36. Impairment of financial assets and receivables

Changes in impairment losses on financial assets in the year ended 31 December 2015 Impairment losses – opening balance Recognition of impairment losses in the statement of profit or loss Reversal of impairment losses in the statement of profit or loss Derecognition of impairment losses (sale, write-off etc.) Exchange differences Other changes in impairment losses Impairment losses – closing balance
Available-for-sale financial instruments 158,163 - - (111,972) (291) - 45,900
Equity instruments 158,163 - - (111,972) (291) - 45,900
Financial assets held to maturity 1,235 - - - 1 - 1,236
Debt instruments 1,235 - - - 1 - 1,236
Loans 25,020 51,644 - (64) (74) - 76,526
Debt instruments 10,144 32,693 - - - - 42,837
Term deposits with credit institutions - 947 - - (55) - 892
Loans 14,876 18,004 - (64) (19) - 32,797
Receivables, including insurance receivables 593,647 109,679 (110,651) (3,337) (1,517) 535 588,356
Receivables from direct insurance 565,901 105,007 (105,951) (1,626) (1,233) 126 562,224
Reinsurance receivables 5,021 3,059 (4,039) - - 2,207 6,248
Other receivables 22,725 1,613 (661) (1,711) (284) (1,798) 19,884
Reinsurers’ share in technical provisions 17,531 8,531 (15,269) - - - 10,793
Cash and cash equivalents - 1,389 - - (81) - 1,308
Total 795,596 171,243 (125,920) (115,373) (1,962) 535 724,119
impairment_of_financial_assets_1_pzu2015.xlsx

As at the date of consolidating Alior Bank Group, credit receivables of clients towards Alior Bank were measured at fair value, and thus as at 31 December 2015 no impairment losses on those assets were recognized.

Changes in impairment losses on financial assets in the year ended 31 December 2014 Impairment losses – opening balance Recognition of impairment losses in the statement of profit or loss Reversal of impairment losses in the statement of profit or loss Derecognition of impairment losses (sale, write-off etc.) Exchange differences Change in group composition Other changes in impairment losses 2) Impairment losses – closing balance
Available-for-sale financial instruments 154,899 3,945 - - (681) - - 158,163
Equity instruments 154,899 3,945 - - (681) - - 158,163
Financial assets held to maturity 1,202 - - - 33 - - 1,235
Debt instruments 1,202 - - - 33 - - 1,235
Loans 24,725 10,242 - - 86 - (10,033) 25,020
Debt instruments - 10,144 - - - - - 10,144
Term deposits with credit institutions 9,797 - - - 100 - (9,897) -
Loans 14,928 98 - - (14) - (136) 14,876
Receivables, including insurance receivables 651,579 66,974 (128,024) (4,269) (3,216) 13,273 (2,670) 593,647
Receivables from direct insurance 597,608 58,748 (94,279) (1,418) (2,616) 10,143 (2,285) 565,901
Reinsurance receivables 4,619 5,319 (4,938) - - 21 - 5,021
Other receivables 49,352 2,907 (28,807),1) (2,851) (600) 3,109 (385) 22,725
Reinsurers’ share in technical provisions 4,828 21,880 (9,178) - 1 - - 17,531
Total 837,233 103,041 (137,202) (4,269) (3,777) 13,273 (12,703) 795,596

1) Including reversal of impairment losses in the amount of PLN 26,275 thousand due to a mortgage loan granted to Metro-Projekt Sp. z o.o. described in Note 53.6.

