
Article 1 

1. The following measures implemented or planned by Austria constitute State aid within the meaning of Article 107(1) of the Treaty on the Functioning of the European Union:
(a) the recapitalisation measures of EUR 1 billion and EUR 250 million to Österreichische Volksbanken AG by Austria;
(b) the liquidity guarantees granted by Austria to Österreichische Volksbanken AG in the amount of EUR 3 billion;
(c) the asset guarantee to Österreichische Volksbanken AG by Austria with the capital relief effect of EUR 100 million.
2. The State aid referred to in paragraph 1 is compatible with the internal market, within the meaning of Article 107(3)(b) of the Treaty on the Functioning of the European Union, subject to the conditions set out in Article 2.
Article 2 
Austria shall ensure that the restructuring plan submitted on 4 September 2012 is implemented in full, including the commitments set out in the Annex to this Decision.
Article 3 
This Decision is addressed to the Republic of Austria.
Done at Brussels, 19 September 2012.
For the Commission
Joaquín ALMUNIA
Vice-President
ANNEX
Pursuant to Article 7(4) of Council Regulation (EC) No 659/1999, as amended, the Republic of Austria (“Austria”) hereby provides the following commitments concerning Österreichische Volksbanken-Aktiengesellschaft ("ÖVAG") in order to enable the European Commission (“the Commission”), by decision under Article 107(3)(b) of the Treaty on the Functioning of the European Union, to find aid granted to ÖVAG compatible with the internal market.
The commitments will take effect upon the date of adoption of the decision.
This text should be interpreted within the general framework of Community law and with reference to Council Regulation (EC) No 659/1999, as well as with regard to the decision to which the commitments are attached as commitments and/or conditions and obligations.

1.  1.1. Austria is to ensure that the restructuring plan (“restructuring plan”) for ÖVAG submitted on 4 September 2012 is correct and fully implemented.
 1.2. Austria is to ensure that the commitments (“commitments”) listed below are fully observed during the implementation of the restructuring plan.
 1.3. The restructuring phase will end on 31 December 2017. The following commitments apply during the restructuring phase, unless otherwise provided.

2.  2.1. ÖVAG has set up an internal winding-up segment to which certain assets are assigned in order to wind them up. The winding-up segment is to be managed as a segment in its own right with separate accounting in the sense of its own reporting procedure.

3.  3.1. [Reduction of balance sheet total – group] Starting from ÖVAG’s audited balance sheet total of EUR 48 116 million on 31 December 2009, the group’s total balance sheet assets are to be reduced to EUR [26 000-28 000] million by 31 December 2013, to EUR [22 000-24 000] million by 31 December 2014, to EUR [20 000-22 000] million by 31 December 2015, to EUR [18 000-20 000] million by 31 December 2016, and to EUR 18 390 million by 31 December 2017.
 3.2. [Reduction of RWA – group] Starting from the group’s total risk-weighted assets (from total risk) of EUR 29 505 million on 31 December 2009, these assets are to be reduced to EUR [16 000-18 000] million by 31 December 2013, to EUR [14 000-16 000] million by 31 December 2014, to EUR 11 682 million by 31 December 2015, to EUR [10 000-12 000] million by 31 December 2016, and to EUR [10 000-12 000] million by 31 December 2017.
 3.3. [Reduction of balance sheet total – core segment] The total balance sheet assets in the core segment are to be reduced to EUR [15 000-17 000] million by 31 December 2013, to EUR [15 000-17 000] million by 31 December 2014, to EUR [14 000-16 000] million by 31 December 2015, to EUR [13 000-15 000] million by 31 December 2016, and to EUR [13 000-15 000] million by 31 December 2017. These amounts may be exceeded by 2 %, as long as this is the result of increased syndicate operations with the primary level, higher regulatory requirements for retaining liquidity or a greater need for refinancing the primary institutions than originally planned. Thorough justification must be provided to the monitoring trustee in cases where these amounts are exceeded.
 3.4. [RWA reduction – core segment] The total risk-weighted assets in the core segment (total risk) are to be reduced to EUR [5 500-6 500] million by 31 December 2013, to EUR [5 000-6 000] million by 31 December 2014, to EUR [5 000-6 000] million by 31 December 2015, to EUR [5 000-6 000] million by 31 December 2016, and to EUR [5 000-6 000] million by 31 December 2017. These amounts may be exceeded by 2 %, as long as this is the result of increased syndicate operations with the primary level, higher regulatory requirements for retaining liquidity or a greater need for refinancing the primary institutions than originally planned. Thorough justification must be provided to the monitoring trustee in cases where these amounts are exceeded.
 3.5. [Reduction of balance sheet total – winding-up segment] The total balance sheet assets in the winding-up segment are to be reduced to EUR [10 000-12 000] million by 31 December 2013, to EUR [6 000-8 000] million by 31 December 2014, to EUR [6 000-8 000] by 31 December 2015, to EUR [5 000-7 000] million by 31 December 2016, and to EUR [4 000-6 000] million by 31 December 2017.
 3.6. [RWA reduction – winding-up segment] The total risk-weighted assets in the winding-up segment (total risk) are to be reduced to EUR [11 000-13 000] million by 31 December 2013, to EUR [8 000-10 000] million by 31 December 2014, to EUR [5 000-7 000] million by 31 December 2015, to EUR [5 000-7 000] million by 31 December 2016, and to EUR [4 000-6 000] million by 31 December 2017.
 3.7. Deadlines in the winding-up segment are to be extended only if there is a realistic, factual and plausible possibility that an extension will make the financing easier to use in the future. Extensions are to be granted only three times and for a maximum of one year in each case. Justified exceptions with longer extension periods are to be disclosed to the monitoring trustee and adequately justified in each individual case. At the end of the restructuring period all winding-up activities must still be brought to a close as quickly as possible.
 3.8. When calculating the amounts in Nos 3.1 – 3.6, changes due to amended legal provisions resulting from the application of the CRD IV/CRR are not to be taken into account.

