Capital adequacy and riskmanagement

Transcription

1 Capital adequacy and riskmanagement 2

2 Capital adequacy and risk management This information refers to Ikano Bank AB (Publ) Corporate Identity Number This document contains information regarding the Bank s capital adequacy and risk management and refers to such information as to be provided in compliance with the Swedish Financial Supervisory Authority s regulations and general guidelines regarding the public disclosure of information concerning capital adequacy and risk management (FFFS 2007:5). Operations Ikano Bank carries out banking activities subject to a license from Finansinspektionen [the Swedish Financial Supervisory Authority] in Sweden, Denmark, Norway, Finland and the Netherlands. There are three business areas within these operations: Corporate, Sales Finance and Consumer. The Swedish operations are divided into two business segments, Business to Business (B2B) in Stockholm and Business to Consumer (B2C) in Älmhult. Operations in Denmark, Norway, Finland and the Netherlands are undertaken as branches of the Swedish operations. The Bank also has a dormant branch in the UK. Corporate Offered within the Corporate business area are financial solutions for corporate clients and organisations, in the form of rental and leasing agreements, object financing and factoring. This business area is represented in Sweden, Denmark and Norway. Sales finance Services for financing and sales support, mainly to our partners in the retail trade, are managed and marketed within the Sales Finance business area. This business area is represented in all of our geographical markets and the services offered comprise of consumer finance for sales support, credit cards with Visa and MasterCard, benefit cards, bonus management and information services for sales support. The largest partner within Sales Finance is the INGKA group (the largest IKEA retailer)from where the Bank originated. Over the years several more partners have been added to the business. These partners are both domestic partners within each country and Nordic partners covering several of the geographical markets. On August 30th, the Bank opened a branch in the Netherlands, where Sales Finance services are offered via the furniture retailer IKEA. Consumer The Consumer business area is comprised of traditional banking activities and is aimed at private individuals with simple, beneficial products and services for savings and loans. The customers carry out part of the work themselves on the Internet or by telephone, which enables matters to be dealt with efficiently and places the Bank in a position to be able to offer customers competitive products. Lending is offered in the form of unsecured loans, mortgage loans and Visa credit cards. Mortgage loans are offered in cooperation with Sveriges Bostadsfinansieringsaktiebolag (SBAB) which implies that loans are arranged together with and provided by SBAB under the distinctive product name of Ikano Bolån. Lending is provided as unsecured loans and card products in Sweden, Denmark and Norway, whereas deposits and mortgage loan products are only offered on the Swedish market. During 2013, deposit products will also be offered on the Danish market. Risk management The Bank is, in its operations, exposed to various types of risk, such as credit risk, operational risk, liquidity risk, and market risk. The Bank also handles other types of risk, such as strategic risk and reputation risk. Banking activities are based on deposits from and lending to private individuals and small and medium-sized enterprises. The Bank is risk-averse and all growth in volumes takes place with controlled, conscious risk-taking. Risk management aims to ensure that the risks do not exceed the risk tolerance levels established by the Board of Directors. Organisation and responsibility The Board of Directors and the Managing Director have the ultimate responsibility for risk management at Ikano Bank. The Board of Directors regulates the risks through policies relating to such matters as risk appetite and risk limits. The risk control function is responsible for monitoring and reporting to the Board of Directors and management. The Bank s control organisation is based on the three lines of defence method which implies that the handling and control of the Company's risks are divided into three lines of defence. The first line of defence is the operational units that are exposed to and manage the risks in daily operations. This includes the Managing Director/management and business unit managers, as well as support functions. Every business area and support function has a compliance and risk coordinator who is responsible for reporting Ikano Bank AB Capital adequacy and risk management 1

