Billionaire Richard Branson's Virgin Money Holdings U.K. Ltd. agreed to buy Northern Rock Plc for 747 million pounds ($1.2 billion) last month, the first sale of a British government bank holding since the 2008 financial crisis. With additional payments, the total price of as much as 1.03 billion pounds was lower than the bank's book value of 1.1 billion pounds at the end of June, and almost 400 million pounds less than the sum invested by the government.
KBC Groep NV's shares dropped 16 percent in the 10 days after the company announced the sale of its private banking unit to Precision Capital, backed by a Qatari investor, for 1.05 billion euros, at the low end of the range the Belgian bank had sought and 300 million euros less than an earlier deal that collapsed for regulatory reasons.
"The valuation of these businesses is not making transactions any easier," said Thierry Marais, global head of BNP Paribas SA's financial institutions group. "Banks want to create capital, but many of them face selling at a loss, which is why negotiations often take a long time."
Potential hot spots for sales are asset management and private-banking operations, because regulations for the businesses make deals more feasible for nonbank buyers. Deutsche Bank has begun talks with potential bidders for its asset management arm, which it may break up to raise capital. The unit may fetch less than $4 billion, people familiar with the matter said on Nov. 30. Klaus Winker, a spokesman for Deutsche Bank, declined to comment.
"Sovereign wealth funds and private equity firms can play a role in asset management and private banking, but would find it more difficult in traditional retail banking from a regulatory standpoint," said Credit Suisse's Richard.
Newedge, the futures and options brokerage jointly owned by Societe Generale and Credit Agricole SA previously valued at about 2 billion euros, may be sold, according to two people with knowledge of the process. At least part of the business has been open to acquirers for about a year, the people said.
The unit may be valued at between 800 million euros and 1.2 billion euros, based on its 2010 earnings, estimated Christophe Nijdam, a Paris-based analyst at AlphaValue. Spokeswomen for Societe Generale and Credit Agricole declined to comment.
Europe's debt crisis drove Banco Santander SA, Spain's largest bank, to retreat from its expansion in Latin America as it seeks to raise 5.2 billion euros in capital. The bank announced two days ago the sale of its Colombian unit to Chile's Corpbanca for $1.2 billion, and yesterday raised $958 million by selling a 7.8 percent stake in its Chilean unit. Latin America accounted for 62 percent of Santander's net income last year and 21 percent of its assets, according to data compiled by Bloomberg.
Dexia, the Franco-Belgian lender that's being broken up, has seen potential bidders for Denizbank drop away as banks including Russia's OAO Sberbank withdrew, people familiar with the discussions said.
The Istanbul-based lender, which had a book value of 4 billion Turkish new lira ($2.2 billion) at the end of September, might be valued at about 3 billion euros, said Alex Koagne, a Paris-based analyst at Natixis SA.