L 116/36 Official Journal of the European Communities 4.5.1999 COMMISSION DECISION of 29 July 1998 giving conditional approval to the aid granted by Italy to Banco di Napoli (notified under document number C(1998) 2495) (Only the Italian text is authentic) (Text with EEA relevance) (1999/288/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 (1), Whereas: 1. Introduction Banco di Napoli is a former public monetary institution. When Law No 218 of 30 July 1990 (the ‘Amato’ Law) was adopted with its implementing decrees, the Bank’s banking activities were entrusted to a joint stock company separated from the former public body, and its social security activities were entrusted to a transferring body (Foundation) which holds the capital of the banking company. Before the aid in question, the Foundation held 48,1% of the equity of Banco di Napoli and 71,2 % of its voting rights. The Treasury held 9,1% of the capital, which represents 13,5% of voting rights. The other shareholders had 10,3% of the capital, representing 15,3% of the voting rights. The remaining capital (32,4 %) took the form of savings’ shares, without voting rights, quoted on the stock market. () OJ C 328, 1.11.1996, p. 23. The Banco di Napoli group, composed of Banco di Napoli SpA at the head, a sub-holding company, 11 companies controlled directly, two companies controlled indirectly and 16 other major direct or indirect holdings, was present at the end of 1994 throughout the national territory, with 810 branches, of which 684 were located in the south and 126 in central and northern Italy. In addition to that network, it was present abroad, with main subsidiaries in France, Luxembourg, Germany, Great Britain, Spain, United States of America and Hong Kong. The group’s activities cover various areas of financial intermediation and credit, movable and immovable property activities, factoring, leasing, management of trust funds and unit trusts, merchant banking and insurance. At the end of 1993, Banco di Napoli ranked seventh in Italy in terms of total balance sheet (total consolidated assets of ITL 126 000 billion), with a capital-debt ratio (9,3 %) above the minimum of 8% but with a low profitability (profits for the financial year to net assets ratio of 3,8 %). Banco di Napoli (hereinafter ‘the Bank’) incurred particularly severe losses in 1994 and 1995 of ITL 1 147 billion and ITL 3 155 billion respectively, which virtually wiped out its assets and made it impossible to comply with the prudential ratios laid down by the rules on credit. The reasons for such extensive losses are many. For a long time the major reference point for local bodies, the Bank launched a particularly active policy of expansion at the beginning of the 1990s, focusing on its network of branches and loans to the large industrial groups of northern Italy and small and medium-sized enterprises in the south, at a time when the economy had already entered into a recession. The difficulties experienced by debtors, together with unsuitable credit selection methods and inadequate risk control procedures, led to serious losses on loans. The Bank’s public status delayed its adjustment to an increasingly competitive environment and the adoption of the measures necessary to increase its technical