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Bank rescue: EU approves state aid for Nord LB

2019-12-05T19:17:16.816Z

The economically troubled Norddeutsche Landesbank may claim state bailouts. This has been decided by the EU Commission.



The Nord LB (Norddeutsche Landesbank) may be supported by a billion-dollar state financial injection. The transaction is on market terms and "in line with EU state aid rules", said EU Competition Commissioner Margrethe Vestager on Thursday. The Nord LB had been in difficulties with loans in the shipping sector. It will now receive a capital injection of 3.6 billion euros by the end of the year.

Nord LB, with a balance sheet total of 150 billion euros, is majority owned by the state of Lower Saxony. Shares also hold Saxony Anhalt and regional savings banks. Through the capital injection, they should now be repositioned and made more resilient. At the same time, the bank is to be significantly downsized and its workforce approximately halved by 2024 so that it can return to working profitability. The Institute wants to get out of the maritime transport sector.

Guarantees with customary remuneration

Lower Saxony, Saxony-Anhalt and the savings banks want to invest 2.8 billion euros in the bank by the end of the year. Moreover, according to the Commission, Lower Saxony wants to provide guarantees that would mean a reduction of 0.8 billion euros for the bank. Lower Saxony receives according to Brussels according to a customary market remuneration.

In order to examine the support plan, the Commission has also examined a detailed business plan for the Bank for the years 2019-2024. The result, according to the agency, was that "this transformation will enable the bank to return to viability."

Source: zeit

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