Dexia to sell UK private banking to Rathbone

13 January 2006

BRUSSELS – French-Belgian banking group Dexia confirmed on Friday its plans to sell its British private banking business to UK fund manager Rathbone Brothers for up to EUR 21 million.

Dexia said the sale of the operation, which has assets under management of about EUR 850 million would have no material impact on its results.

Private banking in the UK was no longer an attractive market for Dexia because it was too fragmented, a source close to Dexia said.

Rathbone said in a statement that it would pay up to 14 million pounds for the former business of Ely Fund Managers, and said the deal should boost earnings from 2007. The UK firm also said the deal did not bring an end to its acquisition plans.

Meanwhile, Dexia’s Chief Executive Axel Miller, who took office this year, said he was interested in expanding into Romania, Turkey and Japan. In an open letter to employees, published on Dexia’s Web site, Miller said he hoped to succeed in the bid for Romania’s fourth-largest bank CEC. He also said he was “actively looking” at Turkey and considering establishing a joint venture in Japan with a local institution.

Dexia’s expansion plans have been eagerly awaited by the market after it rebuffed a merger proposal from Belgian-Dutch rival Fortis and following its failure to join forces with Italy’s San Paolo IMI.

Dexia was founded in 1996 through the merger of Crédit Communal de Belgique (founded 1860) and Crédit Local de France (founded 1987). The Dexia Group was founded as a dual-listed company, but in 1999 the Belgian entity took over the French entity to form one company. Dexia is a member of both the BEL20 and CAC 40 indices.)

Subject: Belgian news