Off-balance sheet information

34. 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 oblige 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 statement of financial position, they are subject to credit risk similar to loans to the private sector. Therefore, provisions are calculated for financial guarantees and loan commitments according to the 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 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 the amount of guarantees received by FMO is as follows:

	2023	2022

Contingent liabilities
Encumbered funds (Single Resolution Fund)	2,946	2,130
Effective guarantees issued	154,675	138,359
Total guarantees issued	157,621	140,489

Effective guarantees received	-403,008	-449,913
Total guarantees received	-403,008	-449,913

Nominal amounts for irrevocable facilities are as follows:

		2023	2022

Irrevocable facilities
Contractual commitments for disbursements of:
ˑ	Loans	751,393	565,435
ˑ	Equity investments and associates	875,906	754,898
ˑ	Contractual commitments for financial guarantees given	195,733	180,836
Total irrevocable facilities		1,823,032	1,501,169

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

Movement financial guarantees in 2023

	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
Balance at January 1, 2023	305,172	-1,314	-	-	14,023	-10,717	319,195	-12,031
Additions	193,805	-1,084	978	-3	-	-	194,783	-1,087
Exposures matured (excluding write-offs)	-112,260	515	-16,376	28	-	-	-128,636	543
Transfers to Stage 1	-	-	-	-	-	-	-	-
Transfers to Stage 2	-42,260	210	42,260	-210	-	-	-	-
Transfers to Stage 3	-8,414	29	-	-	8,414	-29	-	-
Changes to models and inputs used for ECL calculations	-	540	-	-327	4,255	580	4,255	793
Foreign exchange adjustments	-32,302	168	-6,009	5	-878	329	-39,189	502
Balance at December 31, 2023	303,741	-936	20,853	-507	25,814	-9,837	350,408	-11,280

	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
Balance at January 1, 2022	203,653	-723	2,138	-36	-	-	205,791	-759
Additions	283,786	-801	-	-	-	-	283,786	-801
Exposures matured (excluding write-offs)	-169,544	611	-2,169	783	-27,799	202	-199,512	1,596
Transfers to Stage 1	-	-	-	-	-	-	-	-
Transfers to Stage 2	-	-	-	-	-	-	-	-
Transfers to Stage 3	-13,182	117	-	-	13,182	-117	-	-
Changes to models and inputs used for ECL calculations	398	-524	-	-744	27,807	-10,382	28,205	-11,650
Foreign exchange adjustments	61	6	31	-3	833	-420	925	-417
Balance at December 31, 2022	305,172	-1,314	-	-	14,023	-10,717	319,195	-12,031

Financial guarantees represent €154,675k (2022: €138,359k) classified as contingent liabilities and €195,733k (2022: €180,836k) classified as irrevocable facilities.

Movement of loan commitments and ECL allowances in 2023

	Stage 1		Stage 2		Stage 3		Total
	Nominal amount	ECL allowance	Nominal amount	ECL allowance	Nominal amount	ECL allowance	Nominal amount	ECL allowance
Balance at January 1, 2023	426,057	-2,387	127,071	-6,185	5,504	-	558,632	-8,572
Additions	2,043,510	-5,183	13,665	-994	-	-	2,057,175	-6,177
Exposures derecognized or matured (excluding write-offs)	-1,831,516	3,778	-65,547	5,709	-1,176	-	-1,898,239	9,487
Transfers to Stage 1	-	-	-	-	-	-	-	-
Transfers to Stage 2	-56,473	484	56,473	-484	-	-	-	-
Transfers to Stage 3	-	-	-394	-	394	-	-	-
Changes to models and inputs used for ECL calculations	-	134	-	-4,704	-	-	-	-4,570
Changes due to modifications not resulting in derecognition	-	-	-	-	-	-	-	-
Amounts written off	-	-	-	-	-	-	-	-
Foreign exchange adjustments	-15,839	82	-4,626	200	-213	-	-20,678	282
Balance at December 31, 2023	565,739	-3,092	126,642	-6,458	4,509	-	696,890	-9,550

	Stage 1		Stage 2		Stage 3		Total
	Nominal amount	ECL allowance	Nominal amount	ECL allowance	Nominal amount	ECL allowance	Nominal amount	ECL allowance
Balance at January 1, 2022	532,219	-2,397	64,972	-880	10,477	-	607,668	-3,277
Additions	1,876,065	-4,684	171,114	-3,837	297	-	2,047,476	-8,521
Exposures derecognized or matured (excluding write-offs)	-1,984,850	3,912	-133,783	3,329	-5,565	-	-2,124,198	7,241
Transfers to Stage 1	46,138	-506	-46,138	506	-	-	-	-
Transfers to Stage 2	-67,946	456	67,946	-456	-	-	-	-
Transfers to Stage 3	-	-	-	-	-	-	-	-
Changes to models and inputs used for ECL calculations	-	950	-	-4,932	-	-	-	-3,982
Changes due to modifications not resulting in derecognition	-	-	-	-	-	-	-	-
Amounts written off	-	-	-	-	-	-	-	-
Foreign exchange adjustments	24,431	-118	2,960	85	295	-	27,686	-33
Balance at December 31, 2022	426,057	-2,387	127,071	-6,185	5,504	-	558,632	-8,572