Result from ordinary activities of EUR 70 million
Further progress made in winding up the DEPFA Group
FMS Wertmanagement (FMS-WM), the German federal government’s winding-up institution, today announced that it generated a positive result from operating activities of EUR 70 million in the first half of 2019 (H1 2018: EUR 105 million).
The nominal volume of the portfolio was reduced by EUR 2.6 billion compared with the beginning of the year. Including the assets of EUR 1.6 billion acquired from the DEPFA Group in the first six months of 2019, the portfolio remaining with FMS-WM as at 30 June 2019 has a value of EUR 68.2 billion. The cumulative wind-up of the portfolio since 2010 amounts to EUR 107.5 billion, or 61.2 percent.
Total assets of FMS-WM as at 30 June 2019 were EUR 146.9 billion (year-end 2018: EUR 144.7 billion). This increase is mainly attributable to the cash collateral provided for derivatives, which rose as a result of falling interest rates.
General and administrative expenses decreased to EUR 68 million in the first half of 2019 (H1 2018: EUR 69 million) and thus remain well below the sum total of net interest and net commission income of EUR 144 million, which continues to decline (H1 2018: EUR 198 million).
On FMS-WM’s funding side, Bundesrepublik Deutschland Finanzagentur GmbH (German Finance Agency) took over the capital market funding in euros as scheduled in January 2019. Overall, FMS-WM raised funds of EUR 17.7 billion on the capital markets in the first half of 2019, including EUR 13.0 billion raised by the German Finance Agency.
“Despite the challenging market environment, we continued our successful winding-up activities in the first half of 2019 and delivered a very satisfactory result,” said Spokesman of the Executive Board Christoph Müller. For 2019 as a whole, the Executive Board again expects a positive result from ordinary activities.
FMS-WM made further progress with the accelerated wind-up of the DEPFA Group in Dublin. In June 2019, FMS-WM sold previously acquired DEPFA liabilities to DEPFA for the third time, simultaneously acquiring assets of DEPFA. This transaction was instrumental in reducing DEPFA’s total assets to EUR 14.4 billion, with the Tier 1 capital (CET1) ratio rising accordingly to 144.2 percent as at 30 June 2019. There are plans to transfer or distribute some of the capital that will no longer be needed in the DEPFA Group in future to FMS-WM in the second half of 2019. At the same time, FMS-WM is examining the possibility of selling the DEPFA Group in 2020.
FMS-WM was founded in 2010 with the aim of winding up the risk positions and operations that were transferred to the company from the Hypo Real Estate Group (HRE Group) effective 1 October 2010. FMS-WM is supervised by the Federal Agency for Financial Market Stabilisation. The Federal Republic of Germany is the sole owner of FMS-WM via the Financial Market Stabilisation Fund – FMS.