Reference Areas:
Best Pratices in PZU

33.6.1 Accounting policy

Loans and other receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market, other than:

  • financial assets that the entity intends to sell immediately or in the near term, which shall be classified as held for trading, and those that the entity upon initial recognition designates as at fair value through profit or loss;
  • financial assets those that the entity upon initial recognition designates as available for sale;
  • financial assets for which the holder may not recover substantially all of its initial investment, other than because of credit deterioration, which shall be classified as available for sale.

Loans and other receivables include in particular:

  • payment transferred for debt securities purchased under a contract under which the seller retained substantially all the risks and rewards of ownership of the securities (buy-sell-back and reverse repo transactions);
  • debt securities not quoted on an active market;
  • term deposits with credit institutions;
  • loans granted;
  • loan receivables from clients
  • receivables under concluded insurance contracts (including reinsurance);
  • other receivables.

Loans and other receivables, with the exception of receivables under concluded insurance contracts and other short-term receivables, are measured at the end of the reporting period at amortized cost.

Because of their nature, receivables under concluded insurance contracts and other short-term receivables are measured at their nominal value, while taking into account impairment losses on doubtful debts (the method used to estimate these impairment losses for insurance receivables is presented in section

The result of remeasurement of loans and other receivables to amortized cost is recognized under “Net investment income”.

33.6.2 Estimates and assumptions 

For all on-balance sheet credit exposures (groups of on-balance sheet credit exposures) an assessment is made to identify objective indications of impairment, according to the most recent data at the remeasurement date. In order to calculate an impairment loss amount, the estimated amounts and timing of future cash flows must be assessed. The estimates are based on assumptions about many factors, so the actual results may differ. As a result, the impairment loss amount may be subject to change in the future.

Individual assessment is required for impaired exposures that exceed the accepted materiality or exposure thresholds, for which a group of assets with similar credit risk characteristics cannot be identified or where the sample is too small to estimate the group’s parameters.

Individual measurement consists in a case-by-case verification whether a credit exposure is impaired and projection of future cash flows, including cash flows from seizure of collateral less cost to seize and sell, or from other repayment sources. The value of recoveries expected in individual measurements are regularly compared with actual recoveries.

Group measurement is based on the time over which an exposure remains in an impaired state; it considers the specificity of the group in terms of expected recoveries. Collateral is taken into account at the exposure level.

Credit exposures, for which no individual indications of impairment have been identified, are grouped in accordance with the risk profile homogeneity principle and a provision is recognized for the entire group of exposures to cover losses incurred but not reported (IBNR).

Impairment losses for assets held to maturity and loans are calculated at the difference between the carrying amount of the assets and the present value of estimated future cash flows discounted by the effective interest rate determined on initial recognition (initial effective interest rate).

If an impairment loss amount decreases in a subsequent periods a result of an event that occurred after the impairment, the previously recognized impairment loss is reversed through an adjustment of the balance of impairment losses. The amount of the reversal is posted to the profit and loss account under “Net result on realization and impairment losses on investments”.

33.6.3 Quantitative data

Loans31 December 201731 December 2016 (restated)
Debt securities13,6232,463
Government securities12
Fixed rate12
Quoted on a regulated market977-
Fixed rate281-
Floating rate696-
Not quoted on a regulated market12,6452,461
Fixed rate1,181-
Floating rate11,4642,461
Other, including:175,88151,871
Loan receivables from clients169,45744,998
Buy-sell-back transactions8852,880
Term deposits with credit institutions1,8412,285
Total loans189,50454,334
Loan receivables from clients31 December 201731 December 2016 (restated)
Retail segment89,40725,303
Operating loans278294
Consumer finance26,18513,859
Consumer finance loans2,1291,222
Loan to purchase securities109125
Overdrafts in credit card accounts1,297970
Loans for residential real estate58,4567,969
Other mortgage loans832813
Other receivables12151
Business segment80,05019,695
Operating loans33,87910,838
Car financing loans80132
Investment loans26,1087,468
Receivables purchased (factoring)4,576794
Overdrafts in credit card accounts179-
Loans for residential real estate24-
Other mortgage loans8,465-
Finance leases5,086281
Other receivables1,653182
Total receivables from clients on account of loans169,45744,998
Loan receivables from clients – outstanding31 December 201731 December 2016
Unimpaired receivables159,11539,930
Retail segment84,54022,434
Business segment74,57517,496
Impaired receivables1,869523
Past due receivables31 December 201731 December 2016
Unimpaired receivables5,0032,977
Up to 30 days3,4562,187
30-60 days944537
Over 60 days603253
Impaired receivables3,4701,568
Up to 30 days137173
1 to 3 months201137
3 to 12 months894522
1 to 5 years1,562722
Over 5 years67614

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