Profit from ordinary activities of EUR 47 million for the first half-year
Nominal volume of the portfolio reduced to EUR 53.2 billion
A further EUR 5.0 billion in funding raised via the FMS
FMS Wertmanagement (FMS-WM), the German federal government’s winding-up institution, today announced that it generated a result from operating activities of EUR 47 million in the first half of 2022 (H1 2021: EUR 28 million).
The nominal volume of the portfolio was reduced by EUR 2.1 billion, or 3.9 percent, since the beginning of the year. Taking into account foreign currency effects that increased the portfolio by EUR 1.2 billion, the portfolio’s nominal volume came to EUR 53.2 billion as at 30 June 2022.
Total assets of FMS-WM as at 30 June 2022 decreased by EUR 14.6 billion to EUR 109.7 billion compared to 31 December 2021. This decline is mainly attributable to a market-value driven decrease in cash collateral required to be provided for financial derivatives.
In the first six months of 2022, earnings were reduced by the balance of the items dominated by valuation and wind-up measures – risk provisions and net income from investments – which came to EUR -64 million (H1 2021: EUR -70 million).
"Despite the increasingly difficult market environment, we were able to further reduce the portfolio according to plan and implement further measures aimed at achieving the medium-term target of FMS Wertmanagement," said Spokesman of the Executive Board Christoph Müller.
General and administrative expenses in the first half of 2022 amounted to EUR 62 million (H1 2021: EUR 60 million) The slight increase results from the project to migrate IT services as of the fourth quarter of 2022. Overall, general and administrative expenses remain well below the balance of net interest income and net commission income of EUR 178 million (H1 2021: EUR 163 million).
On the funding side, FMS-WM continues to avail itself of the funding facility provided via the Financial Market Stabilisation Fund (FMS) to achieve its targets. “As planned, FMS-WM obtained another EUR 5.0 billion in funding via the FMS in the first half of 2022, thus fully utilising the EUR 60 billion funding facility,” said Carola Falkner, the Executive Board member in charge of Treasury and Asset Management.
FMS-WM itself continues to ensure long-term funding in foreign currencies and short-term money market funding.
FMS-WM anticipates at least a breakeven result from ordinary activities for fiscal year 2022. At the time of preparing the financial statements for the period ended 30 June 2022, there had not been any concrete indications that contradict this forecast. Nevertheless, the ongoing war situation in Ukraine and any associated consequences may have a negative impact overall on the unwinding of the portfolio anticipated in fiscal year 2022, the further development of the operating model and the course of business in 2022.
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 Financial Market Stabilisation Fund is obligated without limitation to provide additional funds under Section 8a of the German Law Establishing a Financial Market and Economy Stabilisation Fund (Gesetz zur Errichtung eines Finanzmarkt- und Witschaftsstabilisierungsfonds - Stabilisierungsfondsgesetz) for losses incurred in winding up the portfolio.