The State will remain a shareholder in BIL and will not sell its shares in the bank. Finance Minister Gilles Roth confirmed as much to RTL on request, following a report in the Financial Times that Chinese group Legend Holdings had put its stake up for sale.
According to the report, Legend Holdings has appointed Goldman Sachs to handle the sale of its 90% holding in a transaction that would put a value of 2.5 billion euros on the bank.
The Finance Minister declined to comment on the Financial Times article itself. Roth did, however, make clear that the government is committed to its responsibilities as a shareholder, and that BIL, as an essential bank in Luxembourg with 1,555 employees, works "in the interest of the country and its people". He also underlined that BIL is a systemically important bank in the country, and that the State therefore stands squarely behind the institution.
When Legend Holdings acquired its majority stake in BIL back in 2017, the then-government negotiated with the new owners to make sure that the bank's headquarters would remain in Luxembourg and that no social plan, meaning no mass redundancies, would be brought in for at least three years.
Asked whether the current government would seek similar guarantees from any potential new shareholder, Roth explained that, if a takeover were to go ahead, the new shareholder would, from a legal standpoint, need to be approved by the European Central Bank in Frankfurt.
Only a serious financial institution could take on that role, he insisted, and any offer would need to come with all the necessary guarantees. On top of that, given that BIL is a long-established bank in Luxembourg, Roth assured RTL that the State would use all its influence to safeguard jobs.
BIL is Luxembourg's oldest bank, though it has been through turbulent times in recent decades. Legend Holdings had acquired its stake from Precision Capital, which is a holding belonging to Qatar's royal family.
Precision Capital made a substantial profit on the sale. Having acquired BIL in 2012 for around €650 million (out of an announced price of €730 million) and collected dividends along the way, Precision Capital ultimately walked away with a tax-free profit of €1.1 billion. It was at that point that the Luxembourg State also became a shareholder in the bank.
Before then, BIL had been owned by the French group Dexia, which was rescued during the 2008 financial crisis through state intervention from France, Belgium and Luxembourg. According to figures from the National Bank of Belgium, the Luxembourg State still guarantees around €160 million in debts left over from BIL's former parent company.
The 2012 sale to Precision Capital, and above all the sale price, drew criticism at the time of the then-Finance Minister Luc Frieden. After leaving politics, Frieden went on to become chairman of BIL's Board in 2016. He stepped down from the role in the spring of 2023 to run as lead candidate for the Christian Social People's Party (CSV) in the general elections.
