No L 308/92 Official Journal of the European Communities 21. 12. 95 -~ COMMISSION COMMISSION DECISION of 26 July 1995 giving conditional approval to the aid granted by France to the bank Crédit Lyonnais (Only the French text is authentic) (Text with EEA relevance) (95/547/EC) THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Community, and in particular Articles 92 and 93 thereof, Having regard to the Agreement on the European Economic Area, and in particular Articles 61 and 62 thereof, Having, in accordance with the abovementioned Articles, . given interested parties formal notice to submit their comments (*), Whereas : 1. INTRODUCTION By letter dated 2 May 1995 [SG/95/D/5500), the Commis- sion informed the French authorities of its decision to initiate the procedure provided for in Article 93 (2) of the EC Treaty in respect of State aid granted to the publicly owned bank Crédit Lyonnais (hereinafter referred to as ‘CL). At the end of 1993 CL was the leading European banking group in terms of total assets (nearly FF 2000 billion), employing over 71000 people. Its business included commercial, investment and merchant banking, third- party fund management, insurance and other activities allied to banking. CL operated in France and abroad, with some 900 branches in Europe outside France and 800 in the rest of the world. On 31 December 1993 the majority shareholder in CL was the French State, which held 55 % of the capital and () OJ No C 121, 17. 5. 1995, p. 4. 76 % of the voting rights. The other ordinary sharehol- ders were Thomson-CSF (a subsidiary of the publicly owned Thomson group, with just under 20 % of the voting rights) and Caisse des Dépbts et Consignations (a publicly owned credit institution, with 4 % of the voting rights). The rest of the capital (22 %) was accounted for by preference shares quoted on the stock exchange. After almost five years of rapid growth, CL recorded losses in 1992 (FF 1,8 billion) and 1993 (FF 6,9 billion). These were very heavy losses in proportion to CL's own funds, and its solvency ratio — the ratio of own funds to risk- adjusted assets — would have fallen below the 8 % legal minimum if the French authorities, acting at the request of the authority responsible for supervising the French banking system (the Commission Bancaire), had not taken financial support measures in 1994, essentially consisting of a capital increase and the underwriting by the State of certain non-performing assets. At the begin- ning of 1995 it became clear that CL would be recording further losses which would threaten its solvency; the French Government put together a new rescue package, involving the setting-up of another specific hived-off vehicle to take over FF 13§ billion of assets, including CL’s non-performing or poorly performing assets. The setting-up of this vehicle limited the accounting loss for 1994 to FF 12,1 billion. The crisis affecting CL seems to be linked to a large extent to the bank’s aggressive lending and investment policy in the 1980s and at the beginning of the 1990s, without there being sufficiently strict monitoring of expo- sure. Between 1988 and 1993 total assets almost doubled, while the value of CL’s industrial portfolio increased almost five-fold to FF 50 billion. CL's assets on the property market exceeded FF 100 billion, placing the bank among the leading group of French credit institu-