Loans and advances to customers at amortised cost:

 

2021

2020

 

Gross carrying amount

Allowance for ECL

Carrying amount

Gross carrying amount

Allowance for ECL

Carrying amount

Corporate loans

6,267,585

-45,366

6,222,219

5,987,800

-46,524

5,941,276

Mortgage lending

3,621,128

-1,078

3,620,050

2,739,930

-1,650

2,738,280

Municipality loans

138,628

-

138,628

332,713

-

332,713

Current accounts and credit cards

186,192

-2,536

183,656

122,593

-2,796

119,797

Fair value hedge accounting

-14,708

-

-14,708

5,286

-

5,286

Interest receivables

17,953

-

17,953

19,358

-

19,358

Balance sheet value as at 31 December

10,216,778

-48,980

10,167,798

9,207,680

-50,970

9,156,710

The Expected Credit Loss allowance (ECL) 2021 is 0.48% of the total loan portfolio gross carrying amount at 31 December 2021 (31 December 2020: 0.55%).

The annual incurred loss rate, which is the stage 3 impairment expense over the average loan book per 31 December 2021, is 0.06%(6 bps) (2020: 0.12% (12 bps)).

The movements of the ECL of Loans and Advances to customers is as follows:

 

2021

 

Stage 1

Stage 2

Stage 3

Total

Balance at 1 January

8,148

9,384

33,438

50,970

 

 

 

 

 

Net remeasurement of allowance for expected credit losses

-985

-5,899

5,613

-1,271

of which:

 

 

 

 

- Effect of transition between stages

851

-266

395

980

- Macro-economic forward looking impact

-3,916

-6,646

-

-10,562

- Update ECL model

778

-437

-

341

- Individual loan or advance behaviour

1,302

1,450

5,218

7,970

 

 

 

 

 

Net portfolio growth

1,432

-168

-

1,264

Other transfers

-

-

-

-

Write-offs

-

-

-2,306

-2,306

Exchange rate differences

80

101

142

323

Balance at 31 December

8,675

3,418

36,887

48,980

The total ECL provision of EUR 51.0 million per 31 December 2020 decreased by EUR 2.0 million to EUR 49.0 million per 31 December 2021 due to a decrease in the Stage 2 provision of EUR 6.0 million which is partially offset by an increase in Stage 3 of EUR 3.4 million. The decrease in Stage 2 is mainly caused by the decrease of EUR 6.6 million due to more favourable macro-economic forward looking parameters compared to 2020. This is partly offset by an increase of EUR 1.5 million due to changes in individual loan or advance behaviour which includes, amongst others, changes in credit ratings and exposure. This has resulted in a net gain in the profit and loss account of EUR 7 (2020: a net loss of EUR 22,358).

In 2020, because of the COVID-19 pandemic, the economic circumstances resulted in a large increase in the ECL provision, mainly in Stages 1 and 2. This increase in ECL provision was expected to move to the Stage 3 ECL provision in 2021 once defaults due to the economic downturn would materialise. The Stage 3 ECL provision has shown an increase of EUR 3.4 million in 2021.

More detailed information regarding the allowance for ECL and the impairment gain/loss recognised in the profit and loss accounts can be found in the Risk Management chapter, section Credit risk, with quantitative information starting on page Credit risk quantitative disclosures.

Loans and advances to customers classified by residual maturity:

 

2021

2020

Payable on demand

186,558

132,435

1 to 3 months

520,850

615,256

3 months to 1 year

896,227

832,317

1 to 5 years

3,600,046

3,202,127

Longer than 5 years

4,964,117

4,374,575

Balance sheet value as at 31 December

10,167,798

9,156,710

A total amount of EUR 9.4 million (2020: EUR 16.9 million) of the loans and advances to customers is subordinated. Within the loans to local municipalities a total of EUR 65.0 million (2020: EUR 252.7 million) have a maximum original maturity of one year and one day.

As part of the interest rate risk management, Triodos Bank entered into interest rate swaps to hedge the interest risk on fixed interest rate loans. Please see Non-trading derivatives and hedge accounting for additional information.