Annual Report & Accounts 2009 - Anglo Irish Bank

Notes to the financial statements continued
51. Risk management and control continued
122
Aged analysis of financial assets past due but not impaired
The following tables present an analysis of financial assets, other than those carried at fair value, where contractual interest or
principal payments are past due but impairment is not appropriate as the level of collateral and the present value of estimated
future cash flows available to the Group is sufficient.
Other
Business Other Financial
Commercial Residential Banking Lending Assets Total
€m €m €m €m €m €m
Past due 1 to 30 days 962 68 263 127 - 1,420
Past due 31 to 60 days 665 319 14 52 - 1,050
Past due 61 to 90 days 346 19 14 52 - 431
Past due 91 days and over 943 262 193 461 - 1,859
Total 2,916 668 484 692 - 4,760
Other
Business Other Financial
Commercial Residential Banking Lending Assets Total
€m €m €m €m €m €m
Past due 1 to 30 days 240 76 4 56 - 376
Past due 31 to 60 days 143 31 1 11 - 186
Past due 61 to 90 days 124 46 - 6 - 176
Past due 91 days and over 744 155 28 117 - 1,044
Total 1,251 308 33 190 - 1,782
Collateral
The Group
31 December 2009
The Group
30 September 2008
The acceptance of both financial and non-financial collateral is central to the risk mitigation and underwriting policies of the
Group. The nature of the collateral held will reflect the transaction being underwritten. Loans and advances to customers are
collateralised principally by charges over real estate assets, business assets and liens on cash deposits, and are supplemented by
personal guarantees. In the case of clients with more than one transaction, the Bank seeks to cross-collateralise security to
strengthen repayment cover.
Due to the significant dislocation in property markets and the lack of transactional activity over the period, it is impracticable
for the Bank to obtain reliable fair values for individual collateral held against past due or impaired financial assets as at
31 December 2009. However declines in prices of approximately 50% since the market peak for Irish commercial property
reflected in certain market indices would appear to be a fair indicator of the scale of the decline in collateral values over the
past twelve months. Ireland, which represents the majority of impaired and past due loan balances, experienced the most
significant drop in valuations compared with price declines in the UK and US markets. At 30 September 2008, collateral of
€834m was held against impaired loans and advances to customers of €957m.
During the period the Group repossessed collateral, consisting of land and property, of €6m on balances of €20m (2008: €7m
on balances of €15m). It is the Group’s policy to dispose of repossessed assets in an orderly fashion. The proceeds are used to
reduce or repay the outstanding balance. The Group does not use repossessed assets for business purposes.
Loans and advances to banks are generally unsecured except where securities are held as collateral in reverse repurchase
agreements (note 22). Credit risk in respect of exposures to certain monetary financial institutions is mitigated by financial
guarantees from parent institutions or governments. The Group has executed Collateral Support Agreements ('CSAs') with its
principal interbank derivatives counterparties. Under the terms of a CSA, if the aggregate market value of a set of derivative
contracts between two parties exceeds an agreed threshold amount, the party which would be exposed to loss in the event of
default receives a deposit of cash or eligible securities equal to the excess aggregate value over the threshold.