The royal family of Qatar is moving up its investment in Europe’s banking sector with plans to acquire private banking arms of Dexia and its Belgian competitor KBC.

Private lender KBC said it was to sell its Luxembourg division to Qatari investment group Precision Capital for €1.05bn. The sale will allow the bank to reduce its risk profile, raise capital and permit it to focus on its central and eastern European markets.

Luxembourg’s finance minister Luc Frieden said late on Monday that the Qatari investment group, which is now to take over Dexia’s Banque Internationale Luxembourg, belongs to the al-Thani royal family.

The al Thani’s, who are known also for their sovereign wealth fund the Qatar Investment Authority, have previously invested in European banks at the end of 2008 when they helped raise emergency funds for Barclays bank.

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