71
2014 ANNUAL REPORT
4 Advances
(continued)
a) Advances
(continued)
2013
Retail
Commercial
Mortgages
Total
Lending and Corporate
Lending
Performing advances
4,657,838
10,687,882
9,352,129
24,697,849
Non-performing advances
98,375
593,299
256,772
948,446
4,756,213
11,281,181
9,608,901
25,646,295
Unearned interest/finance charge
(51,267)
(130,223)
–
(181,490)
Accrued interest
23,508
71,097
29,205
123,810
4,728,454
11,222,055
9,638,106
25,588,615
Allowance for impairment losses
(66,530)
(211,320)
(75,248)
(353,098)
Net advances
4,661,924
11,010,735
9,562,858
25,235,517
b) Allowance for impairment losses
i) Impairment assessment
The main considerations for the loan impairment assessment include whether any payments of principal or interest are overdue by more
than 90 days or there are any known difficulties in the cash flows of counterparties, credit rating downgrades, or infringement of the
original terms of the contract. The Group addresses impairment assessment in two areas: individually assessed allowances and collectively
assessed allowances.
Individually assessed allowances
The Group determines the allowances appropriate for each individually significant loan or advance on an individual basis. Items
considered when determining allowance amounts include the sustainability of the counterparty’s business plan, its ability to improve
performance once a financial difficulty has arisen, projected receipts and the expected dividend payout should bankruptcy ensue, the
availability of other financial support and the realisable value of collateral, and the timing of the expected cash flows. The impairment
losses are evaluated at each reporting date, unless unforeseen circumstances require more immediate attention.
Collectively assessed allowances
Allowances are assessed collectively for losses on loans and advances that are not individually significant (including credit cards, residential
mortgages and unsecured consumer lending) and for individually significant loans and advances where there is not yet objective
evidence of individual impairment.
Allowances are evaluated on each reporting date with each portfolio receiving a separate review. The collective assessment takes
account of impairment that is likely to be present in the portfolio even though there is not yet objective evidence of the impairment in
an individual assessment. Impairment losses are estimated by taking into consideration the following information: historical losses on
the portfolio, current economic conditions, the approximate delay between the time a loss is likely to have been incurred and the time it
will be identified as requiring an individually assessed impairment allowance, and expected receipts and recoveries once impaired. The
impairment allowance is then reviewed by credit management to ensure alignment with the Group’s overall policy.