3 and dialogue with the Compliance and Risk control function in the second line of defence. The second line of defence is the independent control function responsible for identifying, quantifying and reporting risks. Compliance is responsible for monitoring the policies and rules determined by the Board of Directors. This function shall also contribute with advice for and support to the business functions. The third line of defence is the internal audit which shall independently audit the first and second lines of defence. By testing and evaluating the efficiency in the risk management and control functions, the internal audit function is to ensure the quality in the Bank s management of risks. The function reports directly to the Board of Directors. Internal audit Risk control function andcompliance Operating activities Credit risk Credit risk is the Bank s largest risk and is defined as the risk that the counterparty may be unable to fulfil their obligations towards the Bank. Credit risk arises in the lending business as well as when investing the Bank's excess liquidity and overnight investment. These investments are made in municipalities, credit institutions and businesses with a good rating or as deposits in other banks in accordance with the Bank s finance policy and liquidity strategy. This type of credit risk is called counterparty risk and is managed by the Bank s treasury function. Credit management Lending activities consist of the product areas: Leases, Factoring, Card Credits and Unsecured Loans. All of them are designed for quantity management with small individual commitments. The Bank has, for a long time, been applying scoring models in the assessment of credit risk. In the application process the risk of default is calculated before credit is granted. The result of the initial application gives a score on a scale reflecting the probability of default. The assessment is supplemented with information from information companies before the credit is finally approved. If the risk exceeds the internally accepted maximum risk exposure, the credit is denied. In addition to application scoring, Ikano Bank utilises various types of behavioural scoring models. The Bank s models for assessing the probability that customers will default (probability of default, PD-models ) are based on the Basel II principles for advanced models. Leasing and Factoring The business area Corporate primarily comprises the leasing of office equipment (mini leasing). The business area also includes Factoring which is an additional product for partners undertaking comprehensive invoicing to corporate customers. Leasing contracts are generated mainly by the partners selling office equipment. Ikano Bank has cooperated with various partners throughout the course of several years. In many cases, repurchase agreements are made in the case of end customer default and guaranteed residual value when the lease agreement expires. Operations have been focused on a few types of objects for which there is good internal expertise of over-the-counter markets when no repurchase guarantees are available. Credit assessment takes place on the basis of the credit information agency s scoring and rating models and customary credit information. Limits for larger engagements are determined in the local credit committees and the largest engagements are forwarded to the central credit and risk committee. The established limits on partners and large engagements are followed up frequently during the year. Card credits Lending in the form of a credit cards consist of low revolving credits and is represented in the business area Sales Finance and Consumer. The majority of credit card loans include store cards with either VISA or MasterCard attached. Credit card loans are managed from Älmhult, Denmark, Norway, Finland and the Netherlands. Credits are generated through the trading partners with whom the Bank cooperates, and through the distribution of cards via the internet. Unsecured loans Lending in the form of unsecured loans is managed in the business area Consumer. Unsecured loans are loans without collateral to private individuals. Sales of various types of unsecured loan products take place in different types of media. The various sales channels are followed up on a regular basis. Most products are sold on the basis of individual price setting in which the price reflects the customer s assessed risk class as at the application date. Ikano Bank AB Capital adequacy and risk management 2

4 Counterparty risk The credit risk that occurs in trading with financial instruments is called counterparty risk. This is the risk that the counterparty in a financial transaction cannot fulfill their payment obligations or deliver the securities in accordance with what has been agreed upon. Exposure per counterparty group is limited through limits and rating requirements which are stated in the banks finance policy. Operational risk Ikano Bank defines operational risk as the risk of direct or indirect losses caused by deficient or incorrect internal processes, procedures and systems, administrative errors or external events and factors. This definition includes legal risk, but not strategic or reputation risk. Ikano Bank is an Internet Bank which is highly dependent on IT systems and telephony. The monitoring of incidents and improvements in accessibility are priority areas. The Bank has an incident reporting system in which incidents are reported and followed-up. Threats and risks are continually analysed and policies, guidelines and descriptions of procedures are available for the prevention of operational risks and damage limitation. The central risk organisation coordinates the work on operational risks but the respective managers are responsible for operational risks in operations. Annual risk reviews are carried out with the management of the various operations, during which the largest risks are evaluated and managed in a plan of action. New products, partners and IT systems undergo a risk assessment including operational risks. The aim is to guarantee efficient processes and to minimise the operational risks so that the Bank s customers and other interested parties are assured of Ikano Bank s high safety and accessibility. Currency risk Currency risk is the risk that the fair value of a financial instrument, or the future cash flows from it, may vary due to changes in exchange rates. For Ikano Bank, currency exposure arises as transaction exposure, accounting exposure (when the reporting currency is in Euro) and in the context of net investment in foreign operations. All of the Bank s liquid flows, in all currencies, are handled in a common cash pool. Net exposures are hedged centrally by Treasury. The accounting exposure is managed through hedge accounting. A sensitivity analysis shows that a 10% rise in the exchange rate decreases the net exposure by keur 0.2. Interest risk Interest rate risk is the risk that the fair value or future cash flows from a financial instrument may vary due to changes in market interest rates. Interest rate risk occurs if deposits and borrowings are not optimally matched. The Bank s deposits and borrowings are primarily short-term with a maturity period no longer than three months, as shown in the table on the next page. Under the Bank s finance policy, interest-rate risk must be minimised so that any possible effect on income is limited. Exposure is calculated as the change in market value arising from 2% parallel shift, upwards or downwards, on the yield curve. The maximum is regulated by the Bank's financial policy. Fixed interest periods for the bank s assets and liabilities and for items off-balance is shown on the next page. Market risk The market risk is the risk of a decrease in income or of losses due to unfavourable market conditions. The Bank does not trade in derivatives or financial instruments, either on their own or their customers behalf. Consequently, the Bank has no capital requirements according to the regulations for trading books. Securities are held solely for the purpose of retaining sufficient liquidity to meet the liquidity regulations. Derivative financial instruments are traded in order to minimise exposure arising in the deposit and lending operations with customers. Market risks are managed by the Bank s Treasury group. Market risks include interest-rate risks and currency risks. Ikano Bank AB Capital adequacy and risk management 3

