FMS Wertmanagement meets wind-up target and records positive result in demanding market environment
Portfolio reduced by EUR 4.5 billion in challenging market environment
Profit from ordinary activities of EUR 77 million
New IT platform successfully put into operation
FMS Wertmanagement (FMS-WM), the German federal government’s winding-up institution, today announced that it ended fiscal year 2022 with a positive result from ordinary activities of EUR 77 million (previous year: EUR 44 million).
Portfolio wind-up in fiscal year 2022 came to EUR 4.6 billion. Taking into account countervailing currency effects of EUR 0.1 billion, the nominal value of the portfolio declined to EUR 49.6 billion as at 31 December 2022.
“Our activities in fiscal year 2022 once again focused on unwinding the portfolio in a way that maximises its value. FMS Wertmanagement also successfully implemented measures aimed at achieving its medium-term objectives in fiscal year 2022 despite a market environment characterised by sharply rising interest rates, inflation and volatility,” said Spokesman of the Executive Board Christoph Müller.
Total assets as at 31 December 2022 fell by 20.4% to EUR 99.0 billion compared to 31 December 2021, taking this figure below EUR 100 billion for the first time since the creation of FMS-WM. This was mainly attributable to a market-value driven decrease in cash collateral provided for derivatives and the unwinding of the acquired risk positions and derivatives.
The balance of risk provisions and net income from investments in the amount of EUR -182 million (previous year: EUR -175 million) was impacted by valuation and wind-up measures and had a negative effect on the result in fiscal year 2022. Risk provisions primarily include additions to general loan loss provisions in accordance with the change in requirements for recognising latent credit risk.
General and administrative expenses in fiscal year 2022 amounted to EUR 129 million (previous year: EUR 124 million). This increase resulted from direct and indirect one-off effects associated with the IT transition totalling EUR -15 million (previous year: EUR -7 million). Given that the previous IT services agreements were set to expire in the fourth quarter of 2022, FMS-WM has already been working on renewing its IT platform and adapting it to the latest developments since 2020. In October 2022, FMS-WM successfully put the new IT platform into operation, marking a major development step in the modernisation of its IT systems. At the same time, FMS-WM laid the foundations for implementing digitalisation projects, expanding IT security measures and achieving its targets for reducing IT expenses.
At EUR 391 million, net interest income rose compared to the previous year (EUR 358 million). This development was primarily due to the higher overall level of interest rates in all relevant currencies. The improved funding terms attributable to gradually replacing capital market funding with borrowings raised via the FMS also contributed to the increase in net interest income during fiscal year 2022. “The optimised funding structure is making an important contribution to the positive development of net interest income, more than offsetting the countervailing effects of the progressive unwinding of the portfolio,” said Carola Falkner, Executive Board member in charge of Treasury and Asset Management.
The result from ordinary activities is mainly dependent on risk provisions and net income from investments – volatile items which are heavily influenced by valuation decisions and sales results. Subject to further geopolitical developments, particularly those associated with the war in Ukraine and its effects as well as other unforeseen events, FMS-WM expects the result from ordinary activities to at least break even for fiscal year 2023.
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.
If you have any questions, please do not hesitate to contact Frank Hessel, Press Spokesman, at +49 (0)89-9547627 647 or by email at