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European Commission - Press release

State aid: Commission approves Catalunya Banc's revised restructuring plan following its sale to BBVA

Brussels, 17 December 2014

The European Commission has concluded that the sale of the Spanish bank Catalunya Banc to BBVA and the proposed amendments to its original restructuring plan were in line with EU state aid rules. The sale and the amendmentsensure the bank's long-term viability as part of BBVA. At the same timecompetition distortions in the Single Market are mitigated andno additional state aid to Catalunya Banc or the buyer is granted.

In November 2012, the Commission approved Catalunya Banc's restructuring plan, including a commitment by the Spanish authorities to sell their 98.4% stake in the bank. Following a competitive tender process, the international banking group BBVA will acquire Catalunya Banc, in line with this commitment.

The Spanish authorities notified a number of modifications to the original restructuring plan to the Commission to take into accountthe sale of Catalunya Banc and its planned integration into BBVA. The Commission concluded that this revised restructuring plan was consistent with the principles of the original restructuring plan and is in line with the applicable rules on state aid for the restructuring of banks. In particular, it will allow Catalunya Banc to become viable in the long-term through its integration into a sound credit institution. BBVA intends to gradually converge Catalunya Banc to BBVA's general policies and procedures as well as to BBVA's efficiency, profitability and solvency levels.

Moreover, Catalunya Banc is sold on market terms to a competitor that has not received any public aid and without the provision of any additional state aid.In this context, the Commission considers that the reductionsin geographical footprint, business segments and total balance sheet under its restructuring plan are appropriate to limit the distortions of competition brought about by the aid granted to Catalunya Banc.The Commission has also found that the sale of a credit portfolio from Catalunya Banc to Blackstone involvedno additional state aid to either buyer or seller because it was carried out on market terms.

 

Background

Catalunya Banc is a Spanish savings bank established in October 2011, after taking over the banking business of its predecessor entity, CatalunyaCaixa, which itself was created through the merger of three Catalan savings banks. Traditionally, Catalunya Banc's and its predecessors' focus has been on the Spanish region of Catalonia, where it has a market share of 11.2% in deposits and 8.5% in loans. Its market share at a national level is around 2.4% for both deposits and loans. Pending the completion of the sale to BBVA, the Spanish State, through its banking restructuring fund FROB (Fondo de Reestructuración Ordenada Bancaria) and its deposit guarantee fund FGD (Fondo de Garantía de Depósitos), holds a 98.4% stake in Catalunya Banc.

Between 2002 and 2008, Catalunya Banc's predecessors expanded geographically and broadened their business activities, in particular in the real estate development sector, corporate banking and equity participations. This resulted in operational challenges which led to the need for state aid. Since 2010 Catalunya Banc and its predecessors have benefitted from several state aid measures. Overall, Spain provided capital injections totalling € 12.05 billion and guarantees worth € 10.76 billion. Catalunya Banc transferred assets amounting to € 18.61 billion gross to an asset management company (SAREB).

The non-confidential version of this decision will be made available under the case number SA.39402 in the State Aid Register on the 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.

IP/14/2741

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