While the significantly decreased number of exposures and counterparties since the portfolio was taken over has reduced complexity significantly, concentrations of risk have increased, particularly in the Public Sector segment.
The Public Sector segment accounts for around 50% of the overall portfolio’s nominal volume. Italian borrowers – mainly government bonds and instruments issued by other public borrowers – account for around 49% of the total nominal volume. When non-strategic and at-risk exposures were transferred from the HRE Group to FMS-WM on 1 October 2010, the Public Sector segment was the largest in the portfolio, making up 49.3% with a nominal value of EUR 86.6 billion. The borrowers and issuers of securities are state and regional governments, municipalities, public law entities and semi-public companies. At the end of 2016, the sub-portfolio worth a nominal value of EUR 44.3 billion still comprised a total of 927 exposures to 417 borrowers, with loans making up a much smaller share (21%) than securities holdings (79%).