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European Commission — Financial Crisis Taskforce
DG Competition
Rue Joseph II/Jozef II-straat 70
1000 Brussels
Belgium
Pursuant to Article 7(3) of Council Regulation (EC) No 659/99(1), as amended, Germany hereby provides the following commitments concerning Sparkasse KölnBonn in order to enable the European Commission (‘the Commission’) to find the recapitalisation of Sparkasse KölnBonn compatible with the internal market by decision under Article 107(3)(b) of the Treaty on the Functioning of the European Union.
The commitments are to take effect on the date of the decision’s adoption.
This text is to be interpreted within the general framework of EU law and with reference to Regulation (EC) No 659/99, and also taking into consideration the Decision to which the commitments are attached.
The number of external members of the Supervisory Board is to be increased from the current two members to four as of 1 January 2011. The total number of Supervisory Board members is to be restricted to 18.
The Supervisory Board of Sparkasse KölnBonn is to appoint only the following committees in future and to reduce their members to the number stipulated no later than on 1 January 2011.
Accounting committee (seven members)
Risk committee (six members)
Main committee (three members)
The Strategy committee and the Investment committee are to be abolished no later than on 31 December 2010 and 31 December 2011 respectively.
All members of the Supervisory Board are to possess the abilities stipulated in the first sentence of §36(3) of the German Banking Act.
With effect from 1 January 2011 the Management Board of Sparkasse KölnBonn is to tighten the guidelines for investment decisions as follows: The Management Board will be able to take investment decisions only if there is unanimity and — in the case of investments over a nominal value of EUR [2-5] million — following a due diligence check involving an auditor, if necessary.
are necessary to receive, transmit and carry out its clients’ orders to buy and sell; or
help the savings bank perform liquidity or risk management.
Under no circumstances is Sparkasse KölnBonn to create positions on its own account, unless they arise because Sparkasse KölnBonn, for example, does not carry out certain customer orders straight away. Positions of this kind and the liquidity/risk management positions are allowed only if they do not jeopardise the Bank’s viability and/or liquidity. Sparkasse KölnBonn is therefore to limit the market risk of its trading portfolio to EUR [3-5] million (Value at Risk at a confidence level of 99 %).
As part of its reorientation, Sparkasse KölnBonn is to gradually reduce its large credit exposures in the area of corporate banking in order to reduce the associated risks. The measures include, among other things, limiting the credit lines, requesting additional collateral or transferring risks to other credit institutions.
By the end of 2013 Sparkasse KölnBonn is to reduce its large credit exposures by EUR [900-1 100] million, of which EUR [400-550] million should already be achieved by the end of 2010. Cash credits granted to institutional clients, who are not connected to the Cologne-Bonn region, are to be reduced by EUR [800-900] million by the end of 2013.
Sparkasse KölnBonn or any other of its entities is not to use the capital or reserves of Sparkasse KölnBonn to pay any coupons on capital instruments, unless (a) there is a legal obligation to do so, or (b) where the payment of the relevant coupon will be covered by the current profits of Sparkasse KölnBonn. In the case of doubts as to the existence of a legal obligation or sufficient current profit for the purpose of this commitment, Sparkasse KölnBonn is to submit the proposed coupon payment to the Commission for approval;
No entity of Sparkasse KölnBonn is to exercise a call option in respect of these hybrid capital instruments if Sparkasse KölnBonn’s total regulatory capital would be reduced as a result.
During the implementation of the restructuring plan, until 31 December 2014 at the latest, Sparkasse KölnBonn is to pay coupon on and avoid loss absorption by the subordinated capital only if it is obliged to do so, and provided it does not require the release of reserves and of the special items pursuant to §340 f and g of the Commercial Code.
