April 16, 2014 / 9:54 AM / 5 years ago

EU regulators to probe extra state aid given to two Latvian banks

A Parex bank logo is seen in Riga July 29, 2009. REUTERS/Ints Kalnins

BRUSSELS (Reuters) - European Union regulators opened on Wednesday an investigation into state aid granted to Latvian Banks AS Parex banka and Citadele banka, saying the measure may have violated EU state aid rules.

The European Commission, tasked with ensuring a level playing field in the 28-country bloc, said Latvian authorities may also have failed to carry out the banks’ restructuring in line with their pledge to the EU watchdog.

Parex banka was split into a good bank named Citadele banka and a bad bank called Parex, which was later renamed Reverta, in 2010 under an overhaul plan agreed with the Commission in return for approving its bailout.

“The Commission has concerns that the additional measures were not limited to the minimum necessary,” the EU competition authority said in a statement.

Reporting by Foo Yun Chee; editing by Robert-Jan Bartunek

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