Repurchase agreements Repurchase agreements Repos are treated as collateralised Goodwill Properties and other fixed assets
Specific allowances for credit losses are evaluated either individually or collectively for a portfolio.
Specific allowance for an individual credit exposure is made when existing facts, conditions or valuations indicate that the Group is
not likely to collect the principal and interest due contractually on the claim. An allowance is reversed only when there has
been an identifiable event that has led to an improvement in the collectability of the claim. The amount of specific allowance also
takes into account the collateral value, which may be discounted to reflect the impact of a forced sale or untimely liquidation.
Overdue unsecured consumer loans which are homogenous in nature, such as credit card receivables, are pooled according
to their delinquency behaviour and evaluated for impairment collectively as a group, taking into account the historical loss
experience of such loans.
When a loan is uncollectible, it is written off against the related allowance for loan impairment. Such loans are written off after
all the recovery procedures have been exhausted and the amount of the loss has been determined. Recoveries in full or in part
of amounts previously written off are credited to the income statement in “Allowances for credit and other losses”.
GENERAL ALLOWANCES FOR CREDIT LOSSES Apart from specific allowances, the Group also recognises general
allowances for credit losses. The Group maintains a level of allowances that is deemed sufficient to absorb the estimated credit
losses inherent in its loan portfolio including off-balance sheet credit exposures. The Group maintains general allowances of at
least 1 of credit exposures arising from both on and off-balance sheet items against which specific allowances have not been
made, adjusted for collateral held. This is in accordance with the transitional arrangements under MAS Notice 612.
b Financial assets classified as available-for-sale The Group assesses at each balance sheet date whether there is
evidence that an available-for-sale financial asset is impaired.
In the case of an equity investment, a significant or prolonged decline in the fair value of the security below its cost is a factor in
determining whether the asset is impaired.
When there is evidence of an impairment of an available-for-sale financial asset, the cumulative loss – measured as the difference
between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in
the income statement – is reclassified from the revaluation reserve within equity to the income statement.
For equity investments, impairment losses are not reversed until they are disposed of. For impaired debt instruments that
subsequently recover in value, the impairment losses are reversed through the income statement if there has been an identifiable
event that led to the recovery.