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KBC Prepares Winding Down Antwerp Diamond Bank Operations

Sep 19, 2014 8:36 AM   By Jeff Miller
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RAPAPORT... The KBC Group failed to complete the sale of  Antwerp Diamond Bank to the Yinren Group and  will wind down the bank's operations. KBC stated that it would carry out the process in an orderly manner, with respect for diamond clients and the contractual arrangements already in place.

No new loans or business will be conducted through Antwerp Diamond Bank and KBC Group will absorb outstanding loans through KBC Bank NV.  The group noted that this decision was in accordance with the European Commission on divesting the bank after the sale failed to materialize. In December 2013, KBC agreed to sell Antwerp Diamond Bank to the Yinren Group of China, but the buyer didn't submit a comprehensive report to the Belgian regulator, the National Bank of Belgium, within the agreed time frame, according to KBC.

Since 2009, KBC has made continuous efforts to find a suitable strategic investor for the bank; however, due to the bank's specific niche business,  daily funding needs and difficult economic and market conditions for the industry -- all of those factors were  too much of a challenge, according to KBC. Antwerp Diamond Bank employs about 160 professionals, the majority of whom work out of Belgium and they may be absorbed elsewhere in the KBC organization. All foreign branches will be closed.

"It is a pity that, despite long and intense efforts, the Yinren Group was unable to complete the acquisition of Antwerp Diamond Bank within the set deadline," said KBC's CEO,  Johan Thijs. "We regret that a strong brand and a leading player in the diamond banking industry, with a long and rich history, will have to cease operations as a result."

Pierre De Bosscher, the CEO of Antwerp Diamond Bank, said, "Its specific niche business made the divestment of Antwerp Diamond Bank less than straightforward, despite the long track record of this renowned institution. It is, of course, unfortunate that no opportunities had emerged in the past few years to develop the business further with a new shareholder. However, I'm convinced that the current approach under the arrangements agreed between KBC and Europe takes full account of the interests of our client's, staff, shareholders and all other stakeholders."

The Antwerp World Diamond Centre  (AWDC), however, believed there was still room to find a solution and  keep the financing levels of the Antwerp diamond sector in check.  Margaux Donckier, the spokesperson for AWDC, said,   “The divestiture of the Antwerp Diamond Bank in 2009 was a precondition for KBC to be saved by means of state aid.”

About one-third of Antwerp diamond dealers are financed by the bank,  primarily small and medium size diamond dealers, for whom finding other sources of financing presents challenges, she added.

Moreover, KBC’s press release clearly demonstrates that there is a possibility for Antwerp Diamond Bank to make a fresh start, surmised AWDC. With this in mind, AWDC is taking the necessary initiatives in collaboration with all partners involved. “Sound and reliable financing is crucial for the continuity and leadership of the Antwerp diamond sector,” said Donckier.

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Tags: Antwerp Diamond Bank, Antwerp World Diamond Centre, Banking, diamonds dealers, finance, funding, Jeff Miller, kbc group, merger
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