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04 Foreword
10 Notes to the consolidated financial statements of
Toyota Kreditbank GmbH for the 2014/2015 financial year
12 1. General information
12 2. Consolidated companies
12 3. Consolidation principles
12 4. Accounting policies, foreign currency translation
15 5. Notes to the balance sheet
23 6. Notes to the income statement
24 7. Other disclosures
28 Consolidated Cash Flow Statement for Toyota Kreditbank Group for the period 1 April 2014 to 31 March 2015
29 Consolidated Statement of Changes in Equity of Toyota Kreditbank GmbH as at 31 March 2015
30 Segment information
02 – 03
Annual Report of Toyota Kreditbank GmbH Group
Toyota is pleased to reveal the most profitable year in the Successes we can be proud of
company’s history worldwide. With record sales of 10.23
million units, Toyota is once again the world’s largest car manu- The satisfactory results of the Toyota Kreditbank GmbH Group
facturer. At the same time, Toyota has continued to increase for the 2015 financial year are something to be proud of. They
its lead in innovative power concepts, particularly hybrid have been achieved in spite of strong competition and difficult
technology, and has also introduced the Mirai, the first pro- economic conditions. While Germany continues to be a highly
duction fuel-cell vehicle. For the future, the company is also competitive market, the Group achieved the best result ever
re-entering motor sport. From 2017, Toyota will return to in spite of the crisis in Russia. In France, we were able to produce
rallying with new models after an absence of 16 years. our best figures in spite of the reduced promotion of hybrid
vehicles. In both the Spanish and Italian markets, we see a
Team spirit products bring success in new car business positive trend.
Intelligent co-operation with the importer, e.g. jointly Customer proximity and team spirit between bank and dealers
financed interest schemes and racy advertising strategies were rewarded by the retailer with excellent feedback. For the
for smaller cars like the Aygo "go fun yourself" campaign, not sixth time in succession, Toyota Kreditbank was awarded the
only enthused young people in particular but also ensured title of "Best Captive". The Bankenmonitor 2014 dealer survey
high market penetration rates. in Germany awarded the industry report overall winner top
marks and, for the ninth time in succession, first place as the
Service products, such as "Toyota Komplett" and "Toyota best car bank of the major imported brands and the highest
Service Leasing" provided considerable added value for the score of all manufacturers in a good third of all individual cri-
customer with their attractive conditions and additional teria. At this point, we would also like to thank all our partners
benefits. The icing on the cake was the special finance deal for their many years of successful and loyal co-operation. In our
with "3 years’ free servicing" for many models. other markets too, we are always far ahead in the eyes of our
end customers and dealers in terms of customer satisfaction.
Our business customers were enthusiastic about the "Busi-
ness Plus Weeks", during which, in addition to their dream Well positioned and ready to accelerate
cars, they were also provided with perfectly tailored finance
and service packages. This encouraged further growth in We can draw the following conclusion: "With strong pro-
the business sector. grammes on the part of the bank and importers, which will be
further extended in the future, with excellent capital funding
Side-by-side in the used car business and successful Basel-II-IRBA implementation, we at Toyota
Kreditbank GmbH, stand side-by-side with the retailer in
At Toyota Kreditbank we are consistently implementing our pole position for the next financial year."
successful "side-by-side with the retailer" formula. Continu-
ous dialogue, support in all situations and a joint approach
to the digital world, in which, for example, online finance will
be available as required, ensure that Toyota will not lose out
on any used car business in Germany. Retailer and bank
appear as a single unit and will continue to work together
more in the future.
04 – 05
Annual Report of Toyota Kreditbank GmbH Group
Total of assets 7,441,166,317.00 7,419,554,610.58 Total of equity and liabilities 7,441,166,317.00 7,419,554,610.58
Other obligations
06 – 07
Annual Report of Toyota Kreditbank GmbH Group
01/04/2014 01/04/2013
to 31/03/2015 to 31/03/2014
EUR EUR
14 Other taxes, to the extent not included in item (9) above 1,060,845.79 858,353.40
08 – 09
Annual Report of Toyota Kreditbank GmbH Group
12 1. General information
12 2. Consolidated companies
12 3. Consolidation principles
12 4. Accounting policies, foreign currency translation
15 5. Notes to the balance sheet
5.1 Cash reserve
5.2 Due from banks
5.3 Customer receivables
5.4 Bonds and other fixed interest bearing securities
5.5 Investments
5.6 Leasing assets
5.7 Intangible assets
5.8 Property, plant and equipment
5.9 Fixed assets movement schedule
5.10 Other assets
5.11 Assets denominated in a foreign currency
5.12 Prepaid expenses and deferred charges
5.13 Liabilities to banks
5.14 Liabilities to customers
5.15 Securitised liabilities
5.16 Other liabilities
5.17 Deferred income
5.18 Accruals and provisions
5.19 Subordinated liabilities
5.20 Foreign currency liabilities
23 6. Notes to the income statement
6.1 Other operating income
6.2 Depreciation and amortisation of intangible assets, tangible fixed assets and leasing assets
6.3 Other operating expenses
6.4 Extraordinary expenses
6.5 Income taxes
24 7. Other disclosures
7.1 Derivative transactions
7.2 Valuation units
7.3 Other financial obligations and disclosures reported below the balance sheet (liabilities)
7.4 Auditors’ fees
7.5 Related party transactions
7.6 Executive Management (Geschäftsleitung) of the Parent Company
7.7 Receivables from members of the Executive Management of the Parent Company
7.8 Number of employees
7.9 Name and place of business of the parent company, information about the consolidated financial statements
28 Consolidated Cash Flow Statement for Toyota Kreditbank Group for the period 1 April 2014 to 31 March 2015
29 Consolidated Statement of Changes in Equity of Toyota Kreditbank GmbH as at 31 March 2015
30 Segment information
10 – 11
Annual Report of Toyota Kreditbank GmbH Group
1. General disclosures For this reason, Koromo S.A. is included as a subsidiary in the taking account of cash flows achieved in the past and collat- Provisions and accruals are recognised for all identified risks
The consolidated financial statements for the period ended consolidated financial statements of Toyota Kreditbank GmbH eral held. Specific allowances are recognised on dealer finan- and for liabilities of uncertain timing and amount. Provisions
31 March 2015 of Toyota Kreditbank GmbH have been prepared in accordance with § 290 (2) no. 4 HGB. cing receivables on the basis of a case-by-case assessment. and accruals with a remaining term of more than one year are
in accordance with the regulations of the Handelsgesetzbuch General allowances are recognised on a contract-by-contract discounted to their present value using the average market
(German Commercial Code) and the requirements of the All subsidiaries are fully consolidated. basis, taking account of the likelihood of default and the ex- interest rate for the past seven years (corresponding to their
German Accounting Regulation for Banks and Financial Institu- pected loss. For the purposes of determining the probability remaining term) in accordance with § 253 (2) sentence 1 HGB.
tions (RechKredV), taking account of the specific requirements of default and the expected loss, the Group takes account, at
of the Limited Liability Company Law (GmbHG). The structure 3. Consolidation principles a minimum, of the parameters which it also uses to measure The pension provision for employees in Germany is calculated
corresponds to the formats required for banks as specified in The consolidated financial statements have been prepared uni- equity coverage of default risks using an internal ratings- for HGB purposes at 31 March 2015 using the projected-unit-
section 2 et seq. RechKredV. The applicable accounting stan- formly using the accounting policies of Toyota Kreditbank GmbH based approach (IRBA). credit method based on a discount rate of 4.37% (2013/2014:
dards of the German Financial Reporting Committee (DRSC) described below. Where necessary, the financial statements 4.83%), and assumed future salary and pension increases of
have also been taken into consideration. of the included companies have been adjusted to bring them Bonds and other fixed-interest-bearing securities are clas- 3% (2013/2014: 3%) and 2% (2013/2014: 2%) respectively.
into line with the classification regulations used by the parent sified as current assets and measured in accordance with the The 2005 mortality tables issued by Prof. Dr. Klaus Heubeck
company. strict lowest value principle pursuant to § 340e (1) sentence are used as the basis of calculation.
2. Group reporting entity 2 HGB in conjunction with § 253 (4) HGB.
Besides the parent company, Toyota Kreditbank GmbH, the The cost of investment in the consolidated subsidiaries, Toyota Toyota Kreditbank GmbH has set up Contractual Trust Arrange-
consolidated financial statements for the year ended 31 March Leasing GmbH, Toyota Bank Polska Spolka Akcyjna, Toyota Investments are stated at the lower of acquisition cost or fair ments whereby assets designated to fulfil pension obligations
2015 include the following German and foreign subsidiaries: Leasing Polska Sp. z o.o. and ZAO Toyota Bank has been con- value. have been separated from other assets and transferred to
solidated pursuant to Art. 66 (3) sentence 4 EGHG using the trustees. Assets which cannot be accessed by other creditors
― Toyota Leasing GmbH, Cologne German book value method in accordance with § 301 (1) sen- Leasing assets relate primarily to leased-out vehicles. Leasing and have been designated as being held exclusively to settle
― Toyota Bank Polska Spolka Akcýjna, Warsaw, Poland tence 2 no. 1 HGB (old version). assets are stated at acquisition cost less accumulated sched- pension obligations, are offset at the balance sheet date against
― Toyota Leasing Polska Sp. z o.o., Warsaw, Poland uled depreciation and impairment losses. The provision for the relevant obligations relating to fund-performance-based
― ZAO Toyota Bank, Moscow, Russia The equity capital of the three Dutch foundations is presented potential residual value risks has been offset against leased commitments in accordance with § 246 (2) sentence 2 HGB.
― Koromo S.A, Luxembourg in the consolidated financial statements within other liabilities assets on the assets side of the balance sheet. The surplus of assets over obligations is presented within the
due to the restricted liability function of these entities (and line item "Other assets". Pension obligations resulting from
Toyota Kreditbank GmbH holds 100% of the shares of Toyota not as minority interests). As a general rule, leasing assets are depreciated straight line the bank's previous arrangements and from guaranteed pen-
Leasing GmbH and Toyota Bank Polska Spolka Akcýjna. down to their agreed residual value over the term of the lease. sions are presented within the line item "Provisions and similar
Intragroup receivables, payables, income and expenses bet- Leasing assets of the Norwegian and Swedish branches are obligations". In these cases, there are no separate plan assets.
