KBC Bank

KBC Bank N.V. is a Belgian universal multi-channel bank, focusing on private clients and small and medium-sized enterprises. Besides retail banking, insurance and asset management activities (in collaboration with sister companies KBC Insurance NV and KBC Asset Management NV), KBC is active in European debt capital markets, domestic cash equity markets and in the field of corporate banking, leasing, factoring, reinsurance, private equity and project and trade finance in Belgium, Central and Eastern Europe and elsewhere (mainly in Europe). KBC is an initialism for Kredietbank ABB Insurance CERA Bank.

The parent company, KBC Group N.V., is one of the major companies and the second largest bancassurer in Belgium. It is the 18th largest bank in Europe (by market capitalisation) and a major financial player in Central and Eastern Europe, employing some 57,000 staff worldwide (of which 32,000 in Central and Eastern Europe and Russia) and serving 11 million customers worldwide (some 8 million in Central and Eastern Europe).

The group is controlled by a syndicate of core shareholders, but has a free float of some 42%. In the core shareholders, CERA/KBC Ancora group controls 30%, MRBB (a farmers' association) controls around 13% and a group of industrialist families controls another 11%.^[1] The free float was chiefly held by a large variety of international institutional investors (close to 45% UK-or US-based) as of the end of 2010. Its shares are traded on the Euronext exchange in Brussels and the Luxembourg Stock Exchange.

The group's overall aim is to be an independent, medium-sized provider of bancassurance for private clients and enterprises in selected European countries, with a focus on asset management and in financial markets.

History

In 1889, the Catholic Volksbank van Leuven was founded, the earliest predecessor of the KBC Bank. In 1935, the banks Algemeene Bankvereeniging and Volksbank van Leuven merged with the Bank voor Handel en Nijverheid to create the Kredietbank. The Kredietbank would be the only Belgian financial institution under Flemish control which would survive the financial crisis of the great depression of the 1930s. Fernand Collin, who became president in 1938, conceived the business strategy which would lead to the growth of the bank. He defined the Kredietbank as an independent bank with a decidedly Flemish character which would be an instrument to further Flemish economic growth.

During World War II, the bank would be able to expand its activities and grow its deposits from the Flemish middle class. After the war, because of the economic recovery, the Kredietbank, now the third largest bank in Belgium, was able to increase the number of operating branches in Flanders. The postwar growth strategy of the bank, emphasized foreign expansion and the development of portfolio-management services for investors. The bank expanded into Luxembourg in 1949 with the Kredietbank S.A. Luxembourgeoise and into Wallonia with the establishment of the Crédit Général de Belgique in 1961.

The Kredietbank also expanded into Belgian Congo. It established a branch in Léopoldville in 1952. Then in 1954 it acquired Banque Congolaise pour l’Industrie, le Commerce, et l’Agriculture and renamed it Kredietbank-Congo,^[2] Ultimately it had four branches, one each in Léopoldville, Bukavu, Elizabethville and Stanleyville. Due the situation emerging after the independence of Belgian Congo in 1960, the bank discontinued its Congolese operations in 1966.

In the sixties, driven by increasing competition, the bank worked on the expansion of its branch network and improvement of consumer services. In 1966, the bank began building a foreign-correspondent network and the establishment of foreign branches in New York, London, the Cayman Islands, and a subsidiary in Geneva, the Kredietbank (Suisse) S.A.. In 1970, together with six other European institutions, Kredietbank established the Inter-Alpha Group of Banks.

In 1998, the Kredietbank merged with two financial institutions originating from the Boerenbond (E: Belgian Catholic Farmers Association) , ABB-insurance and CERA Bank, to form the 'KBC Bank and Insurance Holding Company'. Since then, the group has significantly expanded its activities, chiefly in Central and Eastern Europe. In 2005, KBC set another milestone by merging with its parent company, Almanij, and changing its name to KBC Group NV.

