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.
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.
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.
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).