Toyota Bank Polska Spolka Akcyjna holds 100% of the shares ween consolidated entities are eliminated. depreciated systematically down to an agreed residual value
of Toyota Leasing Polska Sp. z o.o. over the duration of the contract with the monthly deprecia- The provision for pre-retirement part-time working ar-
Inter-company profits and losses, which would have had to be tion charge measured on the basis of the amount of capital rangements was measured at 31 March 2015 in the HGB
Toyota Kreditbank GmbH directly holds 99.9% of the shares eliminated in accordance with section 304 (1) HGB, did not tied up in the asset. Depending on their terms, the leasing balance sheet using the projected-unit-credit method and
of ZAO Toyota Bank, with the remainder held by Toyota occur in the year under review. contracts are treated either as operating leases or as finance a discount rate of 3.06% (31 March 2014: 3.68%).
Leasing GmbH. leases and the underlying assets are accordingly shown either
as leasing assets or as customer receivables. The financial statements of group subsidiaries denominated
Koromo S.A., Luxembourg, is a special purpose entity. The 4. Accounting policies, foreign currency translation in a foreign currency are converted into Euro at 31 March
shares of the special purpose entity are held by three Dutch Customer receivables resulting from instalment credit trans- Software at cost of purchase less scheduled straight-line 2015 in accordance with § 308a HGB. The translation differ-
foundations, each of which have an investment of TEUR 33 in actions and finance lease business are stated including inter- amortisation over three to five years is shown under intan- ence arising is reported within the group entity as the cur-
the company’s equity. Toyota Kreditbank GmbH has again est and charges for the remaining term. Other customer gible assets. rency translation difference on equity.
executed an ABS transaction with Koromo S.A., Luxembourg, receivables and receivables due from banks as well as other
during the 2014/2015 financial year and securitised some of assets are stated at their nominal amounts. Tangible fixed assets are stated at cost less scheduled depre- Foreign currency assets and liabilities are translated in accor-
its portfolio of instalment credit receivables. The ABS trans- ciation. Assets are all depreciated on a straight-line basis over dance with § 256a HGB (in conjunction with § 340h HGB).
action in place since the 2010/2011 financial year was closed Specific allowances are recognised to cover foreseeable risks their expected useful lives. The impairment loss previously The provisions contained in § 256a HGB are not applied if
out prior to the execution of the new ABS transaction. resulting from customer receivables. The general bad debt recorded on buildings in accordance with § 7 (5) no. 1 EStG was valuation units are created pursuant to § 254 HGB as hedges
allowance takes account of the general credit risk relating to retained in accordance with Art. 67 (4) sentence 1 EGHGB. for foreign currency items.
All of the bonds issued by the special purpose purchasing all business lines. Where deemed prudent and appropriate,
entity to refinance these transactions have been acquired by general allowances have also been recognised over and above Liabilities are stated at their expected settlement amount, The loss provisioning expense is reported in the income
Toyota Kreditbank GmbH. As a result of the sale of receivables the amounts allowed for tax purposes. including accrued interest. statement net of recoveries.
to the special purpose entity and the parallel acquisition of
bonds by the bank, the innate credit risk attached to the re- In the case of receivables from customers, specific allowances Deferred income comprises interest and fees arising primarily Deferred taxes are calculated on timing differences between
ceivables rests with Toyota Kreditbank GmbH. The receivable are recognised for contracts allocated to a default risk cat- from the instalment credit business. It is released to income the HGB carrying amounts and the tax bases of assets, liabil-
balances continue to be credit receivables for the bank in sub- egory or for which there has been a delay in payment in excess under the so-called "Rule-of-78 method". This item is also used ities and deferred items which are expected to reverse in
stance and are therefore retained on the balance sheet on the of a defined period. The level of the specific allowance is deter- to show special leasing payments from leasing business. By way subsequent years.
line "Customer receivables". mined on the basis of expected cash flows from each contract, of analogy with the leasing instalments, these are released on
a straight-line basis over the term of the contract.
12 – 13
Annual Report of Toyota Kreditbank GmbH Group
Deferred tax liabilities at 31 March 2015 result primarily from 5. Explanatory notes to the balance sheet
the different useful lives utilised to depreciate leasing assets
of the Toyota Kreditbank GmbH branch in Norway. Deferred 5.1 Cash reserve
tax assets arise at 31 March 2015 mainly for Germany, the The cash reserve includes foreign currency amounts of
branch in France and the subsidiary in Poland. The timing differ- TEUR 16,994 (31 March 2014: TEUR 25,030).
ences at 31 March 2015 relate mostly to the different carrying
amounts of leasing assets, provisions and write-downs. In addition to the balance with the Deutsche Bundesbank, cash
balances with central banks related to the National Bank of
Deferred taxes are measured on the basis of a combined income Poland amounting to TEUR 12,356 (31 March 2014:
tax rate which covers corporation tax, municipal trade tax and TEUR 17,105) and to the Central Bank of Russia amounting to
the solidarity surcharge. Deferred taxes relating to the foreign TEUR 4,638 (31 March 2014: TEUR 7,925).
branches of Toyota Kreditbank GmbH and to the foreign sub-
sidiaries are measured using the tax rates applicable in the re- Cash on hand amounting to TEUR 45 (31 March 2014: TEUR 20)
levant tax jurisdiction. and balances with central banks amounting to TEUR 33,881
(31 March 2014: TEUR 39,711) correspond to cash funds re-
Deferred tax liabilities were set off against deferred tax assets ported in the consolidated cash flow statement.
at an overall group level. A surplus of deferred tax assets over
deferred tax liabilities is not recognised on the basis of the
accounting option available in § 274 (1) sentence 2 HGB. 5.2 Receivables from banks
Receivables from banks have the following remaining terms:
The market values of derivative financial instruments have
been determined using IT-based valuation methods (discounted
Remaining term of 31/03/2015 31/03/2014
cash flow method). Fair values are determined by the parent
company, Toyota Financial Services Corporation. Derivative up to three months TEUR 104,077 40,030
financial instruments are not recognised since they are always more than three months and up to one year TEUR 20,006 20,029
used as hedging instruments in valuation units. Only the ac- more than one year and up to five years TEUR 9,008 9,000
crued interest is shown in the balance sheet.
In compliance with IDW RS BFA 3, for the purposes of calcula- Receivables from banks include foreign currency amounts
ting a possible net obligation on transactions with interest- totalling TEUR 114,567 (31 March 2014: TEUR 47,668).
related financial instruments allocated to the banking book,
an overall assessment is made of all interest-bearing assets
and liabilities (including derivatives), also taking account of 5.3 Receivables from customers
all risk-related and administrative costs expected to be in- The caption comprises instalment credits from the financing
curred until the transactions have been processed in full. This business, lease receivables, dealer financing credits and residual-
calculation takes account of specific refinancing opportu- value receivables payable on a daily basis. Specific and general
nities available in each relevant accounting period. There was allowances including a provision to cover doubtful receivables
no net obligation at the end of the reporting period, as a and the general credit risk have been deducted from the receiv-
result of which it was not necessary to recognise a provision ables.
at that date.
The figure stated for receivables from customers includes an
Interest rate swaps are used to manage the general interest amount of TEUR 37,473 (31 March 2014: TEUR 27,845) for
rate risk in the banking book. Interest rate risks are monitored receivables due from affiliated companies.
at a banking book level and risks quantified using a value-at
risk (VaR) model. The VaR model is used to demonstrate that Analysed by remaining terms, receivables from customers
the interest rate derivatives have a risk-reducing impact. are broken down as follows:
Customer receivables include foreign currency amounts of TEUR 2,243,254 (31 March 2014: TEUR 2,418,700).
14 – 15
Annual Report of Toyota Kreditbank GmbH Group
5.4 Bonds and other fixed interest bearing securities 5.8 Tangible assets
The figures shown under buildings comprise the purchase
Nominal amount values less scheduled depreciation of the business premises
Issuer Term begins (Million) Interest rate (%) Maturity of Toyota Kreditbank GmbH as well as a production facility
PLN 220.0 which is used by an affiliated company of the TKG Group.
Narodowy Bank Polski (Polish National Bank) 27/03/2015 1.50 03/04/2015
(EUR 53.9) Buildings used for Toyota Kreditbank GmbH’s own business
PLN 30 6-months have a carrying amount of TEUR 1,342 (31 March 2014: TEUR
Polish Republic 18/04/2014 25/01/2017
(EUR 7.3) WIBOR + 2.80 1,654). The corresponding land is leased on a long-term
PLN 30 6-months basis from Toyota Deutschland GmbH.
Polish Republic 18/04/2014 25/01/2017
(EUR 7.3) WIBOR + 2.80
5.5 Investments
Toyota Kreditbank GmbH has a 0.01% shareholding in
Liquiditäts-Konsortialbank GmbH i. L., Frankfurt am Main.
16 – 17
Annual Report of Toyota Kreditbank GmbH Group
01/04/2014 Currency Additions Disposals 31/03/2015 01/04/2014 Currency Additions Disposals 31/03/2015 31/03/2014 31/03/2015
translation translation
Participations 19 0 0 0 19 0 0 0 0 0 19 19
Leasing assets 1,309,440 -10,298 446,231 496,168 1,249,205 400,399 -2,994 205,995 251,450 351,950 909,041 897,255
Intangible assets 38,163 -952 3,007 277 39,941 31,566 -531 2,421 132 33,324 6,597 6,617
Other operational and 30,191 -1,810 7,655 6,335 29,701 18,122 -1,373 3,174 1,378 18,545 12,069 11,156
office equipment
Tangible assets 62,817 -1,810 7,661 6,335 62,333 46,504 -1,373 3,994 1,378 47,747 16,313 14,586
Total 1,410,439 -13,060 456,899 502,780 1,351,498 478,469 -4,898 212,410 252,960 433,021 931,970 918,477
18 – 19
Annual Report of Toyota Kreditbank GmbH Group
5.12 Prepaid expenses and deferred charges 5.15 Securitised liabilities TEUR 4,337 (31 March 2014: TEUR 3,881). Contributions set
This line item includes prepaid general administrative expenses As at the end of the previous years, securitised liabilities aside for investments in designated plan assets amounting
amounting to TEUR 6,128 (31 March 2014: TEUR 5,050), pre- reported at 31 March 2014 relate to issued commercial paper. to TEUR 128 (31 March 2014: TEUR 126) – which are not due
paid expenses for service work to be performed in conjunction until January of the following year – are reported at the end of
with full service lease business amounting to TEUR 5,000 Securitised liabilities include foreign currency amounts the reporting period in the line item "Provisions for pensions
(31 March 2014: TEUR 5,341) and guarantee fees of TEUR 206 equivalent to TEUR 387,151 (31 March 2014: TEUR 396,629) and similar obligations".
