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State aid: Commission approves restructuring aid for Austrian bank Hypo Tirol

European Commission - IP/12/1067   04/10/2012

Other available languages: FR DE

European Commission

Press release

Brussels, 4 October 2012

State aid: Commission approves restructuring aid for Austrian bank Hypo Tirol

The European Commission has concluded that a planned capital injection of €220 million for the Austrian bank Hypo Tirol Bank AG was in line with EU state aid rules. In particular, the Commission found that the bank's restructuring plan ensures the bank's viability without state support and provides for a sufficient own contribution to the restructuring costs while minimising distortions of competition.

Commission Vice President in charge of competition policy Joaquín Almunia said: "The restructuring plan demonstrates that Hypo Tirol has made all necessary efforts and commitments to operate as a viable regional bank."

Hypo Tirol was conducting business in the Austrian Federal State of Tirol, in Vienna, Italy (Alto Adige/Südtirol, Verona, Trentino), Germany and Switzerland. In recent years, the bank suffered problems in particular in Germany and Italy due to significant write-off. According to its restructuring plan, the bank will in the future focus on its core market Tirol and withdraw from Germany and Italy (except Südtirol/Alto Adige). It has already withdrawn from Switzerland. Hypo Tirol will considerably reduce its balance sheet and commits, in particular, to limit certain types of loans and to do new business only above a certain profitability level. Moreover, Hypo Tirol will further strengthen its corporate governance by increasing the number of independent experts in the supervisory board. The bank commits that any decision as regards lending will solely be taken on the basis of market principles.

Hypo Tirol commits to pay out dividends to its owner – the State of Tirol – once an appropriate core tier-1 ratio is reached. Such a pay-out will contribute to limiting the aid to the minimum.

The Commission found that the restructuring plan is adequate to restore the bank's long term viability and that the planned capital injection was limited to the minimum necessary to restructure the bank. Moreover, the bank makes an adequate contribution to the cost of restructuring through divestments and the restructuring plan provides for sufficient measures to limit the distortions of competition caused by the State support. The Commission therefore concluded that the aid is in line with its Communication on banking restructuring during the crisis (see IP/09/1180).

Background

Hypo Tirol Bank is a regional bank which is fully owned by the Austrian Federal State of Tirol via its Landeshypothekenbank Tirol Anteilsverwaltung. At the end of 2011, the bank had a balance sheet total of €11 billion.

In 2009, the Commission already approved a guarantee granted by the Federal State of Tirol for Hypo Tirol of up to €100 million for the issuance of capital (see IP/09/928). The capital which was subscribed by private investors will be paid back and the guarantee will be given back by end June 2013 at the latest.

The non-confidential version of the decision will be made available under the case number SA.34716 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

Contacts :

Antoine Colombani (+32 2 297 45 13)

Maria Madrid Pina (+32 2 295 45 30)


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