Hindujas may acquire KBC arm

The Hinduja group is set to acquire the private banking arm of Belgium's KBL for ¤1.5 billion (Rs 8,900 crore). KBL European Private Bankers has ¤47 billion in assets under management.

“The Hinduja group has emerged as the preferred bidder and it is all set to clinch the deal,” said a person familiar with the development. “A joint announcement is expected in a few days.”

The Hinduja group refused to talk on the issue.

Italy’s Exor, controlled by the Agnelli family and the majority shareholder of the Fiat group, was the second highest bidder.

Brazilian banking group Safra, which wanted to buy parts of the unit, equity firm KKR and Swiss Bank Julius Baer had also bid.

The sale is being managed by global investment bank JPMorgan.

The acquisition of KBL by the Hindujas is unlikely to have any immediate impact in India, where the group is the largest shareholder in IndusInd Bank.

Incidentally, IndusInd Bank has been on the lookout for expertise in manufacturing private banking products and is even willing to offer strategic stake.

KBC recently tied up with Union Bank of India to set up an asset management company in the country.

The Belgian financial services company decided to sell KBL European Private Bankers, which has operations in 10 countries of Europe, following the global financial crisis.

KBC is the second largest bancassurer in Belgium. It is also one of the largest banks in Europe and a major financial player in central and eastern Europe, serving 11 million customers worldwide.

In November, the Belgian government and the Flemish regional government had pumped ¤7 billion into KBC. In return, the financial services company agreed to scale down its merchant banking business, sell its private banking and also disinvest other businesses. It, however, wants to keep its core bancassurer model intact.