FMS Wertmanagement awards IT contract to IBM
Munich-based FMS Wertmanagement, the Federal government’s winding-up institution, today announced that it signed a framework agreement with IBM Deutschland GmbH last Friday. The future partner emerged the winner of a Europe-wide invitation to tender for extensive IT services, which marks an important step for FMS Wertmanagement in separating from the HRE Group. On 1 October 2010, the HRE Group transferred a portfolio of risk positions and non-strategic assets with a nominal value of EUR 175.7 billion to FMS Wertmanagement, but is only permitted to service this portfolio until the end of September 2013 according to an EU requirement. The Federal Republic of Germany is the sole owner of FMS Wertmanagement via the Financial Market Stabilisation Fund (SoFFin).
IBM will begin performing the tendered IT services for FMS Wertmanagement not later than 1 October 2013. “We are pleased that in IBM we have found an experienced and capable partner with a proven track record for this important task,” said Executive Board spokesman Dr. Christian Bluhm.
In a parallel invitation to tender, FMS Wertmanagement also sought a service provider for operations, including collateral management, settlement functions and credit operations. The Management Board of FMS Wertmanagement decided to withdraw this invitation to tender on 8 October 2012. The operations services will not be transferred to an external service provider, but instead performed by FMS Wertmanagement’s own service entity. “In evaluating the options, it turned out that in view of the need to ensure operational stability and to comply with the EU requirement stipulating separation of HRE as of September 2013, it made more sense at this juncture to provide these services ourselves,” said Bluhm. “Integration into our own service entity means that these requirements will be met.”
As early as spring 2012, FMS Wertmanagement formed FMS Wertmanagement Service GmbH as its own service entity, tasking this company with portfolio management and some aspects of risk controlling. The responsibilities of this service entity are now being expanded to include operations. HRE Group employees who are currently involved in servicing the portfolio of FMS Wertmanagement will be given the opportunity during the business transfer to switch to working for the newly formed FMS Wertmanagement Service GmbH.
The service entity, which was originally set up as a wholly owned subsidiary of the winding-up institution, will be developed further in future. “Besides rapidly winding up the portfolio, our objective as a government-owned winding-up institution with a limited duration is and remains to outsource all possible activities that FMS Wertmanagement does not wish to perform itself. For this reason, the service entity is expected to be privatised as early as 2014 when all processes are established and have been tried and tested in day-to-day business,” said Bluhm.
Due to its status as a public-law entity, FMS Wertmanagement is obliged to award such contracts according to the EU’s rules on invitations to tender. FMS Wertmanagement was established in July 2010 for the purpose of taking over and unwinding the HRE Group’s risk positions and non-strategic operations in ways aimed at minimising losses.
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