Document ID: 02013D0298-20160210
Language: ENG

02013D0298 — EN — 10.02.2016 — 001.001
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<table><col/><col/><tr><td><p><a>&#9658;B</a></p></td><td><p>                        COMMISSION DECISION</p><p>of 19 September 2012</p><p>on the State aid SA.31883 (2011/C) (ex N 516/10) which Austria implemented and is planning to implement for &#214;sterreichische Volksbanken AG</p><p>(notified under document C(2012) 6307)</p><p>(Only the German text is authentic)</p><p>(Text with EEA relevance)</p><p><a>(2013/298/EU)</a></p><p>(OJ L 168 20.6.2013, p. 30)</p></td></tr></table>
Amended by:
<table><col/><col/><col/><col/><col/><tr><td><p>&#160;</p></td><td><p>&#160;</p></td><td><p>Official Journal</p></td></tr><tr><td><p>&#160;&#160;No</p></td><td><p>page</p></td><td><p>date</p></td></tr><tr><td><p><a>&#9658;M1</a></p></td><td><p><a>                              COMMISSION DECISION (EU) 2016/153&#160;of 2 July 2015</a></p></td><td><p>&#160;&#160;L&#160;34</p></td><td><p>132</p></td><td><p>10.2.2016</p></td></tr></table>
COMMISSION DECISION
of 19 September 2012
on the State aid SA.31883 (2011/C) (ex N 516/10) which Austria implemented and is planning to implement for Österreichische Volksbanken AG
(notified under document C(2012) 6307)
(Only the German text is authentic)
(Text with EEA relevance)
(2013/298/EU)
Article 1
1. The following measures implemented or planned by Austria constitute State aid within the meaning of Article 107(1) of the Treaty on the Functioning of the European Union:
(a) the recapitalisation measures of EUR 1 billion and EUR 250 million to Österreichische Volksbanken AG by Austria;
(b) the liquidity guarantees granted by Austria to Österreichische Volksbanken AG in the amount of EUR 3 billion;
(c) the asset guarantee to Österreichische Volksbanken AG by Austria with the capital relief effect of EUR 100 million.
2. The State aid referred to in paragraph 1 is compatible with the internal market, within the meaning of Article 107(3)(b) of the Treaty on the Functioning of the European Union, subject to the conditions set out in Article 2.
Article 2
Austria shall ensure that the restructuring plan submitted on 23 June 2015 is implemented in full, including the commitments set out in the Annex to this Decision.
Article 3
This Decision is addressed to the Republic of Austria.
ANNEX
LIST OF COMMITMENTS IN STATE AID PROCEDURE SA.31883 ÖSTERREICHISCHE VOLKSBANKEN AG
PREAMBLE
By Commission decision of 19 September 2012, State aid SA.31883 (2011/C) which Austria granted to Österreichische Volksbanken AG (ÖVAG) was found to be compatible with the internal market.
Owing to the renewed need for restructuring of the Volksbanken sector, the present list of commitments has been drawn up taking into account the earlier set of commitments and the underlying restructuring and liquidation plan of ÖVAG (‘the restructuring plan’). The provisions of the earlier set of commitments annexed to the Commission decision of 19 September 2012 thereby cease to have effect.
The modified restructuring plan makes no provision for additional State support measures for ÖVAG. The reduction in ÖVAG's share capital including the Republic of Austria's share in the amount of 43,3 % (corresponding to approximately EUR 250 million) and the simultaneous reduction in the Republic of Austria's participation capital in the amount of EUR 300 million by 96,65 % do not constitute new aid within the meaning of Article 1(c) of Council Regulation (EC) No 659/1999 ( 67 ).
The Republic of Austria hereby provides the following commitments concerning Österreichische Volksbanken-Aktiengesellschaft (‘ÖVAG’) and the Volksbanken-Verbund, represented by Volksbank Wien-Baden AG (‘VBWB’) in its capacity as the new central organisation of the Verbund, in order that the European Commission, by decision under Article 107(3)(b) of the Treaty on the Functioning of the European Union (‘TFEU’), may find the aid granted to ÖVAG compatible with the internal market.
