One of the most aggressively growing Bulgarian banks in recent years, TBI Bank, is likely to have a new owner soon, according to a stock exchange announcement by the consumer lending specialist 4finance Holding S.A. that has signed a definitive sale agreement with venture capital fund Advent International.
The exact price is not disclosed and it is usually subject to conditions, as it inevitably takes time to finalise such a deal. It will also require regulatory approval from the national and European central banks, BNB and ECB, as well as the Bulgarian Competition Commission. It is expected to be completed in the last quarter of 2025.
In the banking sector, valuations are usually in terms of a capital multiplier, which in the case of TBI is approaching 300 million euro. 4finance's announcement specifies that the total price exceeds book value at the end of 2024, with 75% to be paid in cash on completion and the balance to be covered by operations over the next 18 months. The last major deal for Raiffeisenbank was at around 1.65 times capital, however here we are talking about a more modest market share. However, for a clean portfolio with growth potential and a recognisable brand, it could also fetch a hefty premium over book value.
The news is interesting along several lines. First of all, this is the first bank deal in many years where it is not about consolidation, but about interest from a new foreign investor. Secondly, the current owner - the fast loans company 4finance, which has been dominated by the Russian billionaire Oleg Boyko since the financial crisis, does not seem to be selling under pressure. Over the years, his sanctioning issues have been cleared up, with the group's formal ties to him also terminated in 2022. And it also means that the pending sale, which has been rumoured and speculated in the sector for years, is likely to be at a relatively high valuation. Finally, this is Advent's second landmark purchase in Bulgaria's financial sector, after the fund acquired MyPOS, a fintech specialising in POS terminals, in 2023.
What's on sale
TBI Bank is the ninth largest bank by assets in Bulgaria with nearly BGN 3.5 billion at the end of 2024, giving it a market share of less than 2%. However, its focus is almost entirely in consumer lending, where it is No. 4 with a portfolio of more than BGN 2.2 billion. It should be borne in mind here that Unicredit Group's consumer finance business in Bulgaria has been relegated to a non-bank, with a portfolio of BGN 2.7 billion by the end of 2023. Since its acquisition by 4finance in 2016, it has embarked on an aggressive strategy, repositioning itself as a niche challenger bank (with a distinct digital model), and since then assets have grown nearly tenfold.
TBI Bank finished 2024 with a profit of BGN 105.6 million, slightly above the BGN 104 million achieved in 2023 as per individual data from BNB. On a consolidated basis, the profit growth declared by the bank is 18%.
Thanks to its specific model, focused on higher-risk consumer lending, it has traditionally operated with some of the highest interest margins in Bulgaria and shows some of the highest profitability indicators. It also operates in Romania and Greece through its local licence, and in fact its Romanian loan book is larger than its Bulgarian one. It is also aggressive on deposits, offering some of the highest interest rates in the country and subsidising some of the services that other banks normally charge for.
The other area where it is trying to develop is as a service bank for businesses, where synergies with MyPOS can be sought. According to the release, TBI Bank is present in 32,000 partner outlets in its core markets and has 2.4 million customers using its mobile app.
It seems that the deal also entails management retention. "Together with the team at TBI Bank, we are very excited to open this new chapter in establishing ourselves as a leading regional challenger bank. Advent's support will give us many opportunities to accelerate the execution of our strategy and further improve the way we serve customers. We are proud of what we have achieved so far and we are grateful to Advent for their trust," says Peter Baron, CEO of TBI Financial Services B.V. - the bank's direct shareholder.
The return of Advent
Advent is one of the largest global players in private equity. It has offices in 16 destinations and, according to its official presentation, has assets under management in excess of USD 100 billion, which are invested in 430 companies in 44 countries.
If successfully completed, this will be Advent's fifth deal in Bulgaria. The fund was previously an investor in ceramic tile manufacturer KAI Group, BTC and Devin over the years, exiting them.
Its last purchase in the country was in 2023, when it acquired MyPOS, founded by local entrepreneur Hristo Georgiev. No price was announced then, but according to a Reuters publication, the deal valued the POS terminal operator at 500 million euro.
"As a global financial investor with local expertise, Advent International is in an excellent position to partner with TBI Bank's management team to support its strategic growth plans," the deal announcement points out.
Advent Managing Partner Ranjan Sen is also quoted saying that "4finance has transformed TBI Bank into an agile, digital and customer-centric organisation. We share a vision for the future of banking with the management team and are excited to support them in their quest to develop and deliver innovative solutions for customers."
One of the most aggressively growing Bulgarian banks in recent years, TBI Bank, is likely to have a new owner soon, according to a stock exchange announcement by the consumer lending specialist 4finance Holding S.A. that has signed a definitive sale agreement with venture capital fund Advent International.
The exact price is not disclosed and it is usually subject to conditions, as it inevitably takes time to finalise such a deal. It will also require regulatory approval from the national and European central banks, BNB and ECB, as well as the Bulgarian Competition Commission. It is expected to be completed in the last quarter of 2025.
