Interim Report as of 30 June 2019

EAA makes further progress in portfolio reduction and achieves break-even result

Good portfolio quality despite progress in wind-up

Düsseldorf, 28 August 2019. The EAA generated a surplus of EUR 0.3 million from January to June 2019. As expected, current income declined as a result of the ongoing portfolio reduction: the net interest result was a good EUR 41 million compared to commission expenses of just under EUR 9 million and general administrative expenses of around EUR 68 million. "This lead to a negative operating result which, however, was offset by a positive result from the reversal of loan loss provisions as at 30 June 2019," explained Matthias Wargers, Spokesman of the EAA Managing Board. The portfolio reduction made it possible to release risk provisions established in previous years to a greater extent than new provisions were required.

The EAA once again significantly reduced its costs in the first six months of the current fiscal year; as at 30 June 2019 they were around 13% below the previous year's level. Wargers stressed that the EAA had already reduced its administrative expenses by a total of 61% between 2012 and 2018. The bulk of the remaining expenses is attributable to costs for portfolio and IT services. The EAA’s personnel costs accounted for approximately 17% of general administrative expenses in the first half of 2019.

"Despite cost discipline, it is no longer possible at this stage of the process to reduce spending in line with the decrease in income from the wind-up portfolio," Wargers said. The EAA has therefore regularly pointed out that losses are to be expected in coming fiscal years, which are reflected in its planning. The wind-up target remains not to make use of the liability shield provided by Investors.