KBC solo news

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Precision Capital acquires KBL epb,
KBC’s private banking subsidiary
KBC increases its tier-1 ratio by 0.6%
The KBC group (‘KBC‘) has reached an agreement with Precision Capital for the sale of its dedicated private banking subsidiary KBL European Private Bankers (‘KBL epb‘) for a total consideration of EUR 1.050 billion, EUR 50 million of which depend on the results of KBL epb (‘conditional earn out’).
• Precision Capital is a Luxembourg entity, a company representing the business interests of a Qatari investor.
• KBL epb is one of Europe’s largest onshore private banking groups with affiliated local banks in numerous locations across nine European countries: Belgium, France, Germany, Luxembourg, Monaco, the Netherlands, Spain, Switzerland and the United Kingdom.
• As at 30 June 2011, KBL epb had assets under management of EUR 47 billion, assets under custody of EUR 38.2 billion (and, through a 51.13% stake in EFA, assets under administration of EUR 87.5 billion).
• 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 of KBL epb.
• 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 first quarter of 2012.
• The transaction will release a total of approximately EUR 0.7 billion in capital for KBC, resulting in a 0.6 % increase in KBC’s tier-1 ratio. In addition, over the last 18 months, some EUR 115 million in capital have already been released as a result of a reduction in risk-weighted assets. The transaction will have a negative impact of approximately EUR 0.4 billion on KBC’s third-quarter P&L.
• KBC will continue to offer private banking services in Belgium and Central and Eastern Europe through its KBC-branded private banking businesses.
Jan Vanhevel, KBC Group CEO: ’The least we can say is that the market circumstances of the last few months have been particularly challenging. All the more reason why we are pleased to be able to announce today’s deal. This agreement marks a crucial step in implementing our refocus strategy, while at the same time providing continuity, stability and certainty to the customers and staff of KBL epb. The
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agreement will allow KBC to release a significant amount of capital, to reduce our risk profile and to further
strengthen our focus on the core bancassurance expertise and markets of Belgium and Central and
Eastern Europe. It is also reassuring to see that a Qatari investor recognises and values the strengths and
potential of a European private banking group. Precision Capital believes it can grow KBL epb organically
onshore and through strategic opportunities and also wishes to further capitalise on links with the Middle
East and Asia.
On a personal note, it is with regret that I say goodbye to our KBL epb colleagues, with whom we have
worked together successfully for many years. I especially wish to express my appreciation for the hard
work and commitment they have shown, giving their customers the same high-quality service in these
challenging circumstances and during the period of uncertainty of the last few months. I am convinced that
Precision Capital will provide KBL epb with ample growth opportunities, secure the future of KBL epb’s
staff and continue to offer excellent customer service.’
Jacques Peters, KBL epb CEO: ’We are pleased with the agreement which has been signed and which
allows us to end this period of uncertainty. We can now look to the future with more confidence. Precision
Capital will be for us a leading partner who is committed to supporting our customer-driven business model
and strategy with a long-term perspective. With Precision Capital, we will be able to work closely together
with the aim of tapping into new markets, in particular in the Middle East and Asia. We are convinced that
our private banking clients, our staff and the Luxembourg financial centre as a whole will benefit from the
highly committed support of our new owner.’
Contact details
KBC Group
Wim Allegaert, General Manager, Investor Relations, KBC Group
Tel 32 2 429 40 51 wim.allegaert@kbc.be
Viviane Huybrecht, General Manager, Group Communications/Spokesperson, KBC Group
Tel 32 2 429 85 45 pressofficekbc@kbc.be
About KBL epb
KBL epb operates a unique private banking business model focused on local client service supported by
centralised operations. This model has resulted in the global-hub concept based in Luxembourg with
control functions such as audit, compliance and risk management.
KBL epb operates some of the strongest brands in leading European markets:
• Theodoor Gilissen Bankiers in the Netherlands
• Merck Finck & Co in Germany
• Puilaetco Dewaay in Belgium
• Brown Shipley & Co in the United Kingdom
• KBL epb Luxembourg
• Puilaetco Dewaay Luxembourg
• KBL epb Richelieu Banque Privée in France
• KBL epb Switzerland
• KBL epb Monaco
• KBL epb España
• Luxembourg-based life insurance subsidiary VITIS Life.
The group employs 2 553 staff, 401 of whom are private bankers.
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About KBC
On 18 November 2009, KBC announced its updated strategy of focusing on its core bancassurance expertise in its home markets (in Belgium and Central Europe) and further reducing the risk profile of the group.
As part of this updated strategy, the group announced its intention to deconsolidate the activities of the European Private Banking Business Unit, which operated with commercial autonomy and benefited from lower-than-average synergies with the bancassurance activities of the group. The announcement today represents the implementation of a major element of the strategic plan presented in November 2009.
KBC will continue to offer private banking services in Belgium and Central and Eastern Europe through its KBC-branded private banking businesses


