Awards for Excellence 2017
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The €610 million sale of United Bulgaria Bank (UBB) says much about the work National Bank of Greece has done to re-orientate its business model over the last year. These are praiseworthy, if somewhat belated, actions by the Greek bank. But the UBB deal says even more about the benefits of earlier actions by the acquiring bank to refocus on core countries and businesses.
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Johan Thijs, KBC |
The UBB acquisition demonstrates how far the transformation of KBC has come. After a decade in which it sold 30 companies around the world, it is now the one making acquisitions.
The UBB deal furthers the strategy KBC’s sales have implemented elsewhere: to fine tune an integrated bank and insurance group focused on a tight-knit group of European markets, with an emphasis on big market shares in smaller countries (usually with a population size similar to Belgium).
UBB is Bulgaria’s fourth biggest bank and rebalances KBC’s business in the country, where previously it owned a top-tier insurer without a top-tier bank.
By contrast, when KBC required a €7 billion government bailout after a venture into US structured products, the group had numerous small operations from Russia and Germany to the US and Japan. Having repaid the state aid five years early in 2015, its international spread is now restricted to Czech Republic, Slovakia, Hungary and Bulgaria, alongside a new commitment to Ireland, which CEO Johan Thijs deems an important diversification play for the group.
The ambition is to outperform its European peers both in terms of its financial metrics and customer satisfaction. If the latter goal is less tangible, the former has certainly been achieved, with a market-beating return on equity of 18% in 2016.
