Bloomberg News

BayernLB Said to Work With SocGen to Sell LBLUX Division

January 17, 2013

Bayerische Landesbank hired Societe Generale SA (GLE) to pursue a sale of its Banque LBLUX corporate and private banking unit in Luxembourg, three people with knowledge of the matter said.

LBLUX has 300 million euros to 400 million euros ($534 million) in equity and may fetch about that much in a sale, said two of the people, who asked not to be identified because the matter is private. Banks and private-equity firms have been invited to express interest next month, one of the people said.

BayernLB is selling businesses to shrink by about half compared with 2008 levels under conditions set by European Union regulators for a taxpayer-funded bailout. The European Commission said in July that the lender must also repay 5 billion euros in state aid and avoid acquisitions and dividends.

LBLUX reduced its balance sheet to less than 6 billion euros at the end of last year from 12 billion euros in 2008, said the people. The unit has wealth management and corporate banking operations and offers treasury and securities services, according to information on its website.

Matthias Luecke, a spokesman for Munich-based BayernLB, declined to comment on the matter.

BayernLB started the sale of its GBW AG real estate unit in October to help satisfy an order by the EU and to take advantage of rising demand for German property assets. The lender has selected a short list of bidders for the second round and GBW’s 32,000 homes in Bavaria may fetch more than 1 billion euros, said one of the people.

The bank sold its DKB Immobilien AG real estate unit to Hamburg-based TAG Immobilien AG (TEG) for 160 million euros last year.

BayernLB, majority-owned by the German state of Bavaria, received 10 billion euros in capital and a 4.8 billion-euro risk shield from the state’s government, as well as 15 billion euros in guarantees from Germany’s bank-rescue fund, to save it from a collapse in 2008.

To contact the reporters on this story: Nicholas Comfort in Frankfurt at ncomfort1@bloomberg.net; Aaron Kirchfeld in London at akirchfeld@bloomberg.net

To contact the editors responsible for this story: Frank Connelly at fconnelly@bloomberg.net; Jacqueline Simmons at jackiem@bloomberg.net


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