EAA-Interim Report as of 31.03.2020

The EAA is operationally stable

The EAA closed the first quarter of 2020 with a loss. Interest and commission income from the greatly reduced settlement portfolio is falling and can no longer cover general administrative expenses. In contrast to what was often possible in previous years, the resulting loss can no longer be offset by non-recurring income from financial investments and participations. Such a development was taken into account in the EAA’s winding-up plan from the outset. In this respect, shortfalls are no surprise and do not jeopardise the EAA’s wind-up objectives. Moreover, the deficit in the first quarter of 2020 is not attributable to a deterioration in the conditions for winding up the positions taken over.

The EAA is operationally stable. The EAA has launched an internal coronavirus task force to monitor the coronavirus pandemic and its potential impact. Numerous preventive measures have been taken. No coronavirus infections have been registered among the EAA’s employees to date. Against this background, we do not expect any significant negative impact on operations in the second quarter of 2020 either. The EAA also has sufficient liquidity and risk buffers, and monitors risks closely across the entire portfolio. Further good progress was made in reducing the portfolio in the first three months of the year, particularly with regard to the trading portfolio. However, as many of the EAA’s counterparties are having to deal increasingly with the negative impact from the coronavirus pandemic, the EAA expects the winding-up processes to slow down in the second quarter of 2020. Stronger fluctuations in
value cannot be ruled out at sub-portfolio level in the coming months either.

The EAA has pressed ahead since the beginning of the year with structural measures to increase efficiency and reduce costs. In the first quarter of 2020, general administrative expenses were reduced by EUR 3.8 million (-11.2%) compared with the same period of the previous year. We will continue to focus on the objective of further streamlining the organisation and optimising it in terms of earnings, costs and risk in the coming months. Given that the sale of the subsidiary EAA CBB could not go ahead as planned, the first preparatory measures for winding up the Irish bank have now been initiated.