a […]. | |
b […]. | |
Participation | To be sold by no later than |
---|---|
Golfclub Gut Lärchenhof GmbH | Already sold in 2009 |
TA Triumph Adler AG | Already sold in 2009 |
RW Holding AG | Already sold in 2009 |
S ProFinanz Versicherungsmakler GmbH | Already sold in 2009 |
Schufa Holding AG | Already sold in 2009 |
Sparkassen Servicegesellschaft für Zahlungssysteme und elektronische Vertriebskanäle mbH & Co KG | Assets sold/Liquidation by the end of 2010 |
[…] | […] |
Campus Grundstückentwicklungs GmbH | Assets already sold/liquidation in 2011 |
[…] | […] |
[…] | […] |
[…] | […] |
neue leben Pensionsverwaltung AG | End of 2010 |
[…] | […] |
[…]a | […] |
[…]b | […] |
the deadline will be extended by a further […] if Sparkasse KölnBonn can prove that […]. Sparkasse KölnBonn undertakes to enter into a final, binding purchase agreement […] within the extended divestiture period for the sale of the business to be divested;
if Sparkasse KölnBonn has not entered into such an agreement by the end of the extended divestiture period, it is to grant the divestiture trustee an exclusive mandate to sell the business to be divested within the trustee divestiture period(4). The procedure for the nomination of the divestiture trustee, and his duties are set out in Annex III.
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[…]
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[…]
[…]
In the context of the transaction it is also permitted to transfer the assets and business activities of a company, instead of the company in question, if this serves the intended business purpose.
not to carry out any activity that might have an adverse impact on the value, management or competitiveness of the business to be divested, or that might alter the nature and scope of its activity, its industrial or commercial strategy or its investment policy;
to make available sufficient resources for the development of the business to be divested, on the basis of and by implementing the existing business plans;
to take all reasonable steps, including appropriate incentive schemes (based on industry practice), to encourage all key personnel to remain with the business to be divested.
provide potential purchasers with sufficient information on the business to be divested;
give potential purchasers sufficient information on and reasonable access to the personnel.
the purchaser must be independent of and unconnected to Sparkasse KölnBonn. This does not apply, however, to the sale of […], […] and the participations listed in paragraph 13 to the responsible municipalities, their affiliated companies, and members of the Sparkassen financial group;
the purchaser must have the financial resources, proven expertise and incentive to maintain and develop the business to be divested as a viable and active competitive force in competition with Sparkasse KölnBonn and other competitors;
in the light of the information available to the Commission, the purchaser must not give rise to prima facie competition concerns, nor to a risk that the fulfilment of the commitments will be delayed, and can, in particular, reasonably be expected to obtain all necessary approvals from the relevant regulatory authorities for the acquisition of the business to be divested.
Zweckverband Sparkasse KölnBonn (Sparkasse KölnBonn special-purpose association) will purchase by 31 December 2011, to be effective as of 1 January 2011, a first tranche of EUR 150 million in certificates of participation of the Rheinische Sparkassen-Förderungsgesellschaft and convert them into an instrument recognised as regulatory core capital (tier 1 capital).
By 31 December 2011 Sparkasse KölnBonn will repurchase a second tranche of EUR 150 million in certificates of participation of the Rheinische Sparkassen-Förderungsgesellschaft, provided that this is compatible with Sparkasse KölnBonn’s risk-bearing capacity and has been approved by the Federal Financial Supervisory Agency.
In addition to the measures already carried out to reduce the total assets, Sparkasse KölnBonn undertakes to reduce other assets (large-scale lending activities, short-term lending, investments) by EUR [2,5-4] billion by the end of 2014. On the other hand, however, Sparkasse KölnBonn is to develop its core business activities (in particular, regional retail and corporate lending) while ensuring that the net total assets do not exceed EUR [25-30] billion at the end of 2014. In line with this, the Sparkasse KölnBonn’s risk weighted assets are not to exceed EUR [16-19] billion at the end of 2014.
