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State aid: Commission approves restructuring of Banco Portugues de Negócios (BPN)

European Commission - IP/12/315   27/03/2012

Other available languages: FR DE PT

European Commission - Press release

State aid: Commission approves restructuring of Banco Portugues de Negócios (BPN)

Brussels, 27 March 2012 - The European Commission has authorised under EU state aid rules the restructuring of Banco Portugues de Negócios (BPN). BPN was nationalised in November 2008 and benefitted from several aid measures. The restructuring plan includes the sale of BPN to Banco BIC Portugal. Following revisions made to the initial plan and the commitments submitted by Portugal, the Commission concluded that the restructuring and sale of BPN will create a viable entity while ensuring an adequate own contribution of the bank to the costs of restructuring and limiting the distortions of competition created by the aid.

Commission Vice-President in charge of competition policy, Joaquín Almunia, said: “I welcome the commitments provided by Portugal, which bring the case in line with EU state aid rules and preserve financial stability”.

The revised restructuring plan demonstrates that BPN's integration with BIC will restore the company's viability through a restructuring of BPN's activities and operational mode, as well as through synergies created between the two entities.

Moreover, the plan foresees an enhanced remuneration for the aid measures from which the company benefitted. Portugal also committed to (i) set a limit on the Core Tier 1 capital of BPN, (ii) adjust, in time and remuneration, the liquidity lines requested by Banco BIC Portugal and to be granted by Caixa Geral de Depósitos and (iii) respect an acquisition and dividend ban, as well as a ban on the exercise of call option rights in relation to subordinated bond holders until 31 December 2016.

The measures proposed are also appropriate and proportional to offset the distortions of competition brought about by the aid.

Background

BPN is a financial institution based in Portugal providing banking services. The bank was nationalised at zero price in November 2008 in the wake of the financial crisis and benefited from several aid measures, including state guarantees on commercial paper issued by BPN.

Following the failure of the first two calls for privatisation in 2010 and the adoption of the financial assistance programme for Portugal in May 2011 (see MEMO/11/313), the Portuguese authorities entered into exclusive negotiations with Banco BIC Portugal in view of a sale of BPN.

The Commission opened an in-depth investigation in October 2011 (see IP/11/1235) to ascertain whether BIC's bid of July 2011 was in line with its guidelines on restructuring aid for banks (see IP/09/1180). Following the doubts expressed by the Commission, Portugal provided an updated restructuring plan in January 2012. No third party submitted any comments or observations.

The non-confidential version of today's decision will be made available under case number SA.26909 in the State Aid Register on the DG Competition website 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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