Press Release :: KBC Group
KBC has reached an agreement with SociĂ©tĂ© GĂ©nĂ©rale Srbija and Telenor Serbia on the acquisition of KBC Banka, KBC's banking entity in Serbia. Under the agreement, Telenor will purchase 100% of KBC Banka's shares, while SociĂ©tĂ© GĂ©nĂ©rale Srbija will acquire KBC Banka's key assets and deposits.
All the parties involved agreed not to disclose any financial details of the transaction. For KBC, however, the transaction will have an impact on earnings of an estimated -47 million euros (-17m euros of which recorded in 1Q 2013), largely offset by another capital release of an estimated 42 million euros, resulting in a negligible total capital release. The agreement marks KBC's exit from the Serbian banking market.
Strategic rationale behind the agreement
KBC's decision to sell KBC Banka was part of the Group's strategic refocus that was agreed with the European Commission in November 2009. Since then, KBC has been refocusing on retail customers, small and medium-sized enterprises and mid-caps in its core markets of Belgium and Central and Eastern Europe, while reducing risk-weighted assets. The divestment of KBC Banka fits in with this updated strategy.
The acquisition of KBC Banka's key portfolio illustrates the strategic ambitions of SociĂ©tĂ© GĂ©nĂ©rale Srbija to further expand its businesses, to offer new products and services to customers in Serbia and to support the country's economic growth.
For Telenor the acquisition of KBC Banka is a crucial step in the process of bringing advanced mobile financial services to customers in Serbia. This investment will contribute to support economic growth in Serbia.
KBC Banka customers and other relevant stakeholders will soon receive further details of the transaction and the necessary assistance to transfer their assets. During a transition period of a few months, KBC Banka â€“ with the backing of KBC â€“ will continue to provide a full range of services to its customers and serve their financial needs. KBC Banka customers will be able to use all their usual products and enjoy the same level of professional service as before. All parties included in the transaction have committed to mitigate the effects of KBC's withdrawal from the Serbian market. KBC will ensure that during the transition process, the necessary staff levels are maintained to provide service and support to KBC Bankaâ€™s customers. Respecting social dialogue, KBC will establish a redundancy plan for any employees directly impacted.
Johan Thijs, CEO of KBC Group NV commented on the deal as follows: "I am pleased to announce another step in implementing KBCâ€™s updated and refocused strategy that was agreed with the European Commission in 2009 and is now almost fully realised. The divestment of KBC Banka further strengthens our focus on our core bancassurance markets while reducing our risk profile. Today's announcement marks KBC's exit from the Serbian market and the end of period of uncertainty for KBC Banka. I would like to thank KBC Bankaâ€™s management and staff for their commitment and efforts over the past years and wish them every success in the future."
Source: KBC Group
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