7.5.1 Aid to the investors of the bank?

When a Member State rescues a failing bank, this is not only beneficial to the bank itself, but also to those who invested in the bank. Indeed, the bailout of a failing bank prevents that the investors lose their investments in that bank. The Commission has recognised that investors usually benefit from the bailout. As will be explained in detail in chapter 12, shareholders and subordinated debt holders are normally required to contribute to the restructuring of the bank. This “own contribution-requirement” addresses the fact that these investors would otherwise benefit from the State aid.

Are retail depositors beneficiaries of State aid? This question was addressed in the case of Bradford&Bingley (B&B). In this case, the retail deposit book of B&B was sold to another institution (together with several other assets and liabilities), while the remainder of B&B’s business was wound-down. The Commission noted that the main beneficiaries of the State aid measure were the retail depositors of B&B: the aid measure enabled the transfer of some of B&B’s business (including the retail deposit book). Without this aid measure and the subsequent transfer of the retail deposit book, the deposit holders would have suffered serious difficulties in accessing their deposits. In addition, they might also have lost some of their deposits.1 The depositors thus clearly benefited from the State aid measure. Nevertheless, the Commission remarked that retail depositors are individuals and therefore not considered as undertakings. Since Article 107(1) TFEU only applies to ‘undertakings’, depositors fall outside the scope of the State aid rules.2 Moreover, even if there were some undertakings among the depositors, the aid should be considered ‘de minimis’ aid and therefore outside State aid control.3

In several other bank State aid decisions, the Commission reiterated its considerations of the decision on Bradford&Bingley to underline that retail depositors fall outside the scope of the State aid rules.4 The approach of the Commission with respect to depositors is thus consistent.