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 |
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|
|
|
|
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.