saxo-bank-annual-report-2015

NOTES – RISK MANAGEMENT – SAXO BANK GROUP
(DKK 1,000)
CREDIT EXPOSURE RELATING TO LENDING ACTIVITIES · continued
Collateral held against lending activities
An essential element of the Group´s credit policy is to mitigate credit risk in the loan portfolio by requiring collateral. The Group continuously
assesses the market value of the collaterals. For the most common types of collateral the Group has its own valuation models that estimate the
value. For collateral types where no valuation models exist, the valuation is done manually. The value of the collateral is assessed at the current
estimated market value including a haircut. A Haircut is a measure of the risk that the Group will not be able to sell the collateral asset at a price
equal to the expected value. For property the haircut depends on property type, condition, location etc.
The main categories of collateral are shown in the table below. Clients’ collateral is included up to the amount of debt it covers.
Investment
brokers and
trading clients
Lending
clients
2015
Total
Credit exposure net of impairment 251,956 3,360,603 3,612,559
Collateral
Cash 9,161 54,445 63,606
Exchange traded equities, bonds and mutual funds 91,419 215,423 306,842
Property - 580,005 580,005
Other 26,721 43,801 70,522
Total collateral 127,301 893,674 1,020,975
Total unsecured credit exposure lending activities 124,655 2,466,929 2,591,584
2014
Credit exposure net of impairment 125,927 2,792,889 2,918,816
Collateral
Cash 48,153 4,158 52,311
Exchange traded equities, bonds and mutual funds - 256,991 256,991
Property - 405,921 405,921
Other - 52,592 52,592
Total collateral 48,153 719,662 767,815
Total unsecured credit exposure lending activities 77,774 2,073,227 2,151,001
SAXO BANK · ANNUAL REPORT 2015 · 93