ANNOUNCED AS TEMPORARYNo
Bailout (capital injection or equity participation)
On 10 June 2009, the Luxembourg authorities notified the Commission of the set-up of a loan of EUR 320 million to Kaupthing Bank Luxembourg SA. The Belgian State is financing half of the loan through an inter-state loan to Luxembourg of EUR 160 million. The Belgian authorities notified the Commission of the loan on 23 June 2009 and submitted additional information on 30 June and 6 July 2009.
Kaupthing Bank Luxembourg SA ('the Bank') is a Luxembourg credit institution and a subsidiary of the Icelandic banking group Kaupthing Bank hf. It provides private banking services in Luxembourg and through its two branches in Belgium and Switzerland. It also accepts online deposits ( 'Kaupthing Edge') from retail banking customers in Luxembourg and Belgium.
The state intervention takes the form of a loan from the Luxembourg State to the Bank of EUR 320 million (made up of the liquidity shortfall of EUR 310 million plus a margin of EUR 10 million), which will be paid out in two tranches:
- a super-senior tranche of EUR 210 million, and
- a senior tranche of EUR 110 million.
The Commission gave the following assessment:
"The loan from the Luxembourg State to the Bank is charged to the State budget. The Commission therefore considers that this measure involves a transfer of State
resources. The Bank is an institution active in the financial sector, subject to strong international competition, and any advantage granted to it from State resources may affect trade between States and distort competition." (par. 34-35 of the letter from the EC to Luxemburg - Brussels, 9 July 2009 C(2009) 5640 final).
The Comission found that the loan of EUR 160 million to be granted by Belgium to Luxembourg does not constitute State aid. The loan of EUR 320 million to be granted by Luxembourg to Kaupthing Bank Luxembourg constitutes State aid but is compatible with the common market under Article 87(3)(b) of the Treaty.
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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