FMS Wertmanagement reports further progress in winding up its portfolio in the first half of 2021
Profit from ordinary activities of EUR 28 million for the first half-year
Nominal volume of the portfolio reduced to EUR 57.8 billion
Sale of the DEPFA Group nearing completion
FMS Wertmanagement (FMS-WM), the German federal government’s winding-up institution, today announced that it generated a result from operating activities of EUR 28 million in the first half of 2021 (H1 2020: EUR 46 million).
The nominal volume of the portfolio was reduced by EUR 5.0 billion, or 8.1 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 contracted to EUR 57.8 billion as at 30 June 2021.
Total assets of FMS-WM as at 30 June 2021 decreased by EUR 16.0 billion to EUR 129.8 billion compared to 31 December 2020.
In the first six months of 2021, earnings were reduced by the balance of the items dominated by valuation and wind-up measures (risk provisions and net income from investments) of EUR -70 million (H1 2020: EUR -72 million).
General and administrative expenses were lowered to EUR 60 million (H1 2020: EUR 66 million) and thus remain well below the balance of net interest and net commission income of EUR 163 million (H1 2020: EUR 155 million).
"In the first half of 2021, we continued to make progress in winding up the transferred portfolio and were able to further reduce our administrative expenses compared to the prior-year period," said Spokesman of the Executive Board Christoph Müller.
On the funding side, the extent to which FMS-WM can obtain long-term funding via the Financial Market Stabilisation Fund (FMS) was increased from EUR 30 billion to EUR 60 billion at the end of 2020. “This increase has enabled us to raise a total of EUR 18.2 billion in funding via the FMS in the first half of 2021,” said Carola Falkner, the Executive Board member in charge of Treasury and Asset Management. In addition, FMS-WM raised USD 500 million in long-term funds on the capital market in the reporting period.
FMS-WM anticipates at least a breakeven result from ordinary activities for fiscal year 2021. There were no developments in the 2021 fiscal year that contradicted these forecasts.
The sale of Ireland’s DEPFA Bank plc announced in February is nearing completion and is expected to be closed before the end of this year as planned.
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.
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