Brussels: Belgian bancassurer KBC has cancelled a proposed €1.35 billion ($1.9 billion) sale of its private banking arm to Indian group Hinduja after it failed to get regulatory approval.
The sale of KBL European Private Bankers (KBL epb), part of a KBC restructuring plan required by the European Commission, failed to win clearance from the Luxembourg financial markets regulator CSSF, KBC said on Tuesday.
“Over the coming weeks, and in relation to implementing its strategic plan, the group will thoroughly assess the various options so that, given current market conditions, it can take the best decision regarding the future of KBL epb,” KBC said.
The sale to Indian family-owned investment firm Hinduja Group, which would have been the largest of KBC divestments to date, was originally due for completion in the third quarter of 2010. Its delay caused nervousness among KBC investors.
Exor, the investment firm controlled by Italian family Agnelli had also been named as a potential bidder before a deal with Hinduja was announced last May.
The market has also been keen to learn when KBC will float a minority stake in Czech unit CSOB to help satisfy regulators after it received €7 billion state aid to help it through the global financial crisis.