The Belgian bank said through this deal it will free up nearly EUR400m of capital for KBC, primarily through reducing risk-weighted assets by EUR4.2bn, increaseing its tier-1 ratio to around 0.4%.
The savings bank, Centea, caters for the banking and insurance needs of over 615,000 private customers, the self-employed and small companies through a network of 657 points of sale operated by 608 tied bank agents across Belgium.
Centea’s range of products includes deposits, investments and loans, as well as life and non-life insurance provided in close co-operation with Fidea (the complementary network of insurance brokers owned by KBC).
Credit Agricole, Centea and Fidea have also agreed that, in an initial phase, Fidea will continue to offer its life and non-life insurance products through the Centea agents, as well as through Credit Agricole’s network.
KBC Group CEO Jan Vanhevel said that divestment will free up a considerable amount of capital and help to further strengthen the KBC group. With a lower risk profile, the group will continue to focus on the core activity as a bancassurer in the core markets of Belgium and Central and Eastern Europe.
"In Belgium, we will operate as before through our comprehensive network of KBC and CBC bank branches and insurance agencies," Vanhevel said.
Credit Agricole CEO Luc Versele said that this deal is unique in Credit Agricole’s history. Not only does it double the total assets and market share, but will also acquire 600,000 new customers in one fell swoop.
KBC said that it will continue to provide banking and insurance services under the KBC brand name in Flanders and Brussels through its network of 722 bank branches, 19 private banking branches, 13 corporate branches and 569 insurance agencies.
The KBC will also continue to do the same under the CBC name in Brussels and Wallonia through 88 bank branches, 13 corporate branches, 7 private banking branches and 75 insurance agencies.
Finalization of the deal depends on the customary approval of the regulators and is likely to occur in the second quarter of 2011.
In this deal, Credit Agricole was advised by Econopolis, Deloitte, CMS DeBacker and AT Kearney, while KBC was advised by KBC Securities, Morgan Stanley, Eubelius and Linklaters.