This text should be interpreted within the general framework of EU law and with reference to Regulation (EC) No 659/1999, as well as with regard to the decision, to which the commitments are attached as commitments and/or conditions and obligations.
1. General
<table><col/><col/><tr><td><p>1.1.</p></td><td><p>The Republic of Austria undertakes to ensure that the restructuring for &#214;VAG submitted end of June 2015 is correctly and fully implemented.</p></td></tr></table>
<table><col/><col/><tr><td><p>1.2.</p></td><td><p>The Republic of Austria undertakes to ensure that the commitments listed below (&#8216;the commitments&#8217;) are fully observed during the implementation of the restructuring plan.</p></td></tr></table>
<table><col/><col/><tr><td><p>1.3.</p></td><td><p>The restructuring phase will end on the date of the general meeting of VBWB which decides on the annual accounts for the fiscal year 2019, but at the latest on 30 June 2020. The following commitments will apply during the restructuring phase unless otherwise provided.</p></td></tr></table>
2. Restructuring and liquidation plan
<table><col/><col/><tr><td><p>2.1.</p></td><td><p>&#214;VAG's share capital of EUR 577&#160;328&#160;623,46  (including the Republic of Austria's share in the amount of&#160;43,3 %) will be reduced to EUR 19&#160;335&#160;951,23 . The State's participation capital in the amount of EUR 300&#160;million will be reduced in the same proportion by 96,65 %.</p></td></tr></table>
<table><col/><col/><tr><td><p>2.2.</p></td><td><p>The central organisation and central institution function of &#214;VAG will be transferred retroactively with effect from 31 December 2014 by it as transferor company to VBWB as transferee company subject to the continued existence of the transferor company, in exchange for the issue of shares.</p></td></tr></table>
<table><col/><col/><tr><td><p>2.3.</p></td><td><p>With effect from 4 July 2015, &#214;VAG will with the agreement of the competent supervisory authority (ECB) withdraw from the Verbund, after supervisory approval operate henceforth as a wind-down entity in accordance with Section 162 of the Federal Act on the Recovery and Resolution of Banks (Bundesgesetz &#252;ber die Sanierung und Abwicklung von Banken &#8212; BaSAG) and as such will no longer hold a banking licence in accordance with Section 1 of the Banking Act (Bankwesengesetz, BWG). The name of the wind-down entity will be changed to &#8216;immigon portfolioabbau ag&#8217;.</p></td></tr></table>
<table><col/><col/><tr><td><p>2.4.</p></td><td><p>Drawing on the federal Republic as provider of an asset guarantee to the amount of EUR 100 million in line with the agreement on an asset guarantee from 15 March 2013 as amended by the draft agreement from 25 June 2015 (&#8216;the guarantee amendment agreement&#8217;) is allowed at any time between 31 December 2015 up to and including the day of the approval of the annual accounts of &#214;VAG for the financial year 2017.</p></td></tr></table>
<table><col/><col/><tr><td><p>2.5.</p></td><td><p>Conditions for an eventual drawing on the asset guarantee are either the partial or entire uncollectibility of the assets concerned or the formal insolvency of the debtor in addition to the necessity of the payout from the guarantee to prevent over-indebtedness of &#214;VAG in accordance with insolvency law and subject to all other applicable conditions in the guarantee amendment agreement. Reference date for the evaluation of guaranteed claims in the pool according to Annex 1 to the guarantee agreement from 15 March 2013 as amended by the guarantee amendment agreement is 31 December 2015. No further claims from the guarantee will be accepted after that date.</p></td></tr></table>
<table><col/><col/><tr><td><p>2.6.</p></td><td><p>The aim of the liquidation plan of &#214;VAG is to fully liquidate all assets by 31 December 2017. It also follows from &#214;VAG's liquidation plan that a positive residual value will remain. As partial compensation for the reduction in the share capital held by the Republic of Austria in &#214;VAG, the Verbund and Volksbanken Holding eGen will assign their claims to the liquidation proceeds of &#214;VAG to the Republic. Moreover, the Verbund has given a best endeavour commitment to the effect that other shareholders in &#214;VAG will also assign their claims to the Republic of Austria.</p></td></tr></table>
3. Sale of ÖVAG holdings
In implementation of the provided draft of the restructuring agreement with the Republic of Austria from 23 June 2015 (‘the restructuring agreement’), ÖVAG will sell off all shares in RZB completely (‘signing’) by 31 December 2017.
