KBC has signed an agreement with funds managed by affiliates of Fortress Investment Group to sell them the US life settlement portfolio held by KBC Financial Products.

The transaction is not material to KBC Group’s results and does not impact KBC’s Tier-1 ratio.

KBC Insurance Derivatives is a New York-based specialised business line of KBC Financial Products that stopped originating premium finance loans and acquiring new assets in the life settlements space in September 2008. Premium finance loans provide funds to owners of life insurance policies to pay the premiums on their life insurance policies. The portfolio was earmarked at the end of 2008 for divestment. 

While reducing KBC’s risk profile, the transaction has no impact on KBC’s Tier-1 ratio and is not material to KBC Group’s results.

Closing of the transaction is subject to US regulatory approval and is expected to be completed in the next months.

Luc Popelier, chief executive of KBC Group’s market activities, says: "The agreement announced today is part of KBC’s strategic refocus of its merchant banking activities. Within its updated strategy, KBC Merchant Banking will from now on focus on servicing core corporate customers of the group’s home markets in Belgium and Central and Eastern Europe and internationally active corporate customers with a natural link to KBC’s home markets."