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) by investing some 7.4 billion euros in acquisitions. More recently (2007), KBC has made acquisitions in Bulgaria (DZI Insurance, DZI Invest and EIBANK), Romania (KBC Securities Romania, Romstal Leasing and INK Insurance Broker), Russia (Absolut Bank), Serbia (KBC Banka and Senzal, now KBC Securities AD Beograd, Hipobroker, now KBC Broker, and Bastion, now KBC Securities Corporate Finance) and Slovakia (Istrobanka).

After receiving government support during the financial crisis, the bank embarked on a divestment programme to satisfy the requirements of the European Commission. As such, it has sold or is planning to sell several subsidiaries, such as Centea, Fidea, Kredyt Bank, ADB, KBC Deutschland, and KBL epb (Krediet Bank Luxembourgeoise), its network of European private banking subsidiaries.

Structure and main subsidiaries

KBC Group NV is the direct parent company of:

• KBC Bank NV
• KBC Insurance NV
• KBC Asset Management NV
• Kredietbank SA Luxembourgeoise
• Value Source Technologies, Chennai, INDIA

All other KBC Group companies are direct or indirect subsidiaries of these.

KBC Bank NV

KBC Bank is the main subsidiary. Its first home market is Belgium, where it is one of the top three banks, with a 20-25% market share and over three million customers (counting the customers of the subsidiaries in Belgium). Its second home market is Central Europe, served via subsidiaries and investments in the Czech Republic (ČSOB), Slovakia (ČSOB), Hungary (K&H Bank), Poland (Kredyt Bank) and Slovenia (Nova Ljubljanska Banka). With effect from July 2008, KBC Bank has acquired another small Slovakian Bank, Istrobanka.^[3] In all of these countries except Poland, KBC Bank is a top-4 player by market share. It also has a substantial presence in Ireland through its subsidiary KBC Bank Ireland (formerly IIB Bank), which is a major player in both the corporate and residential mortgage markets there. In all, KBC Bank has established a presence in some thirty countries around the globe. In 2007, KBC expanded its presence to Eastern Europe through the acquisition of DZI Insurance and CIBank in Bulgaria.

KBC Project Finance is a subsidiary of KBC Bank, and has been an active player in the non-recourse financing of projects since the early 1990s. Headquartered in Dublin, it also has professionals based in London, Brussels, New York, Hong Kong, and Sydney. Its main business lines are Energy and Infrastructure. This includes financing projects in sectors such as the oil & gas industry, power, renewable energy, and Public-Private Partnership. It has a portfolio in excess of US$5bn, financing approximately 250 projects worldwide.

KBC Bank also has investment banking operations in Europe, US and Asia. A specialist arm called KBC Financial Products operates primarily in global convertible bonds; its branch in Japan is called KBC Securities Japan, which specialises in secondary equity broking, convertible bonds, warrants, and equity derivatives.

Kredietbank SA Luxembourgeoise - European Private Bankers (KBL)

KBL is no longer a subsidiary of KBC since a sale was agreed to the Indian Hinduja Group in 2010 for a reported £1.3 Billion.

In March 2011, it was announced that the deal was not completed due to the Luxembourg financial markets regulator, Commission de Surveillance du Secteur Financier (CSSF), blocking the deal.

See also

• Paul Borghgraef
• Luc Debaillie
• Frank Donck
• Alain Tytgadt
• Jozef Van Waeyenberge
• Remi Vermeiren, former president
• Philippe Vlerick

References

1. ^ ^{a b c d e f g} "Annual Report 2010" (PDF). KBC Group. https://multimediafiles.kbcgroup.eu/ng/published/KBCCOM/PDF/COM_RVG_pdf_08042010_jaarverslag_KBC_Groep_2010_EN.pdf. Retrieved 22 April 2011. 
2. ^ Edouard Mambu ma Khenzu. 2006. A Modern History of Monetary and Financial Systems of Congo, 1885-1995. (Lewiston: Edward Mellan).
3. ^ Istrobanka bought by ČSOB owner - The Slovak Spectator

• Van der Wee, Herman and Van der Wee-Verbreyt, Monique, People Make History: The Kredietbank and the Economic Rise of Flanders, 1935-1985, Brussels, Kredietbank, 1985.

External links

• Official website