4. Measures by RZB
Austria undertakes that the measures planned by Raiffeisen Zentralbank Österreich AG (RZB) to reduce ÖVAG's equity capital as laid down in the restructuring agreement of 26 April 2012 with a current residual amount of EUR [0-20] million will be implemented by […].
5. Future profit distribution by the Verbund
<table><col/><col/><tr><td><p>5.1.</p></td><td><p>Profit distributions by entities consolidated in the credit institution association (Kreditinstituteverbund) of the Volksbanken in agreement with Section 30a(1) BWG, as amended, to third (natural or legal) persons will in principle be admissible only if the conditions set out in points 5.2 to 5.6 of this agreement are fulfilled.</p></td></tr></table>
<table><col/><col/><tr><td><p>5.2.</p></td><td><p>The exercise of the Republic of Austria's profit participation right will take place in agreement with the restructuring agreement; in particular, non-observance of the thresholds laid down therein will entitle the Republic of Austria to dispose of the shares in VBWB transferred to it pursuant to the restructuring agreement.</p></td></tr></table>
<table><col/><col/><tr><td><p>5.3.</p></td><td><p>The exercise of the Republic of Austria's profit participation right in accordance with the restructuring agreement will take place preferentially in at least the amount of the distribution.</p></td></tr></table>
<table><col/><col/><tr><td><p>5.4.</p></td><td><p>The total amount of all distributions will be limited to EUR [5-8] million p.a.</p></td></tr></table>
<table><col/><col/><tr><td><p>5.5.</p></td><td><p>The Republic of Austria will receive a compensation payment independent of point 5.3 in the amount of the distribution. Profit distributions on own-fund items designated after 29 June 2015 to strengthen and aid the recovery of the Verbund will not give rise to any compensation payment to the Republic of Austria.</p></td></tr></table>
<table><col/><col/><tr><td><p>5.6.</p></td><td><p>The Verbund will raise fresh external common equity tier 1 capital (net, after the deduction of repayments) in at least an amount corresponding to the annual sum of the distributions and compensation payments (compensation for retained earnings).</p></td></tr></table>
6. ÖVAG dividend ban
ÖVAG will not pay dividends in the period up to the end of the liquidation. In so far as they are legally separable, payments for remunerating the aid measures will remain unaffected.
7. Ban on price leadership
In the area of deposit services, Live Bank is prohibited in the period up to the end of the liquidation from offering interest rate conditions (for all maturities) better than its competitor with the third-best conditions in the Austrian market for direct online banking without the Commission's prior approval.
8. Representation of the Republic of Austria in Volksbank Wien-Baden AG in its capacity as central organisation of the Verbund
<table><col/><col/><tr><td><p>8.1.</p></td><td><p>With effect from the splitting-up of &#214;VAG and the transfer of the function as central organisation of the Verbund to VBWB the Republic of Austria will have transferred to it a share of 25 % plus one share (&#8216;25 %&#160;+&#160;1&#8217;) free of charge by the Verbund.</p></td></tr></table>
<table><col/><col/><tr><td><p>8.2.</p></td><td><p>If the Verbund fails to fulfil its repayment commitments in accordance with point 9.3, the Republic of Austria will have transferred to it additional shares in VBWB free of charge by the Verbund up to a total stake of Austria of [26-40]&#160;%. In addition, the Republic of Austria will receive the right of disposal over its entire shareholding in accordance with the provisions of the restructuring agreement.</p></td></tr></table>
<table><col/><col/><tr><td><p>8.3.</p></td><td><p>The Republic of Austria will be granted by the Verbund a right of representation of half of the members of the VBWB supervisory board to be appointed by the owners.</p></td></tr></table>
9. Remuneration of the aid measures
<table><col/><col/><tr><td><p>9.1.</p></td><td><p>The asset guarantee of EUR 100 million provided by the Republic of Austria to &#214;VAG will be remunerated with a non-profit-related bonus of 10 % p.a.</p></td></tr></table>
