KBC group has reached an agreement with the Hinduja Group for the sale of its private banking subsidiary, KBL European Private Bankers, for a total consideration of EUR1.35bn.
The Hinduja Group has been in the banking business since 1914 and is present in the sector through Hinduja Bank Switzerland and IndusInd Bank in India.
It will give KBL greater access to the fast-growing Middle-East, Indian and Asian markets.
The Hinduja Group intends to grow KBL epb internationally by using the group’s business interests in more than 100 countries.
KBL epb is one of Europe’s largest onshore private banking groups with affiliated local banks in 55 locations across ten European countries: Belgium, France, Germany, Luxembourg, Monaco, the Netherlands, Poland, Spain, Switzerland and the UK.
At the end of 2009, KBL epb had assets under management of EUR47bn, assets under custody of EUR37bn and, through a 52.7 per cent stake in EFA, assets under administration of EUR103bn.
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.
The closing of the transaction is subject to customary regulatory approvals and is expected to be completed in the third quarter of 2010.
As of 31 March 2010, the pro forma release on core capital of the transaction for KBC is approximately a positive EUR1.3bn, resulting in a one per cent increase in KBC’s core tier-1 ratio and a strong pro forma core tier-1 ratio of 10.4 per cent.
KBC will continue to offer private banking services in Belgium and Central and Eastern Europe through its KBC-branded private banking businesses.
Jan Vanhevel (pictured), KBC Group chief executive, says: “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.”
Srichand P. Hinduja, chairman of the Hinduja Group, adds: “We are very pleased to welcome KBL epb into our business, which has a long and successful history in the banking sector. We intend to ensure that KBL epb clients continue to receive exemplary service from a highly-motivated staff working in a new and secure environment.”
