Belgium's KBC sells private bank to Qatari-backed Luxembourg firm Precision Capital for $1.4 billion

BRUSSELS: Belgian bank KBC has agreed the sale of its KBL private banking unit for 1.050 billion euros ($1.42 billion) to Qatari-backed Luxembourg firm Precision Capital, it said on Monday, falling 300 million euros short of previous plans for the sale.

The news sent KBC's shares down 2.45 percent at Monday's market opening.

The sale is a central part of a restructuring plan required by the European Commission in return for 7 billion euros of state aid that KBC received to help it through the global financial crisis.

Last year KBC agreed to sell the unit to Indian family-owned investment firm Hinduja Group for 1.35 billion euros, but the deal fell through for regulatory reasons.

"The market currently is much more volatile than it was a year ago," said a spokesman. KBC said in a statement the agreement would release a total of about 700 million euros in capital for KBC.

Precision Capital represents the business interests of a Qatari investor who has requested anonymity, it added.

Private equity firm KKR has previously been identified as a potential bidder, along with Societe Generale and Canadian lender Royal Bank of Canada.

Exor, the investment firm controlled by Italy's Agnelli family, had also been named as a potential bidder before the agreement with Hinduja was announced.