(31 March 2014: TEUR 738) paid to raise cash funds. Expenses and include liabilities denominated in British pounds equiva-
for service work to be performed relates primarily to the Spanish lent to TEUR 275,659 (31 March 2014: TEUR 323,396) and in The amount by which pension plan assets exceed obligations
branch of Toyota Kreditbank GmbH and the Polish subsidiary US Dollars equivalent to TEUR 111,492 (TEUR 73,233). All is presented in the balance sheet line "Surplus of plan assets
company. This expenditure is spread over the term of the rele- of these securitised liabilities fall due for payment during the over liabilities". The designated plan assets had an acquisition
vant leases. financial year ending 31 March 2016. cost of TEUR 4,552 (31 March 2014: TEUR 3,965).
5.14 Liabilities to customers In total, other liabilities include foreign currency liabilities
Liabilities to customers with fixed terms or notice periods are amounting to TEUR 24,482 (31 March 2014: TEUR 31,710).
analysed, by remaining terms, as follows:
Other liabilities at 31 March 2015 include payables to the
31/03/2015 31/03/2014
shareholder of the parent company, Toyota Financial Services
up to three months TEUR 388,183 304,585 Corporation, amounting to TEUR 311 (31 March 2014:
more than three months and up to one year TEUR 684,056 608,898 TEUR 311).
more than one year and up to five years TEUR 1,300,861 1,477,486
more than five years TEUR 5,126 0
5.17 Deferred income
The liabilities relate mainly to payables to affiliated The balance is made up primarily of interest and fees in con-
companies amounting to TEUR 2,260,138 (31 March 2014: nection with the instalment credit business and attributable
TEUR 1,819,182). to future periods, as well as upfront payments arising in con-
nection with lease contracts. This item also includes discounts
Liabilities to customers include foreign currency liabilities of of TEUR 24 (31 March 2014: TEUR 50).
TEUR 1,664,334 (31 March 2014: TEUR 1,603,086).
20 – 21
Annual Report of Toyota Kreditbank GmbH Group
22 – 23
Annual Report of Toyota Kreditbank GmbH Group
A Total Return Swap is in place to cover the currency and country Underlying
risk for Russia. This swap relates to the issue of subordinated Amounts in TEUR transactions Hedged amount Maximum term
loan of RUB 350 million by Toyota Motor Finance (Netherlands) Interest rate/currency risks 253,121 253,121 2017
B.V., Amsterdam, Netherlands to the bank’s Russian subsidiary. Currency risks 387,151 387,151 2015
An appropriate provision has been recognised to cover the Total amount 640,272 640,272
negative fair value of the instrument.
Derivative financial instruments comprised the following: 7.3 Other financial obligations and disclosures reported
below the balance sheet (liabilities)
Financial commitments not recognised on the balance sheet
or reported below the balance sheet as contingent liabilities
Nominal Nominal Fair values Fair values Fair values Fair values
amounts amounts positive positive negative negative relate to the commitment to contribute additional capital of
in TEUR 31/03/2014 31/03/2015 31/03/2014 31/03/2015 31/03/2014 31/03/2015 TEUR 100 in conjunction with the investment in Liquiditäts-
Konsortialbank GmbH i. L., Frankfurt am Main.
Interest rate risks 277,850 87,850 0 0 7,642 3,834
― interest swaps
Interest rate/currency risks 277,868 252,748 1,112 40,856 22,856 0 Obligations arising from lease, rental, leasing and maintenance
― interest rate/currency swaps agreements at the end of the reporting periods are as follows:
Currency risks 396,929 387,621 1,554 34,167 2,007 655
― forward currency contracts
Total return swap 10,150 10,150 0 0 3,536 5,034 Due by 31 March 2016 TEUR 7,604
Derivative instruments - total 962,797 738,369 2,666 75,023 36,041 9,523 Due between 1 April 2016 and 31 March 2020 TEUR 9,875
Due after 31 March 2020 TEUR 1,878
Total TEUR 19,357
The above figures are "dirty prices" which represent the sum
of "clean price" and accrued interest. of which due to affiliated companies TEUR 4,294
24 – 25
Annual Report of Toyota Kreditbank GmbH Group
Irrevocable credit commitments reported below the balance 7.6 Executive Management (Geschäftsleitung) of the Parent Company
sheet mainly relate to commitments for loans to dealers and The following persons acted as directors during the year under review:
retail customers and are subject to the normal credit monitor-
ing processes that apply to all credit exposures. An increased — Christian Ruben, Diplom-Kaufmann
credit loss risk has not been identified. Claims could arise at — Ivo Ljubica, Diplom-Ökonom
any time.
Mr. Ruben and Mr. Ljubica are directors (Geschäftsführer) of both Toyota Kreditbank GmbH and Toyota Leasing GmbH.
7.4 Auditors’ fees Remuneration paid to board members during the financial year under review totalled TEUR 772.
KPMG AG Wirtschaftsprüfungsgesellschaft is the external
auditor of Toyota Kreditbank GmbH. Fees charged by KPMG AG Pension provisions in respect of former members of management amounted to TEUR 3,914. Pension payments in the financial
Wirtschaftsprüfungsgesellschaft and by non-German entities year under review amounted to TEUR 268.
of the KPMG network for the financial year were as follows:
FY 2014/15 FY 2013/14 7.7 Receivables from members of the Executive Management of the Parent Company
Year end audits TEUR 744 831 Receivables from Board Members at the end of the reporting period totalled TEUR 0.
Other attestation services TEUR 0 135
Tax advisory services TEUR 216 405
Other services TEUR 197 303 7.8 Number of employees
Total TEUR 1,157 1,674 The average number of persons employed during the year under review was 705 (2013/2014: 704), comprising 250
(2013/2014: 250) in Germany, 81 (2013/2014: 83) in France, 27 (2013/2014: 26) in Sweden, 28 (2013/2014: 29) in Norway,
47 (2013/2014: 46) in Spain, 12 (2013/2014: 17) in Italy, 153 (2013/2014: 146) in Russia and 107 (2013/2014: 108) in Poland.
7.5 Related party transactions
Related parties are defined as persons or entities that can be
influenced by the reporting entity or who can exercise influence 7.9 Name and place of business of the parent company, information about the consolidated financial statements
over the Group. Persons or entities that are already included Immediate parent company:
as consolidated companies in the consolidated financial state-
ments of Toyota Kreditbank GmbH are not disclosed below. Toyota Financial Services Corporation
Nagoya Lucent Tower 15F, 6-1, Ushijima-cho, Nishi-ku, Nagoya 451-6015, Japan
Toyota Financial Services Corporation, Nagoya, Japan, is the
sole shareholder of Toyota Kreditbank GmbH. Business relations Ultimate parent company:
between the companies are conducted on an arms' length basis.
Toyota Financial Services Corporation also guarantees the Toyota Motor Corporation
Group’s European commercial paper programme. 1, Toyota-cho, Toyota City, Aichi Prefecture 441-8571, Japan
Christian Ruben Ivo Ljubica
26 – 27
Annual Report of Toyota Kreditbank GmbH Group
Consolidated Cash Flow Statement for Toyota Kreditbank Group for the period Breakdown of cash funds at the end of the period:
1 April 2014 to 31 March 2015
31/03/2015 31/03/2014
The cash flow statement shows the changes in cash funds for the group of Toyota Kreditbank GmbH. The cash flow statement
TEUR TEUR
consists of the cash flows from operating, investing and financing activities. The sum of these cash flows is in line with the
change of the cash funds. The cash flow statement for the group of Toyota Kreditbank GmbH has been drawn up in accordance Cash 45 20
with German Accounting Standard No. 2 and 2-10 of the German Financial Reporting Standards Board. Deposits with central banks 33,881 39,711
Liquid funds at the end oft he period 33,926 39,731
2014/15 2013/14
Consolidated cash flow statement of Toyota Kreditbank Group TEUR TEUR
Consolidated Statement of Changes in Equity of Toyota Kreditbank GmbH as at 31 March 2015
1 Net income for the year 83,322 79,983 Breakdown of consolidated equity:
Non-cash items on reconciling items to the cash flow from operating activities: 0
2 Depreciation, amortisation, write-downs/allowances and reversals of write-downs/ 249,096 263,260 Earnings Group net
allowances in respect of receivables, tangibles and financial assets Capital Revenue brought income for Translation
TEUR Share capital surplus reserves forward the year differences Equity
3 Increase/decrease in provisions 4,934 2,251
4 Other non-cash income/expenses 0 0 As at 31 March 2013 30,000 300,201 304,523 0 109,731 1,244 745,699
5 Gains/losses on the sale of financial and tangible assets 5,326 -6,812 Addition from net 0 0 0 0 79,983 0 79,983
6 Other adjustments (net) -206,095 -180,960 income
7 Sub-total 136,583 157,722 Profit retained 2014 0 0 83,131 0 -83,131 0 0
Change in assets and liabilities relating to operating
activities: Dividends paid 0 0 0 0 -26,600 0 -26,600
8 Receivables from Proceeds from capital 0 45,642 0 0 0 0 45,642
a — banks -67,867 -33,978 injections
b — customers 49,658 -135,815 Translation differences 0 0 -684 0 0 -27,935 -28,619
9 Securities (not classified as fixed assets) -35,561 10,586 As at 31 March 2014 30,000 345,843 386,970 0 79,983 -26,691 816,105
10 Other assets relating to operating activities -23,861 6,167 Addition from net 0 0 0 0 63,362 0 63,362
11 Liabilities due to income
a — banks 93,354 20,342 Profit retained 2015 0 0 47,453 0 -47,453 0 0
b — customers -39,137 60,510
12 Securitised debt 33,082 -30,430 Dividends paid 0 0 0 0 -32,530 0 -32,530
13 Other liabilities relating to operating activities -39,171 -30,857 Proceeds from capital 0 0 0 0 0 0 0
14 Interest and dividends received 352,653 367,564 injections
15 Interest paid -122,839 -135,234 Translation differences 0 0 809 0 0 -35,711 -34,902
16 Extrardinary payments -19,960
17 Income tax paid -23,679 -51,685 As at 31 March 2015 30,000 345,843 435,232 0 63,362 -62,402 812,035
18 Cash flow from operating activities 293,255 204,892
19 Cash received from disposals of
a — tangible fixed assets -1,124 4,598
b — leasing assets 245,584 303,957 Toyota Kreditbank GmbH’s capital is wholly owned by Toyota Financial Services Corporation (Japan).
c — intangible fixed assets 145 0
20 Cash paid for investments in 0 The Board of Directors of the Toyota Kreditbank GmbH will propose to the shareholders’ meeting that a dividend of TEUR 28,000
a — financial assets 0 0 from the net profit of Toyota Kreditbank GmbH (reduced by withholding tax payable in Germany) will be transferred to the
b — tangible fixed assets -7,661 -8,641 shareholder Toyota Financial Services Corporation (Japan).
c — leasing assets -446,231 -422,768
d — intangible fixed assets -3,007 -3,179
21 Cash flow from investing activities -212,294 -126,033
22 Cash received from equity provided 0 45,642
23 Dividends to Shareholder -32,530 -26,600
24 Movement from subordinated loans -20,000 -60,000
25 Cash flow from financing activities -52,530 -40,958
26 Cash relevant change in cash funds (Total calculated on the basis of 17,20,24) 28,431 37,901
27 Change in cash funds due to exchange rates, consolidation and valuation -34,236 -22,003
28 Cash funds at the beginning of the period 39,731 23,833
29 Cash funds at the end of the period 33,926 39,731
28 – 29
Annual Report of Toyota Kreditbank GmbH Group
Segment information for the Toyota Kreditbank GmbH Group for the period
1 April 2014 to 31 March 2015 (1/2)
The Toyota Kreditbank Group operates in Germany and, via its branches, in France, Sweden, Norway, Spain and Italy. The Group
also has subsidiaries in Poland and Russia. In the year under review, the Group was engaged in the instalment credit and leasing
business as well as in the financing of dealers’ car inventories, and provided loans for car dealers’ real estate and working capital.
