Chinese investment holding company Legend Holdings is exploring options, including a possible sale of its 90% stake in Banque Internationale à Luxembourg (BIL), according to recent reports. Legend, which also partly owns computer maker Lenovo and is listed on the Hong Kong stock exchange, has engaged Goldman Sachs to assist with evaluating these options for Luxembourg's oldest private bank.
The potential sale could see BIL valued between €2.5 billion and €3 billion ($2.71 billion to $3.25 billion). One of the strategies being considered is the separate sale of the bank's retail and wealth management units. Legend Holdings acquired its stake in BIL in 2017 for €1.48 billion from Precision Capital.
BIL reported revenues of €762 million and net income of €202 million in its 2023 annual results. Its semi-annual report for 2024 showed a net income of €83 million. The Luxembourg state holds the remaining 10% stake in BIL. A representative from a Luxembourg financial association viewed the potential sale as a standard investment decision by a financial company at the end of its investment cycle, aiming to realize profits, rather than being driven by more complex motivations.
Analyst Leon Kirch, managing partner at European Capital Partners, noted that the current valuation estimates seem high compared to BIL's profitability and that there is significant work needed to restore customer confidence due to operational issues. However, he acknowledged that the bank, in whole or in parts, could be strategically attractive to groups seeking to establish a presence in Luxembourg. The sale process for a bank involves regulatory approvals from authorities like the European Central Bank and assessment of the acquirer's integrity and financial soundness.
