Renegotiated Loans and Forbearances

For economic or legal reasons we might enter into a forbearance agreement with a borrower who faces financial difficulties in order to ease the contractual obligation for a limited period of time. A case by case approach is applied for our corporate clients considering each transaction and client specific facts and circumstances. For consumer loans we offer forbearances for a limited period of time, in which the total or partial outstanding or future installments are deferred to a later point of time. However, the amount not paid including accrued interest during this period must be re-compensated at a later point of time. Repayment options include distribution over residual tenor, a one-off payment or a tenor extension. Forbearances are restricted and depending on the economic situation of the client, our risk management strategies and the local legislation. In case of a forbearance agreement is entered into, an impairment measurement is conducted as described below, an impairment charge is taken if necessary and the loan is subsequently recorded as impaired. These forbearances are considered as renegotiations and disclosed accordingly.

Loans that have been renegotiated in such a way that, for economic or legal reasons related to the borrower’s financial difficulties, we granted a concession to the borrower that we would not otherwise have considered are disclosed as renegotiated loans.

Renegotiated Loans

 

Dec 31, 2013

Dec 31, 2012

2013 increase (decrease) from 2012

in € m.

Renegotiated loans considered nonimpaired

Renegotiated loans considered impaired

Total renegotiated loans

Renegotiated loans considered nonimpaired

Renegotiated loans considered impaired

Total renegotiated loans

Renegotiated loans considered nonimpaired

Renegotiated loans considered impaired

Total renegotiated loans

German

275

564

839

210

309

519

65

255

320

Non-German

397

1,127

1,524

678

1,317

1,995

(281)

(190)

(471)

Total renegotiation loans

672

1,691

2,363

888

1,626

2,514

(216)

65

(151)

The reduction in nonimpaired renegotiated loans recorded in 2013 was primarily due to one commercial real estate loan in Western Europe (excluding Germany) which was consolidated due to the Group obtaining control over the structured entity borrower during the second quarter of 2013. The renegotiated loans considered impaired increased due to individually assessed German customers in our core business for which a small number of new provisions were required. In 2012, renegotiated loans increased by € 96 million or 4 %.

In 2013 our renegotiated loans included € 114 million of loans reclassified to loans and receivables in accordance with IAS 39. This position decreased by € 143 million compared with prior year end, mainly attributable to one commercial real estate position in Western Europe (excluding Germany) which was partially written down and subsequently consolidated due to the Group obtaining control over the structured entity borrower during the second quarter of 2013.