4.  4.1. Only association-related business is to be carried out in the core business. In this connection, “association-related business” means that ÖVAG (i) is to act as a central organisation for the Volksbanken and is therefore to provide services to the directly affiliated institutions, and (ii) is to provide or procure products and services for the Volksbanken and their customers. ÖVAG is not to undertake in its own name or for its own account any credit or other lending business with third-party customers.

5.  5.1. 

5.1.1. “Renewable energy” business area. The business area includes project financing in the “renewable energy” area in Austria, Germany and countries in Eastern Europe. This does not include financing provided by the primary level Volksbanken in order to take over syndicate shares, in so far as the primary bank takes on a share of the financing in proportion to its size.
5.1.2. “Model financing” business area. The “model financing” business area concerns providing loans for purchasing and renovating dwellings in central locations using financial support available to creditworthy private individuals. This does not include financing provided by the primary level Volksbanken in order to take over syndicate shares, in so far as the primary bank takes on a share of the financing in proportion to its size.
 5.2. [Trade for own account] ÖVAG is to further refrain from conducting dedicated proprietary trading. This means that ÖVAG is to carry out only trading activities indicated in its trading book that are necessary either a) for accepting, transferring and executing its customers’ sales and purchase orders (i.e. trading with financial instruments as a service), or b) for hedging customer business or interest and liquidity management in the treasury sector or c) so that the economic transfer of balance sheet items to the restructuring unit or to third parties can be carried out. It is to be ensured in any case that these items are entered into only within the overall limit of EUR 3 million value-at-risk / one-day holding period / confidence level of 99 %, and where there is no danger to ÖVAG’s risk-bearing capacity or liquidity situation. Under no circumstances will ÖVAG carry out business activities that serve purely to make a profit apart from the above-mentioned purposes.

6.  6.1. 

6.1.1. Sale of all shares in the leasing subsidiary VBLI by 31 December [2013-2017];
6.1.2. Sale of all shares in Malta/IK Malta Volksbank by 31 December [2013-2017];
6.1.3. Sale of all shares in Volksbank Rumänien by 31 December [2013-2017];
6.1.4. Sale of all shares in RZB by 31 December [2013-2017];
 6.2. The buyers of the entities stated in Nos 6.1.1 - 6.1.4 must be persons that are legally and economically independent of the Republic of Austria and VB Holding / the primary level banks
 6.3. If the shares mentioned in Nos 6.1.1 to 6.1.3 are not sold by the deadlines laid down there, ÖVAG will take all the measures available to it to end new business in these entities and to wind them up. ÖVAG will do everything in its power to reach an agreement with its joint partners early enough (6.1.1 and 6.1.3) to end the new business by the stipulated deadlines.
 6.4. If the shares mentioned in No 6.1.4 have not been sold by the deadline stipulated there, an official sales agent is to organise the sale.

