In a step to help tackle the financial crisis, the Commission has approved State aid given by the UK Government to assist in the restructuring of the Dunfermline Building Society (“Dunfermline”) of the United Kingdom.
The UK Government split-up Dunfermline into two parts. The first part contained the good quality assets and liabilities which were immediately sold to a competitor. The other contained the impaired commercial loan assets which were put into administration. The UK Government had to provide over £1.5 billion in cash in order to enable the sale to go through as the liabilities of the package sold initially exceeded the assets. The Commission came to the conclusion that the orderly break-up of Dunfermline, followed by the sale of the viable part to a competitor ensured the return of viability of the sold business. Therefore, it was decided that the direct restructuring is compatible with the EU rules on State aid.
IP/10/48 – 25 January 2010