ResponsAbility Investments AG Consolidation and transformation Experience from the region November,...

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Consolidation and transformationExperience from the region

November, 2015Mirza Halilovic


Today’s Agenda

General reasons for consolidation and transformation

Case studies:

MFI acquired by a Bank

Eki acquires Adria

Bank acquires a bank


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


MFI acquired by a Bank

Same shareholders new structure


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



Shareholders

Fun

d a

dviso

ry co

mpany

Funds Funds

MFI Bank



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


Eki acquires Adria

MFI transforms into company


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.


Eki acquires AdriaMFI transforms into company

Company

Foundation

Result:

Shareholding structure

Possibility to attract additional shareholders

Possibility to disburse higher loan amounts

VFI


Bank acquires another bank

Brothering product offering


• 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


Bank acquires another bankBrothering product offering

Shareholders

Bank

Bank

Result:

Well capitalized bank fulfilling all regulatory requirements

New business area for the acquirers

ResponsAbility Investments AG Consolidation and transformation Experience from the region November,...

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