Brussels, 17/12/2010 (Agence Europe) - On 16 December, the European Commission opened a detailed investigation into the restructuring of Hungarian bank FHB, which was given a loan of around €400 million in 2009 and a cash bailout of some €100 million by the Hungarian state. The Commission has doubts whether the aid was properly remunerated and not used for the expansion of the bank at the expense of its competitors, a suspicion raised by FHB's recent expansion and acquisition strategy.
The Commission considers that the capital injection was not granted in line with the criteria set in the guarantee and recapitalisation scheme and thus constitutes illegal aid in the sense that it should have received clearance before being granted. It exceeds the limit of 2% of risk weighed assets for recapitalisations that do not require notification. Hungary took the view that the measures fell under existing national Liquidity and Recapitalisation banking schemes, approved by the Commission, and did not initially notify the measures for approval and it was only upon request in June 2010 that it notified the full plan.
In the light of the above, the Commission has opened an investigation to ensure that an unfair playing field has not been created and is requesting evidence that the current plan will return the bank to viability in the long-term. (F.G./transl.fl)