Effective from September 01, Volkswagen Bank GmbH is a wholly owned subsidiary of Volkswagen AG. Volkswagen Financial Services initiated a corporate restructuring in November of last year. The aim of the realignment has been to bundle the credit and deposit business within the European Economic Area (EEA) in Volkswagen Bank GmbH. All other activities, such as the leasing, insurance, service and mobility business, as well as the credit business outside Europe, remain with Volkswagen Financial Services AG. Through a new company, Volkswagen Financial Services Digital Solutions GmbH, selected services are developed and made available to its parent companies Volkswagen Bank GmbH and Volkswagen Financial Services AG.
Why are you carrying out this restructuring?
With the separation of VW Bank from VW FS AG we want to reduce the scope of regulatory supervision and thereby free-up equity to fund our ambitious growth initiatives and rationalize regulatory reporting requirements.
What is the timetable for implementation? What exactly are the next steps?
The new setup is in place starting September 1, 2017. Afterwards the operational separation of selected activities will be finalized (in close alignment with ECB) and the new business structures stabilized.
What effects will this have on existing control and profit transfer agreements?
The existing profit and loss transfer agreements, guarantees and letter of comfort of Volkswagen Financial Services AG will remain with respect to its subsidiaries. The domination and profit and loss transfer agreement of Volkswagen Financial Services AG with Volkswagen Bank GmbH will be transferred to the Volkswagen AG.
Does this affect repayment of your bonds and ABS transactions?
No, the financial service companies of the Volkswagen Group will of course comply with all their liabilities and payment obligations.
Will bond conditions (ABS and capital market) change?
No, the bond conditions will not fundamentally change. The only thing that changes is the ownership structure of Volkswagen Bank GmbH.
Do you expect any changes with respect to rating?
We cannot comment on rating agency decisions since we are not part of the decision-making process. The rating agencies are being informed and we are, of course, in close contact with the major rating agencies (S&P, Moody’s and Fitch).
Will VW FS AG still be subject to supervision by the ECB?
After the restructuring, Volkswagen Financial Services AG will no longer be operating in the credit and deposit business in Europe. As a consequence, the supervision of the European Central Bank (ECB) will be limited to Volkswagen Bank GmbH and its credit and deposit business in the EEA.
Will employees be laid off?
No. No jobs will be lost by the restructuring measures.
Ad Hoc Announcement
Braunschweig, 01. November 2016.
Today, the supervisory board of Volkswagen Financial Services AG approved a reorganization measure of the Volkswagen Financial Services Group. Volkswagen Bank GmbH, which is currently a subsidiary of Volkswagen Financial Services AG, shall become a direct subsidiary of Volkswagen AG by way of a spin-off, providing consolidation of banking activities relevant to European Central Bank authority and allowing for the separate regulation of European banking activities from other financial services provided by the Volkswagen Financial Services Group. The aim of such reorganization is improved transparency for the regulatory authority and increased efficiency. The implementation of this measure is subject to the approval of the supervisory board of Volkswagen AG.