Scania Annual Report 2011

129
Timing analysis of portfolio
assets past due but not
recognised as impairment
losses
Past-due
payments
2011
Past-due
payments
2010
Past-due
payments
2009
< 30 days 944 839 963
30–90 days 284 246 314
91–180 days 73 52 128
> 180 days 59 170 82
Total 1,360 1,307 1,487
Provisions for bad debts amounted to SEK 516 m. (581 and 725,
respec tively), equivalent to 7.2 (8.0 and 9.9, respectively) percent of
total receiv ables. The year’s bad debt expense amounted to
SEK 92 m. (55 and 188, respectively). Provisions for bad debts
changed as follows:
Provisions for bad debts 2011 2010 2009
Provisions, 1 January 581 725 711
Provisions for potential losses 50 –7 155
Withdrawals due to actual credit
losses –91 –89 –147
Currency rate effects –24 –48 13
Other 0 0 –7
Provisions, 31 December 516 581 725
Credit risk in Financial Services
The credit portfolio including operating leases in the Financial Services
segment can be seen in the table below:
Credit portfolio 2011 2010 2009
Exposure 42,980 36,954 41,328
– of which, operating leases 8,365 8,545 8,931
Credit risk reserve 745 817 924
Carrying amount 42,235 36,137 40,404
– of which, operating leases 8,301 8,497 8,898
To maintain a controlled level of credit risk in the segment, the proces s
of issuing credit is supported by a credit policy as well as credit
instruction s. Credit risks are limited by active credit assessment,
manage ment of the loan portfolio and its underlying assets as well as
an intensive focus and constructive dialogue with those customers who
do not follow the agreed payment plan. Collateral in Financial Services
operations mainly exists in the form of the products being financed.
The portfolio mainly consists of financing of trucks, buses and trailers
for small and medium-sized companies. A description of credit risk
exposur e can be seen in the table below:
Concentration
of credit risk
Number of
customers
Percentage of
total number
of customers
Percentage
of portfolio
value
On 31 December 2011
Exposure < SEK 15 m. 23,501 98.4 67.4
Exposure SEK 15–50 m. 281 1.2 15.0
Exposure > SEK 50 m. 97 0.4 17.6
Total 23,879 100.0 100.0
The credit risk concentration in 2011 was equivalent to that of 2010
and 2009. The table shows that most customers are in the segment
with exposure < SEK 15 m. This segment included 98.4 (98.7 and 98.4,
respectively) percent of the total number of customers, equivalent to
67.4 (70.8 and 67.7, respectively) percent of the portfolio. The segment
with exposure of SEK 15–50 m. included 1.2 (1.0 and 1.3, respectively)
percent of the total number of customers, equivalent to 15.0 (14.2 and
17.4, respectively) percent of the portfolio. The segment with exposure
> SEK 50 m. included 0.4 (0.3 and 0.3, respectively) percent of the total
number of customers, equivalent to 17.6 (15.0 and 14.9, respectively)
percent of the portfolio.
Accounts with past-due receivables ordinaril y lead to relatively
quick repossession of the item being financed. Re negotiation only
occurs in those cases where, after a new credit evaluation, Financial
Service s deems the customer’s payment problems to be of a shortterm,
tempo rary nature and where renegotiation can take place without
greatly worsening its risk position. Since the financial situation of most
Scania customers improved during 2011, the carrying amount of financial
assets whose terms had been renegotiated declined, amounting
to SEK 3,768 m. (5,352 and 7,372, respectively) at year-end. Contracts
are regarded as bad debts when payment is more than 90 days past
due or when there is information that causes Scania to terminate the
contracts early.
The resale market for repossessed and used vehicles functioned
well during most of 2011. During the year, 2,595 (3,579 and 4,354,
respectively) financed vehicle s were repossessed. At year-end,
the number of repossessed but not yet sold vehicles amounted to
596 (677 and 1,223, respec tively), with a total carryin g amount of
SEK 176 m. (274 and 447, respectively). Repossessed vehicles are sold
off by means of a new financing contrac t with another customer, direct
sale to an end custome r or sale via Scania’s dealership network.
financial reports Scania 2011