ANNOUNCED AS TEMPORARYNo
Bailout (capital injection or equity participation)
On 4 September 2012, Spain notified to the European Commission additional capital injections of EUR 4.5 billion in favor of BFA and its subsidiary Bankia. The capital injection was necessary to meet the solvency ratios. The capital is increased through the issue of ordinary shares purchased by the Spanish government program FROB ('Fondo de Reestructuración Ordenada Bancaria'). (par. 22. letter from the EC to Spain, Brussels 7.9.2012)
The measure is the result of the latest financial information from 31 August 2012, revealing losses of EUR 2.81 billion of BFA and EUR 4.45 billion of Bankia. (par. 16)
The EC states that: 'Given the fragile state of BFA Group, including its subsidiary Bankia, and the general uncertainties in the Spanish economy and the Spanish financial sector, it can be excluded that a similar measure would be undertaken by a private investor at all, and certainly not on the terms foreseen in the measure as notified.' (par. 34)
The EC therefore concludes that: 'the measure allows both beneficiaries (BFA & Bankia) to get an economic advantage when compared with other competing banks in both Spain and other Member States and must therefore be regarded as distorting competition.' (par. 35)
Finally, the EC concludes that: the measure is likely to affect trade between Member States because the Group competes on the markets for retail savings, mortgage lending and commercial lending in Spain. (par. 36)
The EC also names potential affected countries by stating that: 'In all those markets, some of BFA and Bankia's competitors are subsidiaries and branches of foreign banks. In addition, the Commission considers that the banking sector operates internationally. (par. 36)
Update: Restructuring plan - SA.35253
On 9 November 2012, Spain notified the restructuring plan for BFA. The stress test revealed that BFA still needs a capital injection by the FROB of EUR 17.95 billion. (par. 46, letter from the EC to Spain, Brussels 28.1.2012) Later in December 2012, the FROB will subscribe EUR 13.5 billion in ordinary shares. Furthermore FROB will provide 4.5 billion in capital in the form of treasury bonds. (par. 47)
A state measure in the GTA database is assessed solely in terms of the extent to which its implementation affects the extent of discrimination against foreign commercial interests. On this metric, the state aid proposed here is discriminatory.
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