Portfolio - FMS Wertmanagement

Since October 2010, FMS-WM has reduced the portfolio taken over from the HRE Group with a nominal value of EUR 175.7 billion to EUR 49.6 billion as at the end of 2022.

Adjusted for the assets acquired from DEPFA Group companies in fiscal years 2016 to 2020 with a total acquisition-date nominal value of EUR 11.8 billion, the portfolio has been reduced by around 75% by the end of 2021.

Since the portfolio was taken over, the number of countries in which FMS-WM still holds exposures has been reduced from 66 to 31 countries. There are still clear concentrations in the United Kingdom, Italy and the USA, which together accounted for around 72% of the nominal value of the portfolio as at 31 December 2022.

The Commercial Real Estate (CRE) segment, which at the time of the transfer comprised 3,512 individual exposures and thus made up almost half of all acquired positions in the overall portfolio, has been reduced at the fastest pace since FMS-WM was established, helped in part by the positive market environment and the short remaining maturities of the loans.

The Commercial Real Estate segment is no longer being managed as an active segment. The receivables from five counterparties with a combined nominal value of EUR 0.3 billion that originally belonged to this segment and were still in the wind-up portfolio at the end of 2021, consisting predominantly of US commercial mortgage loans, were transferred to the Infrastructure segment with effect from 31 December 2021.

The Infrastructure segment still makes up around 17% of the remaining portfolio at the end of 2022.

The Public Sector portfolio was to EUR 24.4 billion at yearend 2022.

The borrowers and issuers of securities are state and regional governments, municipalities, public law entities and semi-public companies. Receivables from European Union member states account for the majority of the portfolio, with a large percentage of this comprising exposures with very long remaining maturities.

At the end of 2022, 34 percent of the overall portfolio was invested in the Structured Products segment.

Among others, this segment includes structured credit instruments such as asset-backed securities (ABS), commercial or residential mortgage-backed securities (CMBS or RMBS) or collateralised debt obligations (CDO).

Information on DEPFA Bank plc

When examining the possibility of acquiring the DEPFA Group, FMS-WM had already identified value levers that would result in a more favourable outlook for the wind-up of the DEPFA Group. These consisted of:

cutting costs
systematically leveraging the funding advantages
buying back the liabilities issued by the DEPFA Group

By the end of 2020, FMS-WM was able to use all of the value levers identified for winding up the DEPFA Group acquired in 2014 in a way that maximises value.

The result achieved confirmed that the wind-up of the DEPFA Group by FMS-WM was the favourable option compared with the privatisation that was not carried out in 2014.

FMS-WM and Austria’s BAWAG Group closed the sale of Ireland’s DEPFA BANK plc on 19 November 2021. The purchase agreement was signed by both parties back in February 2021.