Press Release: State aid: Commission approves €103 million capital injections for ‘Mortgage and Land Bank of Latvia’

The European Commission has approved, under EC Treaty state aid rules, two capital injections in favour of 'The Mortgage and Land Bank of Latvia' (LHZB). The measures amount to LV 72.79 million (€102.48 million). LHZB is currently in the process of phasing out its remaining commercial activities so as to become a pure development bank (i.e. supporting structural, economic and social policies on behalf of the state, in accordance with its public mission). The Commission concluded that the part of the capital injections that benefits LHZB's development bank activities does not constitute state aid, because, within the scope of those activities, LHZB only administers and operates state-supported lending programmes in accordance with the EC state aid rules. Insofar as the aid measures also benefit the remaining commercial activities of LHZB, the Commission found them in line with the EU's state aid rules as outlined in the Commission's October 2008 Communication on state support for banks in the current financial crisis, because they will be phased out by 31 December 2013.