Amounts are allocated to segments on the basis of the location of the registered office of the relevant branches and Group entities.
Due to the close connection of the business activities with TKG head office, the special purpose entity Koromo S.A., Luxembourg,
is allocated to the segment "Germany". All amounts relating to the balance sheet and income statements are presented in TEUR.
Interest income 90,671 101,033 33,137 33,421 12,390 12,617 27,850 28,072 36,487 34,980 3,989 3,864 22,016 22,810
comprising:
― Income from retail financing 75,302 81,051 28,281 28,344 11,546 11,464 27,145 27,319 34,945 33,522 0 0 6,782 7,853
14,858 16,821 4,789 5,027 842 1,151 680 706 878 860 3,555 3,271 3,171 3,951
― Income from dealer financing
Interest expense 23,169 35,683 7,060 7,703 4,464 6,928 12,212 12,022 7,024 8,596 848 649 8,693 9,507
Net interest result 67,502 65,350 26,077 25,718 7,926 5,689 15,638 16,050 29,463 26,384 3,141 3,215 13,323 13,303
Risk provisioning expense -13,982 -2,567 -3,940 -6,512 -255 -366 -723 -1,462 -6,242 -7,303 -1,596 -1,545 -828 -2,148
Net commission result -2,677 -4,365 555 513 -2,693 -2,781 1,781 479 -12,939 -6,333 2,119 1,700 -367 14
Profit/loss leasing business 28,955 33,937 22,118 31,044 7,399 7,833 879 1,100 1,902 1,961 0 0 -355 -230
Other operating income/
-2,844 -1,496 -410 -172 -522 -421 -760 -304 264 -575 -342 -506 -553 -185
expenses, net
Administrative expenses -46,437 -45,003 -15,312 -15,323 -5,685 -5,014 -5,848 -5,685 -8,982 -8,197 -2,928 -2,762 -9,947 -9,828
Profit/loss from 30,517 45,856 29,088 35,268 6,170 4,940 10,967 10,178 3,466 5,937 394 102 1,273 926
ordinary activities
Extraordinary Expenses -19,960 0 0 0 0 0 0 0 0 0 0 0 0 0
Taxes -1,303 -18,898 -8,305 -13,840 -8 -13 0 -5 -5,897 -4,529 -598 55 -3,266 -1,346
Net income for the year 9,254 26,958 20,783 21,428 6,162 4,927 10,967 10,173 -2,431 1,408 -204 157 -1,993 -420
Ratio of expenses/income 51.07% 48.17% 31.68% 26.83% 46.94% 48.59% 33.34% 32.81% 48.06% 38.24% 59.54% 62.64% 82.56% 76.17%
before taxes
Liabilities due to customers 504 80,323 514,516 564,618 402,923 398,558 572,551 546,708 261,288 231,750 100 100 312,325 228,899
30 – 31
Annual Report of Toyota Kreditbank GmbH Group
Segment information for the Toyota Kreditbank GmbH Group for the period
1 April 2014 to 31 March 2015 (2/2)
32 – 33
Annual Report of Toyota Kreditbank GmbH Group
34 – 35
Annual Report of Toyota Kreditbank GmbH Group
A. General Information on the Toyota Kreditbank Group Toyota Kreditbank is a classic "captive bank", whose principal The Toyota Kreditbank Group provides financing to Toyota
activity is the financing of Toyota and Lexus brand vehicles and Lexus dealerships for new, showroom and used cars. It
The Toyota Kreditbank Group offers – via its manufacturing manufactured by the Toyota Group. In the case of new cars, also provides investment loans for the purchase or moderni-
based companies – financial services aimed at supporting car financing is provided primarily for Toyota and Lexus brand sation of company real estate and working capital loans.
sales. A wide range of financing products is available to private vehicles. In the case of used cars, other brands are also fi-
and commercial customers on the one hand and to Toyota and nanced. The range of services on offer is only comparable to As well as servicing the German market, financial products are
Lexus dealers on the other. that of a "universal" bank to a limited extent, since the busi- also provided in other European countries where the Toyota
ness model is aimed almost entirely at financing the relevant Kreditbank Group has branches and subsidiaries. The Toyota
Toyota Financial Services Corporation, based in Japan, is the brands. For this reason, performance is dependent to a large Kreditbank Group has branches in France, Sweden, Norway,
parent company of the sub-group and owns all of the shares extent on the volume of cars sold within the operating terri- Spain and Italy as well as subsidiaries in Poland and Russia.
of the entities within the Toyota Kreditbank Group. The ulti- tory. The financing products offered by the Toyota Kreditbank
mate parent company is the Japanese car manufacturer, Toyota Group for Toyota and Lexus vehicles have to compete with In terms of consumer credit business with private and busi-
Motor Corporation, which, in turn, owns 100% of the shares those offered by other banks and German savings banks ness customers, the branches and subsidiaries – with the
of Toyota Financial Services Corporation. The companies con- (Sparkassen). exception of the branch in Italy – offer financing products
cerned also work very closely from a marketing perspective. comparable to those offered in Germany. The product range
The range of financing products on offer in Germany com- also covers the sale of leasing products and the arranging of
prises traditional loan contracts, final instalment financing insurance policies. In addition, the Toyota and Lexus dealers
Toyota Motor Corporation (TMC) arrangements and the sale of leasing products. This range of can apply for investment and working capital loans and are
financing products is supplemented by so-called "package" able to finance new, showroom and used cars via the Group.
100% products offered in conjunction with Toyota Insurance Service The branch in Italy only provides financing to dealerships.
and Aioi Nissay Dowa Life Insurance of Europe AG, Ismaning,
Toyota Financial Services Corporation (TFSC) and with Toyota Motor Europe SA/ NV Brussels, Belgium. In The key performance indicators used by the Toyota Kredit-
addition to a reasonable and fixed financing amount, these bank Group are based on regulatory requirements on one
all-inclusive products include access to TOYOTA service facili- hand and the interests of the shareholder on the other.
ties, a follow-on and mobility guarantee and credit insurance.
Americas Europe Africa Asia Pacific The customer can also opt to add car insurance (with rebate
protection) to the package.
Management system
< 1%
Toyota Leasing GmbH ZAO Toyota Bank Russia Toyota Bank Polska
36 – 37
Annual Report of Toyota Kreditbank GmbH Group
38 – 39
Annual Report of Toyota Kreditbank GmbH Group
Currency developments The Russian Rouble had already depreciated significantly during
Under the prevailing macroeconomic and political conditions, the calendar year 2013 as a reaction to investors' general loss
some exchange rates remained highly volatile during the year of confidence in the world's emerging economies. This trend
under review. The US Dollar/Euro exchange rate fluctuated continued throughout the year under review, culminating in
over the twelve month period between 1.05 and 1.39. particularly hefty loss in value during the fourth quarter 2014,
At the end of the reporting period, the Euro, at almost 1.07, was reflected in fluctuations in the EUR/RUB exchange rate of
stronger than at the beginning of the financial year. The Japanese between 49.92 and 91.52. By March 31 2015, the exchange
Yen gained 10.4% in value against the Euro over the twelve rate had recovered somewhat to 62.44. Lower oil prices com-
month period, whereas the Russian Rouble fell by 21.9% against bined with international economic sanctions against Russia
the Euro during the same period. exposed the country's underlying structural weaknesses and
brought about a further loss of confidence in Russia on the part
Exchange rates of potential investors. These negative developments all contri-
buted to the substantial decreases in the US Dollar and Euro
Currency 31/03/2015 31/03/2014
exchange rates described above.
Euro 1.0000 1.0000
US Dollar 1.0759 1.3788 The situation in the money and capital markets was also favour-
British Pound 0.7273 0.8282 ably influenced by the global economic recovery. The expan-
Japanese Yen 128.9500 142.4200 sionary monetary measures applied by the ECB were primarily
Norwegian Krone 8.7035 8.2550 aimed at combating deflationary worries and encouraging
Swedish Krone 9.2901 8.9483 banks to lend more. As a result of the quantitative easing
Russian Rouble 62.4400 48.7800
measures adopted, the European common currency lost in
Polish Zloty 4.0854 4.1719
value against various currencies, including the US Dollar, the
Source: Bloomberg British pound and the Japanese Yen.
40 – 41
Annual Report of Toyota Kreditbank GmbH Group
With worldwide sales of 10.23 million vehicles in the 2014 2. Course of business
calendar year, Toyota remained the world's largest automobile Despite that fact that economic conditions and developments
manufacturer. For the first time ever, more than ten million in the automobile sector were generally positive, the financial
Toyota vehicles were sold in a single calendar year. year 2014/2015 was nevertheless a challenging one for the
Toyota Kreditbank Group. In the wake of two rulings of the
New car registrations Toyota Europe German Federal Court of Justice (BGH) concerning the appro-
priateness and time limit for charging administration fees,
Toyota Kreditbank GmbH – like many other banks – became
CY 2014 CY 2013 CY 2012 CY 2011
exposed to a surge of reimbursement claims from customers in
Europe 888,015 847,540 837,969 822,386 Germany. The ensuing repayments had a negative impact on
The bank’s operating territory 514,692 486,901 411,087 398,743 the bank's earnings for the year.
