annual report - Hypo Real Estate Holding AG

More documents

Recommendations

Info

Group Accounts 2. Credit Risk Credit risk is defined as the risk of impairment and partial or total loss of a receivable due to deterioration of credit quality on the part of a counterparty. The relevant receivable may be based on traditional on-balance sheet lending business or off-balance sheet business, e.g. counterparty risk arising from derivative financial instruments. Through adhering to very conservative lending principles, over the years DEPFA has built a zero default track record in managing credit risk in lending to the public sector. These principles can be summarised as follows: Thorough and careful analysis of each individual credit risk by specialist teams of independent Credit Analysts supported by quantitative rating models for determining default risk of the borrower and use of early warning systems. Ongoing active observation of the market and adjustment of the lending policy where necessary. Avoiding concentration risks and enforcing systematic diversification of the portfolio by way of credit portfolio management which draws up appropriate recommendations for action. Ensuring that the loans can be resold or syndicated. These principles have been used as the basis for implementing specific credit risk strategies; the general character of these strategies is the focus on individual borrower/transaction risk and maintaining a very high average port folio rating. The credit principles also require the banks within DEPFA to carry out cash-flow simulations and stress tests; particularly in infrastructure and asset finance transactions. Additionally through the continuous monitoring of covenants, increased credit risks can be identified, and managed at an early stage. These analyses relating to individual transactions are complemented by scenario observations at the portfolio level. DEPFA adopts best-practice approaches by way of organizational measures and functional segregation of credit processes right through to management board level into market risk and back office. This allows DEPFA to meet regulatory requirements such as MaRisk (German Minimum Requirements for Risk Management). Internal rating tools are used for all significant customer segments: sovereigns and sub sovereign public sector entities, entities with public sector support, financial institutions, project finance and asset based finance. The quality of the valuation methods which are used is continuously monitored by risk control. Public Sector Credit Risk Public Sector lending accounts for 78% of DEPFA’s total consolidated on-balance sheet exposures. The business is focused on sovereign and sub-sovereign borrowers and public sector supported financial and specialist entities. This is reflected in the risk weightings of the Group’s total public sector portfolio amounting to €158 billion of onbalance sheet interest-earning assets (amount includes IAS 39 adjustments) at 31 December 2007. A BIS risk weighting of 0% applies to 55% of these assets, reflecting the focus on sovereign and the upper level of subsovereign entities. The next largest category is counterparties with a 20% risk weighting, these constitute 36% of on-balance sheet assets. These are mainly municipalities and credit institutions without explicit central government guarantees. 114
Risikoberichtbericht The portfolio is broadly diversified with counterparties in over 40 countries. In order to ensure the top rating for the Pfandbriefe and Asset Covered Security (“ACS”) cover pools and a high rating for the Bank, business is focused on clients and counterparties with the highest credit standings. The geographical split of the assets of the Group is as presented below. Geographical concentrations of assets, liabilities and off-balance sheet items At 31 December 2007 € m Group Company Total Total Credit Total Total Credit assets liabilities commit- assets liabilities commitments ments Germany 28,002 18,119 440 13,776 11,119 411 Italy 26,600 183 1,794 18,484 185 1,794 France 7,575 15,486 673 3,846 13,303 254 United Kingdom 28,053 45,902 1,695 22,936 39,497 1,562 Spain 12,876 436 431 4,392 396 231 Austria 4,056 484 - 996 485 - Greece 4,057 3 27 2,788 - - Ireland 9,885 11,418 1,951 28,880 27,162 210 Other European countries 31,857 25,853 1,545 14,644 22,990 1,312 USA 40,445 27,339 18,383 19,210 20,422 18,202 Canada 6,865 479 182 4,650 453 185 Japan 7,941 9,350 133 7,399 9,534 133 Other Asian countries 1,273 863 68 915 874 18 Other countries 8,415 2,501 200 8,134 2,501 178 Shares in Group undertakings - - - 1,281 - - Unallocated assets/ liabilities - 56,533 - - 602 - Total 217,900 214,949 27,522 152,331 149,523 24,490 115
Page 1 and 2:
2007 DEPFA BANK plc annual report
Page 3 and 4:
