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State Aid

State Aid: No objections raised to restructuring of Icelandic savings banks

27.1.2016

PR(16)03

EN |  IS

Today, the EFTA Surveillance Authority decided not to raise objections to the Icelandic authorities' efforts to restructure Norðurland Savings Bank and its predecessors, the savings banks of Bolungarvík, Svarfdælir and Þórshöfn. However, these efforts were not successful and, effective as from 7 September 2015, Norðurland Savings Bank was taken over by Landsbankinn hf., one of Iceland's main commercial banks.

«I regret that restructuring the savings banks sector in Iceland has taken longer than expected. The existence of smaller market players in the domestic financial market in Iceland may have beneficial effects on competition. The Authority has therefore shown patience to ongoing efforts. Given the failure of those efforts, it is important that the Icelandic authorities do their utmost to maintain effective competition in domestic banking.», Mr Sven Erik Svedman, president of the EFTA Surveillance Authority, said.

The aid was initially granted and temporarily approved in June 2010 and April 2011 as part of a rescue aid scheme in support of five savings banks, subject to submission of restructuring plans. However, finalisation of the restructuring plans was repeatedly delayed and eventually, as concerns Norðurland Savings Bank, failed to lead to return to viable operations.

Given the takeover by Landsbankinn of the savings bank, it is no longer relevant for the Authority to assess the measures aimed at ensuring return to long-term viability. The Authority has nevertheless assessed whether the measures are in line with other relevant provisions in its financial crisis Restructuring Guidelines.

The Authority found that the aid beneficiaries and their creditors provided adequate own contribution. Moreover, in view of the limited distortion of competition and effect on intra-EEA trade, the Authority also exceptionally accepts that the restructuring plan did not include any competition remedies.

A non-confidential version of the decision will be published in the register of state aid decision on the Authority's website, normally within a month.

For further information, please contact:

Mr. Andreas Kjeldsberg Pihl
Press & Information Officer
tel. (+32)(0)2 286 18 66
mob. (+32)(0)492 900 187




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