European Commission - Press release
State aid: Commission opens in-depth review of restructuring of Banco Português de Negócios
Brussels, 24 October 2011 - The European Commission has opened an in-depth investigation to assess whether the proposed restructuring of Banco Português de Negócios (BPN) is in line with EU state aid rules. BPN was nationalised in 2008 and benefitted from several state measures. The opening of an in-depth investigation will enable the Commission to gather all the information it needs to assess the compatibility of the aid and allow third parties the possibility to submit their views on the matter. It does not prejudge the outcome of the investigation.
Commission Vice-President in charge of competition policy Joaquín Almunia said: "The in-depth review will allow the Commission to gather all the information it needs and ensure that the aid granted to the bank is limited to the strict minimum needed, in the interest of fair competition and of Portuguese taxpayers."
In particular, the Commission needs information to be able to assess whether BPN will be a viable entity after its integration with its future purchaser, the aid granted to BPN is limited to the minimum needed for the restructuring, sufficient measures are in place to limit the distortion of competition and the sales process does not entail aid to the buyer.
The bank was nationalised in November 2008 at zero price for the shareholders. But it benefitted from several support measures. Prior to the sale process, three special purpose vehicles were created to which were transferred i) loans and credits, ii) real estate and investment funds and iii) companies owned by the bank. On 31 July 2011, the Portuguese authorities entered into exclusive negotiations with Banco BIC Portugal in view of the sale of the state's shares in BPN. To the Commission's knowledge these negotiations are still ongoing.
Despite repeated requests, the Commission does not hold at this stage all the information necessary to allow for a decision on the possible aid.
The opening of an in-depth investigation is common for complex cases in the banking sector and does not prejudge the final outcome of the investigation. It will allow the Commission to hear the views of stakeholders and assess whether BPN's restructuring, including its privatisation to a suitable bidder, is in line with the Commission's guidance on state aid to financial institutions (see IP/08/1901, IP/09/322 and IP/09/1180).
BPN is small a financial institution based in Portugal. In 2008 it had a network of 213 bank branches and total assets of €6.6 billion. The bank was nationalised in November 2008 in the wake of the financial crisis and benefitted from several aid measures, including state guarantees for more than €4 billion on the issue of commercial paper.
An initial restructuring plan was submitted to the Commission in September 2010. The plan envisaged the re-privatisation of the bank after a capital injection of approximately €550 million and the transfer of assets to the special purpose vehicles at their book value with impairments of around €1.9 billion.
Following the failure of the first two calls for privatisation and the adoption of the financial assistance programme for Portugal in May 2011 (see PRES/11/132) a further sale process was launched.
A summary of today's decision will be published in the EU Official Journal, inviting interested third parties to comment within one month.
The non-confidential version of the decision will also be made available under the case number SA.26909 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.