(1) Credit institutions may recognise receivables from credit institutions and customers, debentures and other fixed-income securities as well as shares of stock and other, non-fixed-income securities insofar as they are not treated like fixed assets and are not part of the trading portfolio, at a lower value than the value stipulated or permitted pursuant to section 253 (1) sentence 1 and (4), insofar as this is deemed necessary when assessed exercising reasonable business judgment in order to hedge against the particular risks inherent to the line of business of the credit institutions. The amount of the contingency provisions formed in this way may not permissibly exceed four per cent of the aggregate value of the assets designated in sentence 1, as computed from their valuation pursuant to section 253 (1) sentence 1 and (4). A lower value that has already been recognised may continue to be used.
(2) (repealed)
(3) The expense and income derived from the application of subsection (1) and from transactions with investment securities designated in subsection (1), as well as losses from write-downs and gains from write-ups of these investment securities may be set off against expense derived from write-downs of receivables, from allocations to provisions for contingent liabilities and credit risks, as well as against the income derived from write-ups of receivables or from their full or partial recoupment after having been written off, and from reversals of provisions for contingent liabilities and credit risks and may be shown on the profit and loss account as an expense item or as an income item.
(4) Information on the formation and reversal of contingency provisions pursuant to subsection (1) as well as on set-offs performed pursuant to subsection (3) is not required to be provided in the annual financial statements, management report, consolidated financial statements or consolidated management report.