On Thursday 5 December, the European Commission decided that the German project to strengthen the equity capital of the State-owned Norddeutsche Landesbank - Girozentrale (NordLB) did not constitute State aid. The measures include a direct investment of 2.8 billion euros, as well as investments to make the necessary structural changes and downsizing of the bank to ensure that NordLB continues to operate profitably on the market.
The Commission considers that the planned measures will be carried out on market terms: the State will receive a remuneration in line with what a private operator would also accept in the same circumstances. The European Central Bank (ECB) gave the green light to the project on 29 November 2019.
Margrethe Vestager, Executive Vice-President in charge of competition policy, said that Germany's project aims to ensure that NordLB remains a stable and profitable public bank, “while keeping the door open for future consolidation of the wider German Landesbank sector”.
NordLB is owned by the Land of Lower Saxony and the Land of Saxony-Anhalt and several publicly-owned regional savings banks. At the beginning of 2019, the bank recorded losses in one of its business lines (ship financing). Germany has notified the Commission of its intention to recapitalise NordLB on market terms. The bank is reducing its workforce, its balance sheet and will exit the loss-making maritime business segment. (Original version in French by Lionel Changeur)