34 Netting of financial assets and financial liabilities
In order to reduce the credit risks in relation to securities repurchasing transactions (repos) and derivatives, the LLB Group has concluded agreements with its counterparties, which permit netting. These include the Swiss Framework Agreement for Repo Transactions (multi-lateral version) and also ISDA master agreements.
The netting agreements serve to protect the LLB Group against losses arising in connection with possible insolvency proceedings and other situations. They are only employed if the counterparty cannot fulfil its commitments. Both securities (repos) and cash (derivatives) serve as collateral.
In its daily business, the LLB Group does not conduct balance sheet netting with the financial assets and financial liabilities of balance sheet transactions because the legal requirements for netting are not fulfilled.
The following table provides an overview of the financial assets and financial liabilities which are subject to an enforceable netting agreement or similar agreements.
Potential netting amounts | ||||
in CHF thousands | On the balance sheet recognised amounts | Financial instruments | Financial collaterals | Amounts after potential netting |
31.12.2023 | ||||
Financial assets subject to off-setting, enforceable netting agreements or similar arrangements | ||||
Reverse repurchase agreements | 0 | 0 | 0 | 0 |
Positive replacement values | 255’458 | 123’598 | 99’892 | 31’968 |
Total assets | 255’458 | 123’598 | 99’892 | 31’968 |
Financial liabilities subject to off-setting, enforceable netting agreements or similar arrangements | ||||
Repurchase agreements | 160’084 | 0 | 160’084 | 0 |
Negative replacement values | 147’106 | 123’598 | 15’154 | 8’354 |
Total liabilities | 307’190 | 123’598 | 175’238 | 8’354 |
31.12.2024 | ||||
Financial assets subject to off-setting, enforceable netting agreements or similar arrangements | ||||
Reverse repurchase agreements | 600’094 | 0 | 0 | 600’094 |
Positive replacement values | 137’831 | 101’942 | 13’144 | 22’745 |
Total assets | 737’925 | 101’942 | 13’144 | 622’839 |
Financial liabilities subject to off-setting, enforceable netting agreements or similar arrangements | ||||
Repurchase agreements | 0 | 0 | 0 | 0 |
Negative replacement values | 302’994 | 101’942 | 180’058 | 20’994 |
Total liabilities | 302’994 | 101’942 | 180’058 | 20’994 |
The LLB Group also conducts securities lending and borrowing transactions as an principal. To reduce the risks associated with such transactions, Global Master Securities Lending Agreements (GMSLA) are concluded with the counterparties. Both securities and cash funds are employed as collateral.