Almost five years after being snapped up by a Middle Eastern fund, the Luxembourg-headquartered private bank is now owned by the parent of Lenovo, the PC company.

Legend Holdings, which owns PC maker Lenovo and which also owns a number of financial businesses, has agreed to buy 90 per cent of Banque Internationale à Luxembourg for €1.48 billion ($1.76 billion), marking another move by a Chinese conglomerate to buy European wealth management operations.

The Hong Kong-listed investment group is committed to “preserving and investing in the BIL brand, its employees and customer offering”, according to a statement on BIL’s website. Under terms of the transaction, the Grand Duchy of Luxembourg will keep a 9.993 per cent shareholding in BIL.

Governance and management at the banking group will be unchanged. Luc Frieden remains chairman and Hugues Delcourt stays as chief executive, the statement continued. 

The agreement means that BIL, which was bought by Qatar-based private equity house Precision Capital in late 2012 from Franco-Belgian bank Dexia, now joins the ranks of European private banks in Chinese hands. Hong Kong-listed Fosun International, for example, has acquired such businesses, buying European wealth management and private banking operations; it agreed to buy Hauck & Aufhäuser, the venerable German private banking and financial firm, for example. Another group reportedly on the hunt for acquisitions is Hong Kong-based Mason Group Holdings, a financial firm backed by Chinese property tycoon Hui Wing Mau. It is said to be preparing to acquire wealth management businesses to build an offshore organisation with at least $3 billion.

While Chinese authorities have sought to curb certain capital outflows in recent months, the acquisition of a foreign private bank could be seen as a way for certain groups to ensure capital can, in certain circumstances, still circulate.

BIL deal
The proposed transaction is expected to close in the first quarter of 2018, subject to approval from the European Central Bank, the Commission de Surveillance du Secteur Financier and other relevant regulatory authorities. The acquisition entity is Beyond Leap Limited, a wholly owned subsidiary of Legend Holdings incorporated in Hong Kong.

Legend Holdings, founded in 1984, focuses on sectors including financial services, consumer services, agriculture and food, and IT. As at 31 December 2016, the company had assets of €43.92 billion, annual revenues in excess of €40 billion and close to 70,000 employees worldwide. Lenovo Group, one of its portfolio companies, was founded by Legend Holdings in 1984. 

BIL said its fortunes have revived under the ownership of Precision Capital; the firm has made a number of changes, including recalibration of its global footprint. In May 2015 the firm said it was closing its operations in Singapore for strategic reasons as part of an overall review of its business. The firm had begun operations in the Asian city in 1992. On the flipside, in 2014 it opened its first office in the United Arab Emirates. 

In its statement, BIL said that since its acquisition in 2012, operating revenue rose 20 per cent to €505 million in 2016, while operating profit has rose 57 per cent to €124 million. Over the same period, total assets have increased to €23 billion, total loans to customers are up by 27% to €12.2 billion and assets under management have grown by 30 per cent to €37.7 billion.

“Legend Holdings has accumulated extensive experience in the financial services industry, and has achieved a solid performance in the sector over the past years. BIL is a well-run and respected universal banking group with strong roots in Luxembourg’s history. We aim to preserve and enhance this status, supporting the bank and its existing management team in growing BIL from a national champion to a Luxembourg-based, international banking brand,” Liu Chuanzhi, founder and chairman of Legend Holdings, said.