Toyota was able to continue the positive trend in Europe in Key performance figures
terms of new registrations. Sales within the Toyota Kreditbank
Group's operating territory also increased on a calendar year
Disclosures in EUR million FY 2014/15 FY 2013/14
basis, rising year-on-year by 5.7% to 514,692 units, a slightly
better performance than the increase of the European market Credit disbursed to customers (before allowances) 6,186.6 6,299.0
as a whole. Thereof:
— retail customers 4,691.7 4,553.8
Toyota and Lexus models in Europe — contract dealerships 1,494.9 1,745.2
Leasing assets 897.3 909.0
Sales volume Sales volume Sales volume
CY 2014 CY 2013 CY 2012
42 – 43
Annual Report of Toyota Kreditbank GmbH Group
44 – 45
Annual Report of Toyota Kreditbank GmbH Group
3. Analysis of net assets, financial position and results of General administrative expenses
operations The following table shows the breakdown of general
administrative expenses.
a. Earnings performance
Group net income for the year fell from EUR 80.0 million to
EUR 63.4 million. The decrease was primarily attributable to the FY 2014/15 FY 2013/14 Change Change
reimbursement of administration fees in Germany. The Group in EUR million in EUR million in EUR million in %
was unable to achieve its forecast of maintaining overall earn- Personnel expense 52.4 52.9 -0.5 -0.9
ings at the previous year's level. This was primarily due to the Other expenses 62.9 63.5 -0.6 -0.9
fact that Toyota Kreditbank GmbH (as well as other banks) was Total 115.3 116.4 -1.1 -0.9
required to settle a massive volume of reimbursement claims
from customers in the wake of two BGH rulings concerning the
appropriateness and time limit for charging administration fees.
Administrative expenses were reduced by EUR 1.1 million
The profit generated by the Group’s branches amounted to thanks to a range of cost saving measures.
EUR 35.3 million (2013/2014: EUR 38.0 million).
Other operating income and expense
Overall, the Toyota Kreditbank Group reports satisfactory earn- The net positive amount of other operating income and ex-
ings for the financial year 2014/2015. The anticipated increase pense was EUR 265.0 million (2013/2014: EUR 300,8 million).
in new registrations throughout the bank's operating territory The decrease was mainly attributable to the reduced volume
as a whole, combined with low market interest rates, had a of leasing income in Germany.
positive impact on earnings, whereas the reimbursement of
administration fees by the parent company had a significant Amortisation and depreciation
negative impact. Amortisation and depreciation on intangible assets, property
plant and equipment, and leasing assets decreased to
EUR 210.9 million (2013/2014: EUR 230.1 million), mainly
Earnings reflecting the lower volume of leasing assets carried in
Germany, Spain and Norway.
FY 2014/15 FY 2013/14 Change Change
in EUR million in EUR million in EUR million in % Risk provisioning expense
Net interest income 226.2 224.5 1.7 0.8
The net expense for write-offs and allowances on receivables
Income from investments 0.0 0.1 -0.1 -100.0 and some marketable securities together with additions to
Net commission income -19.3 -21.5 2.2 -10.2 accruals and provisions relating to lending business amounted
Other operating income/expense (net) 265.0 300.8 -35.8 -11.9 to EUR 37.0 million (2013/2014: EUR 33.2 million).
Administrative expense -115.3 -116.4 1.1 -0.9
Amortisation and depreciation -210.9 -230.1 19.2 -8.3 Tax expense
Risk provisioning expense -37.0 -33.2 -3.8 11.4 The expense for income taxes for the financial year went down
Profit before tax 108.7 124.2 -15.5 -12.5 by EUR 19.2 million to EUR 24.2 million. Most of the tax charge
Extraordinary expense -20.0 0 -20.0 relates to the branches. The effective tax rate is 27.7%, com-
Tax expense -25.3 -44.2 18.9 -42.8 pared to 35.6% one year earlier.
Net income for the year 63.4 80.0 -16.6 -20.8
Please refer to the note on segment information for a regional
breakdown of the Group's net income for the year.
Net interest result Net commission income
The net interest result improved by EUR 1.7 million to The Group recorded a net commission expense of EUR 19.3
EUR 226.2 million, mainly reflecting the continued low level million in the year under report (2013/2014: net commission
of market interest rates. Within this environment, the Toyota expense of EUR 21.5 million). Commission income rose to
Kreditbank Group was able to obtain even better financing EUR 54.2 million (2013/2014: EUR 51.6 million), Commission
conditions from banks and affiliates, with the consequence expense amounted to EUR 73.5 million (2013/2014: EUR 73,2
that interest expense fell by EUR 16.7 million to EUR 126.3 million). The increase in commission expense was mainly
million. attributable to higher disbursements to contract dealerships
outside Germany (in particular Spain) as a result of the higher
volume of instalment credit and leasing business.
46 – 47
Annual Report of Toyota Kreditbank GmbH Group
Liabilities
The average number of contracts in Germany continued to
31/03/2015 31/03/2014 Change Change decrease, mainly reflecting the lower volume of new vehicles
in EUR million in EUR million in EUR million in % sold by the importer.
— to banks 2,714.7 2,621.4 93.3 3.6 FY 2014/15 FY 2013/14
— to customers 2,440.7 2,479.9 -39.2 -1.6
— securitised liabilities 548.1 515.1 33.0 6.4 Risk appetite 90.0% 73.8%
Total 5,703.5 5,616.4 87.1 1.6 Overall capital ratio 19.8% 18.2%
48 – 49
Annual Report of Toyota Kreditbank GmbH Group
Kaizen activities Opportunities for further profitable growth are identified and
included in the decision making process as part of the overall
FY 2014/15 FY 2013/14
strategic process as well as the medium and long-term business
Germany 34 23 planning process. Business opportunities are not reported as
Spain 14 19 part of the risk management system. Instead, they are recorded
Norway 13 16 in conjunction with strategic and medium-term forecasts and
France 2 11 monitored during the year as part of the periodic reporting
Italy 25 7 process.
Sweden 43 56
Poland 74 58
A stronger economic upturn may boost group-brand sales,
Russia 24 24
thus, in turn, generating additional growth for the Toyota
Total 229 214
Kreditbank Group. Assuming a constant penetration rate, any
increase in new registrations results in an upward trend for
new business.
C. Events after the end of the reporting period
No significant events have occurred after the end of the re- Further opportunities arise for the Toyota Kreditbank Group
porting period which have a significant impact on the bank's through the creation of new products for end-user customers
net assets, financial and earnings position. and by moving into growth segments in which customers'
needs are focused on even more closely. This approach also
helps to improve the penetration rate in the long-term.
D. Opportunities and Risks Report
The Toyota Kreditbank Group has applied a stable, strategic In relation to credit business risks, an opportunity may also
business model for years. Its success is attributable firstly to present itself if actual losses incurred within the bank's core
its conservative risk profile combined with effective risk business turn out to be lower than previously expected losses.
management and secondly to its strategic business model of On account of the general economic conditions, the bank has
a "captive" financing company, offering financing for the applied a conservative approach to risk provisioning in recent
vehicles of the Toyota Group within its operating territory. years. If the economies in the countries which are relevant for
the bank continue to stabilise, such that the creditworthiness
Responsibility for the early recognition and control of business of borrowers improves, there may be an opportunity to reverse
risks and opportunities lies with the Executive Management previously recorded risk provisions.
of the parent company.
50 – 51
Annual Report of Toyota Kreditbank GmbH Group
The Executive Management of the parent company is respon- Business & Overall Risk Strategy
sible for the organisation of risk management throughout the
Toyota Kreditbank Group, including its foreign branches and
affiliates. A risk management organisation has been set up Sub-strategies for significant risks
which forms the basis for risk and cost oriented management
of the bank as a whole (overall bank management). Rules specified in writing
(including organisational structure, separation of duties, model concepts)
52 – 53
Annual Report of Toyota Kreditbank GmbH Group
b. Risk management process The Toyota Kreditbank Group, as a financial services provider d. Relevant risk categories
The business strategy of the Toyota Kreditbank Group provides whose primary function is to support the sale of cars, provides As part of the process of drawing up the risk inventory, the next
the framework for the risk strategy. One important aspect of financing for Toyota dealers and retail customers. The resulting step – after identifying all risks – is to perform a quantitative
this risk strategy is that risks will only be entered into after due overall banking risk is therefore significantly lower than that and qualitative analysis of the various risk categories as the
consideration of the level of economic and regulatory capital, of banks offering a full range of banking services. Under the basis for determining materiality. The main risk categories
while at the same time ensuring liquidity, and maintaining a Toyota Kreditbank Group’s business model, concentration risks result directly from banking operations and are of particular
prudent risk profile. The risk management system is therefore are knowingly assumed within reasonable limits. Within the importance for the ongoing management of the Toyota Kredit-
a key component of managing the Toyota Kreditbank Group's retail portfolio, concentration risks are only of secondary im- bank Group. The following risks were identified as material
performance. portance in view of the overall customer structure. By con- risk categories in conjunction with the annual risk inventory:
trast, concentration risks are higher in the business customer
The objective of the risk management system is to assume and dealership financing portfolio due to the relatively small
customary banking risks within a defined framework, including number of customers.
strict compliance with risk-bearing capacity requirements.
Liquidity Operational Business
The core elements of the risk management system are the risk In line with the overall risk strategy, specific sub-strategies Credit Risk Market Risk Other Risk
Risk Risk Risk
strategy, the management of risk-bearing capacity and the are defined for each main risk category, which, together with
internal control system. The internal control system consists the risk inventory, the risk-bearing capacity concept, the stress
of a set of defined rules and an organisational structure, includ- testing concept and the organisational rules, form the basis
ing the specific processes applied to manage and control risks. for the Toyota Kreditbank Group’s risk management system. Interest Short-term Operational
Default Return Strategic
Rate Liquidity Risk
Over the years, the risk management process has been refined,
as a result of which the Toyota Kreditbank Group now has a
full range of tried and tested tools at its disposal. In addition
Higher
to organisational rules, such as competency guidelines and Migration Currency Legal Reputational
Liquidity Cost
process/system documentation, methods have been continu-
ously developed to identify, measure and manage risks.
