Credit loss reserves
The establishment of credit loss reserves on customer-financing receivables is dependent on estimates including assumptions regarding past dues, repossession rates and the recovery rate on the underlying collaterals. As of December 31, 2012, the total credit loss reserves in the Customer Finance segment amounted to 1.23% (1.33) of the total credit portfolio in the segment.
Refer to Note 4 for a description of the credit risk and Note 30 for further information regarding customer-financing receivables.
|Allocation of non-current customer-financing receivables||Dec 31, 2012||Dec 31, 2011|
|Non-current customer financing recivables as of December 31||41,156||40,618|
The effective interest rate for non-current customer-financing receivables amounted to 6.31 % as of December 31, 2012.
|Allocation of current customer-financing receivables||Dec 31,
|Current customer financing receivables as of December 31||39,833||38,081|
The effective interest rate for current customer-financing receivables amounted to 6.06% as of December 31, 2012.
|Customer-financing receivables||Dec 31, 2012||Dec 31, 2011|
|Customer-financing receivables gross||82,080||79,849|
|Valuation allowance for doubtful customer-financing receivables||(1,091)||(1,150)|
|Whereof specific reserve||(258)||(374)|
|Whereof other reserve||(833)||(776)|
|Customer-financing receivables, net||80,989||78,699|
|Customer-financing receivables (days/MSEK)||Dec 31, 2012||Dec 31, 2011|
|payments due||Not due||1-30||31-90||>90||Total||Not due||1-30||31-90||>90||Total|
|Valuation allowance for doubtful customer financing receivables||(64)||(42)||(43)||(109)||(258)||(99)||(63)||(40)||(172)||(374)|
|Customer-financing receivables, net book value||(64)||365||288||295||884||(99)||328||190||476||895|
The table above presents overdue payments within the customer financing operations in relation to specific reserves. It is not unusual for a receivable to be settled a couple of days after its due date, which impacts the age interval of 1-30 days.
|Change of valuation allowance for doubtful customer-financing receivables||2012||2011|
|Valuation allowance for doubtful customer-financing receivables as of December 31, preceding year||1,150||1,325|
|New valuation allowance charged to income||835||910|
|Reversal of valuation allowance charged to income||(252)||(250)|
|Utilization of valuation allowance related to actual losses||(575)||(821)|
|Valuation allowance for doubtful customer-financing receivables as of December 31||1,091||1,150|
|Customer financing receivables||Dec 31, 2012||Dec 31, 2011|
|total exposure||Not due||1-30||31-90||>90||Total||Not due||1-30||31-90||>90||Total|
|Customer financing receivables||72,068||7,221||2,161||630||82,080||70,085||6,828||1,971||965||79,849|
Concentration of credit risk
The ten largest customers in Customer Finance account for 6.2 % (5.6) of the total asset portfolio. The rest of the portfolio is pertinent to a large number of customers. This way the credit risk is spread across many markets and among many customers.
Concentration by geographical market
The adjacent table discloses the concentration of the customer-financing portfolio divided into geographical markets.