Press Release: State aid: Commission approves Austrian State support for the restructuring of Kommunalkredit

The European Commission has approved under EU state aid rules several measures in favour of Kommunalkredit Austria AG, consisting inter alia in state guarantees of more than €10 billion, a capital injection of €250 million in the form of ordinary shares and a split of the bank through the separation of strategic activities and non-strategic activities, with a €1 billion non-refundable loan to Kommunalkredit Finanz, the entity winding down the non-strategic assets. According to the restructuring plan, the bank that continues the strategic business will concentrate on public and project finance lending and withdraw from other activities. The Commission concluded that the restructuring plan is appropriate to restore the bank's viability, while adequately addressing competition distortions brought about by the state support.