Belgian bank KBC today finalised a deal to sell its Luxembourg unit KBL to a Qatar investment group for €1.05 billion ($1.41 billion), after a deal with Hinduja group fell apart.
Qatar's state-owned investment group Precision Capital is buying KBL, which had €47 billion assets under management, €38.2 billion assets under custody through a 51.13-per cent stake in EFA, and €87.5 billion assets under administration.
The sale is a part of a restructuring plan mandated by the European Commission in return for €7 billion pumped in by the Belgian government to help it through the global financial crisis.
KBL is one of Europe's largest onshore private banking groups with affiliated local banks in numerous locations across nine European countries including Belgium, France, Germany, Luxembourg, Monaco, the Netherlands, Spain, Switzerland and the UK.
The transaction comprises the sale of KBC's entire interest in KBL, including all the private banking subsidiaries as well as the custody and life insurance businesses of KBL.
The KBL brand, management team and operations will be maintained in their entirety and will continue to be headquartered in Luxembourg.
The transaction will release approximately €0.7 billion in capital for KBC, resulting in a 0.6-per cent increase in KBC's tier-1 ratio.
KBC will continue to offer private banking services in Belgium and Central and Eastern Europe through its KBC-branded private banking businesses.
Jan Vanhevel, KBC Group CEO said, ''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.''
''The agreement will allow KBC to release a significant amount of capital, to reduce our risk profile and to further strengthen our focus on the core bancassurance expertise and markets of Belgium and Central and Eastern Europe,'' he added.
Diversified international conglomerate Hinduja group had in May last year agreed to buy KBL for €1.35 billion ($1.69 billion), (See: Hindujas snap up KBC's private banking arm for $1.69 billion) but the deal fell through for regulatory reasons.