EBA欧洲银行-Decision_2_-_english_20180913183658_3页_90kb

Finansiel Stabilitet's Second Decision on the Resolution of Københavns Andelskasse under Kontrol (13 September 2018)

1. Core Content

Finansiel Stabilitet issued a second decision on the resolution of Københavns Andelskasse under kontrol (the "Institution") on 13 September 2018, under the Danish Act on Restructuring and Resolution of Certain Financial Businesses (the "Act"). This decision builds upon the First Decision, which had already initiated the resolution process by granting Finansiel Stabilitet control over the Institution and replacing its executive board and board of directors.

2. Additional Considerations

In addition to the considerations outlined in the First Decision, Finansiel Stabilitet took into account the following:

• Asset and Liability Valuation: The provisional valuation of the Institution’s assets and liabilities under Section 7 of the Act indicated the need to:

  • Cancel contributed capital.
  • Write down relevant capital instruments to zero.
  • Carry out bail-in for loss absorption on all subordinated obligations and certain non-subordinated obligations.

• Ownership Transfer: The ownership of the Institution will be transferred to Broinstitut II A/S ("Bridge Institution"), which is controlled by Afviklingsformuen ved Finansiel Stabilitet under Section 21 of the Act. This transfer allows for the continuation of the Institution’s operations during the resolution process and enables the sale of parts of the Institution if necessary.

• Contract Amendments: Amendments to certain contracts involving the Institution may be necessary to implement the resolution measures.

3. Key Decisions

The following decisions were made:

3.1 Resolution Measures

• Cancellation of Contributed Capital: Under Section 44 of the Act, the contributed capital of existing members is cancelled, and members cease to be members of the Institution as of 13 September 2018.
• Write-down of Capital Instruments: All relevant capital instruments are written down to zero under Sections 17 and 18 of the Act.
• Bridge Institution's Role: The Bridge Institution will contribute new capital to the Institution and become its sole owner.
• Bail-in for Loss Absorption:
  • All subordinated obligations are written down to zero under Section 24 of the Act.
  • Obligations that meet the conditions in Section 13(3) of the Act are written down to zero.
  • Obligations under Section 97 of the Danish Bankruptcy Act, excluding those exempted by Section 25 of the Act, are written down to zero.
  • Obligations related to deposits from natural persons and micro, small, and medium-sized enterprises that are not covered by the Danish Guarantee Scheme for Depositors and Investors (Garantiformuen) are written down to zero.
• Contract Adjustments: Finansiel Stabilitet may cancel or amend the Institution’s contracts in accordance with Section 30 of the Act.

3.2 Effective Date and Binding Nature

• The write-down of capital instruments and bail-in for loss absorption are effective and binding as of 13 September 2018 at 20:00.
• If registration of obligations is required, it will be done as soon as possible.

3.3 Capital Increase

• The board of directors of the Institution will adopt a capital increase, resulting in the Bridge Institution becoming the only member.

3.4 Definitive Valuation

• A definitive valuation will be prepared under Section 6 of the Act.
• If the net value of assets and liabilities according to the definitive valuation is higher than the provisional valuation, Finansiel Stabilitet may adjust the written-down claims.

4. Publication and Notification

• The decision will be sent to the Institution, the Danish Financial Supervisory Authority (Finanstilsynet), Danmarks Nationalbank, the Danish Ministry of Business, the Danish Macroprudential Authority (Det Systemiske Risikoråd), the ESRB, the European Commission, the European Central Bank, ESMA, and EIOPA, in accordance with Directive 2014/59/EU (BRRD) and Section 50 of the Act.
• Finansiel Stabilitet will notify individual owners and creditors whose claims were written down under Section 16 of the Executive Order on Resolution Measures.
• Affected creditors and contracting parties will be informed about contract cancellations or amendments within a reasonable time under Section 27 of the Executive Order.

5. Summary of Main Points

• Resolution Initiated: Finansiel Stabilitet has initiated the resolution of the Institution, taking control and replacing its management.
• Capital and Obligations Adjusted: Contributed capital and relevant capital instruments are cancelled, while bail-in for loss absorption is applied to various obligations.
• Ownership Transfer: The Bridge Institution becomes the sole owner of the Institution.
• Provisional and Definitive Valuation: The resolution is based on provisional valuation, with a definitive valuation to be conducted later.
• Transparency and Notification: The decision is published and communicated to relevant authorities and affected parties as required by law.

6. Key Legal Provisions

• The resolution measures are governed by the Danish Act on Restructuring and Resolution of Certain Financial Businesses.
• The European Banking Recovery and Resolution Directive (BRRD) also applies, ensuring transparency and communication with stakeholders.