13 Loans and Receivables

In CHF million  
  Gross amount Allowance for impairment losses Cost/amortised cost (carrying amount)
  31.12.2011 31.12.2010 31.12.2011 31.12.2010 31.12.2011 31.12.2010
 
Loans
Notes 
Mortgages
  5 147 5 192 –24 –25 5 123 5 167
Policy loans
  330 360 330 360
Other originated loans
  1 292 600 –7 –7 1 285 593
Note loans
  8 176 8 990 8 176 8 990
Debt securities previously classified as available for sale
  7 976 8 831 –31 –47 7 945 8 784
Debt securities designated as loans
  663 714 663 714
Repurchase agreements
  93 93
Total loans
33  23 677 24 687 –62 –79 23 615 24 608
 
Receivables
 
Insurance receivables
  972 1 038 –23 –23 949 1 015
Receivables from reinsurers
  136 132 136 132
Accrued income
  1 758 1 682 1 758 1 682
Settlement accounts
  172 1 658 172 1 658
Other
  573 619 –1 –1 572 618
Total receivables
33  3 611 5 129 –24 –24 3 587 5 105
 
Total loans and receivables
  27 288 29 816 –86 –103 27 202 29 713


Allowance for impairment losses
In CHF million  
  Individual evaluation of impairment Collective evaluation of impairment Total
  2011 2010 2011 2010 2011 2010
 
Loans
 
Balance as at 1 January
  70 108 9 79 108
Impairment losses
  0 1 0 0 1
Write-offs and reclassifications
  –17 –40 0 9 –17 –31
Foreign currency translation differences
  0 1 0 1
Balance as at end of period
  53 70 9 9 62 79
 
Receivables
 
Balance as at 1 January
  8 5 16 15 24 20
Impairment losses
  2 5 2 3 4 8
Write-offs
  –3 –2 –1 0 –4 –2
Foreign currency translation differences
  0 0 0 –2 0 –2
Balance as at end of period
  7 8 17 16 24 24
 
Total allowance for impairment losses
  60 78 26 25 86 103


Interest income accrued on impaired loans was CHF 1 million as at 31 December 2011 (2010: CHF 1 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.

As at 1 July 2008, certain financial assets were reclassified from financial assets available for sale to loans due to the disappearance of an active market. The financial assets reclassified primarily consist of corporate debt instruments and debt instruments relating to emerging markets. The fair value as at 1 July 2008 of the financial assets reclassified amounted to CHF 14 966 million. At the date of reclassification the effective interest rate ranged from 0.8% to 9.7%, and the amount of cash flows expected to be recovered was estimated at CHF 32 658 million. In 2008, unrealised losses of CHF 740 million were recognised in equity in respect of these assets.

Further details with regard to the financial assets reclassified are as follows:

DEBT Securities previously classified as available for sale
In CHF million  
  2011 2010
Carrying amount as at 31 December
  7 945 8 784
Fair value as at 31 December
  8 680 9 687
Gains/losses that would have been recognised in equity if the assets had not been reclassified (excluding adjustments for income tax and policyholder participation)
  –58 564
Gains/losses recognised in profit or loss (including impairment)
  –19 –92
Interest income
  490 633


 

The future starts here.