Kbc Group N.v. · EURONEXT:KBC
Kbc — Merger or Acquisition (January 2017)
23 slides from Kbc's merger presentation, Jan 2, 2017
Slide 1: KBC Group Investor Presentation: Acquisition of United Bulgarian Bank and Interlease
KBC Group Investor Presentation Acquisition of United Bulgarian Bank and Interlease Conference call on Monday, 2 January 2017 – 10.30 AM CET Dial-in numbers +44 (0) 1452 555 556 +32 (0) 8170 0061 +1 6315 107 498 Teleconference replay will be available on +420 (0) 228 880 460 www.kbc.com until 16 Jan
Slide 2: Important information for investors
Important information for investors This presentation is provided for information purposes only. It does not constitute an offer to sell or the solicitation to buy any security issued by the KBC Group. KBC believes that this presentation is reliable, although some information is condensed and th
Slide 3: Executive Summary
Executive Summary 1• Transaction summary: KBC Bank NV has agreed to acquire 99.9% of United Bulgarian Bank (UBB) and 100.0% of Interlease from NBG for a total consideration of 610m EUR, paid in cash 2• Strong financial rationale, EPS accretive from year two onwards, whereby purchase price represents
Slide 4: Agenda
Agenda 1 Transaction overview 2 Strategic rationale 3 Financial impact 4 Summary 4
Slide 5: Transaction highlights
Transaction highlights KBC Bank NV has agreed to acquire 99.9% of United Bulgarian Bank (UBB) and 100.0% of Interlease from NBG (together the “Target”) for a total consideration of 610m EUR (the “Transaction”) Transaction The Purchase Price represents a 1.10x multiple of the 2016e Tangible Book
Slide 6: Overview of UBB
Overview of UBB 4th largest bank in Bulgaria with critical mass across retail and corporate segment Business description Key financials – UBB UBB is Bulgaria’s 4th largest banking group by total assets with a 8% market m EUR 2014 2015 9M’16 share as of 9M16 Net interest income 123 132 98 Operating
Slide 7: Overview of UBB: track record of pre-impairment profitability
Overview of UBB Track record of strong pre-impairment profitability UBB pre-provision earnings1 (m EUR) 151 158 142 120 113 92 99 99 86 80 72 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 9M'16 UBB net profit (m EUR) Return on Average 95 100 minimum regulatory 69 capital: 22%2 41 49 33 39 26 6 1
Slide 8: Overview of Interlease
Overview of Interlease 3rd largest leasing provider in Bulgaria Business description Key financials – Interlease 3rd largest leasing provider in Bulgaria with significant market shares1 across m EUR 2014 2015 9M’16 all major asset classes Net interest income 3.5 2.3 1.8 o Equipment leasing: 15.7%
Slide 9: Purchase price & closing requirements
Purchase price & closing requirements KBC Bank NV has agreed to acquire 99.9% of United Bulgarian Bank (UBB) and 100.0% of Interlease from NBG (together the “Target”) for a total cash consideration of 610m EUR (the “Purchase Price”), payable at closing Pre-closing UBB intends to make a 183m EUR
Slide 10: Agenda
Agenda 1 Transaction overview 2 Strategic rationale 3 Financial impact 4 Summary 10
Slide 11: In-market combination with sound strategic and financial rationale
In-market combination with sound strategic and financial rationale Increased presence in Bulgaria; an attractive growth 1 market which KBC knows well Becoming #1 in banking-insurance in one of 2 + our core markets and #3 in banking 3 Highly synergetic transaction with significant value creation for
Slide 12: Increased presence in an attractive, underpenetrated and fast growing market
1 Increased presence in an attractive, underpenetrated and fast growing market Becoming Top 3 player in the relatively fragmented and underpenetrated Bulgarian banking sector Banking sector assets / GDP (2015) Asset MS% of Top 5 banks (2015) 425% 377% 374% 363% 359% 262% 253% 107% 1 102% 88% 72% 124
Slide 13: Delivering on the promise of achieving market leadership in core markets
1 Delivering on the promise of achieving market leadership in core markets and increasing share of profit from International Markets to almost 20% Market shares in KBC Core Markets (2015) Increased importance of International Markets (9M 2016) Banking Life insurance Non-life insurance Pre UBB acquis
Slide 14: Undisputable strategic value to become the reference in bank-insurance in Bulgaria
1 Undisputable strategic value to become the reference in bank-insurance in Bulgaria 1 Market presence 3 Brand Value KBC had significant market presence in banking in all of its Core UBB as first and largest banking consolidation project in Bulgaria markets (>10% market share) apart from Bulgari
Slide 15: Creation of a top bank in Bulgaria by assets and loans
2 Creation of a top 3 bank in Bulgaria by assets and loans closing the gap to market leaders Bank assets (bn EUR, Sep-16)¹ Improved market shares (Sep-16 banking, Aug-16 insurance) 9,2 Top 3 Assets 3% 8% 11% #3 5,9 5,1 r 4,4 Loans 3% 9% 12% #3 r 3,7 3,4 Deposits 2% 8% 10% #4 Mid-sized banks 3,2 2,9
Slide 16: Creating a leading distribution network in the market
2 Creating a leading distribution network in the market Combined branch network The largest branch network in the country (Dec-15)¹ 1 2 287 Silsitra r Vidin 2 8 1 2 2 6 2 7 Dobrich 1 4 Rousse Razgrad 216 Pleven 1 5 3 2 Montana Vratsa 1 3 Shoumen 6 8 V.Turnovo Targovishte Varna 200 1 5 4 4 Lovech Gab
Slide 17: Significant synergy potential driving value creation in banking
3 Significant synergy potential driving value creation in banking Important efficiency gains for CIBANK and UBB Key synergy sources include: Optimisation of branch network Streamlining HQ functions Optimisation of real estate and procurement costs Merger of the alternative distribution p
Slide 18: Agenda
Agenda 1 Transaction overview 2 Strategic rationale 3 Financial impact 4 Summary 18
Slide 19: Acquisitions to have limited impact on KBC Group CET1
Acquisitions to have limited impact on KBC Group CET1 Pro-forma fully-loaded CET1 ratio at KBC Group (Danish compromise) Comments ~ (54bps) Consideration will be fully paid in cash from available funds 15,3% Limited impact of the transactions on KBC Group CET1 14,7% capital ratio (ca. 54bps) 10.
Slide 20: Overview of combined financials in Bulgaria
Overview of combined financials in Bulgaria m EUR + Total assets 1,478 3,658 5,136 Balance sheet Net loans 765 2,037 2,803 (9M’16) Deposits 798 2,869 3,667 Shareholder equity 166 685 851 Net interest income 32 98 130 Operating income¹ 46 156 202 Profit & Loss Operating expenses (27) (57) (85) (9M’16
Slide 21: Agenda
Agenda 1 Transaction overview 2 Strategic rationale 3 Financial impact 4 Summary 21
Slide 22: Key takeaways
Key takeaways Consistency with KBC Group’s strategy to become the reference in its core markets, previously Bulgaria being the only core market with banking market share <10% Improved critical mass; transformational transaction for the Bulgarian franchise by creating the 3rd largest Bulgarian ba
Slide 23: Contact information
Contact information Investor Relations Office E-mail: investor.relations@kbc.com visit www.kbc.com for the latest update 23