BELGIAN lender KBC gave up today the sale of its Luxembourg private bank unit to India’s Hinduja Group after a financial regulator blocked the $1.9bn (£1.18bn) deal.
KBC said it would now look at “various options” to decide the future of KBL European Private Bankers after Luxembourg’s financial authority, CSSF, refused to back the sale to Hinduja.
The transaction was part of KBC’s efforts to divest assets under the oversight of the European Commission after the bank had to be bailed out by the Belgian government during the global financial crisis.
The deal was contingent on the approval by regulators in 10 European nations where KBL is active.
“To our surprise and regret, the Hinduja group was unable to obtain approval for this deal from the regulators in the ten European countries in which KBL epb is active,” said KBC chief executive Jan Vanhevel.
“Although, naturally, we were and are unable to do anything about the situation, there is no denying that this is disappointing for us,” he said.
KBL is one of the main private banking firms in Europe with a presence in several countries including Belgium, France, Germany, Britain and Switzerland.
The Hinduja group, run by two brothers based in Britain, is a global empire spanning banking and finance, transport, information technology, media, pharmaceuticals, agriculture, oil and chemicals.
The CSSF said it was “stopping its evaluation of the acquisition, after concluding that its decision would have been to object to it,” KBC said in a statement.
“The CSSF reached this decision based on application of the criteria set out in the law governing the financial sector and after consulting with the other competent authorities,” the bank said without elaborating.
