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State aid: Commission authorises restructuring aid for Kaupthing Bank Luxembourg

Commission Européenne - IP/09/1107   09/07/2009

Autres langues disponibles: FR DE NL

IP/09/1107

Brussels, 9 July 2009

State aid: Commission authorises restructuring aid for Kaupthing Bank Luxembourg

The European Commission has approved under EC Treaty state aid rules a loan of €320 million granted by Luxembourg for the restructuring of Kaupthing Bank Luxembourg S.A. The measure will contribute to the stability of the financial system while avoiding undue distortions of competition and is therefore compatible with Article 87(3)(b) of the EC Treaty, as explained in the Commission's guidance on state aid to banks during the crisis (see IP/08/1495 ).

EU Competition Commissioner Neelie Kroes said: “The aid for Kaupthing Bank is designed to enable all depositors to recover their funds. This solution should help to reinforce public confidence in the banking sector without giving rise to competition problems."

On 10 June 2009 the Luxembourg authorities informed the Commiss ion that a €320 million loan had been set up which would be granted by the Luxembourg State to Kaupthing Bank Luxembourg SA for the purpose of its restructuring.

Since the primary purpose of the loan was to compensate depositors with the Belgian branch of Kaupthing Bank Luxembourg SA, the Belgian State decided to help finance it to the tune of €160 million. Under the restructuring plan, deposits with the Belgian branch of Kaupthing Luxembourg were sold to Crédit Agricole Belgique/Keytrade Bank. The Luxembourg‑based private bank part is to be taken over by UK investment fund Blackfish Capital. All these activities were sold to the highest bidder in a transparent tender procedure. The bank’s other assets will be wound up in a hive‑off vehicle and the revenue used to compensate creditors and repay the state aid.

The Commission has concluded that the proposed measure is appropriate for the purpose of restructuring the bank's activities, which will enable depositors to access their money again. The aid is proportionate because it will not result in compensation being paid unduly to the bank’s former shareholders. In addition, the scaling‑down of the bank’s activities and the break‑up of its assets following an open, transparent sale procedure will ensure that the aid does not give rise to distortions of competition.

The non-confidential version of the decision will be made available under case number N344/2009 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News .


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