Gramegna set to clarify fate of Qatar's 90% BIL stake

Luxembourg Finance Minister Pierre Gramegna is set to announce on Friday the sale of the Qatari royal family's 90% stake in Banque Internationale à Luxembourg (BIL) to China-based investment group Legend Holdings, according to a source close to the deal.

Gramegna is understood to have informed the council of the government and the Parliamentary Finance Committee in advance.

The finance minister, after he leaves Luxembourg's Chamber of Deputies, is expected to provide further details on the transaction and an update on the progress of various administrative procedures, which pass through the European Central Bank (ECB) in Frankfurt.

Luxembourg's ministers are also expected to debate on Friday morning the eventual sale of the government's 10% stake in BIL, according to radio 100,7. 

100% added value 

According to information published in the press in recent weeks, the value of the Qatari stake in the Luxembourg bank is estimated at around €1.5 billion.

The Qatari royal family acquired 90% of BIL's capital from Dexia in 2011-12 for €657 million.

At the same time, the Al Thani family acquired the private bank KBL, then a Luxembourg subsidiary of Belgian group KBC. 

The new acquirer of BIL, Legend Holdings, is a Chinese group that has been listed on the Hong Kong Stock Exchange since June 2015.

The company, previously owned by the Chinese state, invests in a number of sectors, including IT services (Lenovo), agribusiness and financial services, but it does not own a bank (it is not a majority shareholder of Hankou Bank).

At the end of 2016, its turnover amounted to 307 billion yuan (€39 billion), while its assets were worth 322 billion yuan. 

Bettel, Gramegna in China 

When Luxembourg Prime Minister Xavier Bettel visited China in June, accompanied by Gramegna, he pointed out that six Chinese banks already operated in Luxembourg and announced that "other banks were finalising the procedures to settle there".

Legend Holdings, in its bi-yearly report published on Tuesday, said it monitored acquisition opportunities closely and would invest in "other financial services business both at home and abroad, mainly focusing on insurance, banking and fintech".

Unions concerned 

In a statement, the banking arm of the Luxembourg Confederation of Christian Trade Unions (LCGB) expressed concerned about the "maintenance and development of employment within the BIL" and said it wished to meet "quickly" with the leaders of the bank "to obtain clarifications and guarantees", particularly the bank's future strategy. 

In July, BIL general manager Hugues Delcourt and president Luc Frieden (also president of the publishing house of the Luxemburger Wort) said they would keep to their current strategy.

Frieden, in an interview with the Lëtzebuerger Land, took pains to emphasise that, with or without changes among shareholders, "no social plan was planned for the next three years".

(By Pierre Sorlut, translated from French by Barbara Tasch)