6 Loans and Advances

Loans and advances

  2018   2017
  AED’000   AED’000
       
       
Commercial loans 2,102,120   2,052,177
Retail finance

550,029

 

498,208

Gross loans and advances 2,652,149   2,550,385
Less: assessed allowance for impairment (351,645)   (214,584)
Net loans and advances
2,300,504
 
2,335,801

 

The movement in the allowance for impairment during the year is shown below:

  2018   2017
  AED’000   AED’000
       
At 1 January 2018 214,584   219,801
Change on initial application of IFRS 9 (Note 2.3) *

61,877

 
Restated balance at 1 January 2018 276,461   219,801
Impairment charges for the year 75,848   48,736
Reversal of no longer required impairment charges (664)   (5,300)
Written off   (48,653)
Balance at 31 December
351,645
 
214,584


In determining the recoverability of loans and advances, the Company considers any change in the credit quality of the loans and advances measured at amortised cost from the date credit was initially granted up to the end of the reporting period. The concentration of credit risk is limited due to the fact that the customer base is large and unrelated.

* Include amount of AED 14,324 thousand relating to unfunded balances as disclosed in Note 2.3.