Grenke : Disclosure Report 31.12.2021

Content

4 // 1. Scope of application

7 // 2. Structure and amount of own funds

7 // 2.1 Key parameters

10 // 2.2 Own funds structure

16 // 2.3 Link between balance sheet and regulatory positions

23 // 2.4 Capital requirements

34 // 3. Countercyclical capital buffer

37 // 4. Disclosures on risk management

37 // 4.1 Risk management

37 // 4.2 Risk-bearing capacity

39 // 4.3 Governing bodies

39 // 4.3.1 Supervisory board

39 // 4.3.2 Board of Directors

40 // 4.3.3 Number of management and supervisory positions held by members of the management body

42 // 4.3.4 Strategy for the selection of members of the management body

42 // 4.3.5 Diversity strategy for the selection of members of the management body

44 // 4.3.6 Risk committee and number of Supervisory Board meetings

44 // 4.3.7 Information flow to the management body

44 // 4.4 Statements of the management body

44 // 4.4.1 Statement on the adequacy of risk management procedures

44 // 4.4.2 Concise risk declaration

45 // 5. Credit risks

45 // 5.1 General information

46 // 5.2 Disclosure on the context of the COVID-19 pandemic

50 // 5.3 Non-performing and past due receivables

61 // 5.4 Credit risk under the standard approach

65 // 5.5 Credit risk mitigation under the standard approach

65 // 5.6 Investments

65 // 6. Counterparty default risk

68 // 7. Market risks

68 // 7.1 Interest rate risk

68 // 7.2 Currency risk

69 // 8. Liquidity risk

69 // 8.1 Description of liquidity risk management

70 // 8.2 Liquidity coverage ratio (LCR)

72 // 8.3 Net stable funding ratio (NSFR)

77 // 9. Other risks

77 // 10. Operational risks

79 // 11. Encumbered and unencumbered assets

81 // 12. Remuneration policy

81 // 12.1 Remuneration strategy at GRENKE

82 // 12.2 Principles of GRENKE's remuneration policy

84 // 12.3 Composition and structure of GRENKE's remuneration system

85 // 12.4 Remuneration of GRENKE Group Board of Directors

88 // 12.5 Remuneration systems of institutions subject to financial supervision

88 // 12.6 GRENKE Group employee remuneration by business line

92 // 12.7 Remuneration of the Supervisory Board

94 // 12.7.1 External consultants

94 // 13. Leverage

100 // List of tables

102 // Glossary

1 Amended by Regulation (EU) 2019/876 of the European Parliament and of the Council of May 20, 2019 amending Regulation (EU) No 575/2013 as regards the leverage ratio, the structural liquidity ratio, requirements for own funds and eligible liabilities, counterparty credit risk, market risk, exposures to central counterparties, exposures to collective investment undertakings, large exposures, reporting and disclosure requirements and Regulation (EU) No 648/2012.

1. Scope of application

The publication of this disclosure report as of the De-cember 31, 2021 reporting date is made in accor-dance with the regulatory requirements pursuant to Part 8 of Regulation (EU) No. 2019/876, amending Regulation (EU) No. 575/2013 (Capital Requirements Regulation - CRR), which came into force on June 28, 2021. This annual disclosure includes quantitative and qualitative information on GRENKE AG's material activities and risks.

Part 8 of the CRR defines the quantitative and qualita-tive requirements for regulatory disclosure and is sup-plemented by the EBA/ITS/2020/04 of June 24, 2020 and the corresponding Implementing Regulation (EU) No. 2021/637, as well as various other regulatory standards relevant for disclosure. As of the December 31, 2021 reporting date, the GRENKE Group must disclose all required information in accordance with Articles 435-455 CRR.

In 2009, the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungs-aufsicht - BaFin) granted GRENKE AG permission to derive the regulatory scope of consolidation from the accounting scope of consolidation used in the consoli-

Table 1: Outline of the differences in the scopes of consolidation (entity by entity) (EU LI3)dated financial statements under commercial law. The group of companies taken into account thus includes all companies with a direct majority shareholding in Germany and abroad as well as potentially controlled parts of companies without a direct shareholding. In the course of coordinating with BaFin on the scope of consolidation, it was agreed that changes to the sco-pe of consolidation, such as those made in the 2020 financial year through the integration of the franchise companies, would be reported to BaFin without de-lay. All of the GRENKE AG subsidiaries are included in the scope of consolidation.

a

Name of the entity

GRENKE Service AG

GRENKE Investitionen Verwaltungs

Kommanditgesellschaft auf Aktien

GRENKE BANK AGGRENKEfactoring GmbHGRENKE Business Solutions GmbH & Co. KG

GRENKE MANAGEMENT SERVICES GmbH

GRENKE digital GmbH

bMethod of accounting consolidation

Full consolidation Full consolidationFull consolidationFull consolidationFull consolidation Full consolidation Full consolidation

c

d

Method of prudential consolidationFull consolidationProportional consolidation

X X

e

Equity method

XXX X X

fNeither consolidated nor deducted

Financial service provider

(leasing/refinancing)Credit institution

(banking/refinancing)

gDeducted

Other type of entityFinancial service provider

(factoring)

hDescription of the entity

Other type of entity (leasing) Other type of entity (leasing)

Other type of entity

b	c	h
GRENKEleasing s.r.o.	Full consolidation	X	Financial service provider (leasing)
GRENKE ALQUILER S.L.	Full consolidation	X	Financial service provider (leasing)
GRENKEFINANCE N.V.	Full consolidation	X	Financial service provider (leasing)
GRENKE RENT S.L.	Full consolidation	X	Financial service provider (leasing)
GRENKEleasing AG	Full consolidation	X	Financial service provider (leasing)
GRENKEleasing GmbH	Full consolidation	X	Financial service provider (leasing)
GRENKEleasing ApS	Full consolidation	X	Financial service provider (leasing)
GRENKE LIMITED	Full consolidation	X	Financial service provider (leasing)
GRENKE Finance Plc.	Full consolidation	X	Financial service provider
(leasing/refinancing)
GRENKE LOCATION SAS	Full consolidation	X	Financial service provider (leasing)
GRENKE LOCAZIONE SRL	Full consolidation	X	Financial service provider (leasing)
GRENKEleasing AB	Full consolidation	X	Financial service provider (leasing)
GRENKE LEASE SRL/BV	Full consolidation	X	Financial service provider (leasing)
GRENKEleasing Ltd.	Full consolidation	X	Financial service provider (leasing)
GRENKEleasing Sp.z.o.o.	Full consolidation	X	Financial service provider (leasing)
GRENKEleasing Magyarország Kft.	Full consolidation	X	Financial service provider (leasing)
GRENKE RENTING S.R.L.	Full consolidation	X	Financial service provider (leasing)
GRENKE RENTING S.A.	Full consolidation	X	Financial service provider (leasing)
GRENKEleasing s.r.o.	Full consolidation	X	Financial service provider (leasing)
GRENKEleasing Oy	Full consolidation	X	Financial service provider (leasing)
GRENKELOCATION SARL	Full consolidation	X	Financial service provider (leasing)
GRENKEfactoring AG	Full consolidation	X	Financial service provider
(factoring)
GRENKEleasing d.o.o.	Full consolidation	X	Financial service provider (leasing)
GRENKE Kiralama Ltd. Sti.	Full consolidation	X	Financial service provider (leasing)
GRENKE RENTING LTD.	Full consolidation	X	Financial service provider (leasing)
GC LOCAÇÃO DE EQUIPAMENTOS LTDA.	Full consolidation	X	Financial service provider (leasing)

a

d

e

f

g