Interim report 31.03.2021
Encouraging start to 2021 for the EAA
The fiscal year 2021 got off to a very encouraging start for the EAA. With the return of the full banking licence of the Irish specialist bank EAA CBB, an important milestone was reached in the wind-up process. The book profit resulting from the capital repatriation, together with the income from the reversal of risk provisions, led to a net result of EUR 53.5 million.
The EAA’s wind-up success continued in the first quarter of 2021. The portfolio of loans and securities was reduced by a further EUR 0.8 billion to EUR 11.9 billion in the first three months of the fiscal year and the nominal volume in the trading portfolio was reduced by EUR 6.2 billion to EUR 88.4 billion.
The EAA can continue to draw on a solid risk buffer to wind up the remaining portfolio. Its equity as of 31 March 2021 amounted to over EUR 707 million. The buffer of equity, equity capital drawing limit and risk provisions in relation to the remaining portfolio has further increased by 0.8 percentage points to 13.1% in the first quarter of 2021 compared to year-end 2020. This underlines the fact that the EAA is making progress in reducing risk exposures. Moreover, despite the corona pandemic, there was hardly any need for new risk provisioning.
The EAA continues to monitor the development of the corona pandemic and its potential impact through an internal corona task force.
The banking book is expected to decline to around EUR 11 billion in fiscal year 2021. The notional volume of the trading portfolio is expected to decline significantly by more than 20% year on year to a mid-double-digit billion value.
Declining interest and commission income from the sharply reduced wind-up portfolio has not been able to cover general administrative expenses for some time. Against this backdrop, the EAA is pressing ahead with the optimisation and flexibilisation of its administrative expenses to ensure that it is in an efficient and cost-effective position for the remaining tasks. This also means that the EAA will rely on a flexible servicer landscape in the medium term. The tenders for this are currently underway and should be completed by the end of 2021. The new service structure is scheduled to go live in the first quarter of 2023.