5 Interest-rate exposure fixed interest periods for assets and liabilities meur No longer than 3 months Longer than 3 months, but not longer than 6 Longer than 6 months, but not longer than 1 year Longer than 1 year, but not longer than 5 years Longer than 5 years No maturity Total Remaining average fixed interest term Assets Cash and balances in central banks ,2 år Treasury bills etc ,2 år Loans to credit institutions ,2 år Loans to the public ,2 år Lease receivables ,5 år Bonds and other interestbearing securities ,2 år Other assets ,3 år Total Liabilities and equity Liabilities to credit institutions ,2 år Deposits and borrowings from the public ,4 år Issued securities ,0 år Other liabilities ,1 år Subordinated liabilities ,8 år Equity and untaxed reserves Total equity and liabilities Difference assets and liabilities Interest rate derivatives, fixed interest received 1) Interest rate derivatives, fixed interest paid 1) Liquidity risk Ikano Bank defines liquidity risk as the risk of being unable to make payment when due, without significantly increasing the costs, or ultimately, not being able to meet payment obligations to any degree. The definition is also linked to the risk of being unable to receive renewed financing on maturity, so-called refinancing risk. The matching of assets and liabilities, both in terms of maturity and volume, along with a good access to and wide spread of financing sources forms the basis of the Bank s liquidity and financing strategy. The liquidity level shall always be sufficient; this means that there should always be a liquidity reserve and that the Bank should always be able to fulfil its payment commitments and be in a position to strengthen liquidity without delay when necessary. The Bank s management and control of liquidity risks is centralised and the liquidity risk is reflected in the Bank s internal pricing. The liquidity risk is managed by the Bank's central Treasury function, which is ultimately responsible for the Bank s liquidity management, which takes place in close cooperation with the local business units. The management of liquidity risk is controlled by the independent Risk Control group. The Board of Directors receives continuous reporting regarding the liquidity positions and development. The liquidity risk is managed through effective liquidity planning, the application of limits, measurement and analysis. Control and monitoring is conducted against the Bank s liquidity metrics specified in the Bank's Financial Policy. Liquidity planning is a significant component of the liquidity management, and forecasts are drawn up regularly in order to manage and control the Bank s total liquidity. Future cash requirements are monitored daily, as is the limit for minimum intra-day liquidity. If it is deemed that a deviation will not return to the minimum required volume within three days, measures are to be taken to restore liquidity to the permitted level. The Bank carries out regular stress tests on liquidity in order to increase its preparedness and assess the ability of the Bank to pay under conditions deviating from normal conditions. The analyses are based on the Bank's risk tolerance, and include both company-specific and marketrelated issues with varying degrees of stress and duration. Examples of events analysed include large withdrawals of deposits by the public, as well as market financing ceasing to be available. The Bank has a preparedness plan including action plans for disruptions in access to liquidity. The preparedness plan shall enter into force if the Bank should find itself in a situation demonstrating that the liquidity reserve is in danger of falling below the allowed minimum level within a period of 12 weeks. Measuring and monitoring is performed continuously with regard to the structure of the balance sheet and the liquidity exposures referring to the remaining maturity of assets and liabilities. Both contractual maturities and behavioural modelled maturities are analysed. Ikano Bank AB Capital adequacy and risk management 4

