Positions and transactions SRLEV NV, SNS REAAL NV, REAAL NV, SNS Bank NV and sister companies
SNS REAAL NV REAAL NV SNS Bank NV Sister companies
In € millions 2013 2012 2013 2012 2013 2012 2013 2012 Positions Loans and advances 28 7 69 656 3,050 3,369 16 - Subordinated debts 95 95 - - - - Other debt 6 6 235 70 862 470 - 11 Transactions Mutation loans and advances 21 4 (587) (415) (319) 2,977 16 (210) Mutation subordinated debts - (11) - - - (198) Mutation other debt - 4 165 (423) 392 196 (11) (198) Income 14 15 3 23 112 82 - 1 Impairments 9 - - - - Other paid costs 70 63 - - 23 - - 3 Fiscal unity
SRLEV NV is a direct and 100% subsidiary of REAAL NV which is a direct and 100% subsidiary of SNS REAAL NV. Together with other group companies, they constitute a fiscal unity for corporate income tax and VAT purposes. All companies within this fiscal unity are jointly and severally liable for corporate income tax debts and VAT debts stemming from the relevant tax entities.
The corporation tax payable and receivable for the years up to and including 2010 is irrevocably determined. The amount of corporation tax recorded by the various subsidiaries pertaining to these years, has not yet been settled with the head of the fiscal unity. The same applies to the corporation tax payable or receivable for the years 2011 through 2013. Funding related intragroup transactions and positions
In the second half of 2013, a number of measures has been taken aimed at strengthening the capital position of parent REAAL NV and reducing the interdependency between SNS Bank NV and REAAL NV. The measures are in line with the commitment to phase out the financial interdependence between the bank and the insurer and have been agreed upon by the Dutch Central Bank. For more information about the re-allocation please refer to Chapter 21 Capital management. The measures with regard to REAAL NV include that SRLEV NV intends to provide a credit facility of € 200 million to REAAL NV. This facility was not legally formalised or used as of 31 December 2013, with the agreement signed in March 2014. This facility, if used, will be deducted in phases from the available capital of SRLEV NV. The phasing did not have an impact on the year-end 2013, and the expectation is that the facility will be used for 50% as of the end of 2014 and for 100% as of the end of 2015. The facility is temporary and will be repaid upon sale of the insurer.
SRLEV NV and REAAL Schadeverzekeringen NV conducted intercompany sales transactions in 2013 to better allocate the risk budget between the segments within the insurer. SRLEV NV realised a gain of € 17 million on the sale of bonds in the amount of € 262 million to REAAL Schadeverzekeringen NV. Additionally, SRLEV NV realised a gain of € 20 million on the sale of shares in the amount of € 201 million. REAAL Schadeverzekeringen NV realised a gain of € 15 million on the sale of obligations in the amount of € 472 million to SRLEV NV. The bond transactions were executed
through a brokerage firm (SNS Securities NV). The share transactions were privately transferred at market value. Mortgage related intragroup transactions and positions
SRLEV and SNS Bank have sold so called “spaarhypotheken” (savings mortgages) to their customers. A savings mortgage is a financial product which combines an insurance policy issued by SRLEV with a mortgage issued by SNS Bank. The proceeds from the insurance policy will ultimately be used to redeem the mortgages.
The savings parts of these insurance premiums received by SRLEV from the policyholders are in the name and at the risk of SRLEV deposited by SRLEV at SNS Bank against interest rates equal to the interest rates on the mortgages linked to these insurance policies.
SRLEV and SNS Bank entered into a cession/retrocession transaction. In this transaction SRLEV purchased and got transferred and will continue to purchase and to get transferred from SNS Bank a portion of the legal ownership of each savings mortgage equal to the amounts of the savings parts SRLEV deposited at SNS Bank including the interest added to it by SNS Bank. The amounts deposited at SNS Bank including the accrued interest thereon are equal to the purchase price of the legal ownership of the mortgages and these amounts are used to settle SRLEV’s relating payment obligation. To the extent that these amount increase due to new (monthly) saving parts deposited by SRLEV at SNS Bank and due to the interest added to it, that amount will be paid by SRLEV to SNS Bank and SNS Bank sells additional portions of legal ownership of saving mortgages and transfers ownership thereof to SRLEV. To the extent these amounts decrease, for example in case of the expiration of an insurance policy, SNS Bank repurchases and gets transferred the legal ownership of the mortgage at a predetermined purchase price equal to the amount of the decrease of the savings parts deposited including the interest added to it. The abovementioned cession/retrocession agreement does not apply to mortgages that are securitised. In addition to the aforementioned, SNS Bank is not allowed to enter into (securitisation) transactions with savings mortgages linked to an insurance policy of SRLEV’s without SRLEV’s prior permission. Because the sale price of the legal ownership corresponds to the repurchase price and the cession/retrocession agreement explicitly stipulates that the credit risk on the savings mortgages remains with SNS Bank, no transfer of economic ownerships takes place. Therefore the mortgages remain recognised on SNS Bank’s balance sheet. As of 31 December 2013, the legal ownership of € 1,586 million was transferred to SRLEV.
With respect to amounts deposited by SRLEV at SNS Bank relating to mortgages that are securitised by SNS Bank (31 December 2013: EUR 811 million; 31 December 2012: EUR 407 million), SRLEV received a loan from SNS Bank that was used by SRLEV to acquire sub participations in the securitised mortgages from the special purpose companies involved in the securitisation.
Other key transactions and positions between SRLEV and SNS Bank