7.  7.1. Austria is to ensure that Deutsche Zentral-Genossenschaftsbank (DZ Bank), ERGO Gruppe and Raiffeisen Zentralbank Österreich AG (RZB) implement the planned measures, as laid down in the restructuring agreement (“restructuring agreement”) reached on 26 April 2012 between the Republic of Austria and DZ Bank AG, ERGO Versicherung AG and ERGO Versicherungsgruppe AG, Raiffeisen Zentralbank Österreich AG, Volksbanken Holding eingetragene Genossenschaft, Österreichischer Genossenschaftsverband and ÖVAG.

8.  8.1. [Ban on acquisitions] ÖVAG commits to refrain from making acquisitions. This applies to both the purchase of companies with their own legal structure, and shares in companies, as well as asset bundles that represent a commercial transaction or a branch of activity. This does not apply to acquisitions that must be made in order to maintain financial and/or association-related stability, or in the interests of effective competition, provided that they have been approved beforehand by the Commission. This does not apply either to acquisitions that belong, in terms of the management of existing obligations of customers in financial difficulty, to a bank's normal ongoing business. The obligation is to apply until the restructuring phase ends.
 8.2. [Dividend ban] ÖVAG will not pay dividends in the period up to and including the financial year ending 31 December 2017. The payments pursuant to No 10 are not affected by this, provided this is separable in a legal sense.
 8.3. [Hybrids] Until 31 December 2017, ÖVAG may not make any payments in respect of profit-related equity instruments (such as hybrid financial instruments and profit participation certificates (Genussscheine), in so far as those payments are not owed on the basis of a contract or the law. If ÖVAG’s balance sheet were to indicate a loss before the adjustment of reserves and retained earnings, the above-mentioned instruments must also participate fully in the loss pursuant to the possibilities under supervisory and civil law. In this connection, ÖVAG is to undertake not to draw on reserves in the case of losses until 31 December 2017.
 8.4. [Ban on price leadership] In the area of deposit services, the Live Bank is prohibited until 31 December 2015 from offering better interest rate conditions (for all maturities) than its competitor with the third-best conditions on the Austrian market for direct online banking without the Commission's prior approval.
 8.5. [Advertising] ÖVAG must not use the granting of the aid measures or any advantages arising therefrom for advertising purposes.
 8.6. [Remuneration of bodies, employees and essential agents] ÖVAG must verify the incentive effect and appropriateness of its remuneration systems and ensure, using the possibilities under civil law, that they do not result in exposure to undue risks, are oriented towards sustainable, long-term company objectives, and are transparent.
 8.7. [Other rules of conduct] ÖVAG is to continue expansion of its risk-monitoring operations and to conduct a commercial policy that is prudent, sound and oriented towards sustainability.

9.  9.1. [Remuneration for liquidity reserves] Pursuant to Section 25(13) of the Austrian Banking Act, ÖVAG is to pay a remuneration for the liquidity reserve to the primary institutions of no more than the three-month Euribor rate plus [40-70] basis points ("bp") for their deposits. On 1 January 2014 and 1 January 2015 the cost rate will be reduced in each case by [5-10] bp, and by a further [3-7] bp on 1 January 2016 and 1 January 2017, so that the conditions are the same as the three-month Euribor rate plus [20-40] bp from 1 January 2017. With the Commission’s explicit approval other fund transfer pricing components can also be used, provided it can be demonstrated that the profit from reducing the conditions for interest paid on the liquidity reserves as described here, is at least achieved.
 9.2. [Fees] ÖVAG is to retain all the fees it charges for business brought in through the LiveBank's website.
 9.3. [Distribution of dividends to the primary institutions] Dividends may be distributed to the primary institutions within the framework laid down in the restructuring agreement, provided that the limit of EUR [7-10] million mentioned there under No 7.2 is reduced to EUR [5-8] million and only to the extent that, where dividends are to be distributed under No 7.2, sufficient profits were made and also new, external base capital was raised (net, after the deduction of repayments) to at least cover (compensation for profits not retained) the amount distributed (to equity investors and to the Federal Government).

