Greek state-run ATEbank (AGBr.AT) won EU regulatory approval on Monday for millions of euros in state aid after it agreed to cut at least a quarter of its assets and adhere to sound market practices.
ATEbank, a state vehicle targeting farmers and the only Greek lender to fail EU-wide bank stress tests last year, found itself in difficulty due mainly to poor asset quality and traditionally low pre-impairment profitability.
The European Commission said ATEbank's revamp plan will restore its long-term viability.
"ATE's restructuring plan contains adequate measures to tackle the bank's weaknesses and minimise distortions of competition," EU Competition Commissioner Joaquin Almunia said in a statement.
Under the restructuring, the Greek government took up 1.14 billion euros of the bank's 1.26 billion euro share capital increase announced in April.
The bank will gradually reduce its total assets by at least 25 percent in 2013, by disposing of certain securities portfolios and total loan balances; it will also cut its operating costs by a quarter by 2013.
REUTERS
