NLB Group Strengthens its Position in its Home Region: NLB to Acquire Summit Leasing

November 30, 2023

The time has come for a new milestone in the development of the NLB Group and the services and solutions it offers to its clients in the markets of its home region, South-Eastern Europe. The Group is namely consolidating its strategically important position, announcing the acquisition of Summit Leasing and further expansion of its asset management activities.

On 30 November 2023, Nova Ljubljanska Banka, d.d. Ljubljana (“NLB”) entered into a sale and purchase agreement to acquire a 100% shareholding in SLS HOLDCO, holdinška družba, d.o.o., the parent company of Summit Leasing Slovenija d.o.o. and its subsidiaries (“Summit Leasing”) from funds managed by affiliates of Apollo Global Management, Inc. (“Apollo Funds”) and the European Bank for Reconstruction and Development (“EBRD”). The company is a leading provider of auto finance in Slovenia, with c. EUR 890 million of consolidated gross receivables, and a leading provider of point-of-sale consumer finance in Slovenia with gross receivables of c. EUR 95 million (figures as of September 30, 2023). Furthermore, the company also boasts a vast network of over 750 dealers in Slovenia and Croatia and over 550 points-of-sale in consumer finance in Slovenia. At the end of 2022, Summit Leasing managed c. 140,000 outstanding financing contracts with over 110,000 customers.

"That the time has come for further growth of the NLB Group, albeit inorganic, should come as no surprise to anyone who has closely followed our development over the past few years. We have namely repeatedly emphasized that we are constantly monitoring market conditions and analysing potential opportunities for tactical mergers and acquisitions, that could open new opportunities or potentially even new markets to us, but above all increase added value for our stakeholders and provide our clients with additional services and solutions,” stated NLB’s CEO Blaž Brodnjak as the acquisition was announced.

Leasing services address clients’ needs well, so it is not surprising that NLB Group decided to gradually expand this activity. After entering the Slovenian market with NLB Lease&Go in the spring of 2020, leasing activities have been gaining momentum, with new leasing companies established within the Group in 2022 in North Macedonian and in Serbia.

Leasing is one of the strategic activities of the NLB Group, the leading banking and financial group with headquarters and an exclusive strategic interest in our home region of Southeast Europe, which supports its clients with universal solutions through retail, corporate, and investment banking. Leasing services offered by the NLB Group members complement the bank’s lending services and enable retail and corporate clients to choose the option that best addresses their needs, situation, and preference.

“We believe that leasing will become a significant part of the Group. It is planned that in its mature phase, it will contribute more than EUR 1 billion to the total assets of the Group, with the newest acquisition significantly accelerating this ambition. Our goal is for our leasing companies to become the leaders in the field of movables across our region and to play an important role in mobility in the markets of our presence. Summit Leasing’s extensive dealer network in Slovenia will complement our digital and direct model and therefore provide the enlarged business with an omnichannel distribution platform that will be well positioned for future growth,” further emphasized NLB’s CEO.  
“Summit Leasing a leader in the leasing market in Slovenia with a firm commitment to providing services of the highest standards to its vendor partners and customers. Since its inception in 2000, the company has undergone an amazing journey of profitable growth, including tripling its balance sheet since 2017. Today represents yet another important milestone in Summit Leasing’s development. We are excited about the planned acquisition of Summit Leasing by NLB and we are convinced that we will continue to thrive as part of one of the region’s largest financial groups. We recognise that NLB shares Summit Leasing’s commitment to and passion for innovation and excellence, and we are looking forward to a fruitful partnership that we believe will benefit our customers and vendor partners. On behalf of the management of Summit Leasing, I also wish to personally and sincerely thank our shareholders Apollo Funds and EBRD for their support, focus, guidance and commitment to the business over the past years,” stated Mitja Otorepec, CEO of Summit Leasing.

The consideration for the transaction represents a modest premium to the book value of Summit Leasing. Subject to the development of the business up until completion, the acquisition is expected to increase NLB's risk weighted assets by approximately EUR 700 million, comfortably within EUR 4 billion tactical capacity for M&A. Cost and funding synergies are expected to ensure that the transaction is earnings accretive from the first full year of acquisition, with full realisation of cost synergies targeted within a period of approximately 18 months from completion.

Completion of the transaction is subject to regulatory and anti-trust approvals and is planned for the second half of 2024.

NLB Skladi are entering the North Macedonian market

Meanwhile, NLB Group and its member company NLB Skladi, which offers clients asset management services, are also writing a new regional story. NLB Skladi, asset management, d.o.o. has namely recently concluded a purchase agreement with the company Generali Investments for the purchase of the majority ownership of the company Generali Investments AD Skopje. The completion of the transaction is expected in the first half of next year.

"North Macedonia is one of the strategically most important markets for the NLB Group, which maintains strong presence on the market. NLB Banka, Skopje is the Group's third largest bank in terms of total assets, holding a systemically important position with a market share of more than 16% measured by total assets and above 20% in retail loans and deposits respectively. On the other hand, we see many opportunities for growth. That's why we have already established a leasing company in North Macedonia almost exactly a year ago, and now we are completing our product portfolio with asset management services," explained NLB’s CEO.
"At NLB Group we believe in the development of investment products in the region of Southeast Europe. North Macedonia is particularly interesting in this regard, as the penetration of investment products is very low; on the other hand, the market is sufficiently developed and receptive to such an offer, therefore we see many opportunities for growth," said Luka Podlogar, President of the Management board of NLB Skladi.

After the completion of the transaction, we will offer clients access to investment products in the extensive network of NLB branches and at the same time also expand the current range of funds, he added. He further explained that NLB Group intends to organize asset management under the umbrella of NLB Funds in the future.

NLB Skladi is the largest mutual fund management company in Slovenia, as well as the largest asset management company by total assets under management. The company has maintained its leading position on the market for many years and constantly achieves the highest share of inflows, furthermore, it is trusted by a large proportion of Slovenians.

General Investments AD Skopje is the third largest asset manager on the Macedonian market with an 18 % market share. The company manages approximately EUR 37 million of client assets in 4 different investment funds (1 money market, 1 balanced and two equity funds).

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