10.  10.1. [Remuneration of the asset guarantee] The asset guarantee of EUR 100 million provided by Austria is to be remunerated with a non-profit-related bonus of 10 % p.a.
 10.2. [Remuneration of the participation capital] The participation capital provided by the State is to be remunerated as laid down in the agreement on principle.

11.  11.1. [Return of the asset guarantee] The asset guarantee of EUR 100 million provided by Austria is to be set up in terms of its maturity in such a way that it ends immediately after 31 December 2015.
 11.2. [Repayment of the participation capital] ÖVAG undertakes to take every suitable measure to relieve the Republic of Austria of half of the burden of its position as a participant (EUR 150 million) in the first half of 2017 and of the entire burden by immediately after 31 December 2017 at the latest. The primary banks are to play a part in realising this, as far as the minimum regulatory requirements allow.
 11.3. [Exit strategy] Austria does not consider itself as the long-term owner of ÖVAG and will therefore attempt to sell the subscribed shares again as quickly as possible, taking into account budgetary interests and the provisions of the Austrian Banking Act and Section 2(3) of the Austrian Financial Market Stability Act.

12.  12.1. Austria is to ensure that the full and correct implementation of ÖVAG’s restructuring plan and the full and correct implementation of all commitments within this commitments document are continuously monitored by an independent, sufficiently qualified monitoring trustee who is obliged to maintain confidentiality.
 12.2. The appointment, duties, obligations and discharge of the monitoring trustee must follow the procedures set out in the “Trustee” Annex.
 12.3. Austria is to ensure that, during the implementation of the decision, the Commission or the trustee has unrestricted access to all information needed to monitor the implementation of this decision. The Commission or the trustee may ask ÖVAG for explanations and clarifications. Austria and ÖVAG are to cooperate fully with the Commission and the monitoring trustee with regard to all enquiries associated with monitoring of the implementation of this decision.

Annex to the list of commitments – The Monitoring Trustee
A.  (i) The Republic of Austria undertakes to ensure that ÖVAG appoints a monitoring trustee to carry out the duties of a monitoring trustee (“trustee”) as set out in paragraph C(x) of this Annex. The mandate applies to the entire duration of the restructuring; i.e. until 31 December 2017. At the end of the mandate, the trustee must submit a final report.
 (ii) The trustee must be independent of ÖVAG. The trustee must possess, for example as an investment bank, consultant or auditor, the specialised knowledge that is required in order to carry out its mandate, and must at no time be exposed to any conflict of interest. The trustee is to be remunerated by ÖVAG in a way that must not impede the independent and effective fulfilment of its mandate.
 (iii) Austria undertakes to ensure that ÖVAG submits the names of two or more persons to the Commission for approval as monitoring trustee no later than four weeks after notification of the decision.
 (iv) 

a)) the full terms of the proposed mandate with all the provisions which are necessary to enable the trustee to fulfil its duties;
b)) the draft of a work plan describing how the trustee intends to carry out its assigned duties.
 (v) The Commission has the discretion to approve or reject the proposed trustees and to approve the proposed mandate subject to any modifications that it deems necessary in order to enable the trustee to fulfil its obligations. If only one name is approved, ÖVAG will appoint the person or institution concerned as trustee or cause that person or institution to be appointed, in accordance with the mandate approved by the Commission. If more than one name is approved, ÖVAG is free to decide which of the approved persons should be appointed as trustee. The trustee will be appointed within one week of the Commission’s approval, in accordance with the mandate approved by the Commission.
 (vi) If all the proposed trustees are rejected, Austria undertakes to ensure that ÖVAG submits the names of at least two further persons or institutions within two weeks of being informed of the rejection, in accordance with the requirements and procedure set out in paragraphs A(i) and A(iv).
 (vii) If all further proposed trustees are also rejected by the Commission, the Commission will nominate a trustee which ÖVAG will appoint or cause to be appointed, in accordance with a trustee mandate approved by the Commission.

