2)
negative cash flows from operating activities in three consecutive annual accounting periods (from the cash
flow statement, and if it is not prepared, then from the simplified cash flow statement),
3)
revenues from core activities decrease significantly (over 50% year on year based on the results of annual
accounting periods) or revenues from core activities decrease (over 30% year on year based on the results
of annual accounting periods) and, at the same time, the ratio of debt to EBITDA (earnings before interest,
taxes, depreciation and amortization, profit before deduction of interest on interest-bearing liabilities, taxes
and depreciation) is greater than 4 or EBITDA is less than 0 (if the contract contains a different definition of
the trigger, the event is a trigger for impairment, if it is exceeded level 4 as defined in the contract. If the
contract indicates the level of the ratio> 4, then we identify the triggers for impairment when exceeding the
level specified in the contract),
4)
Negative EBITDA in two consecutive annual financial periods,
5)
the implementation of financial projections by the client negatively differs from the range approved by the
Group by at least 20%, which leads to a significant breakdown of financial ratios,
6)
the events described in points "1" to "5" occurred during the accounting year, provided that they occurred
in the amounts considered significant and the Group expects that the situation will not improve until the
end of the annual accounting period and this situation may result in failure to repay the financial asset or
its delay,
7)
active enforcement to client accounts kept in the Group, if the oldest active enforcement order persists for
more than 90 days and the total amount of active titles exceeds PLN 100 thousand; PLN for customers of
the corporate sales network or PLN 500 thousand for strategic clients,
8)
unsettled claims under guarantees granted by the Group (lack of customer funds), if the customer's
overdue liability to the Group due to the payment of the guarantee by the Group persists for more than 45
days from the date of payment of the guarantee claim,
9)
termination of a loan agreement with another bank of significant value,
•
a material breach of contractual terms by the customer, which may have a negative impact on future cash
flows from a given financial asset (if there has been a material breach of contractual terms, but the Group,
after identifying and assessing the causes and effects of such breach, accepted them (temporarily or
permanently) or changed, such an event is not treated as a trigger for impairment),
•
unknown whereabouts of the client, resulting in a lack of representation in contacts with the Group and
undisclosed assets of the client,
•
crisis of the sector in which the client operates, combined with the borrower's weak position in a given sector,
•
restructuring of the loan receivable for non-commercial reasons related to significant financial difficulties of
the client, resulting in a change to the existing terms of the contract, full or partial refinancing of the exposure
at risk, which would not have occurred if the client had not experienced these financial difficulties (including
forbearance) and loss of the net present value of cash flows is equal to or less than 1%,
•
credit fraud of the debtor towards the Bank or another ING Group entity,
•
the exposure has received a forbearance 2 or more times in the last 5 years,
•
a significant deterioration of the client's rating resulting in its reclassification to a risk class of at least 17 with a
simultaneous drop by at least 4 classes.
The Group has also determined the following additional triggers for impairment for leveraged transactions (i.e.
transactions with a high level of debt relative to operating profit):
•
a significant breach of an important financial clause or failure to return to the state from before the breach,
especially when the customer simultaneously requests a repayment facility,
•
forbearance refinancing of the existing borrower with an increased level of financial leverage (IBD / EBITDA, i.e.
interest bearing debt / earnings before interest, taxes, depreciation and amortization, total liabilities / profit
before deduction of interest on interest-bearing liabilities, taxes and depreciation) compared to leverage levels
at the time of funding or previous refinancing,
•
refinancing of the exposure with the repayment of the entire mobilised capital at the end of the loan period in
the event of financial difficulties of the client and with a low probability of refinancing by another bank under
current market conditions,
•
the base case and stress case scenarios indicate the lack of sufficient and stable cash flows to service the debt
in accordance with the adopted schedule;
and the following additional triggers for the revenue-generating real estate financing transactions:
•
LTV (Loan to Value)> 90% and this is not a temporary situation,
•
historical DSCR (debt service cover ratio) ratio <1.0 or ICR (interest coverage ratio) <1.0 (depending on which
indicator is used for transaction risk assessments) for two consecutive annual accounting periods and cash
flows generated by the real estate are, in the opinion of experts, insufficient to repay and service the loan in
accordance with the adopted schedule.
The triggers for impairment for
retail credit exposures
and
credit exposures to entrepreneurs
include:
•
failure to meet a minimum of three debt repayment arrangements within the current period of arrears,