54 – 55
Annual Report of Toyota Kreditbank GmbH Group
e. Risk-bearing capacity concept In both the going concern and liquidation approaches, only
The Toyota Kreditbank Group has implemented a risk-bearing part of the risk coverage potential counts towards the risk
capacity concept for the regular assessment of the risk situation coverage amount. The respective risk coverage amount
at a total bank level. The risk-bearing capacity specifies the allocated, as well as the risk appetite, the overall limit and the
extent to which the risks assumed can be covered by the defined allocation limits among the different risk categories are stipu-
risk coverage amounts. The concept was further refined during lated each year by the Executive Management and are based
the financial year 2014/2015. on the business strategy and the associated willingness to
assume risk.
Determining risk-bearing capacity sets the framework for risk
management and control within the Toyota Kreditbank Group. Part of the available risk coverage potential was not allocated
Measuring and ensuring the appropriateness of the capacity to offset potential losses from the material risk categories,
to bear risks is therefore a fundamental aspect of the manage- thus taking account of the risks not limited in the risk-bearing
ment of the Toyota Kreditbank Group as a whole. capacity concept.
Under the current concept, both a balance-sheet-based going In order to ensure the Toyota Kreditbank Group's risk-bearing
concern approach and a liquidation approach are considered capacity, risks (quantified by appropriate instruments) and
to assess the risk-bearing capacity. limits are compared for each risk category.
The going concern approach assumes that operations will be In addition, stress scenarios are also tested, based on scenario
continued, whereas the liquidation approach focuses more and sensitivity analyses which take into account institution-
on the protection of creditors. The Toyota Kreditbank Group specific and general market factors for all material risk catego-
considers both approaches. The going concern approach has ries, thus ensuring an overall consideration of the situation
been defined by the Executive Management of Toyota Kredit- across all risk categories. The so-called "normal case" con-
bank GmbH as being that which is more relevant for managing sidered in the risk-bearing capacity assessment corresponds
the business. to the current relevant economic situation. The historical
recession simulates – for all significant risk categories – the
The risk coverage potential totaling EUR 364.6 million com- stress that would be caused by a severe economic slump
prises subscribed capital, capital surplus, retained earnings (comparable with the Lehman crisis in 2008/2009).
and current year earnings. Under the going concern approach,
the part of the regulatory capital which is necessary as a mini- Risk category correlation effects are not taken into account
mum to comply with the minimum capital requirements pur- to measure the amount of limit utilised. Likewise, the Toyota
suant to the Capital Requirement Regulation (CRR) is not Kreditbank Group does not consider any correlation effects
taken into account for risk coverage purposes. Furthermore, between and/or within the various risk categories. In view of
under the going-concern approach, a budgeted profit is also the nature and scale of business transactions, the Toyota
taken into consideration. In order to comply with MaRisk Kreditbank Group assumes a correlation coefficient of one
requirements and take into account only a prudently budgeted within the material risk categories. As a result, potential capi-
profit, the business risk is deducted from the risk coverage tal-saving diversification effects are not taken into account,
potential as a corrective factor. reflecting the enterprise's prudent approach to risk assess-
ment.
Limit Amount utilised in %
Risk-bearing capacity 31/03/2015 31/03/2015 31/03/2015 The Toyota Kreditbank Group's ability to bear risk (i.e. its risk-
Required capital in economic terms (in EUR million) 328.1 216.5 66.0 bearing capacity) was ensured at all times during the financial
— thereof for customer credit risk 156.0 112.7 72.2 year 2014/2015.
— thereof for interest rate risk 50.0 29.0 58.0
— thereof for liquidity risk 24.0 4.2 17.5
— thereof for operational risks 25.0 12.0 48.0
— thereof cushion for market fluctuations 73.1 58.5 80.0
Risk coverage potential utilisation 90.0% 59.4%
Maximum risk appetite 90.0%
56 – 57
Annual Report of Toyota Kreditbank GmbH Group
2. Risk categories Toyota Kreditbank GmbH's Risk Management Department is Elements of credit risk management
A risk is defined as the danger of incurring a loss or damage responsible for implementing and applying these measure- The Toyota Kreditbank Group uses a range of instruments to
by an outcome that is less favourable than originally expected. ment tools as well as for other operational credit risk control manage credit risk, as described in detail below.
The following risks were identified as material risks in con- measures. Risk monitoring is the key component here. As an
junction with the annual risk inventory: independent function within the risk management system,
risk monitoring concentrates on the identification, analysis,
a. Credit risk measurement, control and monitoring of the default and Instruments used to manage credit risk
Credit risk is defined as the risk of a possible loss arising from credit concentration risks throughout the Toyota Kreditbank
deterioration in the creditworthiness rating or payment default Group as a whole. The Treasury Department is responsible for Strategic Credit risk Operational Monitoring and
of a counterparty. Within credit risk, the following distinctions monitoring issuer and trading counterparty risks. components measurement components communication
can be made depending on the underlying transaction:
- Allocation of risk coverage Internal procedures for - Credit decision processes - Management reporting
Credit risk strategy amount assessing creditworthiness - limits - Risk monitoring
Default risk is defined as the traditional credit business risk – The Toyota Kreditbank Group considers credit risk to be a key - collateral and guarantees
i.e. the core business of the Toyota Kreditbank Group. component of its operations. As such, credit risks are entered - amount of receivable on - intensive management
Default risk refers here to the possible loss arising from de- into in full knowledge of the facts and are subject to proactive default - risk provisionning
- probability of default
terioration in the creditworthiness rating or payment default control, measurement and monitoring. This is particularly true - loss ratio
of a borrower. in the case of default and credit concentration risks. Generally, - expected loss
the materiality of default risks is assessed in conjunction with - unexpected loss
Issuer risk is defined as the default risk in the case of a secu- the annual risk inventory. - stress tests
rities transaction. The credit risk strategy conforms to the guidelines set out in
the business and general risk strategy, thus reflecting the
Trading counterparty risk is defined as risk of default by the prudent approach adopted by the Group. Risk coverage amount (capital cushion)
contracting party in the case of a derivatives transaction. The parent company's Executive Management and Group Risk
As a general rule, default risks are only entered into in accor- Controlling Function jointly assign the risk coverage amount
Credit concentration risk is defined as the risk of the reali- dance with the general risk strategy. Credit decisions and available for credit risks. The risk coverage amount is determined
sation of multiple default risks, issuer risks or trading counter- exposure amounts are always determined on the basis of at group level as well as for each subsidiary and branch individ-
party risks resulting from concentration of the portfolio on creditworthiness. This involves an analysis of the borrower's ually and is assigned as part of the general capital planning
a few individual contracting parties, groups of contracting ability to service debts currently and in the future. process in line with the general risk appetite.
parties or concentrations on individual market sectors.
The Toyota Kreditbank Group recognises appropriate levels of
The Toyota Kreditbank Group’s core business consists of dealer- risk provision to take account of losses from credit business.
ship financing and vehicle financing for end-user customers in
the Corporate and Retail lines of business. Default and credit
concentration risk (dealer financing and corporate end-user
customer exposures) are therefore the principal sources of credit
risk. The principal focus of credit risk management is therefore
placed on the assessment and control of these risks. Trading
counterparty risks arise on account of the hedging of market
risks. Since the securities portfolio is currently very small, issuer
risk is not material at present.
58 – 59
Annual Report of Toyota Kreditbank GmbH Group
Credit risk measurement Other lending transactions which do not relate to the TKG
Internal creditworthiness assessment procedures and stress Group's core business are combined across countries in the
tests are applied to measure and assess credit risks. The Toyota "Other lending transactions" sub-portfolio. Treasury trans-
Kreditbank Group has opted to use the Advanced Internal actions are also shown separately.
Ratings Based Approach (A-IRBA) for the purposes of measu-
ring and assessing credit risks. An application to apply the Measurement Permitted
A-IRBA approach was submitted as of 31 March 2008. In order Country Type of business Customer group approach since
to be able to use the A-IRBA approach on a permanent basis,
End customers Small customers (retail) A-IRBA 04/2008
the regulator requires at least 92% of the portfolio to be mea-
Germany (vehicle financing) Major customers A-IRBA 04/2008
sured through appropriately certified internal rating pro-
cedures. The remaining 8% may continue to be measured Dealership financing Dealerships A-IRBA 04/2008
using the Credit Risk Standardised Approach (CRSA). In order Small customers (retail) A-IRBA 02/2011
End-user customers
to achieve this coverage rate, the Toyota Kreditbank Group Small customers (businesses) A-IRBA 10/2014
France (vehicle financing)
has successively switched over the various sub-portfolios to Major customers CRSA -
the A-IRBA approach by developing rating procedures specific Dealership financing Dealerships A-IRBA 06/2012
to each of them. These sub-portfolios are defined for each Small customers (retail) A-IRBA 09/2009
country as follows: End-user customers
Small customers (businesses) A-IRBA 09/2009
Sweden (vehicle financing)
Major customers CRSA -
— Small customers (end-user customers vehicle
Dealership financing Dealerships CRSA -
financing): end-user customers with an exposure of less
End-user customers Small customers (retail) A-IRBA 10/2010
than TEUR 250. In the small-sized customer segment, a
Norway (vehicle financing) Major customers CRSA -
further distinction is drawn between retail (private
individuals and sole traders) and corporate customers. Dealership financing Dealerships CRSA -
Small customers (retail) A-IRBA 02/2011
End-user customers
— Major customers (end-user customers vehicle financing): Small customers (businesses) A-IRBA 07/2013
Spain (vehicle financing)
end-user customers with an exposure or limit of more Major customers CRSA -
than TEUR 250. Dealership financing Dealerships A-IRBA 09/2009
Italy Dealership financing Dealerships A-IRBA 07/2013
— Dealerships: financing of dealerships.
