Delta Lloyd to sell Belgian banking activities

Dutch insurer Delta Lloyd has announced it will sell its Belgian banking operations, which analysts estimate to be worth about €300m, in order to build up its Belgian life insurance and pensions business, writes Reuters’ Sara Webb. Delta Lloyd Bank Belgium had total assets of €6.9bn at the end of 2012 and reported first-half net income of €12.4m. The proposed sale of the bank - which has 570 employees, about 171,000 customers, and a network of 55 branches - came as a welcome surprise. "We see this decision as part of a strategic process to create a sustainable Belgian life and pension franchise with a focus on capital efficiency," ING analyst Albert Ploegh said in a research note. "We expect further add-on transactions in coming years to strengthen its position. The Belgian bank was a fully-fledged activity but in our view the scale was too small to be sustainable over the long-term." Last month, Delta Lloyd said it had agreed to acquire the Belgium-based insurer ZA Verzekeringen, which specialises in term life insurance and which has annual gross written premiums of about €50m, as it seeks to become a leading player in the Belgian market. Delta Lloyd said the proposed sale would not affect the use of the bank's network as a distribution channel for its pension and life insurance products in Belgium, as it intends to have a long-term distribution agreement between Delta Lloyd Life and the bank. Matthias De Wit, analyst at KBC Securities, put the bank's book value at €300m, adding he assumed the sale would go ahead at a discount - at 0.7 times the book value, or about €200m. Analysts said there were no obvious buyers for the business, and that a private equity deal would be likely to attract more scrutiny from the regulator than another industry peer.