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KBC Group has finalised the sale of its global convertible bond and Asian equity derivatives businesses to Daiwa Capital Markets for a total consideration of approximately USD1.2bn.

The amount consists of approximately USD0.2bn for staff, IT infrastructure and other assets (excluding the trading positions) and approximately USD1bn for trading positions.

The transaction allows KBC to free up capital resources for a total amount of USD0.2bn.

The acquisition, jointly announced on 5 July, forms a foundation for Daiwa’s growing derivatives business and fits within KBC’s renewed strategy to focus on its home markets in Belgium and Central and Eastern Europe and further reduce the risk profile of the group.

Luc Popelier, chief executive of KBC Group’s market activities, says: “The sale that was finalised today is in line with KBC’s renewed strategy to wind down the structured products business within KBC Financial Products and to focus on its core bancassurance market. The transaction allows KBC to free up capital resources for a total amount of USD0.2bn while also further reducing the group’s risk profile. In the Asia Pacific region KBC will continue to concentrate on corporate banking including lending, trade finance and treasury sales for core clients with links to KBC’s home markets in Europe.”

Toshinao Matsushima, head of global markets division at Daiwa, says: “The acquisition fits within Daiwa Capital Markets’ plans announced in November 2009 to significantly grow its global markets operations including derivatives. This acquisition represents a significant step towards implementing this strategy, and we intend to grow the acquired businesses, integrating them into our existing derivatives franchise, and so providing continuity and future growth opportunities for our customers and the 150 staff across offices in London, New York and Hong Kong.”

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