Interim report as at 30 June 2021
First half of 2021 has been satisfying for the EAA
The EAA has made further progress in implementing its wind-up mission. The portfolio of loans and securities was reduced by EUR 1.3 billion to EUR 11.4 billion in the first six months of the fiscal year and the notional volume in the trading portfolio was reduced by EUR 12.2 billion to EUR 82.3 billion. The continued reduction of high-risk exposures is particularly pleasing.
Together with the income from the reversal of loan loss provisions and the positive net interest result and net trading result, the results from financial assets and shareholdings led to a net result of EUR 34.7 million. The majority continues to be attributable to the results from financial assets and shareholdings, and thus to the capital repatriation of Erste EAA Ireland plc (formerly EAA Covered Bond Bank Plc), which led to a book profit of around EUR 66 million at the EAA in the first quarter of 2021.
The EAA can continue to draw on a solid risk buffer to wind up the remaining portfolio. Its equity as of 30 June 2021 amounted to over EUR 688 million. The buffer of equity, equity capital drawing limit and risk provision in relation to the remaining portfolio has further increased by 0.9 percentage points to 13.2% in the first half of 2021 compared to year-end 2020. This emphasises the fact that the EAA’s wind-up measures are not at the expense of the remaining portfolio, but rather reflects the qualitative improvement in the portfolio composition. 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.
As is known, declining interest and fee and commission income from the sharply reduced wind-up portfolio has not been able to cover general administrative expenses for quite 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 includes the EAA plans to rely on a flexible servicer landscape by the first quarter of 2023. To this end, the EAA is conducting invitations to tender, which are expected to be completed by the end of this fiscal year.