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EUROPEAN COMMISSION
PRESS RELEASE
Brussels, 27 November 2013
State aid: Commission approves resolution of French
mortgage lender Crédit Immobilier de France
The European Commission has approved under EU state aid rules the orderly resolution
of Crédit Immobilier de France (CIF) for reasons of financial stability. France will provide
up to €28 billion of state guarantees to fund the orderly resolution. According to the
resolution plan CIF will cease any new business and run off its assets over a period of up
to 22 years. This will eliminate any distortions of competition caused by the state
guarantee.
"The French authorities decided to resolve CIF because its business model is no longer
viable. I am satisfied that the resolution plan of CIF will preserve financial stability while
also minimising the burden for taxpayers and any distortions of competition resulting
from the state aid that the bank received", said Commission Vice President in charge of
competition policy Joaquín Almunia.
The Commission acknowledges that the refinancing guarantees in favour of CIF are
necessary to preserve financial stability and avoid a knock-on effect on the French
banking system. CIF pays an adequate remuneration for the guarantees provided by the
French State and hence contributes to bearing the resolution costs. Moreover, dividend
distributions to the shareholders are subject to strict limits in order to ensure a sufficient
level of burden sharing.
The distortions of competition caused by the aid are minimal as CIF will exit the
mortgage lending market altogether. In addition, CIF will respect a number of
commitments during the run-off period, notably an acquisition and discretionary coupon
ban.
The public support provided for the resolution of the bank is therefore in line with the
EU's crisis rules on state aid to the financial sector.
IP/13/1173
Background
Owned by the cooperatives "SACICAP", CIF is a mortgage lender which specialises in
loans to low income households in France to promote access to home ownership. CIF has
a market share of about 4% and its loan book amounts to roughly €35 billion. CIF
finances itself almost exclusively on the wholesale market by means of covered bonds
and unsecured issuance. Due to a drastic downgrade by Moody's in 2012 and against the
background of the financial crisis, CIF faced serious refinancing problems. To avoid CIF's
immediate default, France granted refinancing guarantees which were approved by the
Commission on a temporary basis (see IP/13/148 and MEX/13/0814).
In agreement with CIF’s shareholders, the French government decided to resolve the
bank, as the purely wholesale-financed business model is no longer viable. The French
government submitted a resolution plan to the Commission, setting out the details of the
run-off in accordance with EU state aid rules.
As of today, CIF will cease new lending and work out its assets over time. CIF will fund
the run-off on the wholesale market with the help of the above-mentioned refinancing
guarantees provided by the State.
The non-confidential version of the current decision will be made available under the
case number SA.37029 in the State Aid Register on the Competition website once any
confidentiality issues have been resolved. New publications of state aid decisions on the
internet and in the Official Journal are listed in the State Aid Weekly e-News
Contacts :
Antoine Colombani (+32 2 297 45 13, Twitter: @ECspokesAntoine )
Maria Madrid Pina (+32 2 295 45 30)
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