Belgian banking and insurance group KBC has agreed to acquire a 70 per cent stake in Bulgarian insurer DZI Insurance for EUR 185 mln, news agency Reuters reported on Tuesday, January 30. KBC, which considers central and eastern Europe to be a second home market, is buying the Balkan country's leading insurer with market share in general and life insurance of 17.7 and 26.4 per cent respectively, said Reuters. The Belgian company plans to launch a public bid for the remaining 30 per cent, which are floated on the Bulgarian stock exchange. This is its first major acquisition of an insurance company since the expansion of the European Union in 2004. DZI said the Belgian group beat France's Axa and Groupama as well as Dutch insurer Eureko for the deal. 'The achieved price is very good, especially in light of the situation of the insurance market in Bulgaria,' DZI Insurance executive director Valeri Aleksiev was quoted as saying by the news agency. Under the terms of the deal, KBC will also pay about EUR 75 mln to Kontrakt Sofia, an amount equal to 70 per cent of the undistributed capital gain proceeds received by DZI Insurance for the sale of its stake in DZI Bank . 'As part of the deal, KBC will also acquire DZI Invest, a securities broker active on the Bulgarian Stock Exchange,' KBC said in a statement. The deal is subject to approval by the Bulgarian regulatory authorities and DZI said the deal would most likely be finalised in two to three months. KBC has already built up a presence in the Czech Republic, Hungary, Poland and Slovakia. It recently announced acquisitions in Romania and is also set to take a majority stake in a bank in Belgrade.
Source: Dnevnik (31.01.2007)

Eleven banks in Bulgaria have secured themselves financing exceeding BGN 570 million through the issue of bonds. These include Allianz Bulgaria, Bulgarian-American Credit Bank, Investbank, MKB Unionbank, United Bulgarian Bank, Postbank, NLB West-East Bank, First Investment Bank, Raiffeisenbank, Economic and Investment Bank, and Texim. The number of bond issues floated by all listed companies in Bulgaria tops 70, their total amount is more than BGN 1 billion. This type of financing is used mainly for the development of core activities and modernisation. According to specialists, the big share of banks is due to the credit boom. First in bond financing is Bulgarian-American Credit Bank with BGN 143 million raised from five issues. It is followed by United Bulgarian Bank with BGN 120 million and Raiffeisenbank with BGN 100 million. Despite the increase in the number of new issues, some financial experts say that the bond market in Bulgaria is still poorly developed and is yet to achieve its full potential. Bonds are considered a lower-risk financial instrument and attract the attention mainly of institutional investor: pension funds, banks and collective investment schemes. Another feature of the Bulgarian bond market is the difficult access of smaller investors to the initial non-public offerings.
Source: Pari (29.05.2007)

NLB West-East Bank raises capital to BGN 21.65m The shareholders in Bulgaria's NLB West-East Bank decided at an extraordinary general meeting to raise the capital of the financial institution by BGN 5.85 million to BGN 21.65 million. NLB West-East Bank was established in Bulgaria in 2003. Slovenia's NLB Group and Factor Bank of Ljubljana are shareholders in the bank. NLB West-East bank floated EUR 5 million corporate bonds in June 2006. The issue, which is traded on the Bulgarian Stock Exchange (BSE), matures in June 2009.
Source: Banker (01.10.2007)