Allowance for Credit Losses


Our allowance for credit losses consists of an allowance for loan losses and an allowance for off-balance sheet positions. The following table provides a breakdown of the movements in our allowance for loan losses for the periods specified.

Allowance for loan losses

in € m.

Six months ended Jun 30, 2010

Six months ended Jun 30, 2009

Individually assessed

Collectively assessed

Total

Individually assessed

Collectively assessed

Total

Balance, beginning of year

2,029

1,314

3,343

977

961

1,938

Provision for loan losses

247

279

526

1,034

484

1,518

Net charge-offs

(191)

(198)

(389)

(146)

(145)

(291)

Charge-offs

(212)

(250)

(462)

(163)

(211)

(374)

Recoveries

21

52

73

17

66

83

Changes in the group of consolidated companies

Exchange rate changes/other

49

13

62

(19)

(19)

(38)

Balance, end of period

2,134

1,408

3,542

1,846

1,281

3,127

The following table shows the activity in our allowance for off-balance sheet positions, which consist of contingent liabilities and lending-related commitments.

Allowance for off-balance sheet positions
in € m.

Six months ended Jun 30, 2010

Six months ended Jun 30, 2009

Individually assessed

Collectively assessed

Total

Individually assessed

Collectively assessed

Total

Balance, beginning of year

83

124

207

98

112

210

Provision for off-balance sheet positions

(15)

(5)

(20)

17

(9)

8

Usage

(42)

(42)

Changes in the group of consolidated companies

9

9

Exchange rate changes

13

13

5

2

7

Balance, end of period

77

132

209

78

105

183

During the first half of 2010, provision for credit losses was € 506 million, versus € 1.5 billion in the first six months of 2009. Provision for credit losses in the current period included € 154 million related to assets reclassified in accordance with IAS 39. In CIB, provision for credit losses was € 167 million, versus € 1.1 billion in the first half of 2009. This decrease was driven primarily by lesser charges taken in respect of the aforementioned reclassifications, especially with regard to high specific charges in the second quarter 2009, and reflected the slightly stronger credit environment. In PCAM, provision for credit losses was € 349 million, versus € 391 million in the first six months of 2009, predominantly reflecting lower provisions in PBC. This development included a lower level of provisions for credit losses of € 28 million in the first quarter 2010 and a one-time release of allowance for loan losses of € 60 million in the first quarter 2009, both in relation to revised parameter and model assumptions in the prior year.

Service Functions

Download PDF (Management Report , 303 kB) Download XLS (Allowance for Loan Losses, 20 kB) add this file to your file library

Download pdf

Download xls

Add file

Print

e-mail