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Financial Regulator Says No To KBC Planned Sale Of Private Banking Unit To Indian Firm

Vanessa Doctor Asia Editor 15 March 2011

Financial Regulator Says No To KBC Planned Sale Of Private Banking Unit To Indian Firm

KBC Group, the Belgian bancassurance company, has halted the proposed $1.9 billion sale of its private banking unit to India's Hinduja Bank after it failed to obtain regulatory approval, Reuters reports.

The CSSF, the financial markets regulator of Luxembourg, has blocked the planned sale of KBL European Private Bankers, without specifying the reason for its decision, the news service said. KBC, which admitted being disappointed over the rejection, said it will continue to look for other ways to free up capital to repay its government debt. According to the publication, this could mean that any eventual sale might translate to a lower sale price.

KBC is looking to offload its private banking arm as part of a restructuring requirements imposed by the European Commission as conditions of receiving state aid. Had the plan gone smoothly, the sale would have been completed by the third quarter of 2010. The delays had reportedly turned many KBC investors off.

As of the end of 2010, KBL recorded around  €47 billion in assets under management and a stable of 418 private bankers. Other parties eyeing the unit include Exor, the investment firm controlled by the Agnelli family of Italy; Safra, the Brazilian banking group; KKR, and Julius Baer, among others.

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