6 The table below shows the Bank's maturity exposure based on the reported cash flow s contractual remaining maturity as of 31 December. Deposits from the public are comprised of both fixed-term and non-fixed-term deposits. Total deposits from the public are reported in the column On demand, since the counterparty always has an option to choose when repayment should take place. Analyses of the behavioural cash flows show, however, that the deposits constitute a long-term, stable source of financing, which implies, therefore, that the maturity distribution of deposits from the public is, in practice, distributed over several time intervals. The historical cash flows also show that the loans to the public are received at a significantly higher rate than contractual maturities due to premature payments from customers, while lease receivables and other receivables are paid at a rate more in level with the contractual flows. Behavioural cash flows from other items in the balance sheet in general follow the contractual flows. Liquidity risk exposure, reported cash flow remaining contractual term of recovery meur Assets Liabilities and equity Payable on demand < 3 m 3-6 m 6-12 m 1-2 y 2-3 y 3-5 y > 5 y No tenor Liquidity risk exposure, reported cash flow remaining expected term of recovery meur < 3 m 3-6 m 6-12 m 1-2 y 2-3 y 3-5 y > 5 y No tenor Assets Liabilities and equity Liquidity portfolio and liquidity reserve Ikano Bank s liquidity is managed within the framework of the Bank s liquidity portfolio. The structure and size of the Bank s liquidity portfolio are regulated in the finance policy, which is determined by the Board of Directors. Under this policy, the liquidity portfolio shall always amount to a minimum of 10% of deposits from the public, The liquidity portfolio is divided into three categories: Intraday liquidity, Liquidity reserve, and an Investment portfolio. The Intraday liquidity manages the Bank s daily payment commitments. The liquidity in this portfolio is to be available within one day, and is to consist of funds in bank accounts, investments available the next banking day (overnight) and Ikano Bank AB Capital adequacy and risk management 5

7 bank overdraft facilities, granted in writing, in the Bank s cash pool. The Liquidity reserve is to constitute a separate reserve of high-quality liquid assets, which are to be quickly convertible in case of market stress situations that affect the Bank s financing options. The Liquidity reserve is invested in interest-bearing securities with a high credit rating on the Swedish market. The assets are to be available for realisation and conversion into cash at short notice. Unused bank overdraft facilities are not included in the Liquidity portfolio. The Bank s surplus liquidity is managed in the Investment portfolio. The assets of the portfolio consist of interest-bearing securities on the Swedish market. Investments in this portfolio are to have a minimum rating of BBB+ (rating according to Standard and Poor s). The Swedish Financial Supervisory Authority, FI, has introduced a defini tion of liquidity reserve in regulations regarding the management of liquidity risks, FFFS 2010:7. The Bank maintains a liquidity reserve in accordance with this definition, which, as per 31 December, totalled meur at market value. These assets are liquid on private markets and eligible for refinancing in the Swedish Central Bank. None of the assets have been claimed as collateral, and no doubtful debt exists. As per 31 December, the Liquidity portfolio totalled meur 398.1, which constitutes 25% of deposits from the public. This includes the Liquidity reserve as above, as well as other interestbearing securities, at a value of meur In addition to the Liquidity portfolio, the company has agreed credit facilities totalling meur Summary of the Liquidity reserve Cash and balances in central banks and other banks Securities issued by public entities Other secured bonds Liquidity reserve (according to FFFS 2010:7)) Securities (not included in the reserve above) Total liquidity portfolio Other liquidity-creating measures Unutilised credit facilities Sources of funding The aim of the long-term funding plan is a diversified funding which takes into account the spread of risk and funding costs. The long-term goal of the Bank is that the ratio of deposits/ total assets shall amount to 70%. Summary of sources of funding Liabilities to credit institutions Deposits and borrowings to the public Issued securities Subordinated liabilities Equity Other Total Subordinated liabilities; 3% Issued securities; 5% Equity; 12% Other; 6% Liabilities to credit institutions; 5% Deposits and borrowings to the public; 69% Other information Total assets Loans to the public Deposits and borrowings to the public Ratio deposits/total assets 69% Ratio liquidity portfolio/deposits 25% Ikano Bank AB Capital adequacy and risk management 6

