13.6.1 Why is this a relevant characteristic?

Downsizing is aimed at reducing the market presence of the beneficiary bank. It is a compensatory measure; i.e. a measure to limit distortions of competition caused by the State aid. Downsizing can be measured in several ways: a bank can downsize in terms of balance sheet size, scope of activities, branch network (“geographical footprint”) and staff. Downsizing in terms of balance sheet size will be discussed in the current section, while section 13.7 will discuss downsizing in terms of branch and staff reduction.

It should be recalled that the divestments discussed in section 13.5 were specifically aimed at creating a new competitor on the market (“challenger bank”). The divestments discussed in the current section have a more general objective: namely reducing the market presence of the beneficiary bank.