Profile ❚ The only globally opera
Page 5 and 6:
■ Europe incl. EMEA and CIS (Lond
Page 7 and 8:
Risikoberichtbericht Accounts 76 Di
Page 9 and 10:
Millau Viaduct, France
Page 11:
Client: The Region of Campania, Ita
Page 14 and 15:
Corporate Highlights 2007 10 10 Q1:
Page 16 and 17:
John Kirwan: “This award winning
Page 18 and 19:
Executive Directors 14 Paul Leather
Page 20 and 21:
Dr. Christian Kummert: “Probably
Page 22 and 23:
Management Discussion - Segments Ma
Page 24 and 25:
Management Discussion - Segments co
Page 26 and 27:
Management Discussion - Segments be
Page 28 and 29:
Management Discussion - Segments Di
Page 30 and 31:
Management Discussion - Segments in
Page 32 and 33:
Capital Beltway HOT Lanes in Virgin
Page 34 and 35:
Aguas de Portugal (AdP), Portugal
Page 36 and 37:
Public Sector and Infrastructure Fi
Page 38 and 39:
Page 40 and 41:
Page 42 and 43:
Vincent Matrone: “We were the lea
Page 44 and 45:
Marnin Lebovits: “The State of Mi
Page 46 and 47:
Page 48 and 49:
Page 50 and 51:
Export-Import Bank of Korea
Page 52 and 53:
Page 54 and 55:
Sam Miller: “The transaction with
Page 56 and 57:
Puerto Rico Sales Tax Financing Cor
Page 58 and 59:
Energinet, Denmark
Page 60 and 61:
Management Discussion - Segments Cl
Page 62 and 63:
Management Discussion - Segments DE
Page 64 and 65:
Management Discussion - Segments Re
Page 66 and 67:
Management Discussion - Segments Th
Page 68 and 69: Project Omega, Northern Ireland
Page 70 and 71: Business Performance Business Perfo
Page 72 and 73: Business Performance Balance Sheet
Page 74: Business Performance forms of capit
Page 77 and 78: Client: Bulgarian State Railways (B
Page 79 and 80: Client: Royal BAM (BAM PPP Limited)
Page 81 and 82: Risk Committee Ms. B. von Oesterrei
Page 83 and 84: Directors’ and Secretary’s inte
Page 85 and 86: Risikoberichtbericht The credit pro
Page 87 and 88: Risikoberichtbericht Branches outsi
Page 89 and 90: Risikoberichtbericht Independent Au
Page 91 and 92: Risikoberichtbericht We have obtain
Page 93 and 94: Risikoberichtbericht Consolidated b
Page 95 and 96: Consolidated statement of changes i
Page 97 and 98: Consolidated cash flow statement Ca
Page 99 and 100: Notes to the consolidated financial
Page 101 and 102: Risikoberichtbericht Expenses incur
Page 103 and 104: Risikoberichtbericht (b) Loans and
Page 105 and 106: Risikoberichtbericht Hedging deriva
Page 107 and 108: Risikoberichtbericht (vi) observabl
Page 109 and 110: Risikoberichtbericht Cash and cash
Page 111 and 112: Risikoberichtbericht Share capital
Page 113 and 114: Risikoberichtbericht Standards, ame
Page 115 and 116: Risikoberichtbericht Credit Committ
Page 117: Risikoberichtbericht Asset and Liab
Page 121 and 122: Risikoberichtbericht Assessing cred
Page 123 and 124: Company On-Balance Sheet December 2
Page 125 and 126: Company On-Balance Sheet December 2
Page 127 and 128: DEPFA’s Counterparty Risk Pools R
Page 129 and 130: Risikoberichtbericht Credit Risk Ma
Page 131 and 132: Risikoberichtbericht Further Credit
Page 133 and 134: DEPFA Deutsche Pfandbriefbank AG
Page 135 and 136: Risikoberichtbericht As can be seen
Page 137 and 138: The HRE Group risk management commi
Page 139 and 140: Risikoberichtbericht As at 31 Decem
Page 141 and 142: Risikoberichtbericht As at 31 Decem
Page 143 and 144: Risikoberichtbericht 5. Operational
Page 145 and 146: Risikoberichtbericht 7. Compliance
Page 147 and 148: Risikoberichtbericht Taxation The t
Page 149 and 150: Risikoberichtbericht Corporate Infr
Page 151 and 152: 6. Net interest income Interest and
Page 153 and 154: 10. Other operating income Other op
Page 155 and 156: Risikoberichtbericht 14. Result fro
Page 157 and 158: Risikoberichtbericht Operating expe
Page 159 and 160: Cashflows from discontinued operati
Page 161 and 162: 17. Trading assets 18. Derivative f
Page 163 and 164: Risikoberichtbericht Futures are st
Page 165 and 166: Risikoberichtbericht At 31 December
Page 167 and 168: Allowance for losses on loans and a
Page 169 and 170:
Shares in Group undertakings are in
Page 171 and 172:
24. Property, plant and equipment R
Page 173 and 174:
29. Debt securities in issue 30. Ot
Page 175 and 176:
Deferred income tax assets and liab
Page 177 and 178:
(b) Loan commitments Risikoberichtb
Page 179 and 180:
Details of the share awards of Hypo
Page 181 and 182:
40. Other reserves Unrealised gains
Page 183 and 184:
Risikoberichtbericht 45. Fair value
Page 185 and 186:
Company 2007 Risikoberichtbericht F
Page 187 and 188:
Risikoberichtbericht 47. Acquisitio
Page 189 and 190:
Risikoberichtbericht 49. Capital ma
Page 191 and 192:
Nicosia Branch 10 Diomidous Street,
Page 193:
DEPFA BANK plc Member of Hypo Real
show all

annual report - Hypo Real Estate Holding AG

Create successful ePaper yourself

Delete template?

Save as template?