8 Capital management and capital adequacy For the establishment of the statutory capital requirements, the Swedish Capital Adequacy and Large Exposures Act (2006:1371) and the Swedish Financial Supervisory Authority s regulations and general guidelines (FFFS 2007:1) on capital adequacy and large exposures apply. The rules help to strengthen the resistance against financial losses and thereby protect the Bank s customers. The rules imply that the Bank s capital base must cover the prescribed minimum capital requirement by a margin, which for Ikano Bank includes the capital requirements for credit risks, operational risks and currency risks Ikano Bank s capital adequacy fulfils the statutory minimum requirements, the so called pillar I requirements, as well as internal requirements. A summary of the Bank's capital base and statutory minimum capital requirements is provided in the tables. Summary of capital base and capital adequacy requirements Tier 1 capital Tier 2 capital Capital base, net Capital requirements for credit risks in accordance with standardised approach Capital requirements for operational risks in accordance with base indicator approach Capital requirements for exchange rate risks Total capital requirements Capital adequacy quotient 2,07 Capital ratio 16,5% Capital base At least half of a financial institution s capital base must be comprised of Tier 1 capital. The Tier 1 capital in Ikano Bank constitutes 82% of the capital base and is comprised of equity less intangible assets, deferred tax assets and unrealised changes in value reported in the fair value reserve. The Tier 2 capital in the capital base may not exceed an amount equivalent to the Tier 1 capital. On the balance sheet date, the Tier 2 capital amounts to 22% of Tier 1 capital and comprises fixed-term subordinated loans. The fixed-term subordinated loans are subordinated liabilities, meaning that they carry entitlement to payment only after other creditors have been reimbursed. As some of the subordinated loans have remaining maturity of less than 5 years, a deduction of 20% made in these. A breakdown of Ikano Bank s capital base as of 31 December is shown below. Specification of the capital base Tier 1 capital Equity reported in the balance sheet Untaxed reserves (73.7% off which) Less: - Intangible assets and deferred tax assets Unrealised changes in fair value reported in fair value reserve -296 Total tier 1 capital Tier 2 capital Subordinated liabilities Total tier 2 capital Total capital base Ikano Bank AB Capital adequacy and risk management 7

9 Capital requirements When estimating the capital requirement, the Bank applies the standardised approach for credit risks and the base indicator approach for operational risks. When calculating capital adequacy requirements, all lending is considered to be unsecured lending, no consideration is taken to securities when lending to companies. The reduced risk when private customers sign payment protection insurance is not taken into account when calculating capital adequacy requirement. According to the capital adequacy requirement rules, the capital base shall be at least equivalent to the sum of the capital adequacy requirements for credit risks, market risks and operational risks. Ikano Bank has a capital adequacy which exceeds these statutory minimum requirements. A breakdown of the capital adequacy requirement for Ikano Bank as of 31 December is shown below. Specification of the capital requirements Capital requirements Credit risk in accordance with standardised approach Institutional exposure Corporate exposure Retail exposure Past due items Covered bond exposure 418 Other items Total capital requirements for credit risk Operational risk Base indicator approach Total capital requirements for operational risk Currency risk Currency risk Total capital requirements for market risk Total minimum capital requirement Internal capital assessment To ensure that the internal capital of Ikano Bank is sufficient, internal capital assessments (IKU) are performed under the Basel II principles. This process is a tool used by the Board of Directors to assess the need for possible changes in the capital requirement in the event of changed circumstances. This might involve strategic commercial decisions or events in the surrounding environment impacting the operations and their development. The Bank performs stress tests and scenario analyses to assess the need for further capital. This assessment is performed for all risks that are identified under the Basel regulation s Pillar 2 principles. The internal capital assessment is performed on an annual basis as an integral part of the strategic work of the Bank, to ensure that the risks are correctly considered and that they reflect the Bank s true risk profile and requirement of capital. The implementation and results of the capital assessment process are reported to the Swedish Financial Supervisory Authority on an annual basis. Ikano Bank aims to ensure that the capital adequacy ratio does not fall below 14%, which can be compared with the statutory capital requirement of 8%. This buffer constitutes an additional margin which is in line with the Bank s risk profile, identified risks on the basis of their probability and economic effects, stress tests, anticipated lending expansion, freedom of strategic action and changes in the surrounding environment. When estimating the capital requirement, the Bank applies the standardised approach for credit risks and the base indicator approach for operational risks. At closing day, the capital base of the Bank totalled meur 319, compared to the statutory capital requirement of meur 155. Thus, Ikano Bank has a very good capital adequacy which fulfils the statutory minimum requirements, the so called pillar I requirements, as well as internal requirements. Ikano Bank AB Capital adequacy and risk management 8

