Brussels, 30/09/2011 (Agence Europe) - On Friday 30 September, the European Commission granted temporary approval to the recapitalisations of NCG Banco, Catalunya Banc and Unnim Banc by the Fondo de Reestructuración Ordenada Bancaria (“FROB”). All three banks were created this year as part of the restructuring of the Spanish savings banks system. NCG Banco brought together the banking business of the savings bank Novacaixagalicia that was its sole owner before the FROB granted a €2.465 million recapitalisation, which is the object of the current investigation. This aid - €2.465 billion for NCG Banco, €1.718 billion for Catalunya Banc and €568 million for Unnim Banc - should enable the three banks to satisfy own fund requirements within the solvency regime introduced in Spain last February - a 10% capital principal level over risk weighted assets is required for credit institutions that have less ability to access capital markets. This aid will be added to previous aid granted by these banks and to the structures they owned. At the end of the second recapitalisation, FROB will take control of the three banks.
Aid will not be definitively authorised until after the presentation of a restructuring plan proving the long-term viability of the three institutions, an appropriate contribution from the shareholders to the costs of the restructuring and the distortions of the limited competition, indicated the Commission.
According to the Bank of Spain, 96.4% of banks are expected to have finished their recapitalisation at an overall cost of €13.4 billion, although the costs had been estimated at €15.2 billion. (FG/transl.fl)