SEC Form 20-F - Deutsche Bank Annual Report 2012

Deutsche Bank
Annual Report 2010 on Form 20-F
Item 11: Quantitative and Qualitative Disclosures about Credit, Market and Other Risk 156
The second component of our problem loans are nonimpaired problem loans, where no impairment loss is
recorded but where either known information about possible credit problems of borrowers causes management
to have serious doubts as to the ability of such borrowers to comply with the present loan repayment terms or
that are 90 days or more past due but for which the accrual of interest has not been discontinued.
In keeping with SEC industry guidance, we also continue to monitor and report the following categories in our
problem loans:
— Nonaccrual Loans: We place a loan on nonaccrual status if the loan has been in default as to payment of
principal or interest for 90 days or more and the loan is neither well secured nor in the process of collection,
or the accrual of interest should be ceased according to management’s judgment as to collectability of contractual
cash flows. When a loan is placed on nonaccrual status, the accrual of interest in accordance with
the contractual terms of the loan is discontinued. However, the accretion of the net present value of the written
down amount of the loan due to the passage of time is recognized as interest income based on the original
effective interest rate of the loan. Cash receipts of interest on nonaccrual loans are recorded as a reduction
of principal.
— Loans Ninety Days or More Past Due and Still Accruing: These are loans in which contractual interest or
principal payments are 90 days or more past due but on which we continue to accrue interest as no impairment
loss is recorded.
— Troubled Debt Restructurings: These are loans that we have restructured due to deterioration in the borrower’s
financial position on terms that we would not otherwise consider. If a borrower performs satisfactorily for one
year under a restructured loan, we no longer consider that borrower’s loan to be a troubled debt restructuring,
unless at the time of restructuring the new interest rate was lower than the market rate for similar credit risks.
With the consolidation of Postbank, parts of the commercial banking activities in the Netherlands acquired from
ABN AMRO and Sal. Oppenheim/BHF-BANK, we acquired certain loans for which a specific allowance had
been established beforehand by Postbank, ABN AMRO or Sal. Oppenheim/BHF-BANK, respectively. These
loans were taken onto our balance sheet at their fair values as determined by their expected cash flows which
reflected the credit quality of these loans at the time of acquisition. As long as our cash flow expectations regarding
these loans have not deteriorated since acquisition, they are not considered impaired or problem loans.
The following two tables present a breakdown of our problem loans for the dates specified.
Dec 31, 2010 Impaired loans Nonimpaired problem loans
Problem
loans
in € m. German Non-German Total German Non-German Total Total
Individually assessed 996 2,556 3,552 239 1,635 1,874 5,426
Nonaccrual loans
Loans 90 days or more past due
902 2,374 3,276 153 897 1,051 4,327
and still accruing – – – 36 8 44 44
Troubled debt restructurings 94 182 276 50 729 779 1,055
Collectively assessed 1,010 1,703 2,713 267 29 296 3,009
Nonaccrual loans
Loans 90 days or more past due
1,009 1,583 2,591 – – – 2,591
and still accruing – – – 252 5 258 258
Troubled debt restructurings 1 120 121 15 24 38 160
Total problem loans
thereof: IAS 39 reclassified
2,006 4,258 6,265 506 1,664 2,170 8,435
problem loans 84 1,150 1,234 – 979 979 2,213