QATAR’S ROYAL family is stepping up its investment in the euro zone’s troubled banking sector with plans to buy private banking businesses from Franco-Belgian financial group Dexia and its Belgian rival KBC.
A Qatari investment group looking to take over Dexia’s Banque Internationale Luxembourg (BIL) belongs to members of the al-Thani royal family, which is also buying KBC’s private bank, Luxembourg’s finance minister Luc Frieden said yesterday.
KBC had earlier said Precision Capital, a Qatari-backed firm based in Luxembourg, had agreed to buy KBL, KBC’s private banking unit, for €1.05 billion. It said the Qatari investor had requested anonymity.
The al-Thani royal family, whose members also run key Qatari investment groups such as sovereign wealth fund the Qatar Investment Authority (QIA), has already invested in European banks in the past, including in British bank Barclays in an emergency fundraising in late 2008.
The sale of KBL to Qatari investors is a central part of a restructuring plan required by the European Commission in return for €7 billion of state aid that KBC received to help it through the global financial crisis.
But the deal will leave the bank €300 million short of the price it last year agreed to sell the unit for, before that deal with Indian firm Hinduja Group fell through for regulatory reasons.
It will still release about €700 million in capital for KBC, which is also planning to sell its majority stake in Poland’s Kredyt Bank and insurer Warta.
KBL has assets under management of €47 billion. – (Reuters)
