BELGIAN banking and insurance group KBC has sold its private banking arm KBL European Private Bankers to Indian family-owned investment firm Hinduja Group for €1.35bn (£1.17bn).
The divestment is the largest to date by KBC in a restructuring plan required by the European Commission in return for €7bn of state aid. Hinduja will push further into Europe, adding to its private bank in Switzerland.
KBC said the deal would add €1.3bn to its capital, boosting its core Tier 1 solvency ratio by one percentage point to 10.4 per cent. However, it would have to book an impairment of €300m in the second quarter.
“It is a positive in our view that KBC managed to sell at a higher price than anticipated and this in the currently unsettled equity markets,” KBW analyst Jean-Pierre Lambert said in a note to clients. Lambert said the market had expected a sale at €1.1bn to €1.2bn.
At the end of 2009 KBL European Private Bankers had €47bn in assets under management, and €37bn in assets under custody.
Just Exor, the investment firm controlled by Italy’s Agnelli family, and Hinduja were interested in the deal.
The KBL epb brand will be retained and based in Luxembourg.
City A.M. Reporter