<table><col/><col/><tr><td><p>9.2.</p></td><td><p>VBWB grants the Republic of Austria a profit participation right as compensation for the reduction under the restructuring agreement in the State's EUR 300 million participation capital in &#214;VAG during the course of the split-up. From the entire payment to be made on the profit participation right will be deducted any participation capital held by the State which is retained during the course of the split-up and is duly repaid.</p></td></tr></table>
<table><col/><col/><tr><td><p>9.3.</p></td><td><p>The payment on the profit participation right has to reach at least EUR [0-50] million by the time of approval of the [&#8230;] annual accounts of VBWB and at least EUR [0-100] million by the time of approval of the [&#8230;] annual accounts of VBWB. In the event of one of these two thresholds not being reached, a new restructuring plan will have to be notified. It should be noted that the restructuring agreement provides for a payment threshold of at least EUR [0-200] million by the time of approval of the [&#8230;] annual accounts of VBWB and for a complete payment by the time of approval of the [2020-2025] annual accounts of VBWB.</p></td></tr></table>
10. Other behavioural obligations
<table><col/><col/><tr><td><p>10.1.</p></td><td><p>&#214;VAG and the Verbund commit to refrain from acquisitions. This applies to both the purchase of companies with their own legal structure, and shares in companies, as well as asset bundles that represent a commercial transaction or a branch of activity. This does not apply to acquisitions that must be made in order to maintain financial and/or association-related stability, or in the interests of effective competition, provided that they have been approved beforehand by the Commission. This does not apply either to acquisitions that belong, in terms of the management of existing obligations of customers in financial difficulty, to a bank's normal ongoing business.</p></td></tr></table>
<table><col/><col/><tr><td><p>10.2.</p></td><td><p>&#214;VAG and the Verbund must not use the granting of the aid measures or any advantages arising therefrom for advertising purposes.</p></td></tr></table>
<table><col/><col/><tr><td><p>10.3.</p></td><td><p>&#214;VAG and the Verbund must verify the incentive effect and appropriateness of their remuneration systems and ensure, using the possibilities under civil law, that they do not result in exposure to undue risks, are oriented towards sustainable, long-term company objectives, and are transparent.</p></td></tr></table>
<table><col/><col/><tr><td><p>10.4.</p></td><td><p>The Verbund is to continue expansion of its risk-monitoring operations and to conduct a commercial policy that is prudent, sound and oriented towards sustainability.</p></td></tr></table>
11. Monitoring trustee
<table><col/><col/><tr><td><p>11.1.</p></td><td><p>The Republic of Austria is to ensure that the full and correct implementation of the restructuring plan of &#214;VAG and the Verbund and the full and correct implementation of all commitments within this commitments document are continuously monitored by an independent, sufficiently qualified monitoring trustee who is obliged to maintain confidentiality.</p></td></tr></table>
<table><col/><col/><tr><td><p>11.2.</p></td><td><p>The appointment, duties, obligations and discharge of the monitoring trustee must follow the procedures set out in the &#8216;Trustee&#8217; Annex.</p></td></tr></table>
<table><col/><col/><tr><td><p>11.3.</p></td><td><p>The Republic of Austria is to ensure that, during the implementation of the Decision, the Commission or the trustee has unrestricted access to all information needed to monitor the implementation of this Decision. The Commission or the trustee may ask &#214;VAG and the Verbund for explanations and clarifications. The Republic of Austria, &#214;VAG and the Verbund are to cooperate fully with the Commission and the monitoring trustee with regard to all enquiries associated with monitoring of the implementation of this Decision.</p></td></tr></table>
<note>
( 1 ) OJ C 46, 17.2.2012, p. 3.
( 2 ) Commission Decision of 9 December 2008 in State aid case N 557/2008 – Maßnahmen nach dem Finanzmarktstabilitäts- und dem Interbankmarktstärkungsgesetz für Kreditinstitute und Versicherungsunternehmen in Österreich , OJ C 3, 8.1.2009, p. 2.
