Daiwa Securities Group Inc, Japan’s second-largest brokerage, agreed to buy KBC Groep NV’s convertible bond unit and its Asia equity derivatives business for about US$1 billion.
Under the agreement, Daiwa is paying about US$200 million for assets and about US$800 million for the trading position, the companies said in a joint statement yesterday.
The transaction is subject to regulatory approval and is expected to be completed early in the fourth quarter, according to the release.
Daiwa chief executive officer Shigeharu Suzuki is expanding broking and investment banking operations globally after ending a decade-long venture with Sumitomo Mitsui Financial Group Inc in December.
The acquisition will help Daiwa boost revenue at its equities and bond business by about ¥15 billion (US$171 million) annually, said Kenichi Kanda, a Tokyo-based spokesman.
The brokerage in April posted an unexpected quarterly loss even as main local rival Nomura Holdings Inc, which bought Lehman Brothers Holdings Inc’s Asian and European operation in 2008, returned to profit.
Daiwa earned ¥121 billion from its equities and bond businesses in the fiscal year ended March 31, Kanda said.
KBC, Belgium’s biggest bank by market value, said the transaction would result in an increase in its Tier 1 capital ratio of 10 basis points.
Over the last two years, the Global Convertible Bond and Asia Equity Derivatives units contributed about 2 percent of KBC Groep’s profit, the company said.
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