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106 NOTES / OTHER DETAILS AND RISK REPORT
(58) Fair value balance sheet
Fair value
Value Banking Available Trading Micro
in EUR m of item book for Sale book hedge Aggregate
Cash reserve 62 62 0 0 0 62
Loans and advances to banks 1,724 1,535 122 0 84 1,742
Loans and advances to customers 10,773 5,757 3,196 0 1,855 10,808
Risk provisions for loans and advances -78 -78 0 0 0 -78
Trading assets 173 0 0 173 0 173
Financial investments 8,008 2,053 4,776 0 1,259 8,088
Property and equipment 684 684 0 0 0 684
Other assets 100 100 0 0 0 100
Aggregate 21,446 10,113 8,094 173 3,199 21,579
Amounts owed to banks 4,718 4,008 0 0 713 4,722
Amounts owed to customers 693 530 0 0 182 713
Securitised liabilities 14,120 7,795 0 0 6,169 13,964
Provisions 68 68 0 0 0 68
Other liabilities 644 88 0 157 434 679
Subordinated capital 545 268 0 0 346 614
Minority interests 267 323 0 0 0 323
Equity 392 497 0 0 0 497
Aggregate 21,446 13,578 0 157 7,844 21,579
(59) Risk management
The management of risks is a decisive competitive factor for a bank. At Investkredit, risk management is seen as
the identification, measurement and management of risks. Investkredit’s basic principles and methods of risk management
are documented in various manuals and internal guidelines and are regularly updated to conform to
both the latest regulatory developments and technical developments on the market. As part of the banking risks,
the credit risk constitutes the most essential risk the Investkredit Group is exposed to. Other risks that may be
encountered are market risks, liquidity risks and operational risks. As a matter of principle, the measurement of
risk is undertaken for all kinds of risk in the form of value at risk by units that are functionally and organisationally
independent from those making the business decisions. A structure of limits deduced from the level of risk
involved and a calculation of margins reflecting that risk are part of the decisive overall conditions when completing
transactions. Stress tests are also carried out to simulate the unfavourable effects of extreme market movements.
In the context of risk management, the amount of economic equity is the crucial figure, helping both to
assess the amount of risk the Bank is able to bear and the level of risk conformity of its performance. Moreover,
quantitative methods for determining economic equity are continuously supported by qualitative analyses of the
market environment and factors that apply specifically to the Bank. Determining the Bank's economic equity is
essential in assessing the amount of risk it is able to bear.
In addition, the legal framework for risk management is changing (keyword: Basel II). The new rules present banks
with new challenges in respect of risk management, both at the accounting as well as the organisational processing
level. Investkredit continues to pursue the goal of rapidly meeting these requirements.