KBC Winding Down Antwerp Diamond Bank

(IDEX Online News) – Belgian banking and insurance group KBC is winding down the Antwerp Diamond Bank (ADB) after failing to complete its sale, to fulfill the last of its commitments to EU regulators after it received state aid.

ADB, a long-time financier to the diamond industry in Antwerp, employs 160 staff, of which 100 are in Belgium. KBC said ADB's foreign entities would be closed, but its Belgian staff would be deployed elsewhere in the KBC group.

KBC, which was given seven billion euros ($9 billion) by the Belgian government in the 2008-2009 financial crisis, agreed in December last year to sell the business to China's Yinren Group.

But the European Commission had given KBC until the end of September this year to complete the deal and KBC said on Friday that the Chinese group had not submitted a comprehensive file to Belgium's central bank within the required time.

KBC said it had no other option than to run down the loan portfolio of ADB in a gradual and orderly manner, not granting any new loans or new business. The operation would begin with KBC absorbing ADB.

KBC has already paid back 5 billion euros of the state aid it received.