Asset Encumbrance

Encumbered assets primarily comprise those on- and off-balance sheet assets that are pledged as collateral against secured funding and other collateralized obligations. Additionally, we consider as encumbered assets those on balance sheet assets held in insurance subsidiaries which are substantially available to support insurance liabilities, as well as assets of structured entities which are held as collateral for the beneficiaries, who are typically the parties that have bought the notes issued by these entities. Readily available assets are those on- and off-balance sheet assets that are not otherwise encumbered, and which are in freely transferrable form. Unencumbered financial assets at fair value and available for sale investments are all assumed to be readily available.

The readily available value represents the current balance sheet carrying value rather than any form of stressed liquidity value (see liquidity reserves disclosure in this section for an analysis of unencumbered liquid assets available under a liquidity stress scenario). Other unencumbered on- and off-balance sheet assets are those assets that have not been pledged as collateral against secured funding or other collateralized obligations, or are otherwise not considered to be ready available. For example, within cash and due from banks and interest earning deposits with banks, other includes balances that are required to support central bank minimum reserve requirements as well as any segregated cash balances held with third parties that are not available for general bank funding. Similarly, for loans and other advances to customers, these would only be viewed as readily available to the extent they are already in a pre-packaged transferrable format, and have not already been used to generate funding. This represents the most conservative view given that an element of such loans currently shown in other could be packaged into a format that would be suitable for use to generate funding.

Encumbered and unencumbered assets

 

Dec 31, 2013

 

 

 

Unencumbered assets

in € bn.
On-balance sheet

Assets

Encumbered assets1

Readily available

Other

1

Encumbered assets are in line with the definition of IFRS12 restricted assets.

Cash and due from banks & Interest earning deposits with banks

95.1

1.1

86.8

7.2

Financial assets at fair value through profit and loss

245.4

94.4

151.0

0

Financial assets available for sale

48.3

7.8

40.5

0

Loans

376.6

56.6

10.1

309.9

Other

143.9

7.7

0

136.2

Total on-balance sheet (excluding derivatives, securities borrowed and securities purchased under resale agreements)

909.3

167.6

288.5

453.3

 

Dec 31, 2013

 

 

 

Unencumbered assets

in € bn.
Off-balance sheet

Assets

Encumbered assets

Readily available

Other

Fair Value of securities accepted as collateral

282.0

241.7

40.3

0

The above table sets out a breakdown of on- and off-balance sheet items, broken down between encumbered, readily available and other. Derivatives, securities borrowed and securities purchased under resale agreements have been excluded from the total on balance sheet shown in the table. Any securities received under reverse repurchase agreements and stock borrow agreements are shown under the fair value of securities received as collateral.

The above table of encumbered assets includes assets that are not encumbered at an individual entity level, but which may be subject to restrictions in terms of their transferability within the group. Such restrictions may be due to local connected lending requirements or similar regulatory restrictions. In this situation, other than assets held in specific insurance entities or structured entities, it is not feasible to identify individual balance sheet items that cannot be transferred.

At December 31, 2013, only € 168 billion of the Group's balance sheet assets were encumbered (excluding derivatives, securities borrowed and securities purchased under resale agreements). Encumbered on balance sheet assets primarily related to firm financing of trading inventory and other securities, and to funding (i.e., Pfandbriefe and covered bonds) secured against loan collateral.

As of December 31, 2013, the Group had received securities as collateral with a fair value of € 282 billion, of which € 242 billion were sold or on pledged. These overnight-pledges typically relate to trades to facilitate client activity, including prime brokerage as well as collateral posted in respect of Exchange Traded Funds as well as derivative margin requirements.


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