End-user customers Small customers CRSA -
Poland (vehicle financing) Major customers CRSA -
Dealership financing Dealerships CRSA -
End-user customers
Small customers (retail) A-IRBA 12/2013
Russia (vehicle financing)
Dealership financing Dealerships A-IRBA 12/2013
Other lending transactions Various CRSA -
Over-arching
Treasury Bank CRSA -
60 – 61
Annual Report of Toyota Kreditbank GmbH Group
The accuracy of the statistical models is checked monthly by The master scale comprises eleven classes for active exposures Operational components Provision for credit risk is recognised in the form of specific
back-testing against actual amounts realised. Anomalies and three classes for exposures at default. For exposures at The credit decision making process relies on both credit allowances and portfolio-based allowances. A specific allow-
identified during this process are examined further in detailed default, the three classes reflect the various stages in the de- application procedures and rating models. In the case of retail ance is required to be recognised if it is likely that the customer
analyses. Furthermore, the models are validated each year in fault process. For the eleven creditworthiness classes for active business, this process is largely automated. In the case of will be unable to fulfil all interest and repayment obligations
accordance with a pre-defined procedure. Where necessary, exposures, the master scale indicates a minimum and a maxi- dealer financing business, credit approvals have to be con- in the future. In the case of contracts for which no specific allow-
the rating procedures are recalibrated with the approval of mum probability of default. As part of the process of calibrat- firmed manually by credit committees. Local credit committees ances are recognised, allowances are calculated at portfolio
Executive Management. ing the models specific to the various sub-portfolios, the at the individual branches and subsidiaries of the Toyota Kredit- level with the aid of the IRBA parameters.
creditworthiness classes are each assigned a final default pro- bank Group consist in each case of front and back office repre-
The main technical terms relevant for the A-IRBA-certified bability, specific to each sub-portfolio. This is based on the sentatives. A European Credit Committee (ECC) is in place at
rating procedure are explained below. maximum and minimum default probabilities specified by the group level.
master scale. The default probability of an exposure results
The definition of loss is based on the Capital Requirement from the application of this final default probability by refer- Depending on the nominal amount of the credit application,
Regulation (CRR). This defines loss as "economic loss, includ- ence to the creditworthiness class and the sub-portfolio. the relevant credit committee is convened and makes its
ing material discount effects, and direct and indirect costs decision with respect to the credit application. In the event
associated with the recovery of outstanding balances for The loss given default (LGD) refers to the expected percentage that the front office and back office representatives within a
the transaction". of the exposure at default which will be lost in the event of local credit committee reach a different decision, the credit
default. As in the case of the default probability, the LGD of an application is transferred to the ECC and the decision is taken
With respect to the Toyota Kreditbank Group's core business, exposure is determined using a statistical model. For the pur- there.
the loss therefore corresponds to receivables outstanding poses of calibrating the statistical models used, particular
after all recovery efforts. This includes discounting effects and consideration is given to actual proceeds realised historically. Credit exposure limits have been introduced to limit default
costs arising in conjunction with recovery efforts. and credit concentration risks. The limits are determined on
The expected loss refers to the loss from credit risks which, the basis of the customer's creditworthiness. Limits are in
Exposure at default (EAD) is defined as the expected amount at the relevant reporting date, is expected to be incurred place both for both individual borrowers and groups of bor-
of the credit exposure at the time of default. within one year. This is a statistical average value which is rowers. Where appropriate, limits are also set for specific pro-
A uniform definition of default, complying with the CRR, is calculated considering the default probability, the LGD and ducts. For exposures to major customers, the amount of the
applied at group level. According to this definition, an expo- the EAD. limit used is monitored on a daily basis in accordance with the
sure is considered to be in default when either or both of the Banking Act (Kreditwesengesetz)
following events have occurred: The unexpected loss (UL) refers to potential losses which
exceed the expected loss. “Potential” for these purposes By way of analogy, limits are also defined and monitored for
― The Toyota Kreditbank Group considers it to be very un- means that, based on a going-concern approach, there is a hedging and securities transactions at the level of individual
likely that the borrower will repay its debt without further 99% probability that actual losses incurred within one year counterparties and issuers.
action by the institution. will not exceed the UL. The UL, which is therefore a key inter-
nal control parameter, is calculated on the basis of the regu- A standardised process is in place within the section for deal-
― The borrower has been in arrears for more than 90 days latory requirements applicable to A-IRBA procedures. More erships and major customers to handle the measurement of
in succession with respect to a material proportion of its specifically, the calculation is based on the default probabil- guarantees and collateral. These serve to compensate for
total debt. ities and loss given defaults determined using the applicable losses in the event of default by the counterparty. The Credit
rating procedure. The issue of concentration risks is Manual defines the type of guarantees or collateral that can
An exposure which is not in default is referred to as an active addressed by taking into account the granularity of the port- be accepted. The extent to which guarantees and collateral
exposure. folio. Model-based default probabilities and loss given de- are acceptable varies from portfolio to portfolio on account of
faults are not available for portfolio components rated using differing regulatory requirements. Within the retail business,
The probability of default expresses the probability of at the credit risk standardised approach (CRSA) and are there- it is the financed vehicles themselves that primarily serve as
least one default by a borrower over a one-year period. The fore replaced by expert estimates. collateral. In the dealership segment, other collateral may also
probability of default of a borrower is determined in con- be accepted on a case-by-case basis.
junction with the relevant internal rating procedure. Stress tests are carried out at least monthly. These serve on
the one hand to check the capital adequacy calculated and on An early warning system, based on the internal credit ratings,
For this purpose, each exposure is first assigned to a credit- the other to identify events and market changes which could has been installed for dealership and major customer business.
worthiness class, based on the rating procedure allowed for have an adverse impact on the Toyota Kreditbank Group so This system has the function of identifying borrowers with
the relevant sub-portfolio. The creditworthiness classes are that countermeasures can be taken at an early stage. Firstly, impending financial difficulties. A borrower identified to be in
defined uniformly across the various sub-portfolios on the the sensitivity of the risk model with respect to various risk this position receives special attention in the form of intensive
basis of a so-called "master scale" that is valid throughout factors is measured on the basis of stress tests. Secondly, management so that measures are taken to reduce the risk
the group. scenario analyses are carried out to examine the effects of and prevent default. Furthermore, a watch list is maintained
economic stress events on the portfolio. For this purpose, showing borrowers directly under threat of default.
both historical events and fictitious events are considered.
62 – 63
Annual Report of Toyota Kreditbank GmbH Group
Monitoring and communication b. Market risk For the purposes of determining which party actually bears
Risk Monitoring draws up a monthly management report for Market risks are defined as risks which may arise as a result of residual value risks, a distinction is made between direct and
distribution to Executive Management and the Group Risk changes in rates of return, exchange rates and prices on the indirect residual value risks. Direct residual value risks are
Controlling Function. In addition to general information on financial markets. This can give rise to a loss since these risks those that are borne directly by the Toyota Kreditbank Group.
the risk situation of the Toyota Kreditbank Group, this contains have an impact on the measurement of open interest rates, These residual values are monitored within the Toyota Kredit-
aggregated quantitative information derived from the A-IRBA equity investment and currency exposures. The main risks for bank Group. Appropriate risk provisions have been recorded
procedure. These reports represent a key component of the the Toyota Kreditbank Group are interest rate risk and to take account of the current situation in used car markets.
risk and management control system. exchange rate risk. An indirect residual value risk exists when the risk has been
transferred to a third party as a result of a residual value guar-
The reliability of the information derived from the A-IRBA Strategy antee.
procedure is examined monthly by Risk Monitoring and, where The Toyota Kreditbank Group has set out a general framework
necessary, communicated to the Group Risk Controlling Func- for the management of assets and liabilities as part of its Under the Toyota Kreditbank Group’s current range of pro-
tion and Executive Management. The latter also monitors the current group risk strategy. This framework takes the concrete ducts, the residual value risk is transferred either to the lessee
credit risk of the individual sub-portfolios by means of detailed form of internal group instructions and other guidelines/ (residual value leases) or to the dealership (distance driven
reports. The reports are communicated on a quarterly basis manuals. leases) with the consequence that a counterparty risk arises
to the Group Risk Controlling Function and Executive Manage- in the first instance with regards to the residual value guaran-
ment. Derivative instruments are used as a general rule to hedge tee. If the residual value guarantor defaults or the calculated
interest and currency risks. The derivative instruments used residual value cannot be realised, the leased asset (and hence
The tables below present the Toyota Kreditbank Group’s (interest swaps, interest/currency swaps and currency futures) the related residual value risk) is transferred to the Toyota
credit portfolio, broken down according to various risk are used exclusively for hedging purposes. In each case, the Kreditbank Group.
classes. hedging instruments are matched by a liabilities-side hedged
item with a corresponding opposite risk profile. Interest rate
swaps are exclusively used to manage the general interest rate
UL (EUR million) risk in the banking book.
31/03/2015 31/03/2015 31/03/2014 31/03/2014 The Toyota Kreditbank Group does not run a trading book and
in EUR millon in % in EUR millon in % does not engage in any commercial transactions in the sense
Germany 37.93 33.6 38.35 31.0
of aiming to make a short-term profit by exploiting market
France 21.01 18.6 21.71 17.6 price fluctuations. All trading transactions serve to create an
Italy 10.49 9.3 15.04 12.1 efficient bank book structure from the point of view of risk and
Spain 19.44 17.2 15.29 12.3 return.
Norway 3.00 2.7 3.53 2.8
Sweden 2.05 1.8 1.84 1.5 Money market transactions and the issue of own instruments
Poland 4.48 4.0 11.69 9.4 are executed primarily with a view to securing the Toyota Kredit-
Russia 14.33 12.7 16.49 13.3 bank Group's liquidity. Surplus liquidity may be invested with
Total 112.72 100.0 123.95 100.0 selected credit institutions.
64 – 65
Annual Report of Toyota Kreditbank GmbH Group
Interest rate risk c. Liquidity risk Responsibility for the management and control of operational
The Toyota Kreditbank Group pursues a dual control approach The liquidity risk is defined as the risk that it may not be pos- risks lies with the centralised Risk Management Department.
to interest rate risk. Monitoring and control are based on a sible to meet present and future payment obligations on time OpRisk Managers at branches and subsidiaries are responsible
value-at-risk indicator and the square hedge ratio. Limits/ranges, or in full (short-term liquidity) or that, in the event of a liqui- for ensuring close cooperation between head office and local
within which the respective figures should fall, are set for the dity crisis, funds are obtainable for refinancing only at higher departments and are responsible for assessing operational
relevant indicator. market rates (higher liquidity cost). risks and implementing operational risk management pro-
cesses locally.
The square hedge ratio is determined by dividing the sum of In line with its overall banking strategy, the Toyota Kreditbank
all refinancing amounts across all maturity ranges by the sum Group's liquidity risk strategy is aimed at ensuring a stable, The remit of the centralised Risk Management Department
of the assets to be refinanced across all maturity ranges1. comfortable liquidity position, thus – in particular – preventing includes the specification of methods to be used to identify,
insolvency and limiting any losses arising from refinancing on quantify and control operational risks as well as appropriate
The value-at-risk model is based on a historic simulation. The the money and capital markets. reporting to the OpRisk Committee, which, in turn, reports to
parameters used for the calculation are a confidence level of Executive Management and the Group Risk Controlling Func-
99%, a holding period of 250 days and a mirrored interest rate These risks are managed with the aid of overnight and term tion on the risk situation and measures taken.
history of 1,001 days. deposits, repo transactions with the European Central Bank,
the issue of commercial paper and promissory notes (Schuld- As part of the annual scenario based OpRisk inventory, opera-
scheindarlehen). tional risks are allocated to four levels of risk using a risk matrix,
Value-at-Risk Sensitivity of the banking book depending on frequency and loss potential. In the case of
Square hedge ratio in EUR millon in EUR millon2 As part of the risk measurement process, the refinancing risk risks in the top two levels, risk mitigation strategies must be
Germany 87% -5.0 -8.6
(higher liquidity cost) is determined by means of regular devised and the resulting measures implemented in order to
France 85% -1.4 -3.5 scenario analyses (LVaR) based on present value calculations. reduce the risks to an acceptable level.
