Brussels, 29 June 2012
State aid: Commission temporarily approves public support granted to Danish FIH Erhvervsbank A/S ("FIH") and opens a formal investigation
The European Commission has temporarily authorised, under EU State aid rules, an impaired asset measure and an asset relief measure in favour of FIH Erhvervsbank A/S. The public support measures are approved for a period of six months in order to preserve financial stability. In parallel, the Commission has opened a formal investigation because it is concerned that the State may not be adequately remunerated for its support and because of the risks remaining in FIH's balance sheet.
FIH has approximately 4000 customers and is the fifth largest bank in Denmark by volume of lending. It specialises in lending to Danish corporations, with a particular focus on SMEs. Although at present FIH has no problems in meeting its regulatory requirements, it might face liquidity constraints during the next 12-18 months. FIH issued state guaranteed bonds of approximately DKK 42 billion (€5.7 billion) which will expire in 2012 and 2013. The guarantees were provided within the framework of the Danish Guarantee Scheme approved by the European Commission in 2008.
The measures approved comprise an impaired asset measure in the amount of DKK 2 billion (€269 million) and an asset relief measure amounting to DKK 17.1 billion (€2.315 billion). In addition, the package includes a side agreement between the bank and the state-owned Danish Financial Stability Company ("FSC") which provides for additional loss, funding and recapitalisation guarantees to be granted by the FSC.
According to the Danish authorities, the purpose of the public support granted is to prevent a substantial reduction of the bank's balance sheet through a reduction of its lending activities to corporations, in particular SMEs.
The measures have been temporarily authorised for six months. Alternatively, if an in-depth restructuring plan is submitted within this period of time, it will be considered approved until the Commission has adopted a final position based on the restructuring plan.
The non-confidential version of the decision will be made available under the case number SA.34445 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.