24. Loans and advances to customers

Loans and advances to customers by sector and type of product 31.12.2015 31.12.2014
Loans and advances to customers, gross, of which: 198 700 917 187 519 861
financial sector 4 834 177 1 630 191
corporate, of which: 391 286 1 319 339
finance lease receivables 101 -
deposits of the Brokerage House of PKO Bank Polski SA
in the Stock Exchange Guarantee Fund and initial deposit
10 217 11 440
receivables due from repurchase agreements 4 432 239 310 852
International financial organisations 10 652 -
non-financial sector 183 864 042 175 789 529
housing 103 005 812 98 105 676
corporate of which: 54 668 212 53 930 247
finance lease receivables 5 664 209 5 154 057
consumer 23 529 145 21 644 625
debt securities (corporate) 2 660 873 2 108 981
public sector 10 002 698 10 100 141
corporate of which: 7 307 327 7 277 642
finance lease receivables 71 584 75 267
debt securities (municipal) 2 695 371 2 822 499
Impairment allowances on loans and advances of which (8 287 209) (8 022 477)
impairment allowances on receivable from leasing (202 068) (184 807)
Loans and advances to customers, net 190 413 708 179 497 384

Loans and advances to customers by method
of calculating impairment allowances
31.12.2015 31.12.2014
Assessed on an individual basis, of which: 7 549 635 7 377 955
impaired of which: 5 412 768 5 615 878
finance lease receivables 407 063 344 975
not impaired of which: 2 136 867 1 762 077
finance lease receivables 332 905 300 021
Assessed on a portfolio basis, impaired 7 688 142 7 361 432
impaired of which: 7 688 142 7 361 432
finance lease receivables 96 732 106 401
Assessed on a group basis (IBNR) 183 463 140 172 780 474
finance lease receivables 4 899 194 4 477 927
Loans and advances to customers, gross 198 700 917 187 519 861
Impairment allowances on exposures assessed
on an individual basis, of which:
(2 895 857) (2 963 733)
finance lease receivables (111 165) (95 057)
impaired of which: (2 882 352) (2 948 025)
finance lease receivables (109 504) (95 057)
Impairment allowances on exposures assessed
on a portfolio basis of which:
(4 822 183) (4 426 869)
finance lease receivables (77 804) (75 273)
Impairment allowances on exposures assessed
on a group basis (IBNR) of which:
(569 169) (631 875)
finance lease receivables (13 099) (14 477)
Impairment allowances - total (8 287 209) (8 022 477)
Loans and advances to customers, net 190 413 708 179 497 384

A detailed description of changes in allowances has been presented in the note 13 ‘Net impairment allowance, write-downs and provisions’.

As at 31 December 2015, the share of impaired loans amounted to 6.6% (as at 31 December 2014: 6.9%), whereas the coverage ratio for impaired loans as at 31 December 2015 (calculated as total impairment allowances on loans and advances to customers divided by gross carrying amount of impaired loans) amounted to 63.3% (as at 31 December 2014: 61.8%).

As at 31 December 2015, the share of loans overdue by more than 90 days in the gross amount of loans and advances was 4.9% (as at 31 December 2014: 5.2%).

Loans and advances to customers by customer segment 31.12.2015 31.12.2014
Loans and advances granted, gross, of which: 198 700 917 187 519 861
mortgage banking 96 060 668 90 768 711
corporate 51 160 753 50 661 094
retail and private banking 23 529 145 21 644 625
small and medium enterprises 23 497 243 24 123 139
International financial organisations 10 652 -
receivables due from repurchase agreements 4 432 239 310 852
other receivables 10 217 11 440
Impairment allowances on loans and advances (8 287 209) (8 022 477)
Loans and advances granted, net 190 413 708 179 497 384

The structure of loans and advances presented in the note includes the following segmentation:

  • corporate loans of financial institutions (ie. leasing companies, insurance companies, investment companies) include corporate banking,
  • housing loans include loans of mortgage banking and housing market clients, corporate client segment and small and medium enterprises as regards to products intended for housing purposes,
  • corporate loans of non-financial entities, depending on the size of the entity, include loans for small and medium enterprises, housing market loans and corporate loans granted to corporate entities for non-housing purposes,
  • consumer loans include retail and private banking,
  • corporate loans of public entities include corporate banking loans,
  • reclassified debt securities are included in the corporate client segment.

Debt securities in the loans and advances to customers portfolio 31.12.2015 31.12.2014
Debt securities reclassified to the loans and advances to customers portfolio, gross 1 339 721 1 494 983
Debt securities directly classified to the loans and advances to customers portfolio, gross 4 016 523 3 436 497
Impairment allowances (71 679) (94 704)
Total debt securities, net 5 284 565 4 836 776

Securities reclassification

In 2012 due to the change of intention as regards holding of the selected portfolio of non-Treasury securities classified upon initial recognition as available for sale, the Group reclassified them to loans and advances to customers category. As a result of the reclassification of the portfolio, the valuation methods for the portfolio have changed, i.e. from measured at fair value to measured at amortised cost.

Debt securities reclassified from financial assets available for sale to loans and advances to customers, as at the date of reclassification:

Portfolio reclassified in the 3rd quarter of 2012 nominal value fair value carrying amount
Municipal bonds 778 233 807 275 807 275
Corporate bonds 632 160 632 013 632 013
Total 1 410 393 1 439 288 1 439 288

Portfolio reclassified in the 4th quarter of 2012 nominal value fair value carrying amount
Municipal bonds 440 950 430 124 430 124
Corporate bonds 656 630 661 546 661 546
Total 1 097 580 1 091 670 1 091 670

Debt securities reclassified from financial assets available for sale to loans and advances to customers as at:

As at 31 December 2015 nominal value fair value carrying amount
Municipal bonds 745 362 741 656 747 693
Corporate bonds 582 000 591 416 537 703
Total 1 327 362 1 333 072 1 285 396

As at 31 December 2014 nominal value fair value carrying amount
Municipal bonds 850 183 847 435 853 129
Corporate bonds 631 640 640 689 568 483
Total 1 481 823 1 488 124 1 421 612

Change in fair value which would have been recognised in the income statement and/or in other comprehensive income if there was no reclassification, would amount to PLN (4 700) thousand for the period from the date of reclassification until 31 December 2015 (31 December 2014 PLN (5 720) thousand). As at 31 December 2015, the average effective interest rate for the debt securities portfolio was 3.2558% (as at 31 December 2014 was 3.632%).

Finance lease agreements

The Group conducts lease activities through the entities from the PKO Leasing SA Group.

Gross lease investment value and minimal lease payments as at 31 December 2015 Gross lease investment Present value of the minimal lease payments Unrealised income
Gross lease receivables      
up to 1 year 2 317 051 2 100 243 216 808
from 1 year to 5 years 3 483 688 3 204 114 279 574
over 5 years 477 436 431 537 45 899
Gross total 6 278 175 5 735 894 542 281
Impairment allowances (202 068) (202 068) -
Net total 6 076 107 5 533 826 542 281

Gross lease investment value and minimal lease payments as at 31 December 2014 Gross lease investment Present value of the minimal lease payments Unrealised income
Gross lease receivables      
up to 1 year 2 117 836 1 899 603 218 233
from 1 year to 5 years 3 153 066 2 862 421 290 645
over 5 years 527 165 467 300 59 865
Gross total 5 798 067 5 229 324 568 743
Impairment allowances (184 808) (184 808) -
Net total 5 613 259 5 044 516 568 743

As at 31 December 2015 and 31 December 2014, there are no unguaranteed residual values attributable to the lessor.