April 5, 2012 / 1:57 PM / 5 years ago

Dexia's Luxembourg arm BIL posts 1.9 bln-euro loss

BRUSSELS, April 5 (Reuters) - The Luxembourg arm of Franco-Belgian lender Dexia, which is in the process of being sold to a Qatari investment fund, said on Thursday it made a net loss last year of 1.9 billion euros ($2.5 billion) due to its bond portfolio.

Banque Internationale Luxembourg (BIL) said it transferred its bond portfolio to Dexia at Dec 2011 market prices, which contributed to the loss.

It also had to sell stakes in units such as Dexia Asset Management Luxembourg and RBC Dexia Investor Services.

BIL said that after the sales it had a Common Equity Tier 1 capital adequacy ratio of 9 percent of assets under Basel III and 12 percent under Basel II banking industry standards.

Qatar and Luxembourg agreed to buy BIL for 730 million euros ($971 million), with a 90 percent stake going to Precision Capital, owned by the Qatar's al-Thani royal family, and the remaining 10 percent to Luxembourg.

The European Commission said on Tuesday it had opened an in-depth investigation to determine whether the sale of unit was appropriately conducted and did not include state aid.

$1=0.7623 euros Reporting By Michele Sinner in Luxembourg; Writing by Robert-Jan Bartunek in Brussels; Editing by Greg Mahlich

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