EAA Interim Report as of 31 March 2017

Positive result in the first quarter of 2017

The process of winding up the loans, securities, shareholdings and derivatives transferred to the EAA continues to proceed better than originally expected, with the first quarter of 2017 also concluding with a positive result. Net profit of EUR 3.6 million is attributable in particular to cost reductions and stable income, even though the portfolio has already been reduced considerably.

Net interest income of EUR 32.2 million and the trading result of EUR 11.0 million impacted decisively on the earnings situation. The quarterly result was supported by a decline of around 24% in general administrative expenses compared with the same period of the previous year. The EAA also benefited from improvements in the credit ratings of various exposures, resulting in a positive balance from additions to and reversals of risk provisioning items.

The volume of loans and securities held in the EAA’s banking book declined by EUR 1.6 billion in the first three months. The notional volume of the derivatives held in the trading portfolio contracted by EUR 11.2 billion. At the same time, the total business volume was reduced significantly by more than EUR 4 billion in the first quarter. In addition to total assets, this figure also includes contingent liabilities and irrevocable loan commitments. The contingent liabilities originate mainly from guarantees, the volume of which is constantly decreasing as a result of scheduled and unscheduled repayments.

The EAA will concentrate during the rest of the fiscal year above all on winding up its shareholdings, including the planned implementation (closing) of the sale of EAA CBB in Dublin and EPA in Düsseldorf, among other things. It is also continuing with its review of outsourcing measures at its services subsidiary EFS. It seems possible at present to move the service operations of EFS to a private service provider. The initial results in this regard are expected in the second quarter of 2017.