B.  (viii) The trustee is to assist the Commission to ensure ÖVAG’s compliance with the commitments and to assume the duties of a monitoring trustee specified in the commitments document. The trustee is to carry out the duties under this mandate in accordance with the work plan, as well as revisions of the work plan that have been approved by the Commission. The Commission may, on its own initiative or at the request of the trustee or ÖVAG, issue orders or instructions to the trustee in order to ensure compliance with the commitments. ÖVAG is not entitled to issue instructions to the trustee.

C.  (ix) The duty of the trustee is to guarantee full and correct compliance with the obligations set out in the commitments, and full and correct implementation of ÖVAG’s restructuring plan. The Commission may, on its own initiative or at the request of the trustee, issue any orders or instructions to the trustee or ÖVAG in order to ensure compliance with the commitments attached to the decision.
 (x) 

a)) is to propose to the Commission in its first report a detailed work plan describing how it intends to monitor compliance with the commitments attached to the decision;
b)) is to monitor the full and correct implementation of ÖVAG’s restructuring plan, in particular

((I)) the reduction of the balance sheet total and the RWA
((II)) the restriction of business activities;
((III)) the discontinuation of predefined business areas;
((IV)) The sales process for shares in the predefined business areas;
c)) is to monitor compliance with all other commitments,
d)) is to assume the other functions assigned to the trustee in the commitments attached to the decision;
e)) is to propose measures to ÖVAG that it considers necessary to ensure that ÖVAG fulfils the commitments attached to the decision;
f)) is to submit a draft written report to the Commission, Austria and ÖVAG within thirty days after the end of each six-month period. The Commission, Austria and ÖVAG can submit comments on the draft within five working days. Within five working days of receipt of the comments, the trustee is to prepare a final report, incorporating the comments as far as possible and at its discretion, and submit it to the Commission. Only afterwards the trustee is also to send a copy of the final report to Austria and ÖVAG. If the draft report or the final report contains any information that may not be disclosed to ÖVAG, only a non-confidential version of the draft report or the final report is to be sent to ÖVAG. Under no circumstances is the trustee to submit any version of the report to Austria and/or ÖVAG before submitting it to the Commission.
g)) The report is to focus on the duties set out in the mandate by the trustee and compliance with the obligations by ÖVAG, thus enabling the Commission to assess whether ÖVAG is being managed in accordance with the obligations. If necessary, the Commission may specify the scope of the report in more detail. In addition to these reports, the trustee is to report promptly in writing to the Commission if it has reason to suppose that ÖVAG is failing to comply with these obligations, sending a non-confidential version to ÖVAG at the same time.

D.  (xi) ÖVAG is to provide and to require its advisors to provide the trustee with all such cooperation, assistance and information as the trustee may reasonably require to perform its tasks under this mandate. The trustee is to have unrestricted access to any books, records, documents, management or other personnel, facilities, sites and technical information of ÖVAG or of the business to be sold that are necessary to fulfil its duties under the mandate. ÖVAG is to make available to the trustee one or more offices at its business premises and all employees of ÖVAG are to be available for meetings with the trustee in order to provide it with all the information it needs to perform its duties.
 (xii) Subject to ÖVAG’s approval (this approval may not to be unreasonably withheld or delayed) and at its expense, the trustee may appoint advisors (in particular for corporate finance or legal advice), if the trustee considers the appointment of such advisors necessary or appropriate for the performance of its duties and obligations under the mandate, provided that any costs and other expenses incurred by the trustee are reasonable. Should ÖVAG refuse to approve the advisors proposed by the trustee, the Commission may approve their appointment instead, after hearing ÖVAG’s reasons. Only the trustee is entitled to issue instructions to the advisors.

E.  (xiii) 

a)) the Commission can, after hearing the trustee, require ÖVAG to replace it, or
b)) ÖVAG, with the approval of the Commission, can replace the trustee.
 (xiv) If the trustee is removed in accordance with paragraph E(xiii), it may be required to continue in its function until a new trustee is in place to whom the trustee has effected a full handover of all relevant information. The new trustee is to be appointed in accordance with the procedure referred to in paragraphs A(i) to A(vi).
 (xv) Besides removal in accordance with paragraph E(xiii), the trustee is to cease its activities only after the Commission has discharged it from its duties. This discharge is to take place when all the obligations with which the trustee has been entrusted have been implemented. However, the Commission may at any time require the reappointment of the trustee if it is subsequently found that the relevant remedies have not been fully and properly implemented.
