"The Commission is satisfied that the restructuring of CajaSur and the sale of its banking business in an open and competitive tender ensures the viability of the banking activity and limits the distortions of competition,” said Joaquín Almunia, Commission Vice President in charge of competition policy.
CajaSur provided retail banking services in the region of Andalucía in southern Spain. It came into financial difficulties in particular due to its significant exposure to developers and other real estate-related transactions. The Bank of Spain intervened in May 2010, placing it under the control of the Fund for Orderly Bank Restructuring (Fondo de Reestructuración Ordenada Bancaria or FROB).
FROB provided CajaSur with two temporary rescue measures: a capital injection of €800 million, to meet regulatory capital requirements, and a liquidity line of €1,500 million to meet its estimated liquidity needs until its restructuring were finalised.
In July BBK SA, another Spanish saving bank, agreed to buy the banking business of CajaSur after an open and competitive tender. Before the sale becomes effective, CajaSur will repay the capital injection to FROB. The liquidity measure, which was never used, will be terminated.
As part of the sale, a guarantee for five years of approximately €392 million on losses stemming from €5.54 billion portfolio of loans has been granted by the FROB to the banking business bought by BBK Bank.
The Commission decision finds that the liquidation of CajaSur and the sale of its banking business in an open and competitive tender ensured that the sold business became viable without continued state support. The Commission further concluded that the distortion of competition caused by the significant amount of aid compared to the size of the banking business - in June 2010 it had a total balance sheet of €17.6 billion - was limited by the liquidation of CajaSur and the sale of its banking business through an open and competitive auction. Furthermore, CajaSur had a limited market presence in the Spanish banking market of around 0.8% in mid 2010.
© European Commission
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