BRUSSELS Belgian banking and insurance group KBC (KBC.BR) said on Friday it had agreed to sell its Serbian unit KBC Banka to Societe Generale Srbija (SOGN.PA) and Telenor Serbia (TEL.OL), one of the final divestments required by the European Commission.
Telenor will buy all of KBC Banka's shares, and so secure a banking licence, while Societe Generale Srbija will acquire KBC Banka's key assets and deposits, KBC said in a statement.
For Telenor, the world's sixth largest mobile operator, the deal is a key step towards bringing more advanced financial services to Serbian customers.
Societe Generale has had operations in Serbia for more than 35 years, with 102 branches employing over 1,300 people.
It will acquire some of KBC Banka's 58 branches and 492 staff and its portfolio of 81,000 retail and small business customers.
All the parties involved agreed not to disclose any financial details of the transaction, which is expected to be finalised in the fourth quarter of the year.
However, KBC said it would reduce earnings by 47 million euros, 17 million euros of which would be taken in the first quarter, although this would be largely offset by a capital release of an estimated 42 million euros.
Separately on Friday, KBC announced that it was refocusing its markets unit in Poland. KBC Securities Poland would drop its retail brokerage, institutional sales, research and corporate finance and focus on activities including clearing, settlement and securities lending.
KBC's Serbian exit was part of a reorganisation agreed with the European Commission in 2009 in return for approval of 7 billion euros in state aid to help it through the 2008-2009 financial crisis.
KBC has already paid back the 3.5 billion euros it received from the Belgian federal government and plans to start repaying the Flemish regional government this year.
(Reporting by Philip Blenkinsop, additional reporting by Aleksandar Vasovic in Belgrade; editing by Rex Merrifield)