KBC group launches greenfield consumer finance ...

Today, during  a press  conference in  Bucharest, André  Bergen,  KBC
Group CEO, announced the launch  of KBC Consumer Finance's  operation
in Romania. Entering the Romanian  consumer finance market through  a
greenfield venture illustrates KBC group's commitment to Romania as a
high-growth, high-potential market. 
 
In Romania, KBC Consumer Finance offers instalment loans (POS  loans)
in close co-operation  with retailers, who  receive support  services
through the KBC Business  Partner Programme to  help them grow  their
own business. The company will also offer cash loans and credit cards
directly to  Romanian  consumers through  its  own network  of  sales
outlets,  agents,  brokers,  telemarketing  (call  centre)  and   the
Internet.
 
KBC Consumer Finance works according to a multi-channel,  multi-brand
and multi-product model. It employs  1 700 FTE, has its  headquarters
in Warsaw (Poland), and is active in the Czech Republic, Belgium  and
Poland.
 
André Bergen,  KBC Group  CEO  welcomes the  launch of  KBC  Consumer
Finance's operations in Romania: "Romania is among the most populated
CEE countries, with  21.7  million inhabitants  and  economic  growth
consistently  above  the  CEE average.  We  believe  in  the   growth
potential of  Romania, which  has increased  following the  country's
accession to the EU. The  KBC group already made important  long-term
strategic and successful investments  last year with the  acquisition
of Romstal  Leasing  and KBC  Securities  Romania (the  former  Swiss
Capital). Just as in other CEE countries, the consumer finance market
in Romania  is a  very competitive  one,  but at  the same  time  has
tremendous potential.  The  KBC group  sees  consumer finance  as  an
important growth engine for the group,  and has decided to enter  the
Romanian consumer  finance market.  We are  a long-term  investor  in
Romania because we  believe the  country offers  great potential  and
opportunities for the KBC group".
 
According to Bart Vanhaeren, General Manager of KBC Consumer Finance:
"KBC Consumer Finance is a fast growing unit within the KBC group. We
offer credit  solutions to  customers  in Belgium  and in  a  growing
number of CEE  countries, which  now includes  Romania. KBC  Consumer
Finance uses  a  multi-product, multi-channel,  multi-brand  business
model and is one of the few pan-European players to have  established
its headquarters in a CEE country, Poland. The company has  developed
very rapidly  since  its  inception.  We started  in  2006  with  two
countries and today we are present in four, employing more than 1 700
people. We manage partnerships with 27 000 retailers, 3 100  brokers,
and are servicing more than 2 million customers. KBC Consumer Finance
is a success  and it is  our intention and  ambition to make  Romania
part of  this. We  will continue  to develop  KBC's consumer  finance
business  internationally  and  continue  to  evaluate  opportunities
arising in other Central and Eastern European markets."
 
Willem Hueting, Executive  Director of KBC  Consumer Finance IFN  SA,
added: "KBC,  as  an  internationally strong  and  financially  sound
group, has chosen Romania to  start a new consumer finance  business.
KBC  Consumer  Finance  is  about  offering  consumers  flexible  and
reliable credit  solutions  to  bring their  plans  to  fruition.  We
believe  in  responsible  lending  and,  therefore,  aim  to  protect
customers from financial risk, while offering them access to a  range
of personal finance facilities through the channels of their  choice.
We are convinced that KBC Consumer Finance, building on the extensive
experience  which  it  has  already  acquired  internationally,  will
quickly become  a key  player  in the  Romanian market  for  personal
finance,  to   the   benefit   of  its   customers,   employees   and
shareholders."
Central  European  and   Romanian  consumer   finance  market:   high
potential, high growth
 
Romania is among the most populated CEE countries, with 21.7  million
inhabitants and economic growth  consistently above the  CEE average.
It has  strong economic  fundamentals and  its growth  potential  has
increased since the country's accession to the EU.
 
Whereas demand for consumer  loans is stagnating  as a percentage  of
GDP in the EMU, growth in Central and Eastern Europe continues.  Just
as in the other CEE countries, the consumer finance market in Romania
is a  very competitive  one,  but at  the  same time  has  tremendous
potential. It is  expected to grow  by 15 to  20% annually and  could
exceed 30 bn EUR by 2011 with strong growth in consumer spending  and
personal  consumption  generating   mounting  demand  for   financial
products and services such as consumer finance.
 
KBC Group  : international  group  with longstanding  experience  and
know-how in the consumer finance market
 
KBC Consumer Finance was created in 2006 as an independent,  cohesive
and dedicated  entity within  the KBC  group to  manage the  consumer
finance activities of all KBC group entities.
A  multi-product,  multi-channel,  international   financial-services
provider, KBC  Consumer  Finance  offers a  wide  range  of  personal
finance solutions (cash  loans, instalment loans,  and credit  cards)
directly to  customers as  well as  via commercial  partners such  as
retailers, intermediaries, franchisees, and agents.
KBC Consumer Finance operates a hybrid business model focused on:
 
- accelerating the  growth of the  retail banks in  the KBC group  by
acting as an in-house product factory;
- growing  the  consumer  finance business  outside  of  the  banking
channels, as a specialist provider  of personal finance products  and
services.
 
Today, KBC Consumer  Finance has operating  units in four  countries:
Poland, Belgium, the Czech Republic and Romania.
 
