European competition regulators have opened a full probe into possible state aid given to Sparkasse KölnBonn, the German savings bank owned jointly by the cities of Cologne and Bonn.

It is understood to be the first Sparkasse to come under Brussels’ spotlight directly. However, EU competition commissioner Neelie Kroes has issued a general call for restructuring on the German banking system, describing the three-pillar system of commercial, co-operative and savings banks as “obsolete”.