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Nuove news

KBC clarifies
early redemption of CDOs
There have been a number of reports in the media today about KBC’s decision to redeem customers’ investments in a certain CDO before it reached maturity. KBC would like to clarify these reports.
In a press release on 13 July 2011, KBC announced its intention to sell or unwind selected ABS and CDO assets as part of its strategic plan, which will allow KBC Group to release capital at no or limited loss to the group.
Earlier this year, customers who had invested in the Lancaster CDO were repaid early and in full.
At the end of September, KBC informed all customers who had invested in the Fulham CDO that they would be paid back the full amount of capital invested and would receive a final coupon. The prospectus for that CDO contained such an option for early redemption provided certain conditions were met. The unwinding of the Fulham CDO generated enough funds to allow KBC to exercise that option.
The prospectuses for certain other CDOs also contain an early redemption option. KBC is looking at each CDO individually to establish whether such option can be exercised.
KBC Group

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J.C. Flowers & Co. acquires Fidea (Belgium)
from KBC group
KBC Group has reached an agreement with J.C. Flowers & Co. for the sale of its subsidiary Fidea for a total consideration of 243,6 million euros, including 22,6 million euros pre-completion dividend and subject to pricing adjustments on closing accounts.
• With this transaction, Fidea will become part of an international well-established private equity group specialised in participations/investments in the financial services sector. Besides Fidea the portfolio of J.C. Flowers & Co. already contains a number of financial groups such as Pension Corporation (U.K.), NIBC Bank N.V. (The Netherlands) and BTG Pactual (Brazil). Through its investment funds, J.C. Flowers & Co. has owned and operated financial institutions, including insurance companies, across Europe for many years.
• Today’s announcement fits in with the refocus strategy that KBC communicated at the end of 2009. The divestment of Fidea is a further step in implementing this plan and will not adversely affect the strength of KBC’s business model in its core markets. Indeed, KBC will continue to provide banking and insurance services under the KBC brand name in Flanders and Brussels through its network of 736 bank branches, 19 private banking branches, 13 corporate branches and 513 insurance agencies. It will continue to do the same under the CBC name in Brussels and Wallonia through 88 bank branches, 13 corporate branches, 7 private banking branches and 75 insurance agencies.
• J.C. Flowers pays a total consideration for Fidea of 243,6 million euros, including 22,6 million euros pre-completion dividend and subject to pricing adjustments on closing accounts. A potential ‘conditional earn out’ is subject to Fidea’s future results.
In total, this deal will free up around 0.1 billion euros in capital for KBC, primarily by reducing risk-weighted assets by 1.8 billion euros, but also taking into account that the transaction will ultimately have a negative impact of approximately 0.1 billion euros on KBC’s P&L. The overall positive impact on KBC’s tier-1 ratio is around 0.1% (impact calculated on 30 June 2011).
• Fidea is a well-established player on the Belgian insurance market and a renowned brand. The company offers both life and non-life insurance products to private customers, the self-employed and companies. It sells its policies through independent insurance brokers and – within a bancassurance co-operation agreement – through Centea’s and Crédit Agricole’s network of agents.
• The Fidea brand and management team will be maintained and Fidea will continue to operate out of Antwerp.
• In order to ensure continuity of service, KBC will continue providing, among other things, IT-related support to Fidea during the transition phase estimated to last three years.
• The closing of the transaction is subject to customary regulatory approvals and is expected to be completed in the first quarter of 2012.
• In this deal, J.C. Flowers & Co. was advised by Credit Suisse, Deloitte and Cleary Gottlieb Steen & Hamilton, while KBC Group was advised by KBC Securities, Morgan Stanley, Eubelius and Linklaters