10 Information regarding credit risk Total exposures to credit risk and capital adequacy requirements for each exposure class and the average exposure amount for the period are shown below. The average exposure amount for the period is based on calculations of exposure for each quarter during the period. Breakdown of total exposures for credit risk shown by class of exposure Total exposures refer to exposures in the balance sheet after provisions for loan losses also including unused credit limits and other commitments. According to the capital adequacy requirement rules, the exposure class Past due items refers to items which are overdue by more than 90 days. meur Total exposure Capital adequacy requirement Average exposure amount Government and central banks 16-5 Local government and comparable associations Institutional exposure Corporate exposure Retail exposure Past due items Covered bond exposure Other items Total Geographical distribution of total exposures Credit portfolio distributed by sector Norge 18% Finland 1% Netherlands; 0% Public sector 1% Corporate sector 29% Danmark 10% Sverige 71% Retail sector 70% Total remaining contractual term of exposures shown by class of exposure meur On demand <3 months 3-12 months 1-5 years > 5 years No tenor Total Government and central banks Local government and comparable associations Institutional exposure Corporate exposure Retail exposure Past due items Covered bond exposure Other items Total Ikano Bank AB Capital adequacy and risk management 9

11 Exposures in the credit portfolio before and after impairment shown by industry Total Exposure after keur exposures Impairments impairments Households Trade Manufacturing industry Transport and communication Property- and rental acitvity Service operations Municipalities and county councils Building acitivity Education Finance and insurance Healthcare and social services Hotel- and restaurant business Farming, hunting and forestry Other businesses Total The table above specifies exposures in the credit portfolio before and after impairment, broken down by industry. Granted but unused credit limit is not included in the exposures. An exposure requiring impairment is regarded as a doubtful debt according to the definition given in the Annual Report. In the Annual Report, a loan is classified as doubtful if one or more events have occurred impacting the estimated future cash flows from the asset or group of assets. Payments more than days over-due, depending on the product and market, are generally considered by the Bank as objective evidence that a loan is doubtful. Other objective evidence may consist of information of considerable financial difficulties. The Bank evaluates whether a need for impairment exists for doubtful loans and whether a loan loss must be recognised on an individual basis for each loan due and for substantial individual loans. When no need for impairment can be identified for loans evaluated in relation to the need for impairment on an individual basis, an additional assessment is carried out along with other loans with similar credit-risk properties to investigate whether a need for impairment exists at portfolio level. An assessment to establish portfolio impairment is carried out using statistical models which calculate the probability that a debt in the different portfolios will not be settled in accordance with the original contract. The recognised value of assets after impairment is calculated as the present value of the future cash flows discounted by the effective interest rate applicable when the asset was initially recognised. Short-term assets are not discounted. Impairment is charged to the income statement. Unsettled receivables refers to receivables which are due for payment and which are not included in doubtful debts. These receivables are included in the future assessment in which impairment is made at portfolio level. Doubtful debts and unsettled receivables distributed by sector are shown in the tables below. Doubtful debt divided by sector - household sector corporate sector public sector 56 Total Ikano Bank AB Capital adequacy and risk management 10

12 Unsettled receivables, not included in doubtful debts, divided by sector - household sector corporate sector public sector Total Credit exposure, divided by sector Loan receivables, gross - household sector corporate sector public sector Total Less: Specific impairment for individually assessed significant loan receivables household sector 25 - corporate sector public sector 21 Collective impairment for individually assessed significant loan receivables household sector 41 - corporate sector public sector 14 Impairment for collectively assessed homogenous groups of loan receivables household sector corporate sector public sector - Loan receivables, net reported value - household sector corporate sector public sector Total The changes in impairment for loan losses during are shown below. Impairment for keur Impairment for individually assessed loan receivables collectively assessed homogenous groups of loan receivables Total Opening balance 1 Jan Reversal of previous impairment of loan losses reported in the annual accounts as established loan losses Impairment of loan losses for the year Closing balance 31 Dec Ikano Bank AB Capital adequacy and risk management 11