Spain 81% -4.1 -7.0 The present value measures the additional refinancing costs
Sweden 79% -0.3 -0.3 for the coming twelve months in the event of an ad hoc in- Risk capital requirements for the purpose of measuring risk-
Norway 75% -3.1 -3.8 crease in refinancing costs around a specified number of basis bearing capacity are calculated with the aid of a Monte Carlo
Italy n.a. -0.8 -0.1 points. An indicator (DAF2) is calculated for the short-term simulation after aggregating the results of individual scenarios
Poland 71% -1.3 -0.8 liquidity risk reflecting the number of days for which secure applied in conjunction with the OpRisk inventory. The OpRisk
Russia 84% -13.0 -3.3 sources of liquidity are currently available in order to cover Committee notifies Executive Management and the Group
future payment obligations (including new business). Risk Controlling Function if the groupwide limits are exceeded.
in each case up to the end of the currently valid fixed interest rate period
1
66 – 67
Annual Report of Toyota Kreditbank GmbH Group
3. Summarised description of risk situation Euro area 1.5 1.6 1.7 0.1 1.0 1.4
At no stage during the financial year 2014/2015 did the total Germany 1.6 1.7 1.7 0.2 1.3 1.7
amount of risks entered into exceed the Toyota Kreditbank Poland 3.5 3.5 3.5 -0.8 1.2 2.0
Russia -3.8 -1.1 1.3 17.9 9.8 6.9
Group's risk coverage potential, thus demonstrating its capa-
Source: IMF (2015, 2016), Focus Economics (2017)
city to bear risk throughout the year under review.
68 – 69
Annual Report of Toyota Kreditbank GmbH Group
In view of the circumstances and in order to overcome on- 2. Review of operations of the Toyota Kreditbank Group As a result of the pressure on margins, profit from ordinary
going sovereign debt problems and potential deflation con- The following section describes the expected future develop- activities for the 2015/2016 financial year is expected to be
cerns, the ECB is set to continue its expansionary monetary ment of the Toyota Kreditbank Group, based on the general at a similar level or slightly lower than profit reported for the
and low interest rate policies in 2015 in order to underpin business and economic conditions described above. The 2014/2015 financial year and hence still at a satisfactory level.
economic recovery in the Euro area. The ECB reduced its main following outlook is based on forecasts (and specific budgets)
refinancing rate at the beginning of September 2014 to 0.05%. drawn up at the end of 2014 for the individual markets includ- Based on its coherent business concept, good liquidity and
In addition, it announced its intention of buying government ed in the Toyota Kreditbank Group's operating territory. The refinancing structure, the strong partnership with the dealer
and private bonds for a monthly amount of up to EUR 60 billion forecast period covers the 2015/2016 financial year. The network and its efficient organisation, management considers
in the period from spring 2015 to autumn 2016, with a view forward looking assertions contained therein are based partly that the Toyota Kreditbank Group is well positioned to rise to
to lifting the inflation rate back to approximately 2.0%. on general expectations of future macro-economic develop- future challenges. Comprehensive mobility concepts, financing
The Toyota Kreditbank Group does not expect any significant ments, with a primary focus on the automobile sector. packages combined with service and insurance products as
rise in short-term interest rates in the near future; if there is well as new digital sales and marketing instruments are set to
any change in the situation, it is only expected to entail small We expect to achieve stable levels of lending by focusing on play a key role in the future strategic direction of the business.
rises in medium- and long-term interest rates. The ECB's low retail customers and offering a comprehensive range of services
interest rate policy will result in higher credit disbursement to dealers. As in the previous year, there are plans to expand the
by the banks and hence to a more competitive market envi- bank's leasing portfolio in Germany and abroad by the addition Cologne, 16 July 2015
ronment for the Toyota Kreditbank Group. of new products tailored to commercial customers' require-
ments, in the hope that the leasing business in Germany also
According to a study undertaken by the Center Automotive settles down at the previous year's level. Toyota Kreditbank Group
Research of the University of Duisburg-Essen, the global
growth rate of 3.5 % forecast by the IMF for the calendar year The net interest result is expected to be at a similar level to Executive Management
2015 should also be reflected in increased global demand the 2014/2015 financial year.
for passenger vehicles. An average growth rate of 3.0% is
predicted for passenger vehicle sales. According to the study, The Toyota Kreditbank Group will continue to apply a policy of
the principal drivers of growth will be China and the USA. rigorous cost management in order to ensure that cost levels
remain commensurate with business volumes. Due to invest-
Automobile sales may well develop differently in the various ments in strategic business segments, however, the Toyota
countries covered by the bank's operating territory. Whereas Kreditbank Group forecasts a slight increase in administrative
the predicted rates of growth in Germany and France are low expenses for the 2015/2016 financial year.
and in Russia even negative, vehicle sales in Italy and Spain
are expected to grow at above average rates. The risk provisioning expense for lending business is likely to
be at a similar level in 2015/2016 to the past financial year.
New registrations of Toyota vehicles are again expected to Appropriate levels of risk provision have been recognised to
rise slightly year-on-year in the various markets in the coming take account of macro-economic developments in the territory
financial year. Despite restructuring of the dealership network in which the Toyota Kreditbank Group operates.
in Germany that is planned for the coming calendar year, we
expect registration figures for the German market to come in The negative impact on the Russian economy caused by the
at the previous year's level. Ukraine crisis, including a massive loss in value of the Rouble
and a rise in benchmark interest rates in Russia, is already
showing signs of stabilising. In view of the political and eco-
nomic situation, we forecast lower overall vehicle sales in
Russia, with the Toyota brand achieving a stable market share.
In the medium term, we expect vehicle sales to return to a
positive trend, thus generating a rising volume of vehicle
financing.
70 – 71
Annual Report of Toyota Kreditbank GmbH Group
Country by Country Reporting as of March 31, 2015 Auditors’ Report The audit includes assessing the annual financial statements of
We have audited the consolidated financial statements prepared those entities included in consolidation, the determination of
According to § 26a KWG Turnover is the profit before tax as shown in financial state- by Toyota Kreditbank GmbH, Cologne, comprising the consoli- entities to be included in consolidation, the accounting and con-
The requirements of EU guideline 2013/36/EU ("Capital ments before consolidation effects, risk provisioning and other dated balance sheet, consolidated income statement, notes to solidation principles used and significant estimates made by
Requirement Directive", CRD IV) was transposed into German operating expenses. the consolidated financial statements, consolidated cashflow management, as well as evaluating the overall presentation of
law with § 26a (1) sentence 2 KWG. statement, consolidated statement of changes in equity and the consolidated financial statements and group management
Taxes on profit/loss are are shown as in financial statements. segment reporting together with the group management report report. We believe that our audit provides are a reasonable
CRR institutes are required to publish the following for the business year from 1 April 2014 to 31March 2015. The basis for our opinion.
information under "Country by Country Reporting". This report contains the relevant data of fully consolidated preparation of the consolidated financial statements and the
companies as of March 31, 2015. group management report in accordance with German commer- Our audit has not led to any reservations.
1. company name, type of activity and cial law are the responsibility of the parent company’s manage-
geographical position of branches The average number of employees is shown in terms of full time ment. Our responsibility is to express an opinion on the consoli- In our opinion, based on the findings of our audit, the consolidat-
2. turnover equivalents according to § 267 (5) HGB. dated financial statements and on the group management report ed financial statements comply with the legal requirements
3. average number of employees in Full Time based on our audit. and give a true and fair view of the net assets, financial position
Equivalent (FTE) and results of operations of the Group in accordance with these
4. profit/loss before tax We conducted our audit of the consolidated financial statements requirements. The group management report is consistent with
5. income taxes and profit/loss in accordance with Article 317 HGB ("Handelsgesetzbuch": the consolidated financial statements and as a whole provides a
6. government aid received "German Commercial Code") and generally accepted German suitable view of the Group’s position and suitably presents the
standards for the audit of financial statements promulgated by opportunities and risks of future development.
the Institut der Wirtschaftsprüfer (Institute of Public Auditors
in Germany, IDW). Those standards require that we plan and
perform the audit such that misstatements materially affecting Düsseldorf, 17 July 2015
profit/loss income taxes government the presentation of the net assets, financial position and results
turnover average number before tax on profit/loss aid received
of operations in the consolidated financial statements in accor- (Original German version signed by)
in EUR of employees in EUR in EUR in EUR
dance with German principles of proper accounting and in the
Germany 60,186,583.09 250 7,949,662.26 1,260,401.74 0,00 group management report are detected with reasonable assur- KPMG AG
France 26,222,264.63 81 28,309,634.80 7,525,071.84 0,00 ance. Knowledge of the business activities and the economic Wirtschaftsprüfungsgesellschaft
Sweden 4,710,829.33 27 6,169,230.37 7,896.51 0,00 and legal environment of the Group and expectations as to
Norway 16,659,199.88 28 10,967,344.16 0.00 0,00
possible misstatements are taken into account in the determina-
Spain 16,788,147.67 47 3,404,596.38 5,836,246.69 0,00
tion of audit procedures. The effectiveness of the accounting Kügler, Wirtschaftsprüfer
Italy 4,917,747.27 12 393,402.73 597,594.84 0,00
related internal control system and the evidence supporting Ernstberger, Wirtschaftsprüfer
Poland 12,401,839.90 107 1,098,740.18 423,625.38 0,00
the disclosures in the consolidated financial statements and the
Russia 56,759,052.91 153 26,744,348.89 5,901,237.31 0,00
group management report are examined primarily on a test
basis within the framework of the audit.
In the event of the publication or transmission of a version of the consolidated financial statements and/or the consolidated management report which diverges
from the version on which we delivered our opinion, including translations into other languages, in so far as our audit opinion is quoted or our audit referred to,
a fresh opinion must be obtained from us. In this respect, the reader is referred to Section 328 of the German Commercial Code.
72 – 73
toyota-bank.de