Brussels, 20 June 2014
State aid: Commission approves revised restructuring plan for NCG following sale to Banesco Group
The European Commission has concluded that the sale of the Spanish bank NCG Banco to Banesco Group and proposed amendments to its restructuring plan were in line with EU state aid rules. The sale will facilitate an orderly resolution of the bank, without resulting in additional state aid to NCG or the buyer. The proposed amendments do not endanger the restoration of NCG's long-term viability nor do they increase the risk of competition distortions in the Single Market.
In November 2012, the Commission approved NCG's restructuring plan, including a commitment by the Spanish authorities to sell their 88.33% stake in NCG (see IP/12/1277). Following a competitive tender process, the international banking entity Banesco Group will acquire NCG, in line with this plan. Banesco Group plans to merge NCG with Banco Etcheverría, a Spanish bank already owned by Banesco Group.
In this context, the Spanish authorities have notified to the Commission a number of modifications to the original restructuring plan, in order to take into account NCG's sale and its planned merger with Banco Etcheverría. Most importantly, the Spanish authorities committed to shorten the duration of the restructuring period.
The Commission has found that the revised restructuring plan is, overall, consistent with the principles of the original restructuring plan. In particular, it will allow NCG to return to long-term viability through its integration into a sound credit institution. NCG will also continue to fundamentally change its business profile, winding down non-core and riskier activities and becoming a regional bank in the North of Spain, focusing on traditional banking activities.
Moreover, applicable restrictions, notably relating to remuneration and dividend policies, will continue to ensure that the bank and its owners adequately contribute to the cost of restructuring. In addition, the continued downsizing of NCG in terms of assets, geographical footprint, and business segments as well as its sale to Banesco Group will further limit the distortions of competition brought about by the state aid.
The Commission has therefore concluded that the amended restructuring plan is in line with its rules for the restructuring of banks (see IP/09/1180).
NCG is a Spanish savings bank established in September 2011, after taking over the banking business of its predecessor entity, Novacaixagalicia, which itself resulted from the merger of two Galician savings banks. Traditionally, NCG's and its predecessors' focus has been on the Spanish region of Galicia, where it has a 33.1% market share. Its market share at a national level is around 1.97%. Pending the completion of the sale to Banesco Group, 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), is holding an 88.33% stake in NCG.
Between 2002 and 2008, NCG's predecessors expanded geographically and broadened their business activities, in particular in the real estate development sector, corporate banking and equity participations. This has resulted in operational challenges which led to the need for state aid. Since 2010 NCG and its predecessors have benefitted from several state aid measures. Overall, Spain provided capital injections totalling € 9 052 million and guarantees worth € 7 703 million. NCG transferred assets amounting to € 10 365 million gross to an asset management company (SAREB).
The non-confidential version of this decision will be made available under the case number SA.38143 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.