Qataris and Luxembourg set to buy Dexia’s private bank

QATAR and Luxembourg are to buy bailed-out Dexia’s private banking arm for €730m (£610.4m), less than analysts had estimated, as the Franco-Belgian group is broken up.

Qatar’s al-Thani royal family will acquire 90 per cent of Banque Internationale Luxembourg (BIL) via their Precision Capital investment group, Dexia said yesterday.

The deal follows Precision’s agreement in October to buy the private banking business of Dexia’s Belgian rival KBC.

Morgan Stanley estimated the value of BIL at €1bn to €1.7bn in October, with reports at the time saying the overall price was likely to be around €1bn.

“It [the price] looks a bit low,” KBC Securities analyst Dirk Peeters said yesterday. “But everyone knows that Dexia have to sell. They may have been willing to pay €800m to €900m, but thought they’d put in a lower offer.”

Dexia was bailed out by Belgium, France and Luxembourg in October, with Belgium nationalising Dexia’s Belgian banking business.

Luxembourg will buy the remaining 10 per cent of BIL, Dexia said.