Europe's KBC completes post-rescue divestment programme with sale of German banking arm.

Belgium-headquartered KBC has completed the sale of KBC Bank Deutschland to investors linked to Teacher Retirement System (Texas), Apollo Global Management, Apollo Commercial Real Estate Finance Inc. and Grovepoint Capital.

The deal will free up €100 million ($126.2 million) of capital for KBC, primarily by reducing risk-weighted assets.

The sale will not have any material impact on KBC’s financial results, but will improve KBC's solvency position by around 15 basis points, the bank said in a statement today.

KBC has spun off, or wound down, 25 operations outside of its home country as a condition of receiving taxpayers' money in the wake of the 2008 financial crash. Its divestment programme was agreed with the European Union in 2009. That programme is now complete.

As a result of the changes, KBC's business focus was redirected to bank-insurance in Belgium, the four core countries in Central Europe (Czech Republic, Slovakia, Hungary and Bulgaria) and Ireland. Scaling back the international loan portfolio has contributed to the decrease of risk-weighted assets by more than one-third since 2008 and the reduction of 22 per cent in KBC's total assets to date.

KBC has  repaid €5 billion euros of the €7 billion received in financial support from the Belgian Federal and Flemish Regional governments. The total amount in principal repayments, coupon payments and fees for the CDO guarantee currently stands at €9.5 billion.

"KBC reiterates its intention to accelerate repayment of the remaining support received from the Flemish Regional Government and to pay back the final instalment by no later than the end of 2017 instead of year-end 2020 as agreed with the European Commission. By the time KBC has repaid all the aid it received, the total figure for principal repayments, coupon payments and fees for the CDO guarantee will have risen to more than €13 billion," it said.