Brussels, 29/09/2010 (Agence Europe) - On 29 September, the European Commission approved €650 million recapitalisation provided by Germany in the context of the restructuring of Sparkasse KölnBonn, following the financial crisis. In exchange, the bank will concentrate on providing retail banking services to its traditional customer segments, i.e. private customers and SMEs, and withdraw from activities such as proprietary trading or investments in structured products and divest non-core subsidiaries. Furthermore, the bank will significantly reduce its administrative expenses.
The Commission's in depth investigation began in November 2009 and revealed that the restructuring plan and commitments made should guarantee the long-term viability of Sparkasse KölnBonn, which is the second largest savings bank in Germany, by rectifying the main causes of the difficulties experienced by the bank. The Commission further found that Sparkasse KölnBonn adequately contributed to the restructuring through asset sales and cost cutting measures. The loss absorption suffered by the private investors and the sale of profitable subsidiaries both contribute to an appropriate burden sharing. The divestments of non-core subsidiaries and the behavioural commitments provided by the German authorities sufficiently limit the distortions of competition brought about by the aid. Overall, the restructuring measures will result in a balance sheet reduction of 17% (not including growth in the traditional local customer segments) by the end of 2014 as compared to the end of 2008. (F.G./transl.jl)