KBC has signed an agreement with the Shanghai-based Yinren Group to dispose of its subsidiary Antwerp Diamond Bank (ADB) for an undisclosed sum.
The acquisition of ADB will enable Yinren to use ADB’s know-how, network and brand reputation to further develop its business in the Chinese market, and to impart a role in the communication between the world’s main diamond hubs including Antwerp, Mumbai, Dubai and Hong Kong and the upcoming centers of the Far and Middle East.
As per the terms of the deal, the Yinren Group will purchase 100% of KBC’s participation in ADB, which represents 99.9% of ADB’s shares.
The transaction will release approximately 0.1bn of capital for KBC, mainly by reducing risk-weighted assets, which will ultimately improve KBC’s tier-1 ratio (Basel II) by almost 0.2%.
Prior to completion of the acquisition, part of ADB’s loan portfolio, which mainly comprises the higher risk and non-performing loans with a net book value of 0.4bn will be transferred to KBC Bank.
Post-acquisition, KBC will also offer funding to ADB at the tune of 0.2bn for a maximum period of two years on a secured basis.
KBC Group CEO Johan Thijs said because of Antwerp Diamond Bank’s very specific business activity in a niche market, this divestment turned out to be a challenging project, though one which we have managed to conclude successfully.
"We are convinced that the Yinren Group will develop Antwerp Diamond Bank’s business going forward, securing the future of its staff and ensuring that quality service will continue to be provided to its customers," Thijs added.