KBC Bank

KBC Group N.V. is a Belgian universal multi-channel bank-insurer, focusing on private clients and small and medium-sized enterprises in Belgium, Ireland, Central Europe and South-East Asia. Besides retail banking, insurance and asset management activities (in collaboration with daughter companies KBC Insurance NV and KBC Asset Management NV), KBC is active in, among other things, European debt capital markets, domestic cash equity markets and in the field of corporate banking, private 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 acronym for Kredietbank ABB Insurance CERA Bank (CEntrale RAiffeisenkas).

KBC Group N.V.
TypeNaamloze vennootschap
Euronext: KBC
LuxSE: KBC
BEL 20 component
IndustryFinancial services
Founded1935 (1935) (Kredietbank), present name (KBC Group) dates from 2005
HeadquartersBrussels, Belgium
Key people
Koenraad Debackere (Chairman), Johan Thijs (CEO), Rik Scheerlinck (CFO)
ProductsBanking, insurance, asset management
Revenue€7.700 billion (2017)[1]
€2.575 billion (2016)[1]
AUM€219 billion (2016)[1]
Total assets€292.3 billion (end 2016)[1]
Total equity€18.8 billion (end 2016)[1]
Number of employees
38,356 (FTE, end 2016)[1]
Websitewww.kbc.com

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 42,000 staff worldwide (of which more than half in Central and Eastern Europe) and serves 11 million customers worldwide (some 7 to 8 million in Central and Eastern Europe).

The group is controlled by a syndicate of core shareholders, and has a free float of approximately 60%. In the core shareholders, KBC Ancora controls 19%, MRBB (part of the Flemish farmers' association) controls around 11%, CERA (the largest cooperative in Flanders) 3% and a group of industrialist families controls another 7%.[1] The free float was chiefly held by a large variety of international institutional investors as of mid 2018. Its shares are traded on the Euronext exchange in Brussels.

The group's overall ambition is to be the reference in bank-insurance in all its core markets.

The private art collection of KBC bank is situated in the Rockox House in Antwerp.

History

The Catholic Volksbank van Leuven, founded in 1889, was one of the earliest predecessors of the KBC Bank. Another predecessor was the Bremer Vorschussverein, founded in 1889 and changed later into Bankverein Bremen AG. 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 emphasised 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 to 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 a number of countries. In 1970, together with six other European institutions, Kredietbank established the Inter-Alpha Group of Banks. The Kredietbank N.V. Bruxelles acquired the main part of the shares from the Bankverein Bremen AG since 1982. The branch in Bremen was renamed to Kredietbank-Bankverein AG in 1990.[3]

In 1998, the Kredietbank merged with two financial institutions originating from the Boerenbond (Vlaanderen) (E: Belgian Catholic Farmers Association), ABB-insurance (Assurances du Boerenbond Belge) and CERA (Centrale Raiffeisenkas) 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 Groep NV.

Over the past 2 decades, KBC built up a strong presence in many of the countries that joined the EU on 1 May 2004. More recently (2007), KBC 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, which became KBC Securities AD Beograd, Hipobroker, which became KBC Broker, and Bastion, which became KBC Securities Corporate Finance) and Slovakia (Istrobanka). In 2017, KBC acquired UBB and Interlease in Bulgaria.

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 sold several subsidiaries, including Centea, Fidea, Kredyt Bank, ADB, KBC Deutschland, Absolut Bank and KBL epb (Krediet Bank Luxembourgeoise), its network of European private banking subsidiaries. The divestment programme was completed in 2014 and the state aid entirely paid back by 2015, five years ahead of the agreed schedule.

The group now focusses on its six core countries: Belgium, The Czech Republic, Slovakia, Hungary, Bulgaria and Ireland.[4]

In December 2016, KBC announced that it would acquire United Bulgarian Bank, making KBC the largest bank-insurance group in the country. In February 2017, Ireland was defined as a new core market of KBC Group.

Investment in coal

KBC has been criticised for its investment policies regarding fossil fuels. According to a 2015 report by Belgian NGO Fairfin KBC invested[5] US$2.4 billion between 2004 and 2014 through loans and emitting shares and obligations. In contrast the money allocated to renewable energy was only US$929 million.

When KBC reviewed its sustainability policy in 2016,[6] the Global Network of Non-governmental organisation cooperating in the field of private banks and sustainability, Banktrack published an analysis acknowledging progress made on fossil fuels, while criticising the exception for the Czech Republic where the bank continues to finance coal,[7] saying “the new general restriction on coal is welcome and positive, however the exception applied to Czech coal companies is concerning."

