Credit risk is defined as the probability of failure by a Group’s trading partner to meet its obligations on time or failure to meet such obligations at all, or the probability that the Group may be unable to recover any monetary assets that have been deposited at a bank or otherwise invested.
7.3.1 Credit risk
The PGNiG Group’s credit exposure arises mostly in connection with the following items:
| Maximum risk exposure, equal to the carrying amount of the item | 2020 | 2019 |
|---|---|---|
| Cash and cash equivalents (cash at banks and bank deposits) | 7,098 | 3,037 |
| Non-current restricted cash | 188 | 190 |
| Trade receivables | 4,449 | 4,511 |
| Loans | 845 | 723 |
| Total | 12,580 | 8,461 |
As a rule, the Group concludes transactions in financial instruments with multiple entities with high creditworthiness. The key criteria applied by the Group in the selection of trading partners include their financial condition as confirmed by rating agencies, as well as their respective market shares and reputation.
Credit risk exposure associated with the individual items specified above is determined by reference to the carrying amounts of those items.