Brussels, 10/02/2016 (Agence Europe) - On Wednesday 10 February, the European Commission announced that it took the view that the Hungarian and Italian plans to transfer non-performing loans of Hungarian and Italian banks did not constitute state aid.
In the case of Italy,Wednesday's decision seals the deal concluded between the Commissioner for Competition, Margrethe Vestager, and the Italian finance minister, Pier Carlo Padoan, on 26 January (see EUROPE 11477). Readers may recall that the Italian scheme will help the country's banks when they carry out the securitisation of dubious loans and their transfer to autonomous entities. The banks will have a state guarantee over the senior tranches of the securitised loans held by these entities. The level of these guarantees will be set at the market price. The state guarantee covering the senior trench will not take effect until once at least 50% of the junior tranche (more risky and not guaranteed) has been successfully sold to private market players. The guarantee premium paid will increase progressively on the basis of the amount of time for which the state is exposed.
As regards the Hungarian plans, the Commission concluded that the tariff models used by the Hungarian impaired asset management company, MARK, ensured the purchase of non-performing loans by that company at market prices. The Commission also explains that an upper limit on the the sale price and an exposed verification of the transactions guarantee that the actual transactions do not comprise any state aid element. The budget for MARK has initially been set at €1 billion, but it may be increased subsequently. In particular, MARK will buy non-performing loans collateralised by commercial real estate assets. (Original version in French by Elodie Lamer)