|PTI/ AFP / Luxembourg October 10, 2011, 16:12 IST
Belgian bank KBC announced today a deal to sell Luxembourg unit KBL to a Qatar
investment group for 1.05 billion euros (or $1.41 billion), finding a new buyer after a
deal with India's Hinduja group fell through.
KBC group chief executive Jan Vanhevel said the sale will allow the Belgian bank to release
capital, reduce its risk profile and further focus on its core markets in Belgiam and Central
and Eastern Europe.
"The least we can say is that the market circumstances of the last few months have been
particularly challenging," Vanhevel said in a statement. "All the more reason why we are
pleased to be able to announce today's deal.
"This agreement marks a crucial step in implementing our refocus strategy, while at the same
time providing continuity, stability and certainty to the customers and staff of KBL," he said.
He said Precision Capital wants to capitalise on links with West Asia and Asia to boost KBL.
The transaction is expected to be completed in the first quarter of 2012 after it is reviewed
by regulators, with 50 million euros in the sale depending on the results of KBL.
The Indian conglomerate Hinduja Group had sought to buy KBL for 1.35 billion euros but the
transaction was called off in March after Luxembourg's financial regulator blocked the deal.
One of Europe's largest onshore private banking groups, KBL is affiliated to local banks
nine European nations, including Belgium, France, Germany, Luxembourg, Monaco, the
Netherlands, Spain, Switzerland and Britain.
As of June 30, the bank had assets under management of 47 billion euros and assets
under custody of 38.2 billion euros.
The transaction will release around 700 million euros in capital for KBC, increasing
the bank's tier-1 capital ratio by 0.6%