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15.12.2009 International

EU approves RBS restructuring plan

By gna
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BRUSSELS, Dec. 15 (Xinhua/GNA) -- The European Commission (EC) approved an impaired asset relief scheme and restructuring plan for the Royal Bank of Scotland (RBS), an official EU statement said on Monday.

The measures foresee an appropriate participation of the bank in the costs of its restructuring, and include safeguards to limit distortions of competition.

The EC approved the measures, under EU state aid rules, as they are in line with its guidelines on impaired asset relief and on restructuring aid for banks.

According to the statement, the measures ensure a sustainable future for RBS without continued state support. However, Competition Commissioner Neelie Kroes warned: "in case RBS does not deliver on its balance sheet reduction targets by 2013, the Commission will be able to intervene again and more divestments will be required."

The state support for RBS is granted in accordance with the Treaty on the Functioning of the European Union (TFEU), which allows state aid to remedy a serious disturbance in a Member State's economy.

The RBS is one of Europe's largest financial services groups. The global crisis in the financial markets and the unprecedented levels of illiquidity experienced in late 2008 brought the RBS to the verge of collapse. The bank received a state recapitalization of 22 billion euros (32.21 billion U.S. dollars), giving the state a 70 percent stake in the RBS.

GNA

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