2)The item presents transfer of impairment losses on PZU Lithuania assets to assets held for sale due to the transaction described in Note 2.4.1. The decrease of impairment losses was translated at average rate described in Note 5.3.

impairment_of_financial_assets_2_pzu2015.xlsx

Credit quality of financial assets as at 31 December 2015 Carrying amount of assets that are not past due Carrying amount of past due assets Carrying amount (net) Impairment losses Gross book value
  impaired not impaired up to 3 months over 3 months and up to 6 months over 6 months   individual group  
Financial assets held to maturity 6,422 17,363,704 - - - 17,370,126 1,236 - 17,371,362
Available-for-sale financial instruments - 7,145,750 - - - 7,145,750 - - 7,145,750
Loans 276,646 38,561,467 3,476,156 202,840 885,942 43,403,051 76,526 - 43,479,577
Debt instruments 151,068 2,579,539 - - - 2,730,607 42,837 - 2,773,444
Loan receivables from clients 1) - 25,766,677 3,476,156 202,840 885,942 30,331,615 - - 30,331,615
Buy sell-back transactions - 3,132,740 - - - 3,132,740 - - 3,132,740
Term deposits with credit institutions 9,253 5,269,791 - - - 5,279,044 892 - 5,279,936
Loans 116,325 1,812,720 - - - 1,929,045 32,797 - 1,961,842
Receivables, including insurance receivables 812,314 2,078,579 181,934 52,134 145,832 3,270,793 58,338 530,018 3,859,149
Receivables from direct insurance 691,809 746,750 156,529 49,371 123,804 1,768,263 32,255 529,969 2,330,487
Reinsurance receivables - 21,189 21,296 785 5,753 49,023 6,248 - 55,271
Other receivables 120,505 1,310,640 4,109 1,978 16,275 1,453,507 19,835 49 1,473,391
Reinsurers’ share in technical provisions 61,910 1,034,942 - - - 1,096,852 10,793 - 1,107,645
Total 1,157,292 66,184,442 3,658,090 254,974 1,031,774 72,286,572 146,893 530,018 72,963,483

1) As at the date of consolidating Alior Bank Group, loan receivables from clients were measured at fair value, and thus as at 31 December 2015 no impairment losses on those assets were recognized. According to the best estimation of cash flows determined in contracts whose influence may not be expected, they amounted to PLN 1,937,689 thousand as at the acquisition date. Due to the provisional nature of the settlement of the acquisition of Alior Bank (presented in Note 2.4.6.1) the presented fair value of credit receivables may change in the period of 12 months from the acquisition date of Alior Bank (18 December 2015).


impairment_of_financial_assets_3_pzu2015.xlsx
 
Credit quality of financial assets as at 31 December 2014 Carrying amount of assets that are not past due Carrying amount of past due assets Carrying amount (net) Impairment losses Gross book value
  impaired not impaired up to 3 months over 3 months and up to 6 months over 6 months   individual group  
Financial assets held to maturity - 19,983,689 - - - 19,983,689 1,235 - 19,984,924
Available-for-sale financial instruments - 2,434,865 - - - 2,434,865 - - 2,434,865
Loans 193,144 14,501,059 278 - - 14,694,481 25,020 - 14,719,501
Debt instruments 193,144 2,797,411 - - - 2,990,555 10,144 - 3,000,699
Buy sell-back transactions - 3,250,173 - - - 3,250,173 - - 3,250,173
Term deposits with credit institutions - 6,143,503 278 - - 6,143,781 - - 6,143,781
Loans - 2,309,972 - - - 2,309,972 14,876 - 2,324,848
Receivables, including insurance receivables 658,762 2,029,108 142,696 36,282 218,584 3,085,432 62,866 530,781 3,679,079
Receivables from direct insurance 654,682 791,053 133,175 34,199 96,974 1,710,083 35,250 530,651 2,275,984
Reinsurance receivables 98 20,042 6,266 461 1,815 28,682 5,021 - 33,703
Other receivables 3,982 1,218,013 3,255 1,622 119,7951) 1,346,667 22,595 130 1,369,392
Reinsurers’ share in technical provisions 79,569 673,546 - - - 753,115 17,531 - 770,646
Total 931,475 39,622,267 142,974 36,282 218,584 40,951,582 106,652 530,781 41,589,015

1) Including PLN 109,478 thousand due to a mortgage loan to Metro-Projekt sp. z o.o. described in Note 53.6.

impairment_of_financial_assets_4_pzu2015.xlsx