KBC acquires majority stake in Absolut Bank
KBC and the shareholders of Absolut Bank reached agreement for KBC to acquire at least 92.5% of Absolut Bank, one of the leading independent mortgage lenders in Russia. The deal values the bank at _761 million, 3.8 times the book value of the company.
Absolut Bank is one of the fastest growing banks in Russia and has doubled its loan book year after year for the last five years. The deal is subject to regulatory approval by the Central Bank of Russia and the Anti-Trust Commission. KBC expects the deal to be closed during the third quarter of 2007. This acquisition constitutes a logical and important step in KBC's international expansion. Having established a strong presence in a number of first- and second-wave EU-accession countries, KBC is now entering a new emerging European market.
The acquisition will not affect the group's current share buy-back programme.
Andre Bergen, KBC Group CEO, commented on the acquisition: "Over the past decade, KBC has built up a strong presence in many of the countries that joined the EU in May 2004 and January 2007. KBC's long-term strategic plans entail further expansion in the markets of emerging Europe. Russia is therefore an extension of our existing presence in neighbouring Central and Eastern Europe. Absolut Bank is a well managed, fast growing, independent bank that constitutes an ideal platform for KBC's long-term presence in this fast growing market. The bank has a good track record in risk governance. As a rule, KBC will strengthen this governance by applying its own high standards."
Nikolay Sidorov, Chairman of the Management Board of Absolut Bank, welcomes today's agreement: "The management team of Absolut Bank is extremely pleased with this development. We look forward to cooperating closely with KBC, especially given their commitment to supporting the expansion of our branch network and increasing the focus on retail banking, both in terms of finance and know-how. We are convinced that both the employees and the customers of the bank will benefit significantly from the involvement of one of the leading bancasssurance groups in Europe."
KBC's interest in Russia
Over the past decade, KBC has built up a strong presence in many of the countries that joined the EU on 1 May 2004 (Poland, Hungary, the Czech and Slovak Republics, Slovenia). More recently, KBC announced acquisitions in Bulgaria (DZI Insurance and DZI Invest), Romania (Swiss Capital, Romstal Leasing, and INK Insurance Broker) and Serbia (A Banka). These acquisitions are consistent with KBC's Central and Eastern European expansion criteria, and take advantage of the region's economic convergence and potential for further penetration of banking and insurance products.
An investment in the Russian market is an extension of KBC's existing presence in Central and Eastern Europe. KBC is confident that Russia, with a population of 142.8 million, an annual GDP growth rate that has gone from 4.7% to 7.3% since 2002, promising macroeconomic indicators and an investment-grade sovereign rating from all the major rating agencies, offers the group enormous potential.
Source: KBC Group
Date: 19.04.2007 [ID: 18]