BMW 2012 Annual Report Download - page 137

137 GROUP FINANCIAL STATEMENTS
31 December 2012 Maturity Maturity Maturity Total
in € million within between one later than
one year and five years five years
Bonds – 8,482 – 18,375 – 5,071 – 31,928
Liabilities to banks – 4,866 – 4,469 – 678 – 10,013
Liabilities from customer deposits (banking) – 10,139 – 3,028 – – 13,167
Commercial paper – 4,578 – – – 4,578
Asset backed financing transactions – 2,170 – 7,346 – 137 – 9,653
Derivative instruments – 1,146 – 1,085 – 1 – 2,232
Trade payables – 6,424 – 9 – – 6,433
Other financial liabilities – 787 – 249 – 424 – 1,460
Total – 38,592 – 34,561 – 6,311 – 79,464
€ 1,031 million). The equivalent figure for dealer financ-
ing is € 18,157 million (2011: € 16,699 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 pat-
terns 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
retail customer and dealer lines of business serve as
first-ranking collateral with a recoverable value. Secu-
rity is also put up by customers in the form of collat-
eral asset pledges, asset assignment and first-ranking
mortgages, supplemented where appropriate by war-
ranties and guarantees. If an item previously accepted
as collateral is acquired, it undergoes a multi-stage
process of repossession and disposal in accordance
with the legal situation prevailing in the relevant mar-
ket. 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 note 5 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 ongoing 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
relevant categories of receivables in notes 25, 26 and 30.
Liquidity risk
The following table shows the maturity structure of ex-
pected contractual cash flows (undiscounted) for finan-
cial liabilities: