9.3.1.2 The split-up of the bank

In several cases, the beneficiary bank was split-up into a good bank (to be sold) and a bad bank (to be wound-down).1 For instance, Dunfermline Building Society was split-up; the good part of Dunfermline was transferred to Nationwide (following an open and transparent tender), while the remaining part (“Rump Dunfermline”) was put in wound-down. The Commission treated the break-up of Dunfermline Building Society as an asset relief measure.2 Consequently, the Commission applied the IAC. In its decision on Dunfermline, the Commission pointed out that the Dunfermline business transferred to Nationwide, being the continuation of economic activity of the former Dunfermline, would not have to bear the consequence of potential losses on the assets left behind in the Rump Dunfermline. The Commission noted that the effect of the aid measures undertaken by the UK was the creation of an entity (sold to Nationwide) that was relieved from the impaired assets of its predecessor.3

This consideration can also be found in other decisions (taken in the S/T/ W-context). For instance, in the decision on Northern Rock, the Commission held that the effect of the aid measures undertaken by the UK had resulted in the creation of a bank (i.e. BankCo) that is relieved from the impaired assets of its predecessor (i.e. Northern Rock).4 By the same token, the split-up of Quinn and of Parex Banka was considered as an asset relief measure.5

Remarkably, there are also cases (in which the bank was split-up) that were not treated as asset relief measures. This is the case for KA6, Eik Banki, Amagerbanken, Fionia Bank, Banco Espirito Santo and Bradford&Bingley.