The Commission approved the recapitalisation of Commerzbank. After Commerzbank sustained major losses, in particular deriving from the Dresdener Bank ABS portfolio, the German Government agreed to provide €18 billion of new capital to the bank.
The Commission approved the recapitalisation of Commerzbank. After Commerzbank sustained major losses, in particular deriving from the Dresdener Bank ABS portfolio, and in view of increased capital needs demanded from financial markets in the current crisis, the German Government agreed for to provide €18 billion of new capital to the bank.
The main element of Coba's plan is a focus on its core businesses, namely retail and corporate banking including in Central and Eastern Europe, which generated stable returns in the past. In contrast, volatile investment banking and commercial real estate activities will be divested. The bank has also reviewed its practices regarding risk management and corporate governance.
The plan includes a number of measures aimed at keeping the aid to the minimum necessary. These measures include divestments by Commerzbank of activities and the sale of subsidiaries to address the Commission's concerns as regards possible distortions of competition due to the large size of the aid granted, and the suspension of dividend and interest payments to holders of hybrid capital.
In addition, to allay further concerns related to potential distortions of competition, the bank will be subject to a general ban for three years on acquisitions of financial institutions or other businesses which potentially compete with it. Furthermore, the bank will not be allowed to do business (including deposit taking) under more favourable price conditions than its competitors in markets/products where it has a market share above 5%.
Press release
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