IBRC annual report for 2011 - Irish Bank Resolution Corporation ...

Irish Bank Resolution Corporation LimitedAnnual Report & Accounts 2011Owing to a marked deterioration in the financial position of some borrowers, in order for the Bank to maximise the recovery ofimpaired loan balances it may in certain specific circumstances agree to a restructuring of loan arrangements so as to improveoverall asset quality. The level of provision write-offs in the current and prior years is primarily as a result of the activemanagement of impaired loans, which may also include the sale of collateral and/or certain loan assets to third parties.Loans assigned as collateralLoans, including those classified as held for sale, of €6,115m (2010: €9,384m) have been assigned as collateral under theBank's various covered securities programmes. Included in the current year balance are loans assigned as collateral under asecuritisation programme acquired under the INBS Transfer Order on 1 July 2011. The Bank's UK covered bond programme wasunwound in June 2011. In addition, loans with a carrying value of €2,550m (2010: €4,110m) have been assigned as collateralunder a Master Loan Repurchase Agreement with the Central Bank of Ireland (note 37). All of the loans remain in the Group'sstatement of financial position as substantially all of the risks and rewards relating to them are retained.An analysis of lending assets by internal credit quality category, geographical location and industry sector concentration isprovided for the Group in note 50 and for the Bank in note 55.28. LeasingLoans and advances to customers include amounts receivable under finance leases and hire purchase contracts analysed byremaining maturity as follows:The GroupThe Bank2011 2010 2011 2010€m €m €m €mGross receivables:Three months or less 26 26 25 25One year or less but over three months 8 11 8 11Five years or less but over one year 9 15 9 15Over five years - - - -43 52 42 51Unearned future income (2) (3) (2) (3)Net receivables (note 27) 41 49 40 48Present value of minimum lease paymentsreceivable:Three months or less 26 25 25 25One year or less but over three months 7 11 7 10Five years or less but over one year 8 13 8 13Over five years - - - -Present value of minimum payments receivable 41 49 40 48Provision for uncollectible minimumlease payments receivable *31 35 30 34* Included in provisions for impairment on loans and advances to customers (note 27).There are no unguaranteed residual values accruing to the benefit of the Bank or the Group (2010: €nil).The cost of assets acquired by the Group during the year for letting under finance leases and hire purchase contracts amountedto €1m (2010: €2m).81