 15% in the third quarter of 2022, KBC Group said.

($ = 0.993837 euro)

(1 euro = 1.95583 levs)

Your complete guide to the emerging economies of Southeast Europe. From latest news to bespoke research – the big picture at the tip of your fingers.