In the Czech Republic and in Belgium, consumer finance is a  business
line /  product factory  within the  local banks,  respectively  CSOB
Bank, Postal Savings Bank (Czech Republic) and KBC Bank (Belgium). In
Poland, where KBC Consumer Finance is also headquartered, it operates
through a separate consumer finance specialist company called Zagiel.
KBC Consumer Finance has acquired significant experience and know-how
in selling consumer finance products and services to a broad range of
customers through  a  mix  of  sales  outlets  dedicated  to  selling
consumer  finance   products   ("loan   shops"),   agents,   brokers,
telemarketing (call centre), and the Internet.
 
In Romania, KBC Consumer  Finance is starting  out with a  greenfield
venture, a  separate  consumer  finance  specialist  company.  It  is
building  on  the  know-how  and  expertise  acquired  in  the  other
operating units in the group, where KBC Consumer Finance can rely  on
15 years of  experience offering  cash loans,  instalment loans  (POS
loans) and  credit  cards  to  more  than  2  million  customers,  in
partnership with 27  000 co-operating  retail sales  partners, 3  100
agents and brokers, supported by more than 1 700 experienced staff.
KBC's ambition is to  build a consumer  finance business of  European
scale, which sets the  standards in terms of  quality as regards  its
offering, the satisfaction level of  its customers and partners,  and
overall profitability. 
In the countries where  KBC Consumer Finance  is already present,  it
will  focus  on  further   developing  its  business  franchise   and
increasing its  market  share. At  the  same time,  it  continues  to
explore   opportunities   for   further   developing   its   business
internationally either through greenfield  operations or mergers  and
acquisitions.
KBC Consumer Finance  plans to further  develop its consumer  finance
business internationally and will  evaluate opportunities arising  in
the other Central and Eastern European markets.
 
KBC Consumer Finance  : product and service offering in Romania
 
KBC Consumer  Finance  will offer  three  core products  in  Romania:
instalment loans (POS loans), cash loans and revolving credit  cards.
It will  deliver  its products  and  services through  a  variety  of
channels, viz.  its  own  network of  sales  outlets  specialised  in
selling   credit   products   ('loan   shops'),   agents,    brokers,
telemarketing (call centre), the Internet, through partnerships  with
retailers (for instalment loans) and via other companies. 
 
In March 2008, KBC Consumer Finance started offering instalment loans
(POS loans) in close-co-operation with Romanian retailers who  joined
the KBC Business Partner Programme, which (in addition to  instalment
loans) offers  its  business  partners  support  services  (including
marketing services, sales  support, and training)  to grow their  own
businesses.
 
KBC Consumer  Finance plans  to launch  cash loans  and credit  cards
which are marketed directly to  Romanian consumers through a  variety
of channels.
 
In order to  support its growth  ambitions, KBC plans  to expand  its
Romanian business rapidly. Currently,  the company employs 50  people
in its headquarters in Bucharest. It plans to increase its  workforce
to 130 FTEs by the end of  2008. By that time, its activities  should
cover the whole geographical territory of Romania.
 
The KBC Consumer Finance team in Romania is led by Willem Hueting and
a strong and united management team of experienced professionals.
 
 
Other KBC group members active in Romania
 
KBC Securities Romania: www.kbcsecurities.ro,  www.kbcsecurities.be 
 
KBC Securities Romania SA (formerly Swiss Capital) has been a  wholly
owned subsidiary of KBC Securities NV since its acquisition in  2007.
KBC Securities Romania  is number  one in  the local  market, with  a
market share of 10%. The company has a dedicated sales force, as well
as a renowned research department and corporate finance team.
 
KBC Securities Romania's  headquarters are located  in Bucharest.  To
cover the whole  territory, the  company operates a  network of  four
agencies (Bucharest, Buzau, Constanta and Ploiesti).
KBC  Securities  Romania  employs  39  people  and  caters  for   600
customers.
 
KBC Securities NV is  the equity house  of the KBC  group. It is  KBC
Securities' mission to offer an  outstanding service in the areas  of
Corporate Finance,  Equity Research,  Sales  & Brokerage  and  Market
Making, with a geographical focus on the Euronext countries (Belgium,
the Netherlands,  France),  the  United Kingdom  and  Central  Europe
(Poland, the Czech Republic, Hungary, Romania, Bulgaria and Serbia).
 
Romstal Leasing Romania : www.romstal-leasing.ro
 
Romstal  Leasing  is  the  largest  independent  leasing  company  in
Romania. At the end of  2007, it held a  4.20% share of the  Romanian
leasing market  and was  ranked twelfth.  The bulk  of its  financing
activity relates to  the leasing of  transportation equipment  (cars,
light commercial vehicles and  trucks, 84%), machinery and  equipment
(9%) and real estate (7%).
 
Romstal Leasing boasts a high level of profitability, with an ROE  of
42% in 2007 and  net profit growth of  115%. During this period,  its
leasing portfolio also expanded by  75%. The company has  experienced
enormous growth in  the last few  years and has  opened new  branches
throughout Romania. It now has a network of 32 branches in almost all
of the  country's  major  cities  and employs  134  people.  To  take
advantage of the rapidly growing market, the company plans to  expand
its network to 35 branches by 2008.
 
On 21 March 2007, the company was licensed as a non-banking financial
institution by the National Bank of Romania.