ANNOUNCEMENT 25 Nov 2014
On 25 November 2014, the European Commission approved a state deposit as liquidity support by Bulgaria in a privately owned bank.
NUMBER OF INTERVENTIONS
SA.39854. First Investment Bank - Restructuring plan :
European Commission decision. SA.39854
European Commission. Press release of 25 November 2014.
On 25 November 2014, the European Commission approved a BGN 900 (USD 576.92) million state deposit by Bulgaria in a privately owned bank called the First Investment Bank (FIB) bank. The deposit will be provided for a period of 18 months and will be repaid by 28 May 2016. A remuneration of at least 0.8% to 3% will be paid on the deposit.
The FIB bank serves clients including "retail, corporate and institutional, offering a wide range of products and financial services." It is the 3rd largest bank operating in Bulgaria in terms of assets. The bank had earlier on 29 June 2014, received liquidity support in the form of a state deposit amounting to BGN 1.2 billion for a period of 5 months (see related State Act). The current support will be effective from the date of expiry of the earlier deposit.
In this context, the European Commission noted the: "Since the additional liquidity support is available only to FIB, it confers a selective advantage on it. Given that FIB is and will be active in the Bulgarian financial sector, which is open to intense international competition (as most of its competitors are subsidiaries and branches of foreign banks), any advantage from State resources to the Bank has the potential to affect intra-Union trade and to distort competition."
Regardless, the Commission has decided not to raise objections to the aid on the grounds that "the restructuring plan for FIB and the additional aid measure it includes are compatible with the internal market for reasons of financial stability on the basis of Article 107(3)(b) of the Treaty."
A state act in the GTA database is assessed solely in terms of the extent to which its implementation affects foreign commercial interests. On this metric, the financial support granted here is discriminatory.