…
Duly authorised for and on behalf of
[Indicate the name of the MS]
the full terms of the proposed mandate together with all the provisions necessary to enable the Monitoring Trustee to carry out its duties in accordance with these commitments;
the outline of a work plan describing how the Monitoring Trustee intends to carry out its assigned tasks.
propose to the Commission within 4 weeks of appointment a detailed work plan describing how it plans to monitor compliance with the commitments towards the Commission and implementation of the restructuring plan;
oversee the ongoing management of the Divestment Business with a view to ensuring its continued economic viability, marketability and competitiveness;
monitor compliance with all obligations towards the Commission and implementation of the restructuring plan;
propose measures, which the Monitoring Trustee considers necessary to ensure compliance by the Federal Republic of Germany with all commitments towards the Commission, in particular the preservation of the full economic viability, marketability or competitiveness of the Divestment Business, the holding separate of the Divestment Business and the non-disclosure of competitively sensitive information;
submit to the Commission, Sparkasse KölnBonn and the Federal Republic of Germany within 30 days after the end of each half year the draft of a written report in German or English. The report shall cover the Monitoring Trustee’s fulfilment of its obligations under the Mandate, compliance with all conditions and obligations and the implementation of the restructuring plan. All recipients of the draft report shall be able to submit their observations within 5 working days. Within 5 working days of receipt of the comments, the Monitoring Trustee shall prepare a final report and submit it to the Commission, taking into account, if possible and at his sole discretion, the comments submitted. The Trustee will also send a copy of the final report to the Federal Republic of Germany and to Sparkasse KölnBonn. Should the draft report or the final report contain any information that must not be disclosed to Sparkasse KölnBonn or the Federal Republic of Germany, Sparkasse KölnBonn or the Federal Republic of Germany shall only be provided with a non-confidential version of the draft report or the final report. The Monitoring Trustee shall submit no version of the report to the Federal Republic of Germany and/or Sparkasse KölnBonn before submitting it to the Commission.
the full terms of the proposed mandate together with all the provisions necessary to enable the Divestiture Trustee to fulfil its duties in accordance with these commitments;
the outline of a work plan describing how the Divestiture Trustee intends to carry out its assigned tasks.
propose to the Commission within 4 weeks of appointment a detailed plan of work describing how it plans to fulfil the conditions and obligations in the Decision regarding the business to be divested; it shall in particular present a concept for the divestiture and an assessment as to which divestiture strategy is the most promising;
shall sell the divestment business to a buyer […], in so far as the Commission has not raised any objections regarding the buyer or the final binding sale and purchase agreement within 4 weeks of these being made known. The Divestiture Trustee shall include in the sale and purchase agreement such terms and conditions as it considers appropriate for an expedient sale. The Divestiture Trustee may include in the sale and purchase agreement such customary representations and warranties and indemnities as are reasonably required to effect the sale;
take on the other duties which are conferred on the Divestiture Trustee in the Decision;
propose such measures as it considers necessary to ensure compliance by the Federal Republic of Germany with all commitments towards the Commission, in particular the preservation of the full economic viability, marketability or competitiveness of the Divestment Business, the holding separate of the Divestment Business and the non-disclosure of competitively sensitive information;
submit to the Commission comprehensive monthly reports in English or in German on the development of the divestment procedure. These reports shall be submitted no later than 15 days after the end of each month. At the same time Sparkasse KölnBonn or the Federal Republic of Germany shall receive non-confidential versions of the report.
examining different options for the divestiture; a detailed proposal taking account of the framework conditions for the structuring and concluding of the sale procedure;
compiling the necessary marketing documents on the participation of Sparkasse KölnBonn concerned (in particular the sales memorandum, teasers, and other presentations which are necessary or beneficial for a sale process). These are to be given to interested parties by way of initial information on the pending sale;
in close agreement with the Sparkasse: preparing the content and logistical coordination of the due diligence process;
identifying potential purchasers and contacting the decision-making bodies of these interested parties. For legally binding reasons with regard to the interests of secrecy and in line with the requirement for a non-discriminatory sale, a potential purchaser will, at the request of the Sparkasse, be denied access to the due diligence information (the burden of proof lying with the Sparkasse), whereby this right must be exercised within 3 working days following receipt of the list of potential purchasers;
collecting and examining sales offers made by interested parties; support with the evaluation of these offers;
conducting sales negotiations with selected interested parties and preparing the conclusion of the contract.
[…].
Period from the Decision’s entry into force until the dates stated in paragraph 10.
[…].
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