The Commission will evaluate in detail whether the planned measures are capable of restoring the long-term viability of BayernLB and HGAA, and whether measures should be put in place to minimise potential distortions of competition created by the aid.
The Commission opened an in-depth investigation into state support measures for German Landesbank BayernLB and its Austrian subsidiary Hypo Group Alpe Adria (HGAA). BayernLB obtained rescue aid in the form of a capital injection of €10 billion and a risk shield of €4.8 billion. Also in December 2008 HGAA received €0.7 billion capital injection from BayernLB. In addition, HGAA received a €0.9 billion capital injection from Austria on the basis of the Austrian banking emergency rescue scheme.
The Free State of Bavaria agreed to strengthen the core capital of BayernLB by an amount of €10 billion and to provide a risk shield of €4.8 on the ABS portfolio of BayernLB, to prevent further write-downs.
In addition, the German Financial Markets Stabilisation Fund (SoFFin) granted a guarantee of €15 billion for liquidity loans to BayernLB on the basis of the German banking emergency rescue scheme.
The Austrian financial group HGAA, a subsidiary of BayernLB, received a capital injection of €0.7 billion from Bayern LB in 2008 in December 2008 which, in the view of the Commission, would not have been granted without the aid measure from the Free State of Bavaria to BayernLB. In addition, also in December 2008, HGAA received State aid in form of a recapitalisation of €0.9 billion from Austria on the basis the Austrian banking rescue scheme.
The Commission will evaluate in detail whether the planned measures are capable of restoring the long-term viability of BayernLB and HGAA, whether the state support is limited to the minimum necessary, and whether measures should be put in place to minimise potential distortions of competition created by the aid.
Press release
© European Commission
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