13 Loans

In CHF millionNotes  31.12.0831.12.0731.12.0831.12.0731.12.0831.12.0731.12.0831.12.07
 


Gross
amount



Gross
amount

Allowance
for
impairment
losses

Allowance
for
impairment
losses
Cost/
amortised
cost
(Carrying
amount)
Cost/
amortised
cost
(Carrying
amount)




Fair value




Fair value
Mortgages  5 5925 974–34–475 5585 9275 6445 784
Policy loans  538671538671555679
Other originated loans  1 4493 511–2–71 4473 5041 4783 483
Purchased loans  10 89510 55010 89510 55011 40410 462
Assets previously classified as available for sale37   14 685 – –44 – 14 641 – 12 337 –
Repurchase agreements  000
Total loans33  33 15920 706–80–5433 07920 65231 41820 408


Allowance for impairment losses
In CHF millionNotes  200820072008200720082007
  Individual
evaluation of
impairment
Individual
evaluation of
impairment
Collective
evaluation of
impairment
Collective
evaluation of
impairment


Total


Total
Balance as at 1 January  541942354217
Impairment losses8  321321
Write-offs  –6–3–6–3
Effect of classification as assets held for sale  –96–23–119
Changes from discontinued operations  –420–42
Foreign currency translation differences  0000
Balance as at 31 December  80548054


An allowance is recognised for the difference between the carrying value and the estimated recoverable amount, if lower.

Interest income accrued on impaired loans from continuing operations was CHF 2 million as at 31 December 2008 (2007: CHF 5 million). The Group’s loan portfolio is monitored closely through the review of information such as debt service, annual reports and assessments. This information is evaluated in light of current economic conditions and other factors such as diversification of the property portfolio. This evaluation is part of the regular review to determine whether the allowance for potential loan losses is warranted. Management believes that the allowance for loan losses is sufficient. However, management cannot predict with assurance the impact of future economic circumstances or how the mortgage and real estate portfolios would be affected by various economic circumstances.

The effect of the reclassification of financial assets available for sale to loans as at 1 July 2008 is shown in note 37.

 
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