responsability investments ag consolidation and transformation experience from the region november,...
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responsAbility Investments AGwww.responsAbility.com
Consolidation and transformationExperience from the region
November, 2015Mirza Halilovic
responsAbility Investments AGwww.responsAbility.com
Today’s Agenda
General reasons for consolidation and transformation
Case studies:
MFI acquired by a Bank
Eki acquires Adria
Bank acquires a bank
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Consolidation and transformationGeneral
• Drivers:• New regulation
• Increased capital requirements• New legal forms
• Changed market environment• Increased competition• New product offering
• Outcome:• Merger• Acquisition• Transformation/Change of legal structure• Mix
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MFI acquired by a Bank
Same shareholders new structure
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MFI acquired by a BankSame shareholders new structure
• Rationale:• Better cost structure• Access to deposits• Stronger regulation
• Steps for MFI:• Step 1: Transfer of business• Step 2: Capital distribution to MFI’s current shareholder• Step 3: Bank acquires 100% of MFI’s shares emerging from Step 2
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MFI acquired by a BankSame shareholders new structure
Shareholders
Fun
d a
dviso
ry co
mpany
Funds Funds
MFI Bank
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MFI acquired by a BankSame shareholders new structure
Shareholders
Fund advisory company
Funds
MFI
Bank
Result:
MFI has been consolidated on Bank’s balance sheet
Focus on microfinance clients
Bank can provide the MFI with preferable funding
Use of bank’s infrastructure
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Eki acquires Adria
MFI transforms into company
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Eki acquires AdriaMFI transforms into company
• Rationale:• Better cost structure• Possibility to disburse larger loans• Possibility to diversify shareholder base
• Steps for EKI:• Step 1: MCF EKI (Foundation) made an offer to purchase 100% of Adria’s
(Company) shares and become its sole owner. • Step 2: Transfer Phase was to establish the operational integration between
MCF EKI and MCC EKI (name changed from Adria). • Step 3: Partner Phase and final phase to introduce VFI as a co-owner of MCC
EKI.
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Eki acquires AdriaMFI transforms into company
Company
Foundation
Result:
Shareholding structure
Possibility to attract additional shareholders
Possibility to disburse higher loan amounts
VFI
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Bank acquires another bank
Brothering product offering
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• Rationale:• Target is under capitalized• Acquirer wants to expand in to the new market segment
• Steps for MFI:• Step 1: Valuation of the target• Step 2: Negotiations and agreement between the shareholders• Step 3: Approval by the central bank
Bank acquires another bankBrothering product offering
responsAbility Investments AGwww.responsAbility.com
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Bank acquires another bankBrothering product offering
Shareholders
Bank
Bank
Result:
Well capitalized bank fulfilling all regulatory requirements
New business area for the acquirers