annual report - Hypo Real Estate Holding AG

Group Accounts
19. Other financial assets at fair value through profit or loss
The loans and advances consist of a portfolio of loans that have been designated as at fair value through profit or
loss to reduce the measurement inconsistency with the relevant offsetting derivative, which is an economic hedge
of the position.
The portfolio of debt securities have also been designated at fair value through profit or loss to reduce the
measurement inconsistency with the relevant offsetting derivative, which is an economic hedge of the position.
In 2007, the loans and advances designated as at fair value through profit or loss had a fair value change of -€4
million attributable to a change in the credit risk of the asset (2006: nil). This was offset by a fair value move on the
credit derivative of €4 million.
The above change in the fair value of the loans and advances that is attributable to credit risk has been
determined as the amount of the change in the fair value that is not attributable to changes in market conditions
that give rise to market risk.
The Group regards the book value of the above loans and advances as the maximum exposure to credit risk on
these assets. This credit exposure is reduced by €564 million by the related credit derivative noted above.
20. Loans and advances to customers
162
Group Company
2007 2006 2007 2006
€ m € m € m € m
Loans and advances 569 551 569 569
Debt securities 3,848 1,524 2,139 1,277
4,417 2,075 2,708 1,846
Group Company
2007 2006 2007 2006
€ m € m € m € m
Public sector and infrastructure loans 109,696 123,417 59,503 39,028
Term deposits 671 1 10 1
Reverse repurchase agreements 9 6 9 -
Property loans 279 1,846 - -
110,655 125,270 59,522 39,029
Allowances for losses on loans and advances -7 -23 -3 -3
110,648 125,247 59,519 39,026
Of which due from group companies - - - -