KBC announced it will sell its subsidiary Centea to Crédit Agricole (Belgium) for €527m. While it is too early to guess what the effect might be on the combined entity's structured products business in Belgium, the deal combines two players with some level of activity in the local market. Crédit Agricole (Belgium) mainly acts as a distributor. It is not a full subsidiary of French Crédit Agricole, but is owned 50% by local Belgian cooperative banks and 50% by two French Crédit Agricole cooperative banks, North France and North East, which are fully part of the Crédit Agricole group.
Crédit Agricole (Belgium) launched 26 products between September 2005 and October 2008 and one product in October 2010. These products, mainly medium term notes, were issued via BNP Paribas (3), Crédit Agricole CIB (9) and SG Acceptance (12). They are worth €358m.
Centea, on the other hand, is one of strongest savings banks in Belgium, with 615,000 private customers. It currently issues a couple of products a month of its own and distributes KBC products as well. SRP's Belgian database registers 193 structured funds, worth €3.3bn (€17.3m per product), distributed by Centea, with strike dates between June 1998 and April 2011.
The deal - still to be approved by the regulator - is part of the reorganisation agreed with the European Commission in compensation for the support the bancassurer received from the Belgian government during the credit crisis.
The deal will free up around €400m of capital for KBC, primarily by reducing risk-weighted assets by €4.2bn, according to the bank. "With a lower risk profile, we will continue to focus on our core activity as a bancassurer in our core markets of Belgium and Central and Eastern Europe," said CEO Group Jan Vanhevel.
Crédit Agricole said it and Centea's management team will review the joint operation. "Not only does this deal double our total assets and market share, but we will also acquire 600,000 new customers in one fell swoop," said CA CEO Luc Versele. At Centea, there seems to be a general feeling of relief the period of uncertainty is over. "We consider this acquisition to be a positive and reassuring development for our customers, employees and agents," said Centea CEO Paul D'Haeyer.
