BMW 2011 Annual Report Download - page 137

137 GROUP FINANCIAL STATEMENTS
31 December 2011 Maturity Maturity Maturity Total
in € million within between one later than
one year and five years five years
Bonds – 9,100 – 17,430 – 4,509 – 31,039
Liabilities to banks – 3,197 – 5,449 – 268 – 8,914
Liabilities from customer deposits (banking) – 8,968 – 3,254 – 24 – 12,246
Commercial paper – 5,486 – – – 5,486
Asset backed financing transactions – 3,191 – 6,474 – – 9,665
Derivative instruments – 1,410 – 2,218 – 7 – 3,635
Trade payables – 5,295 – 43 – 2 – 5,340
Other financial liabilities – 847 – 483 – 488 – 1,818
– 37,494 – 35,351 – 5,298 –78,143
card business amounts to € 1,031 million (2010: € 1,020
million). The equivalent figure for dealer financing is
€ 16,699 million (2010: € 14,388 million).
In the case of performance relationships underlying
non-derivative financial instruments, collateral will be
required, information on the credit-standing of the
counterparty obtained or historical data based on the
existing business relationship (i. e. payment patterns to
date) reviewed in order to minimise the credit risk, all
depending on the nature and amount of the exposure
that the BMW Group is proposing to enter into.
Within the financial services business, the financed
items (e. g. vehicles, equipment and property) in the re-
tail customer and dealer lines of business serve as
first-
ranking collateral with a recoverable value. Security is
also put up by customers in the form of collateral asset
pledges, asset assignment and first-ranking mortgages,
supplemented where appropriate by warranties and
guarantees. If an item previously accepted as collateral
is acquired, it undergoes a multi-stage process of re-
possession
and disposal in accordance with the legal
situation prevailing in the relevant market. The assets
involved are generally vehicles which can be converted
into cash at any time via the dealer organisation.
Impairment losses are recorded as soon as credit risks
are identified on individual financial assets, using a
methodology specifically designed by the BMW Group.
More detailed information regarding this methodology
is provided in the section on accounting policies.
Creditworthiness testing is an important aspect of the
BMW Group’s credit risk management. Every borrower’s
creditworthiness is tested for all credit financing and
lease contracts entered into by the BMW Group. In the
case of retail customers, creditworthiness is assessed
using validated scoring systems integrated into the pur-
chasing process. In the area of dealer financing, credit-
worthiness is assessed by means of on going credit moni-
toring and an internal rating system that takes account
not only of the tangible situation of the borrower but
also of qualitative factors such as past reliability in busi-
ness relations.
The credit risk relating to derivative financial instruments
is minimised by the fact that the Group only enters into
such contracts with parties of first-class credit standing.
The general credit risk on derivative financial instru-
ments utilised by the BMW Group is therefore not con-
sidered
to be significant.
A concentration of credit risk with particular borrowers
or groups of borrowers has not been identified in con-
junction with financial instruments.
Further disclosures relating to credit risk – in particular
with regard to the amounts of impairment losses recog-
nised – are provided in the explanatory notes to the rele-
vant categories of receivables in notes 27, 28 and 32.
Liquidity risk
The following table shows the maturity structure of ex-
pected contractual cash flows (undiscounted) for finan-
cial liabilities: