Off-balance sheet information

31. Irrevocable and contingent liabilities

To meet the financial needs of borrowers, FMO enters into various irrevocable commitments (loan commitments, equity commitments and guarantee commitments) and contingent liabilities. These contingent liabilities consist of financial guarantees, which commit FMO to make payments on behalf of the borrowers in case the borrower fails to fulfill payment obligations. Though these obligations are not recognized on the balance sheet, they are subject to Credit Risk similar to loans to private sector. Therefore, provisions are calculated for financial guarantees and loan commitments according to ECL measurement methodology. 

Furthermore, the contingencies include an irrevocable payment commitment (IPC) to the Single Resolution Board (SRB) in Brussels. In April 2016, the SRB provided credit institutions with the option to fulfill part of their obligation to pay the annual ex - ante contributions to the Single Resolution Fund (SRF) through IPCs.

Moreover, FMO receives guarantees from various guarantors, which participate in the risk FMO takes. For more details refer to section 'Credit Risk' within the Risk Management chapter

The outstanding amount for financial guarantees issued by FMO and amount of guarantees received by FMO is as follows:

 

2021

2020

   

Contingent liabilities

  

Encumbered funds (single resolution fund)

1,453

832

Effective guarantees issued

69,341

66,009

Less: provisions, amortizing fees

-1,953

-5,256

Total guarantees issued

67,388

60,753

Total contingent liabilities

68,841

61,585

   

Effective guarantees received

-334,221

-233,679

Total guarantees received

-334,221

-233,679

Nominal amounts for irrevocable facilities is as follows:

  

2021

2020

    

Irrevocable facilities

   

Contractual commitments for disbursements of:

   

ˑ

Loans

627,630

506,896

ˑ

Grants

-

-

ˑ

Equity investments and associates

701,141

711,599

ˑ

Contractual commitments for financial guarantees given

136,450

331,374

Total irrevocable facilities

 

1,465,221

1,549,869

The movement in exposure for the financial guarantees issued (including contractual commitments) and ECL allowance is as follows:

Movement financial guarantees1 in 2021

Stage 1

Stage 2

Stage 3

Total

 

Outstanding exposure/Nominal amount

ECL allowance

Outstanding exposure/Nominal amount

ECL allowance

Outstanding exposure/Nominal amount

ECL allowance

Outstanding exposure/Nominal amount

ECL allowance

At January 1, 2021

300,939

-1,875

105,612

-2,630

-

-

406,551

-4,505

Additions

176,488

-1,317

1,881

-78

-

-

178,369

-1,395

Exposures matured (excluding write-offs)

-285,081

964

-107,507

1,922

-

-

-392,588

2,886

Transfers to Stage 1

-

-

-

-

-

-

-

-

Transfers to Stage 2

-

-

-

-

-

-

-

-

Transfers to Stage 3

-

-

-

-

-

-

-

-

Changes to models and inputs used for ECL calculations

-

1,583

-

797

-

-

-

2,380

Foreign exchange adjustments

11,307

-78

2,152

-47

-

-

13,459

-125

At December 31, 2021

203,653

-723

2,138

-36

-

-

205,791

-759

  • 1 Financial guarantees represent EUR 69,341 classified as contingent liabilities and EUR 69,341 classified as irrevocable facilities

Movement financial guarantees in 2020

Stage 1

Stage 2

Stage 3

Total

 

Outstanding exposure/Nominal amount

ECL allowance

Outstanding exposure/Nominal amount

ECL allowance

Outstanding exposure/Nominal amount

ECL allowance

Outstanding exposure/Nominal amount

ECL allowance

At January 1, 2020

311,775

-1,067

86,207

-483

2,167

-542

400,149

-2,092

Additions

113,050

-1,166

2,060

-193

-

-

115,110

-1,359

Exposures matured (excluding write-offs)

-52,735

244

-21,607

62

-1,947

487

-76,289

793

Transfers to Stage 1

-

-

-

-

-

-

-

-

Transfers to Stage 2

-45,793

374

45,793

-374

-

-

-

-

Transfers to Stage 3

-

-

-

-

-

-

-

-

Changes to models and inputs used for ECL calculations

-

-317

-

-1,712

-

-

-

-2,029

Foreign exchange adjustments

-25,358

57

-6,841

70

-220

55

-32,419

182

At December 31, 2020

300,939

-1,875

105,612

-2,630

-

-

406,551

-4,505

The movement in nominal amounts for loan commitments and ECL allowances is as follows:

Movement of loan commitments in 2021

Stage 1

Stage 2

Stage 3

Total

 

Nominal amount

ECL allowance

Nominal amount

ECL allowance

Nominal amount

ECL allowance

Nominal amount

ECL allowance

At January 1, 2021

378,990

-3,160

54,904

-1,748

18,360

-

452,254

-4,908

Additions

1,472,825

-4,351

30,858

-3,149

4,394

-

1,508,077

-7,500

Exposures derecognised or matured (excluding write-offs)

-1,318,527

4,010

-40,817

3,595

-16,609

-

-1,375,953

7,605

Transfers to Stage 1

5,233

-836

-5,233

836

-

-

-

-

Transfers to Stage 2

-21,884

167

21,884

-167

-

-

-

-

Transfers to Stage 3

-3,578

37

-

-

3,578

-37

-

-

Changes to models and inputs used for ECL calculations

-

1,840

-

-177

-

37

-

1,700

Changes due to modifications not resulting in derecognition

-

-

-

-

-

-

-

-

Amounts written off

-

-

-

-

-

-

-

-

Foreign exchange adjustments

19,160

-104

3,376

-70

754

-

23,290

-174

At December 31, 2021

532,219

-2,397

64,972

-880

10,477

-

607,668

-3,277

Movement of loan commitments in 2020

Stage 1

Stage 2

Stage 3

Total

 

Nominal amount

ECL allowance

Nominal amount

ECL allowance

Nominal amount

ECL allowance

Nominal amount

ECL allowance

At January 1, 2020

685,149

-3,187

100,122

-3,087

4,849

-

790,120

-6,274

Additions

208,037

-1,841

1,850

-37

1,100

-20

210,987

-1,898

Exposures derecognised or matured (excluding write-offs)

-454,629

2,980

-38,867

1,196

-

-

-493,496

4,176

Transfers to Stage 1

1,732

-2

-1,732

2

-

-

-

-

Transfers to Stage 2

-1,489

15

1,489

-15

-

-

-

-

Transfers to Stage 3

-12,809

-

-

-

12,809

-

-

-

Changes to models and inputs used for ECL calculations

-

-1,418

-

-3

-

-

-

-1,421

Changes due to modifications not resulting in derecognition

-

-

-

-

-

-

-

-

Amounts written off

-

-

-

-

-

-

-

-

Foreign exchange adjustments

-47,001

293

-7,958

196

-398

20

-55,357

509

At December 31, 2020

378,990

-3,160

54,904

-1,748

18,360

-

452,254

-4,908