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Fair values

The following table sets out the fair value of the financial instruments held as at 31 December 2016. The fair value of listed government paper and interest-bearing securities is the market value. The fair value of unlisted government paper and interest-bearing securities is public quoted information if available or nominal value. The fair value of banks, loans, funds entrusted with a fixed interest term and the subordinated loan has been determined by calculating the net present value of expected interest and redemption cashflows, taken into account market interest rates as at the end of the year. The fair value of the loans includes floating rate UK business banking loans, for which the interest percentage contains a floor. For these loans the fair value is determined by calculating the present value of the contractual cash flows of the loan (based on forward rates) plus the present value of the expected cash flows of the floor, assuming interest rates develop accordingly to the forward curve. Therefore, the time value of the embedded derivative (the interest rate floors) is ignored. An assumed prepayment rate of 5% is also included. We did not include a term structure in the spread. Including the time value of the floors would result in a loan valuation EUR 9.2 million higher. The fair value of the other items is assumed to be equal to the balance sheet value.

The fair value of the remaining assets also includes the deferred tax item. The premium and discount for the government paper and interest-bearing securities has been included in the balance sheet value of respectively government paper and interest-bearing securities.

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2016

2016

2015

2015

in thousands of EUR

Balance sheet
value

Fair value

Balance sheet
value

Fair value

 

 

 

 

 

1

The fair value is negatively impacted by the tax effect of all fair value adjustments which has been posted as other.

 

 

 

 

 

Assets

 

 

 

 

Cash

732,219

732,219

285,819

285,819

Government paper including discounts

179,062

179,223

213,135

213,220

Banks

467,529

467,472

545,152

545,309

Loans

5,708,338

5,866,087

5,215,692

5,233,553

Interest-bearing securities including premiums/discounts

1,757,259

1,822,073

1,728,259

1,788,324

Shares

20

20

65

65

Participating interests

16,411

16,411

13,803

13,803

Other

219,430

169,3101

207,768

191,9521

 

 

 

 

 

 

 

 

 

 

 

9,080,268

9,252,815

8,209,693

8,272,045

 

 

 

 

 

Liabilities

 

 

 

 

Banks

31,582

32,347

39,798

39,798

Funds entrusted

8,024,620

8,046,043

7,282,564

7,297,280

Other

120,207

120,207

106,814

107,004

Equity

903,859

903,859

780,517

780,517

Revaluation on equity

150,359

47,446

 

 

 

 

 

 

 

 

 

 

 

9,080,268

9,252,815

8,209,693

8,272,045

 

 

 

 

The estimated fair values provided by financial institutions are considered not to be comparable on an individual basis, due to the differences in valuation methods applied and the use of estimates in these valuations. The lack of an objective method of valuation means that estimated fair values are subjective in respect of the expected maturity and interest rates used.