June 7, 2017 / 6:46 AM / 7 months ago

European Commission approves resolution scheme of Banco Popular

BRUSSELS (Reuters) - The European Commission has approved a resolution scheme of Spain’s Banco Popular Espanol POP.MC based on a proposal prepared by the Single Resolution Board, the Commission said in a statement on Wednesday.

The resolution involves the sale of Banco Popular to Santander (SAN.MC). The customers of Banco Popular will continue to be served with no disruption, the Commission said.

“All depositors continue to have uninterrupted access to the full amount of their deposits. Following the resolution decision, the bank can continue its business activities,” the Commission said.

It said the resolution involved no state aid or aid from the Single Resolution Fund and that the sale to Santander was subject to normal merger and regulatory review by the EU’s competition authorities.

“The Commission has endorsed the resolution scheme because ...the bank was failing, there were no private sector solutions outside of resolution and there were no supervisory actions that would have prevented its failure,” it said.

    “It was the best course of action to ensure the continuity of the important functions performed by the bank and to avoid significant adverse effects on financial stability. In this specific case, losses were fully absorbed by shares and subordinated debt,” the Commission said.

    Reporting By Jan Strupczewski; editing by Robert-Jan Bartunek

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