Page 92 - 86395_CCB - 2024 Annual Report (web)

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16 Allowance for impairment losses
A description of the Bank’s Credit Risk management and methodology in respect of allowances for impairment
losses is provided below in Note 29. This Note also includes the sensitivity of the Bank’s impairment losses to
changes in its forward‑looking economic scenarios. The tables below set out the Bank’s provisions by IFRS 9
stage as well as a reconciliation of the opening to the closing allowance for impairment losses on loans and
advances to customers.

Not credit impaired Credit impaired
Stage 1: Stage 2: Stage 3:
subject to subject to subject to
£’000 12‑month ECL lifetime ECL lifetime ECL Total
Real Estate Finance 1,656 8,512 10,182 20,350

Asset Finance 1,632 395 400 2,427
(including Classic Vehicles & Sports)
At 31 December 2023 3,288 8,907 10,582 22,777

Real Estate Finance 868 7,902 9,897 18,667
Asset Finance 1,777 306 373 2,456
(including Classic Vehicles & Sports)

At 31 December 2024 2,645 8,208 10,270 21,123

Stage 1: Stage 2: Stage 3:
Impairment provision movement 2024 subject to subject to subject to
£’000 12‑month ECL lifetime ECL lifetime ECL Total
Closing Balance at 31 December 2024 2,645 8,208 10,270 21,123

Opening Balance at 1 January 2024 3,288 8,907 10,582 22,777
Increase (decrease) in provision (643) (699) (312) (1,654)

Increase (decrease) in provision
New loans originated 1,966 1,966
Derecognised loans (490) (2,036) (139) (2,665)
Allowance utilised in respect of write‑offs – – (4,499) (4,499)
Transfers between Stages and
increase (decrease) in Credit Risk
– Transfers from Stage 1 (173) 147 26 –
– Transfers from Stage 2 1,745 (2,500) 755 –
– Transfers from Stage 3 – 5 (5) –
– Increase in Credit Risk (3,691) 3,685 3,550 3,544

(643) (699) (312) (1,654)
P&L charge
Increase (decrease) in (643) (699) 4,187 2,845
provision on drawn loans
Increase (decrease) in provision 59 – – 59
on undrawn commitments
Write‑Offs (net of prior year provisions) – – 2,938 2,938
Income Adjustment * – – (909) (909)
Total P&L impairment charge (584) (699) 6,216 4,933

* Interest originally charged on the gross carrying amount for credit impaired stage 3 assets which has subsequently been recalculated on the net carrying amount.
This resulted in a reduced interest income and impairment charge in the income statement of £909k.