Investor Presentaiton
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Investment Case & Challenges for KBC
Attractive Investment Opportunity with Manageable Risks
Key Opportunities
Attractive Standalone Franchise with Proven Track Record
■ Successful universal banking franchise with holistic product offering incl. leasing, asset management and insurance ancillaries that
align to KBC's strategic priorities
■ Track record of delivering attractive growth (CAGR: 12%) (¹) and profitability (ROATE: ~15%) (1,2)
■ Well capitalised (CET1: 16.5%) (3), clean (NPL: 2.5%) (4) and well provisioned (coverage ratio 122%) (4)
Establish UBB as Top 3 Franchise in Consolidating Bulgarian Market
■ Opportunity to establish UBB as Top 3 franchise in the Bulgarian market (PF M/S: ~18%)(5) ...
...Significantly distancing it from the local Tier 2 franchises (Eurobank M/S: 10%; Fibank M/S: 9%) (5) ...
■...And putting it at the level of UCG (M/S: 19%) (5) and OTP (M/S: 18%) (5)
Attractive Value Creation Opportunity
■ Realisation of significant recurring cost synergies on the branch network and HQ overlap in Bulgaria
■ Revenues synergy potential from full implementation of KBC bank-insurance model
High Return & Dividend Enhancement Potential
■ Attractive return on investment for KBC Group (approx. 10%+ expected) driven by a combination of standalone profitability and
net synergy realisation
■ Long term, sustainable enhancement of KBC Group dividend capacity
Opportunity to Deploy KBC Group Excess Capital in a Value Accretive Transaction
Deployment of KBC Group financial resources into a franchise-enhancing, synergistic and value accretive investment opportunity
in a market the group knows intimately
■ Attractive alternative to potential return of excess capital to shareholders
Sources: Company Disclosure, SNL.
(1) 2017-H1'21 CAGR on Gross Loans. (2) FY2019 (pre-COVID) ROATE on a standalone basis. (3) As of FY2020. (4) As of H1'21 Standalone basis.
(5) FY2020 market shares calculated based on total assets; Individual (company) figures based on SNL and company disclosure; Total market size based on BNB annual disclosure for Bulgarian banking sector..
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