(Adds further detail)
BRUSSELS/AMSTERDAM Feb 22 EU competition
regulators gave temporary approval to a rescue plan for SNS
Reaal of the Netherlands, saying the recapitalisation of
the banking and insurance group was necessary for the stability
of the Dutch financial system.
The European Commission, which acts as state aid regulator
in the 27-member European Union, said in a statement on Friday
it was approving the state-backed rescue for six months, during
which time a restructuring plan will have to be drawn up.
The approval would become permanent if the Commission has no
objections to details of the plan once they are submitted.
"The Commission found that the recapitalisation of SNS Reaal
is necessary to preserve the stability of the Dutch financial
system, in line with the Commission's guidelines on state aid
for banks during the crisis," it said.
"Indeed, the measures were required to allow SNS Reaal and
its subsidiaries to comply with minimum capital requirements."
SNS Reaal was nationalised on Feb. 1 in a 10 billion euro
($13 billion) rescue because of continuing losses at the bank's
property finance operations.
But the decision by Dutch Finance Minister Jeroen
Dijsselbloem has sparked a public outcry because of the cost to
taxpayers, while subordinated bondholders and shareholders have
said they will fight the nationalisation.
Dijsselbloem put the initial cost of nationalisation at 3.7
billion euros, consisting of a capital injection of 2.2 billion
euros, and a further 1.5 billion euros to write down state aid
and property assets. The state is providing 1.1 billion euros in
loans and 5 billion euros in guarantees.
SNS Reaal has postponed publication of its 2012 results, and
two former employees have been detained by the authorities on
suspicion of bribery, fraud and money laundering, prosecutors
said last week.
The European Commission said on Friday it was approving for
now the 300-million-euro recapitalisation for SNS Reaal, which
will also receive a bridging loan of 1.1 billion euros. It also
gave temporary approval for a 1.9 billion euros recapitalisation
for the SNS Bank subsidiary.
The Commission's regulators examine sizeable amounts of aid
or funding provided by EU governments to ensure it does not
distort competition by giving aided companies an unfair
($1 = 0.7563 euros)
(Reporting by Rex Merrifield in Brussels and Sara Webb in
Amsterdam; Editing by Tom Pfeiffer)