Case T-11/25: Action brought on 9 January 2025 – Norddeutsche Landesbank – Girozentrale v SRB
Date: 2025-01-09
Institutions: General Court
Subjects: EU banking union, bank resolution, equal treatment, financial risk, mortgage bank, principle of proportionality, risk management








C_202501245EN.000101.fmx.xml












Official Journal of the European Union


EN
C series













C/2025/1245


3.3.2025






Action brought on 9 January 2025 – Norddeutsche Landesbank – Girozentrale v SRB


(Case T-11/25)

(C/2025/1245)
Language of the case: German

Parties


Applicant: Norddeutsche Landesbank – Girozentrale (represented by: J. Seitz and C. Marx, lawyers)

Defendant: Single Resolution Board

Form of order sought

The applicant claims that the Court should:






—


annul the defendant’s decision of 25 October 2024 (reference: SRB/ES/2024/44) including the annexes thereto, in so far as they are relevant to the applicant, and










—


order the defendant to pay the costs of the proceedings.





Pleas in law and main arguments

In support of the action, the applicant relies on eight pleas in law.






1.


First plea in law, alleging infringement of Article 70(2) of Regulation (EU) No 806/2014 (1)

In breach of Article 70(2) of Regulation (EU) No 806/2014, the defendant set the annual target level at more than 1/8 of the final target level.










2.


Second plea in law, alleging that the application of the IPS (2) indicator infringes Delegated Regulation (EU) No 2015/63, (3) which is to be interpreted in the light of higher-ranking law






—


In the context of the second subparagraph of Article 7(4) of Delegated Regulation (EU) 2015/63, the defendant should have taken into account that Deutsche Hypothekenbank holds derivatives primarily for hedging and risk management purposes.










—


When applying the IPS indicator, the significance of Deutsche Hypothekenbank’s membership in the institutional protection scheme of the Sparkassen-Finanzgruppe was disregarded.










—


According to the second subparagraph of Article 6(5) of Delegated Regulation (EU) 2015/63, the defendant should also have taken into account the low probability that the institution concerned would enter resolution and of the consequent probability of making use of the Single Resolution Fund and should have observed the principle of proportionality.














3.


Third plea in law, alleging that taking into account the derivatives exposure in the context of the risk indicator ‘trading activities, off-balance sheet exposures, derivatives, complexity and resolvability’ infringes Delegated Regulation (EU) 2015/63, which is to be interpreted in the light of higher-ranking law
Furthermore, in accordance with the principle of orientation towards the risk profile, the defendant should have taken into account, when considering the derivatives exposure in the context of the first subparagraph of Article 6(5)(a), Article 6(6) and the first subparagraph of Article 7(4)(a) of Delegated Regulation (EU) 2015/63, that in the case of Deutsche Hypothekenbank all derivatives are allocated to the non-trading portfolio and were entered into exclusively for hedging purposes.










4.


Fourth plea in law, alleging that failure to take into account the MREL (4) risk indicator in the context of the ‘risk exposure’ pillar infringes Delegated Regulation (EU) 2015/63
In accordance with Article 6(1)(a) and Article 6(2)(a) of Delegated Regulation (EU) 2015/63, the defendant should have taken into account the applicant’s above average ratio of eligible liabilities and own funds of 67.6 %, which significantly exceeds the minimum ratio of 8 % set by the defendant.










5.


Fifth plea in law, alleging that the application of the risk adjusting multiplier infringes Delegated Regulation (EU) 2015/63, which is to be interpreted in the light of higher-ranking law
When setting the risk adjustment multiplier, the defendant should have taken into account Deutsche Hypothekenbank’s risk-averse business model as a mortgage lending bank without trading book activities, its low probability of default and the above average MREL risk indicator in accordance with the principle of orientation towards the risk profile and the fundamental right to conduct a business under Article 16 of the Charter of Fundamental Rights of the European Union. (5)











6.


Sixth plea in law (in the alternative), alleging that the second subparagraph of Article 7(4) of Delegated Regulation (EU) 2015/63 infringes higher-ranking law
By providing for a relativisation of the IPS indicator in the second subparagraph of Article 7(4) of Delegated Regulation (EU) 2015/63, that provision fails to comply with the general principle of equality under Article 20 of the Charter of Fundamental Rights of the European Union and the principle of proportionality, because institutions which are subject to the same institutional protection and thus have the same probability of default may be treated differently.










7.


Seventh plea in law, alleging that the definition of ‘interbank deposits’ in accordance with Annex I, Step 1, to Delegated Regulation (EU) 2015/63 infringes higher-ranking law
The definition of ‘interbank deposits’ provided for in Annex I, Step 1, to Delegated Regulation (EU) 2015/63 is unlawful, because risk-neutral securities, such as registered mortgage bonds may not be taken into account when calculating the risk indicator ‘interbank loans and deposits’ on account of the existing cover.










8.


Eighth plea in law, alleging that the classification mechanism of Delegated Regulation (EU) 2015/63 infringes higher-ranking law
Assignment to risk bins in accordance with Annex I, Step 2, to Delegated Regulation (EU) 2015/63 gives rise to manifestly unfair results and therefore fails to comply with the principle of orientation towards the risk profile and the principle of equal treatment. In order to prevent this, the defendant should have added a manual check to the calculation formula for assignment to risk bins.






(1)  Regulation (EU) No 806/2014 of the European Parliament and of the Council of 15 July 2014 establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of a Single Resolution Mechanism and a Single Resolution Fund and amending Regulation (EU) No 1093/2010 (OJ 2014 L 225, p. 1).

(2)  Institutional protection schemes – IPS.

(3)  Commission Delegated Regulation (EU) 2015/63 of 21 October 2014 supplementing Directive 2014/59/EU of the European Parliament and of the Council with regard to ex ante contributions to resolution financing arrangements (OJ 2015 L 11, p. 44).

(4)  Minimum Requirement for Own Funds and Eligible Liabilities – MREL.

(5)  
            OJ 2012 C 326, p. 391.


ELI: http://data.europa.eu/eli/C/2025/1245/oj
ISSN 1977-091X (electronic edition)