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 160
Considering the collateral held against impaired loans in addition to the allowance for loan losses, the impaired
loan coverage was 78 % as of December 31, 2010 and 72 % as of December 31, 2009. The increase was
principally driven by a reduction of loans reclassified in accordance with IAS 39. These loans required a lower
amount of loan loss allowance due to fair value charges taken before their reclassification and hence lead to a
lower average coverage ratio.
Collateral Obtained
The following table presents the aggregated value of collateral we obtained on the balance sheet during the
reporting periods by taking possession of collateral held as security or by calling upon other credit enhancements.
in € m. 2010 2009
Commercial real estate 32 78
Residential real estate 47 10
Other 1 –
Total collateral obtained during the reporting period 80 88
Collateral obtained is made available for sale in an orderly fashion or through public auctions, with the proceeds
used to repay or reduce outstanding indebtedness. Generally we do not occupy obtained properties for our
business use.
The commercial real estate collateral obtained in 2010 related to two of our U.S. exposures while the residential
real estate collateral obtained related predominately to a number of cases in Spain and also a few cases in the
U.S. where we have executed foreclosure by taking possession.
The residential real estate collateral obtained, as shown in the table above, excludes collateral recorded as a
result of consolidating securitization trusts under SIC-12 and IAS 27. The year-end amounts in relation to collateral
obtained for these trusts were € 25 million and € 33 million, for December 31, 2010 and December 31,
2009, respectively.
Movements in the Allowance for Loan Losses
We record increases to our allowance for loan losses as an increase of the provision for loan losses in our
income statement. Charge-offs reduce our allowance while recoveries, if any, are credited to the allowance
account. If we determine that we no longer require allowances which we have previously established, we
decrease our allowance and record the amount as a reduction of the provision for loan losses in our income
statement.
The following table presents a breakdown of the movements in our allowance for loan losses for the periods
specified.
in € m.
Individually
assessed
Collectively
assessed Total
2010 2009
Individually
assessed
Collectively
assessed Total
Balance, beginning of year 2,029 1,314 3,343 977 961 1,938
Provision for loan losses 562 751 1,313 1,789 808 2,597
Net charge-offs (896) (404) (1,300) (637) (419) (1,056)
Charge-offs (934) (509) (1,443) (670) (552) (1,222)
Recoveries 38 104 143 33 133 166
Changes in the group of consolidated companies – – – – – –
Exchange rate changes/other (52) (8) (60) (101) (36) (137)
Balance, end of year 1,643 1,653 3,296 2,029 1,314 3,343