KBC group, a Belgium-based banking group, has reached an agreement with the Indian family-owned investment firm Hinduja Group for the sale of its Luxembourg-based private banking subsidiary KBL European Private Bankers (KBL epb) for a total consideration of EUR1.35bn.
The transaction comprises the sale of KBC’s entire interest in KBL epb and includes all the private banking subsidiaries as well as the custody and life insurance businesses.
The KBL epb brand, management team and operations will be maintained in their entirety and KBL epb will continue to be headquartered in Luxembourg.
At the end of 2009, KBL epb had assets under management of EUR47bn, assets under custody of EUR37bn and, through a 52.7% stake in EFA, assets under administration of EUR103bn.
Jan Vanhevel, CEO of KBC group, said: “The transaction today is an important first step in implementing our updated strategy. With this divestment, we are releasing a significant amount of capital and further strengthening the KBC group, with its focus on its core bancassurance expertise and markets (Belgium, Central and Eastern Europe), and with its reduced risk-profile.
“This important transaction enables the group to report a very strong pro forma core tier-1 ratio of 10.4 % as of March 31, 2010. We are convinced that the Hinduja Group will allow KBL epb to grow its business, secure the future of its staff and continue offering superior customer service.”
Srichand Hinduja, chairman of the Hinduja Group, said: “We plan to invest further in the business, maintaining each of the subsidiaries, while also providing KBL epb with access to the fast growing markets of the Middle East, the Indian subcontinent and Asia. In this way, we hope to address the private banking needs of clients internationally and facilitate capital flows between fast growing economies and established Western financial markets.”