KBC Asset Management (KBC AM) has agreed to sell 100% of its stake in its Polish subsidiary KBC TFI to PKO Bank Polski Group. The mutual fund company is ultimately to be merged with PKO TFI, an investment fund company in the PKO Bank Polski Group (wholly owned by PKO Bank Polski).
The deal has been cleared by the president of the Office of Competition and Consumer Protection and the Polish Financial Supervision Authority has issued its no-objection decision. The acquisition from KBC AM of all the shares in KBC TFI by PKO BP Finat was completed on December 12. The two companies manage total assets of approximately PLN29bn (€6.9bn).
The intended merger of PKO TFI with KBC TFI (scheduled for the first half of 2018) will allow clients to gain access to a comprehensive offering of investment products, including structured products. The SRP Poland database lists three open-ended structured funds from KBC TFI. They include KBC Globalny Ochrony 90 Listopad, a CPPI product with risky assets linked to actively managed funds investing into shares, alternatives and real estate, which was launched on December 8, 2015 and has PLN6.1m under management. Non-risky assets are linked to bonds and cash and every year, at the end of November, the fund is reset with a new protection level at 90% of the actual value on that date.
PKO Bank Polski has issued 137 structured products in Poland dating back to July 2006, of which 39 products are still live, according to SRP data. The vast majority of the bank's outstanding products are wrapped as deposits (36), while there are also two structured notes and one fund available to investors in Poland. In 2017, PKO Bank Polski made 27 products available to retail investors in Poland including 24 products linked to currency pairs (Polish zloty/euro and zloty/uS dollar), two products linked to interest rates and one to a basket of shares.
'This transaction is fully aligned with KBC's corporate strategy, which focuses on retail clients, SMEs and midcap corporates in KBC's home markets of Belgium, Bulgaria, Czech Republic, Hungary, Ireland and Slovakia,' said Johan Thijs (pictured), chief executive officer of KBC Group, in a statement. 'I am convinced that, under its new shareholder structure, KBC TFI will be able to successfully continue its business activities, which will benefit its clients and other stakeholders.'
PKO TFI has PLN25bn in assets under management (AUM), while the AUM of KBC TFI amounts to PLN4bn. PKO TFI is the largest retail fund company in Poland, with a 15% share of a market that was worth more than PLN154bn at the end of the third quarter of 2017. PKO TFI is also the largest investment fund company in terms of number of clients (over half a million at the end of November 2017).
On December 29, 2017, KBC reached an agreement with Metlife for KBC - through DZI, its Bulgarian insurance subsidiary - to acquire Metlife's remaining 40% stake in UBB Metlife Insurance, life insurance joint venture between UBB (United Bulgarian Bank, a KBC subsidiary) and Metlife. Earlier this year, as part of KBC's acquisition of UBB and Interlease, KBC (through UBB) acquired 60% of UBB-Metlife, which has a 10% market share in the Bulgarian life insurance market.
Once the deal is closed, KBC, through DZI, will service the insurance policies of the existing UBB-MetLife customers until maturity of their policies. '[This transaction] confirms our position as a strong local market player, which is able to offer a full range of bank-insurance products to its Bulgarian customers in an omni-channel environment,' said Thijs. 'Expanding our activities in the country, building on the competence and dynamism of UBB-CIBank and DZI, and leveraging our joint product and service offering including life insurance will help us to reach this goal and ensure future success.'
There are a number of life insurance products from Metlife and its subsidiaries registered on the SRP database. In the Czech Republic, the insurer launched Aviva Royal III in 2010 via its MetLife pojišťovna subsidiary while in Poland, between September 2007 and November 2011, Metlife acted as third party distributor for 26 life wrapped products from Bank DnB Nord Polska and Citi Handlowy, respectively. All of which have since expired.
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Capital protection is a value we would like to keep at a minimum of 90%, K&H Bank