( 3 ) The first extension of the scheme, including certain amendments, was approved on 30 June 2009 (OJ C 172, 24.7.2009, p. 4), the second extension on 17 December 2009 (OJ C 28, 4.2.2010, p. 6), the third extension on 25 June 2010 (OJ C 250, 17.9.2010, p. 4) and the fourth extension on 16 December 2010 (OJ C 20, 21.1.2011, p. 3).
( 4 ) See point 13 and the Annex to the Commission Communication, OJ C 10, 15.1.2009, p. 2.
( 5 ) Commission Decision of 9 December 2011 in the case SA.31883, Restructuring of Österreichische Volksbanken AG, OJ C 46, 17.2.2012, p. 3.
( 6 ) Those percentages describe the structure of the voting rights. They exclude treasury shares held by ÖVAG. Before the capital cut by 70 % and the planned capital increase by EUR 484 million ÖVAG held 1,63 % of its own shares.
( 7 ) Already down from EUR 78,6 billion total assets as per end 2007. Source: ÖVAG's annual report 2009.
( 8 ) Fitch takes into account the fact that ÖVAG is a member of the protection scheme of the Volksbanken Verbund. That is why ÖVAG has the same long- and short-term Issuer Default Rating as the whole group ('A' and 'F1' respectively).
( 9 ) Opening decision, recitals 7-12.
( 10 ) Opening decision, recitals 13-19.
( 11 ) Investkredit Bank AG is a subsidiary of ÖVAG, which provides corporate lending, factoring, project financing, trade and export financing. More information about it is provided in recital 7 of the opening Decision.
( 12 ) That redemption value is increased by the percentage points by which the dividend on the PS capital fell short of the contractual value when distributable yearly profits would have sufficed for the payment but instead were retained, although the bank was not obliged to do so by regulatory or supervisory requirements.
( 13 ) Common Equity Tier 1 as defined by the Basel Committee on Banking Supervision ("Basel III: A global regulatory framework for more resilient banks and banking systems", December 2010 (rev. June 2011) http://www.bis.org/publ/bcbs189.htm).
( 14 ) ÖVAG and its subsidiaries/participations, in particular VB Factoring Bank Aktiengesellschaft, VB Leasing Finanzierungsgesellschaft m. b. H. and Volksbank Invest Kapitalanlagegesellschaft m. b. H.
( 15 ) That fee will be a regular expense item of the bank and therefore does not depend on ÖVAG being profitable.
( 16 ) After the sale of its public finance subsidiary KA to Austria ÖVAG's balance sheet total was EUR 52,9 billion at the end of 2008.
( *1 ) Contains business secrets, where possible, ranges were provided in [brackets]
( 17 ) Bankwesengesetz (BWG).
( 18 ) Including syndicated loans provided together with IMMO Bank, which is the specialist for the residential property financing within the Volksbanken sector.
( 19 ) The other shareholder is VR Leasing (a subsidiary of DZ Bank).
( 20 ) See point 6.3 of the Annex.
( 21 ) See point 6.3 of the Annex.
( 22 ) See point 6.3 of the Annex.
( 23 ) See point 6.3 of the Annex.
( 24 ) See point 6.4 of the Annex.
( 25 ) See recital 49.
( 26 ) […].
( 27 ) See recital 10.
( 28 ) See recital 23.
( 29 ) That figure includes the effect of the expiry of the asset guarantee in 2015 and the redemption of the PS of EUR 300 million.
( 30 ) Opening decision, recitals 58-62.
( 31 ) Opening decision, recitals 65-69, 73 and 74.
( 32 ) OJ C 356, 6.12.2011, p.7.
( 33 ) The selection of the peer group was based on objective criteria, such as comparable products range and geographic scope of activities.
( 34 ) See points 8.2 and 8.3 of the Annex.
( 35 ) See points 8.5 and 8.4 of the Annex.
( 36 ) See point 8.1 of the Annex
( 37 ) See point 8.6 of the Annex.
( 38 ) See points 6.1-6.4 of the Annex.
( 39 ) OJ C 195, 19.8.2009, p. 9.
