50. Offsetting financial assets and financial liabilities

The Group enters into offsetting arrangements, i.e. International Swaps and Derivatives Association Master Agreements (ISDA) and Global Master Repurchase Agreements (GMRA), which make it possible to offset financial assets and liabilities (final deduction and settlement of the transaction so-called close out netting) in the event of an infringement with respect to one of the parties of the agreement.

These agreements are of particular importance to mitigate the risk posed by derivative instruments, because they enable offsetting both matured liabilities (mitigating the settlement risk) and non-matured liabilities of the parties (mitigating the pre-settlement risk). However, these agreements do not meet the requirements set out in IAS 32, because the right to offset is conditional on the occurrence of a specific future event (instances of infringement).

Exposures arising from derivatives are further secured by margin deposits provided by counterparties as part of executing CSA (Credit Support Annex).

Annual Report
2019

OFFSETTING – ASSETS 31.12.2019 Total
financial assets
Derivatives Amounts due from
repurchase
agreements
Recognized financial assets, gross 4 521 3 440 1 081
Financial assets recognized in the statement of financial position, net 4 521 3 440 1 081
Financial instruments not subject to offsetting in the financial statements 2 486 2 486
Financial liabilities subject to enforceable framework agreement or similar agreement concerning offsetting (excluding financial collateral) 1 744 1 744
Cash or securities received as collateral 742 742
Net amount 2 035 954 1 081

OFFSETTING – LIABILITIES 31.12.2019 Total
financial liabilities
Derivatives Amounts due from
repurchase
agreements
Recognized financial liabilities, gross 3 513 3 513
Financial assets recognized in the statement of financial position, net 3 513 3 513
Financial instruments not subject to offsetting in the financial statements 2 540 2 540
Financial assets subject to enforceable framework agreement or similar agreement concerning offsetting (excluding financial collateral) 1 744 1 744
Cash or securities received as collateral 796 796
Net amount 973 973

OFFSETTING – ASSETS 31.12.2018 Total
financial assets
Derivatives Amounts due from
repurchase
agreements
Recognized financial assets, gross 2 617 2 566 51
Financial liabilities subject to offsetting, gross (1) (1)
Financial assets recognized in the statement of financial position, net 2 616 2 565 51
Financial instruments not subject to offsetting in the financial statements 1 889 1 874 15
Financial liabilities subject to enforceable framework agreement or similar agreement concerning offsetting (excluding financial collateral) 1 565 1 565
Cash or securities received as collateral 324 309 15
Net amount 727 691 36

OFFSETTING – LIABILITIES 31.12.2018 Total
financial liabilities
Derivatives Amounts due from
repurchase
agreements
Recognized financial liabilities, gross 3 127 3 127
Financial liabilities subject to offsetting, gross (1) (1)
Financial assets recognized in the statement of financial position, net 3 126 3 126
Financial instruments not subject to offsetting in the financial statements 2, 71 2 170 1
Financial assets subject to enforceable framework agreement or similar agreement concerning offsetting (excluding financial collateral) 1 565 1 565
Cash or securities received as collateral 606 605 1
Net amount 955 956 (1)

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