In 2017 the Belgian Climate Coalition published a report[8] charting the investments in fossil fuel of the four major banks in Belgium (KBC, ING, BNP Paribas and Belfius). In this report they attacked the exception for the Czech Republic as well,saying “the exceptions for coal activities in the Czech Republic don’t comply with the strict deadlines imposed by climate science.”

Structure and main subsidiaries

KBC Group NV is the direct parent company of:

  • KBC Bank NV
  • KBC Insurance NV

All other KBC Group companies are direct or indirect subsidiaries of these. The main ones are shown in the table:

CompanyRegistered officeShare of capital held at group level (in%)Business unit*Activity
KBC BANK GROUP
KBC Bank NVBrussels – BE100,00BELcredit institution
CBC BANQUE SANamur – BE100,00BELcredit institution
Československá Obchodná Banka a.s.Bratislava – SK100,00IMAcredit institution
Československá Obchodní Banka a.s.Prague – CZ100,00CZRcredit institution
CIBANK EADSofia – BG100,00IMAcredit institution
KBC Asset Management NVBrussels – BE100,00BELasset management
KBC Autolease NVLeuven – BE100,00BELleasing
KBC Bank Ireland Plc.Dublin – IE100,00IMAcredit institution
KBC Commercial Finance NVBrussels – BE100,00BELfactoring
KBC Credit Investments NVBrussels – BE100,00BEL/GRPinvestment firm
KBC IFIMA SALuxembourg – LU100,00GRPfinancing
KBC Securities NVBrussels – BE100,00BELstockbroker
K&H Bank Zrt.Budapest – HU100,00IMAcredit institution
Loan Invest NVBrussels – BE100,00IMAsecuritisation
United Bulgarian Bank ADSofia – BG99,91IMAcredit institution
KBC INSURANCE (GROUP)
KBC Insurance NVLeuven – BE100,00BEL/GRPinsurance company
ADD NVHeverlee – BE100,00BELinsurance broker
KBC Group Re SALuxembourg – LU100,00GRPreinsurance company
ČSOB Pojišt'ovna a.s.Pardubice – CZ100,00CZRinsurance company
ČSOB Poišťovňa a.s.Bratislava – SK100,00IMAinsurance company
DZI (group)Sofia – BG100,00IMAinsurance company
Groep VAB NVZwijndrecht – BE95,00BELdriving school/roadside assistance
K&H Biztosító Zrt.Budapest – HU100,00IMAinsurance company
NLB Vita d.d. (equity method)Ljubljana – SI50,00GRPlife insurance
KBC GROUP
KBC Group NVBrussels – BE100,00GRPbank-insurance holding company
KBC Bank (group)various locations100,00variouscredit institution
KBC Insurance (group)various locations100,00variousinsurance company

BEL = Belgium Business Unit, CZR = Czech Republic Business Unit, IMA = International Markets Business Unit, GRP = Group Centre.

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 and Istrobanka), Hungary (K&H Bank) and Bulgaria (CIBank and UBB Bank). In all of these countries, KBC Bank is a leading 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.

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)

KBC sold KBL European Private Bankers to Precision Capital for a reported €1.05 billion in October 2011.[9]

Other

In 2019, Harvard Business Review ranked KBC's CEO Johan Thijs as the 8th best performing CEO in the world.[10]

See also

References
  1. "Annual Report 2016" (PDF). KBC Group. Retrieved 26 September 2017.
  2. Edouard Mambu ma Khenzu. 2006. A Modern History of Monetary and Financial Systems of Congo, 1885-1995. (Lewiston: Edward Mellan).
  3. "History of the German branch". Kbcbank.de. Retrieved 2013-04-11.
  4. "Ireland: new core market of KBC Group". newsroom.kbc.com. Retrieved 2019-01-19.
  5. "Our future undermined" (PDF). bankwijzer. Retrieved 3 May 2018.
  6. "KBC Group Sustainability Framework" (PDF). KBC. Retrieved 3 May 2018.
  7. "Belgian bank KBC's sustainability policy: a mixed bag". BankTrack. Retrieved 2016-09-22.
  8. "FOSSIELVRIJE BANKEN IN DE STRIJD TEGEN DE KOOLSTOF- ZEEPBEL" (PDF). Klimaat Coalitie. Retrieved 2017-03-30.
  9. Deighton, Ben (2011-10-10). "UPDATE 3-Qatari royals swoop on Belgian, Luxembourg private banks". Reuters. Retrieved 2020-10-16.
  10. "The CEO 100, 2019 Edition". Harvard Business Review. 2019-11-01. Retrieved 2019-11-09.
  • 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.
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