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Nov 19, 2009 14:08 EEST
November 19 (SeeNews) - Belgian bancassurance group KBC on Wednesday said it will sell its non-strategic 31% stake in Slovenian bank NLB and will stay put over the near term in Serbia.
With a market share of less than 1.0% in Serbia, KBC's presence is still limited and strategy synergies are ’early phase‘, KBC said in a statement on Wednesday. Nevertheless, KBC does not intend to start a divestment process soon.
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The Belgian bancassurer has just been given the go-ahead by the European Commission on a restructuring plan that will involve the divestment of a number of businesses, including in central and eastern Europe (CEE). Serbia is one of the non-EU banking markets which KBC has recently entered.
The European Commission said in a statement on Wednesday it has approved an asset relief and restructuring package for KBC that will allow the Belgian group to retain its integrated banking and insurance model but divest or run-down a significant number of businesses, including in CEE, particularly those that are not fully in line with its core business model.
As the financial crisis was gathering speed last October, KBC announced it had reached an agreement with the Belgian government to further strengthen KBC’s financial position, creating an additional core capital buffer so that it could cope with any future challenges. As part of the agreement, the KBC was to issue 3.5 billion euro ($5.2 billion) of securities to the Belgian state following similar initiatives worldwide. The European Commission investigated the transaction, as well as two following aid measures, in order to avoid distortion of competition within the European Union.
"When analysing the effects of the crisis, it is reassuring to note that our core business model remained largely untouched and that the strategic rationale remained valid for our Central and Eastern European presence," the KBC statement said.
The bancassurer also said it is now looking for a new strategic partner for its private banking business outside Belgium and CEE where its KBC-branded private banking activities will remain unchanged.
KBC is an integrated banking and insurance group, serving mainly retail customers, small and medium-sized firms and private banking clients. In CEE, KBC is present in Poland, Hungary, Slovakia, the Czech Republic, Bulgaria, Slovenia, Russia, Romania and Serbia.
KBC acquired the NLB stake in 2002.
In 2007, the Belgian group bought 100% of Serbian lender A Banka and the Hipobroker brokerage house. In March 2008, A Banka was renamed to KBC Banka.
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