Sun, Sep 03, 2017 - Page 16 News List

China’s Legend buys Luxembourg private bank

BUCKING THE TREND:The purchase of a majority interest in Banque Internationale de Luxembourg comes as China discourages large investments abroad by local companies

Bloomberg

Chinese conglomerate Legend Holdings Corp (聯想控股) agreed to buy a controlling stake in Banque Internationale a Luxembourg SA (BIL), one of Europe’s oldest privately held banks, from its Qatari owners for 1.5 billion euros (US$1.8 billion).

Precision Capital, the investment vehicle of Qatari royal family members including former Qatari prime minister Sheikh Hamad bin Jassim bin Jabr Al Thani agreed to sell its 89.9 percent holding in the bank, Legend said in a Hong Kong filing.

Founded in 1856, BIL is the oldest privately owned bank in Luxembourg, with assets under management of 38 billion euros at the end of last year, according to an annual report published in June.

The purchase by Legend marks a shift from a recent trend in which European banks and wealth managers have sought investments in Asia to drive growth.

Qatar has been an active investor in European banks, with the country’s sovereign wealth fund holding stakes in lenders including Barclays PLC and Credit Suisse Group AG.

The deal comes amid tightening Chinese restrictions on capital outflow. China is determined to reduce leverage in financial markets and systemic risks ahead of the expected Chinese Communist Party leadership transition in October, and is stiffening regulation on capital outflows that could weaken the country’s currency.

China said last month it would prohibit or restrict domestic companies from making overseas investment in sectors including the gaming industry, real estate, hotels and entertainment.

Legend, which holds a 31.5 percent stake in Lenovo Group Ltd (聯想), has been expanding its footprint. The Beijing-based conglomerate also controls venture capital fund Legend Capital (君聯資本), Hony Capital (弘毅投資), a buyout firm, and property developer Raycom Real Estate Development Co (融科智地房地產開發).

Legend is also seeking to increase holdings in the financial sector in one to two years, including joining a group of companies for the purchase of Pension Insurance Corp.

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