State aid: Commission approves market conform recapitalisation of Romanian CEC Bank

The European Commission has found Romania’s plans to inject €200 million of capital in fully state-owned CEC Bank to be free of any State aid. The Commission found that the recapitalisation will be carried out on market terms and therefore involves no State aid in favour of the bank within the meaning of EU rules. In October 2019, Romania notified to the Commission its intention to recapitalise state-owned CEC Bank. Romania submitted a business plan for the bank covering the period 2019-2023 to the Commission. Under EU State aid rules, if a Member State intervenes as a private investor would do, and is remunerated for the risk assumed in a way a private investor would accept, such intervention does not constitute State aid. The Commission’s assessment of the business plan submitted by Romania showed that the €200 million capital injection in the bank would yield a return on investment to the Romanian State (as the bank’s sole shareholder) in line with market conditions. The business plan notably foresees an increase in the bank’s lending and deposit market share, improved efficiency and robust capital levels. On this basis, the Commission was able to conclude that the recapitalisation of CEC Bank by Romania would be carried out at conditions that a private investor would accept and that the measure did therefore not involve any State aid in favour of CEC Bank within the meaning of EU rules. Commissioner Margrethe Vestager, in charge of competition policy, said: “The EU Treaty is neutral when it comes to public versus private ownership. We found that the Romanian government, as the sole owner of CEC Bank, would carry out a capital injection in the bank at the same conditions that a private market operator would accept. We therefore concluded that the recapitalisation of the bank did not involve State aid within the meaning of our rules.”