ANNOUNCEMENT 02 Nov 2008In November 2008, the government of Portugal announced a change in private-sector financial support.
NUMBER OF INTERVENTIONS
On 2 November 2008, Portugal notified to the European Commission the nationalisation of Banco Porugues de Negocios (BPN). On 23 June 2009, Portugal indicated its intention to 'segregate the assets of BPN and to sell the bank' (par. 6, letter from the EC to Portugal, Brussels 27.3.2012).
The beneficiary BPN is a financial institution providing various banking services. Before the nationalisation in 2008, BPN has 213 branches and total assets or EUR 6.6 billion, equal to 2 per cent of Portuguese retail banking sector (par. 20). Due to liquidity constraints after various downgrades in late 2008, the bank needed state support. (par. 21) More precisely:
- A EUR 501.6 million financial support by the state in October 2008
- State guarantees of EUR 2 billion in March 2009
- Further state guarantees of EUR 1 billion in October 2009
- Additional state guarantees of EUR 1 billion in April 2010
- Preferential loans by CGD amounting to EUR 2.2 billion in February 2009
On 13 September 2010, Portugal presented a restructuring plan including the transfer of EUR 3.8 billion in assets to special purpose vehicles (functions as a bad bank). The acquisition by the SPVs was subject to state guarantees of EUR 3.1 billion.
In December 2011, a private buyer (BIC) acquired BPN for only EUR 40 million, conditional on certain criteria listed in paragraph 56. The EC expressed its doubts that: 'the aid granted to BPN was limited to the minimum and the sale to BIC was the least expensive option compared with a liquidation scenario. (par. 60).
The EC finds that the loans granted by CGD, the state guarantees, the transfer of assets to the SPVs as well as the recapilisation (part of the sales agreement) all constitute state aid.
Regarding all the individual measures, the EC finds that: 'Given the position of BPN in the Portuguese financial sector, and the fact that the financial sector is open to intense competition at Union level, as well as the fact that BPN is competing with a significant number of subsidiaries of foreign banks in Portugal, the Commission considers that any advantage from state resources would have the potential to affect intra-Union trade and to distort competition within the meaning of Article 107(1) of the Treaty.' (par. 121,127,134,143)
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