| Additional Voluntary Contributions (AVCs) |
These are extra contributions you pay in addition to the normal pension contributions you or your employer make if you are a member of an employer's pension plan. AVCs help boost the value of your pension fund or can be used to contribute to a tax-free lump sum at retirement. You can claim tax relief on AVCs up to certain limits, as long as you earn an income. |
| APR |
The APR is the total cost of credit to the consumer, shown in the form of an annual rate of interest they will be charged on a loan. It takes account of all the costs involved over the term of a loan, such as any set-up charges and the interest rate. You can use the APR to compare costs between different loans, as long as you compare them over the same term, for example, three-year loans. |
| Bank Package |
The Danske Bank Group participates in the Danish Government Bank Guarantee Scheme, established in October 2008. Business and personal customers of all Danske branches, including National Irish Bank, are fully protected under the Scheme. This means that customers can be assured that their funds are 100% guaranteed. |
| Core Capital |
Shareholders' equity plus hybrid core capital. |
| Credit |
Loans or borrowings. |
| Credit crisis |
A situation in which it is difficult to borrow money due to problems in the financial system. |
| Danish credit package |
In January 2009, the Danish government and a broad parliamentary majority adopted a credit package, making credit facilities worth DKK100bn (€13.72bn approx.) available to banks and mortgage credit institutions in Denmark.
Credits totalling DKK75bn (€10.3bn approx.) are made available to banks, while the mortgage credit institutions will have access to DKK25bn (€3.43bn approx.). The government will charge an average interest rate of 10% in its loans. |
| Depression |
Deep economic crisis similar to the one in the 1930's, known as the Great Depression. |
| Economic crisis |
Situation of setback or slow growth in overall economic activity, combined with rising unemployment. |
| Financial crisis |
Crisis in the financial sector and the financial markets. |
| Financial support packages |
Political measures designed to stimulate economic activity.
The measures differ from country to country, but for banks they have included an increase in customers’ guaranteed deposits, injection of capital from governments and significantly increased loan offers from central banks. The Irish Government has also implemented a bank guarantee scheme. |
| Funding |
Obtaining access to liquidity, for example via the issuing of bonds. |
| Goodwill |
Expected future earnings of a company relative to the value of its individual components. Goodwill is only visible if the company is sold. Goodwill thus expresses the difference between the market value of listed companies and the shareholders' equity. |
| Hybrid core capital |
Hybrid core capital is included in the calculation of solvency and stems from a type of bonds offering a yield to the investors buying them. |
| Inflation |
General increases in prices and incomes. |
| Liquidity |
Access to money, for example via loans, bond issuance or deposits. A bank cannot lend money without liquidity. |
| Recession |
The same as economic crisis. Sometimes recession is defined as at least six consecutive months of economic contraction. |
| Share buybacks |
A company may decide to buy back its own shares for several reasons. For example, to bolster the share price, or because it is an opportune time to buy. |
| Share capital |
The nominal value of a company's shares. The share capital is owned by the shareholders, who receive a dividend. |
| Shareholders' equity |
The owners' share of the company's funding. Goodwill is also part of the shareholders' equity. Shareholders' equity is included in the solvency calculation. |
| Solvency |
Access to own funds for covering any losses. In relation to companies, solvency comprises shareholders' equity, hybrid core capital and subordinated loan capital. The solvency ratio is regulated by law. |
| Special surrender charges |
Special surrender charges ensure that pension customers staying with a pension company are not punished financially when other customers leave. Special surrender charges are only paid by customers who decide to transfer or terminate their savings schemes and do not apply to all types of savings. |
| Stagflation |
Combination of stagnation (minor economic crisis) and high inflation. Stagflation was a common phenomenon in the 1970s. |
| Subordinated loan capital |
Stems from the issuance of a type of bond that offers a yield to the investors buying them. Subordinated loan capital is included in the solvency calculation. |
| Subordinated debt |
Term covering hybrid core capital and subordinated loan capital. Only losses exceeding the shareholders' equity are covered. |
| Subprime loans |
Loans in the US granted to customers who would not ordinarily qualify for credit.
The loans typically have variable interest rates and the first years' repayments are low. Moreover, lower interest rates may be charged in the first years. The borrower would be dependent on an environment of low interest rates and rising housing prices. |