State aid: Commission approves Abanka's restructuring plan

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The European Commission has concluded that the restructuring plan of the Slovenian bank Abanka Vipa (Abanka) is in line with EU state aid rules. The Commission has found, in particular, that the restructuring plan will enable Abanka to become viable in the long term without continued state support, while mitigating the distortions of competition brought about by the aid granted to the bank.

Commission Vice President in charge of competition policy Joaquín Almunia said: "Abanka's restructuring plan is designed to ensure that the bank becomes viable again. After our decisions on NLB and NKBM, today's decision will further strengthen the confidence in the Slovenian banking system. "

In February 2014 Slovenia notified a restructuring plan for Abanka to the Commission. The plan covers a first State recapitalisation of €348 million, temporarily authorised by the Commission in December 2013 (see IP/13/1276), and a second recapitalisation of €243 million together with a transfer of assets to the Slovenian asset management company (BAMC) of €1 087 million (gross book value).

According to the restructuring plan and the commitments proposed by Slovenia, Abanka will limit the scope of its activities to its core business. The bank will improve its corporate governance and risk management policy. It will also clean up its balance sheet through a transfer of non-performing loans to the BAMC. The plan will lead the bank to building a profitable business model that will enable its return to viability. As part of the restructuring, all shareholders and subordinated debt holders of Abanka have been written off. This ensures that the bank and its stakeholders adequately contribute to the cost of restructuring. Also, Slovenia committed to merge Abanka with Banka Celje and submit a restructuring plan for the joint entity by the end of 2014.

The Commission therefore concluded that the restructuring support in favor of Abanka is in line with EU rules on state aid for the restructuring of banks during the crisis, in particular the requirements of the 2013 "Banking Communication" (see IP/13/672 and MEMO/13/886).

Background

Abanka is the third largest universal bank in Slovenia with a market share of 7.5% as of 31 December 2013 in terms of total assets. It comprises the parent Abanka Vipa d.d. and its subsidiaries Afaktor d.o.o., Argolina d.o.o., Aleasing d.o.o, Analožbe d.o.o., AB58 d.o.o., Anepremičnine d.o.o.. The banking business is concentrated in the parent company. Abanka operates primarily in Slovenia, providing corporate and retail banking services.

On 18 December 2013 the Commission approved the restructuring plans of of Nova Ljubljanska banka d.d. (NLB) and of Nova Kreditna Banka Maribor d. d. (NKBM), as well as aid for the orderly winding down of Factor Banka d.d. and Probanka d.d. (see IP/13/1276).

The non-confidential version of the decision will be made available under case number SA.38228 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.

News Source : State aid: Commission approves Abanka's restructuring plan
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