Note 9

Note 9a Due from Banks and Loans


By type of exposure
CHF million	31.12.05	31.12.04
Banks ¹	33,689	35,675
Allowance for credit losses	(45)	(256)
Net due from banks	33,644	35,419
Loans1
Residential mortgages	127,990	117,731
Commercial mortgages	18,509	18,950
Other loans	125,081	97,777
Subtotal	271,580	234,458
Allowance for credit losses	(1,611)	(2,291)
Net loans	269,969	232,167
Net due from banks and loans	303,613	267,586

Note 9b Allowances and Provisions for Credit Losses

CHF million	Specific allowances and provisions	Collective loan loss provision	Total 31.12.05	Total 31.12.04
Balance at the beginning of the year	2,641	161	2,802	3,775
Write-offs	(647)	(4)	(651)	(856)
Recoveries	63	0	63	59
Increase / (decrease) in credit loss allowance and provision	(298)	(76)	(374) ²	(241)
Disposal of subsidiaries	(61)	0	(61)	0
Foreign currency translation and other adjustments	(8)	5	(3)	65
Balance at the end of the year ¹	1,690	86	1,776	2,802

CHF million			31.12.05	31.12.04
As a reduction of Due from banks			45	256
As a reduction of Loans			1,611	2,291
As a reduction of other balance sheet positions			11	41
Subtotal			1,667	2,588
Included in Other liabilities related to provisions for contingent claims			109	214
Total allowances and provisions for credit losses			1,776	2,802

¹ Includes country provisions of CHF 65 million and CHF 183 million at 31 December 2005 and 31 December 2004, respectively. ² Credit loss expense of CHF 1 million relates to discontinued operations.

Note 9c Impaired Due from Banks and Loans

CHF million	31.12.05	31.12.04
Total gross impaired due from banks and loans ^{1, 2}	3,434	4,699
Allowance for impaired due from banks	32	239
Allowance for impaired loans	1,561	2,185
Total allowances for credit losses related to impaired due from banks and loans	1,593	2,424
Average total gross impaired due from banks and loans 3	4,089	5,858

¹ All impaired due from banks and loans have a specific allowance for credit losses. ² Interest income on impaired due from banks and loans was CHF 123 million for 2005, CHF 172 million for 2004 and CHF 279 million for 2003. 3 Average balances were calculated from quarterly data.

CHF million	31.12.05	31.12.04
Total gross impaired due from banks and loans	3,434	4,699
Estimated liquidation proceeds of collateral	(1,366)	(1,758)
Net impaired due from banks and loans	2,068	2,941
Total allowances for credit losses related to impaired due from banks and loans	1,593	2,424

Note 9d Non-Performing Due from Banks and Loans

A loan (included in Due from banks or Loans) is classified as non-performing: 1) when the payment of interest, principal or fees is overdue by more than 90 days and there is no firm evidence that they will be made good by later payments or the liquidation of collateral; 2) when insolvency proceedings have commenced; or 3) when obligations have been restructured on concessionary terms.

CHF million	31.12.05	31.12.04
Total gross non-performing due from banks and loans	2,363	3,555
Total allowances for credit losses related to non-performing due from banks and loans	1,393	2,183
Average total gross non-performing due from banks and loans ¹	3,082	4,197

¹ Average balances are calculated from quarterly data.


CHF million	31.12.05	31.12.04
Non-performing due from banks and loans at the beginning of the year	3,555	4,758
Net additions/(reductions)	(515)	(496)
Write-offs and disposals	(677)	(707)
Non-performing due from banks and loans at the end of the year	2,363	3,555

By type of exposure
CHF million	31.12.05	31.12.04
Banks	27	242
Loans
Mortgages	621	1,011
Other	1,715	2,302
Total loans	2,336	3,313
Total non-performing due from banks and loans	2,363	3,555

By geographical region (based on the location of borrower)
CHF million	31.12.05	31.12.04
Switzerland	2,106	2,772
Rest of Europe/Middle East/Africa	155	466
Americas	94	220
Asia Pacific	8	97
Total non-performing due from banks and loans	2,363	3,555