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ANNOUNCED AS TEMPORARYNo
Capital injection and equity stakes (including bailouts)
The Dutch authorities notified the measure to the Commission on 3 December 2008 - State aid N 611/2008.
SNS REAAL N.V. (hereafter "SNS") is a leading Netherland-based financial services provider with a primary focus on the Dutch retail market and on small and medium-sized enterprises. Its main activities cover banking and insurance services.
The measure takes the form of an injection of EUR 750 million of core tier 1 capital represented by 142,857,140 registered securities issued by SNS and fully subscribed by the Dutch State. The nominal value is EUR 1.63 per security and the issue price is EUR 5.25 per security. Furthermore, simultaneously with the capital injection by the Dutch State, SNS will raise EUR 500 million through the issuance of core capital instruments to Stichting Beheer. Hence, on the whole SNS receives a total capital of EUR 1,250 million.
The Commission stated that the measure described above constitutes State aid to SNS pursuant to Article 87 (1) EC Treaty and gave the following assessment:
" Given that SNS is active in the financial sector, which is open to intense international competition, any advantage from State resources to SNS would have the potential to affect intra-Community trade and to distort competition. Since the Netherlands invest EUR 750 million to acquire the securities, it is also clear that if any advantage is granted through the Measure, State resources are involved." (par. 38 of the letter from the EC to the Netherlands - Brussels, 10.12.2008 C(2008)8476 final)
Article 87(3)(b) of the EC Treaty enables the Commission to declare aid compatible with the Common Market if it is "to remedy a serious disturbance in the economy of a Member State." This aid has to be applied restrictively and must tackle a disturbance in the entire economy of the Member State according to the interpretation of the Article 87(3)(b) by the Court of First Instance.
The Commission referred to its Communication on the financial crisis (Temporary Framework) and concluded that the Measure complies with the conditions laid therein. Therefore, despite the measure constituting State aid pursuant to the Article 87(1) EC, it is compatible with the Common Market according to the Article 87(3)(b) EC Treaty. The Commission raises no objections against the measure at issue and authorizes it as emergency intervention in the face of the current financial crisis. (par. 46-72of the letter).
Viability plan SNS REAAL - State aid N 371/2009
Following the capital injection of 750 million euros in December 2008 (see above),the Dutch authorities submittedon 22 June 2009 a viability plan of SNS. On 16 October 2009 the Dutch authorities submitted an amended viability plan.
The viability plan includes the following measures:
- SNS will run-off its high risk International Project Finance business (including a
total portfolio of EUR 5 billion)
- SNS has bought an extra quota-sharing reinsurance contract (which will free up EUR 150 million in required capital thereby pushing up the solvency I ratio by 23%)
- SNS has further reduced its equity portfolio (from EUR 2.1 billion to EUR 1.4 billion) and it improved its interest rate asset and liability management.
- At the end of September 2009, SNS announced (after consultation with the Commission) that it would repay subordinated debt below par and issue new subordinated debt at market conditions (exchange of subordinated debt).
- SNS implemented a cost-cutting programme of EUR 150 million p.a15.
On the viability plan, the EC considered that it constitutes Stat aid since the measure is related to the previous capital injection and gave the following assessment:
"the Commission notes that even in the absence of the State aid measure SNS was at the time of the granting of the aid not in breach of its minimum regulatory requirements. However, it does not need to consider whether SNS had the prospective capital adequacy to weather the crisis even in the absence of aid because in the Rescue Decision the Netherlands has already agreed to some form of '...' by committing not only to present a viability review of SNS but that SNS would limit the aid and distortions of competition to the strict minimum.36 On this basis, the Commission should assess the compatibility of the viability plan with the internal market not only by reference to the viability requirements under the Restructuring Communication but also by examining whether the submitted viability plan contains sufficient burden-sharing and measures to limit distortions of competition." (par. 68 of the letter from the EC to the Netherlands -Brussels, 28.1.2010 C(2010)498 final)
"The presented viability plan meets the commitment provided by the Netherlands in so far as the capital injection enables SNS to restore its long-term viability, is sufficient in respect to burden-sharing and is proportional to offset the limited market-distorting effects of the aid measures in question. The viability plan, which shall be fully implemented, therefore fulfils the relevant criteria of the Restructuring Communication and can therefore be considered compatible pursuant to Article 107(3)(b) TFEU." (par. 82 of the letter)
Update concering the repayment of state aid - SA.33303
On 9 December 2011, the Dutch states commited to the repayment of all state aid by SNS REAAL by 31 December 2013. (par. 14, letter from the EC to the Netherlands, Brussels 19 November 2011). Any non-compliance with the commitment would require an additional rescue aid case, which has not been the case. Therefore this measure is considered to expire on the exact same date.
Update concerning the nationalisation - SA.36598
Finally, the bank has been nationalised on 13 February 2013 (related measures)
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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