( 40 ) Commission Decision of 9 December 2008 in State aid case N 557/2008 – Maßnahmen nach dem Finanzmarktstabilitäts- und dem Interbankmarktstärkungsgesetz für Kreditinstitute und Versicherungsunternehmen in Österreich, OJ C 3, 8.1.2009, p. 2; extended by Commission Decision N 352/2009 of 30 June 2009 (OJ C 172, 24.7.2009, p. 4), further extended by Commission Decision N 663/2009 of 17 December 2009 (OJ C 28, 4.2.2010, p. 6), further extended by Commission Decision N 241/2010 of 25 June 2010 (OJ C 250, 17.9.2010, p. 4) and further extended by Commission Decision SA.32018 of 16 December 2010 (OJ C 20, 21.1.2011, p. 3).
( 41 ) See apart from the decisions on the Austrian bank support scheme Commission Decision in State aid case N 698/2009, Hypo Group Alpe Adria, OJ C 85, 31.3.2010, p. 21; Commission Decision in State aid case N 261/2010, Second restructuring aid for BAWAG, OJ C 250, 17.9.2010, p. 5; and Commission Decision in State aid case SA.32745, Restructuring of Kommunalkredit Austria AG, OJ C 239, 17.8.2011, p. 2.
( 42 ) It can also be noted that Austria granted the aid to ÖVAG under the Austrian bank rescue scheme which has been authorised by the Commission on the basis of Article 107(3)(b) of the Treaty.
( 43 ) See footnote 2 and footnote 3 of this decision.
( 44 ) Theoretical ex-rights price.
( 45 ) Commission Decision of 30 May 2012 in State aid case SA.34055, New recapitalisation scheme for credit institution in Portugal, not yet published.
( 46 ) Because of the application of TERP methodology, that discount already takes into account the dilution effect.
( 47 ) See recital 23.
( 48 ) See reference in footnotes 2 and 3.
( 49 ) See recital 44.
( 50 ) Credit Default Swaps.
( 51 ) For the year 2014 in the group’s accounts prepared in accordance with International Financial Accounting Standards, ÖVAG expects a loss after taxes of EUR [10-30] million, which is mainly due to an extraordinary item, the sale of VBLI at the price of EUR [40-70] million, which is assumed to be below its IFRS book value of EUR [90-120] million. In the accounts of ÖVAG as a single entity prepared in accordance with Austrian Generally Accepted Accounting Principles the book value of VBLI has already been written down to EUR [40-70] million. Therefore, ÖVAG’s result for the year 2014 under Austrian GAAP is not expected to be affected by the sale proceeds and will be positive.
( 52 ) Taking into account the expiry of the asset guarantee in 2015 and the redemption of EUR 150 million of the State PS capital in 2017.
( 53 ) See recitals 58 and 59.
( 54 ) See recital 55.
( 55 ) See recital 60.
( 56 ) The term 'CRD IV/CRR' (Capital Requirements Directive IV/Capital Requirements Regulation) refers to the proposal of the European Commission, how to transpose Basel III rules into European Union law. Basel III, on the other hand, is a global regulatory standard on bank capital adequacy, stress testing and market liquidity risk, developed and agreed upon in response to the deficiencies in financial regulation revealed by the recent financial crisis. Among others, it sets quantitatively and qualitatively stricter capital requirements for banks. The gradual phasing-in of the new requirements is to start in 2013
( 57 ) See recitals 25-27.
( 58 ) See recital 60.
( 59 ) However, that impact includes the effects of divestments and scaling-down of operations in the non-core segment.
( 60 ) See recital 18.
( 61 ) See recital 19.
( 62 ) See recital 52.
( 63 ) ÖVAG's balance sheet and RWA, which were taken as the reference point, are the values as per 31 December 2008, while KA was sold to Austria in November 2008.
( 64 ) Since Livebank is the only part of ÖVAG's business where it is taking deposits, no price leadership ban is necessary for any other market segment.
( 65 ) See point 4.1 of the Annex.
( 66 ) In case of conflict between the text of the decision and the Annex, the conflict has to be resolved with regard to the text of the decision.
( 67 ) Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 108 of the Treaty on the Functioning of the European Union (OJ L 83, 27.3.1999, p. 1).
</note>