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European Commission - Press release

State aid: Commission opens in-depth investigation into restructuring aid for the Danish Vestjysk Bank A/S

Brussels, 4 December 2015

The Commission has opened an in-depth probe to assess whether aid granted by Denmark to Vestjysk Bank is compatible with EU State aid rules. It will in particular examine whether Vestjysk Bank's restructuring plan would restore its long-term viability without unduly distorting competition.

In April 2012, the Commission temporarily approved up to DKK 8,941 million (€1.2 billion) State support for Vestjysk Bank A/S pending the submission of suitable restructuring measures for Vestjysk Bank A/S.

Denmark submitted a preliminary restructuring plan for Vestjysk Bank A/S, which was amended most recentlyin June 2015. The Commission will assess the plan on the basis of its rules on State aid to banks during the financial crisis that were in force in 2012, when the aid was granted.

At this stage, the Commission has concerns as to whether the restructuring plan would be adequate to ensure the bank's return to long-term viability. The Commission will also assess whether the bank and its owners contributed sufficiently to the costs of the restructuring and whether appropriate measures have been put in place to minimise the competition distortion brought about by State aid.

The Commission will now investigate further to see if its concerns are justified. The opening of an in-depth investigation gives interested third parties the opportunity to submit comments on the measures under assessment. It does not prejudge the outcome of the investigation.

 

Background

 

In April 2012, two Danish banks - Vestjysk Bank and Aarhus Lokalbank merged to become Vestjysk Bank A/S which has its main regional presence in Jutland. In June 2015, Vestjysk Bank A/S held total assets of DKK 22,102 million (€ 2,978 million). It is listed on the Copenhagen Stock Exchange.

In April 2012, the Commission temporarily approved up to DKK 8,941 million (€1.2 billion) State aid for Vestjysk Bank A/S. The bank received capital injections of DKK 494 million (€66.3 million) (consisting of a capital increase of DKK 319 millionof which the Danish state  participated with DKK 167 million according to its share of the bank  and sale of shares of DKK 175 million) as well as guarantees of DKK 6 800 million (€913 million). The release of guarantee funds was done according to the guarantee scheme for banks in Denmark last approved under case number SA.42405 in the State Aid register.

More information on the application of EU State aid rules in the banking sector is available in the Commission's Policy Brief "State aid to European banks: returning to viability".


A non-confidential version of this decision will be made available under case number SA.34720 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/15/6252

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