Flexible cost structures for fulfilling the winding up mandate in a cost-efficient manner

Fiscal year 2023 proved successful for the EAA. As in previous years, the winding-up activities were focused on measures for reducing the portfolio ahead of schedule and an active participation management. The portfolio of loans and securities was reduced by EUR 1.3 billion to EUR 6.3 billion as of 31 December 2023 and the notional volume in the trading portfolio declined by EUR 6.7 billion to EUR 49.9 billion.

The EAA reported a negative result after taxes of EUR -0.5 million. This reflects the fact that earnings are bound to decline at the well-advanced stage of the portfolio wind-up and the administrative expenses can no longer be offset.

Following completion of the project in the reporting year for efficient further development, and for optimising and increasing the flexibility of the administrative expenses, the EAA  extensively outsourced its operating processes and infrastructure to new service providers. The EAA is therefore positioned as a lean management unit with its key functions of  monitoring, managing and decision-making. It has also created a flexible cost structure, which is essential for fulfilling the wind-up mandate in a cost-efficient manner.

The EAA can continue to draw on a solid risk buffer to wind up the remaining portfolio. Its equity as of 31 December 2023 amounted to over EUR 653 million. The buffer of equity, equity capital drawing limit and risk provisions in relation to the remaining portfolio increased further by 3.3 percentage points to 21.0% compared to year-end 2022. This underlines the fact that the rapid pace of reduction did not impair the substance of the portfolio.

The EAA successfully defended itself in the reporting year in the claim in connection with dividend arbitrage transactions of the former WestLB AG. Portigon AG’s claim was dismissed in its entirety. This decision by the Federal Court of Justice averted the biggest single risk for the EAA. Several active legal measures in relation to portfolios were also concluded  successfully.