Group	2012 €'000	2011 €'000
Interest on loans and receivables (Note 19)	1,221,862	1,145,360
Interest on acquired derivative financial instruments	84,526	100,348
Interest on cash and cash equivalents	23,792	16,870
Interest on available for sale financial assets	12,365	10,939
Total interest income	1,342,545	1,273,517
Fee income from borrowers	29,650	8,503
Fee income received on IBRC short term facility (a)	14,628	-
Income earned on borrower overdraft accounts	-	1,228
Total interest and fee income	1,386,823	1,283,248

Interest income on loans and receivables is recognised in accordance with accounting policy 2.9.

Interest income on loans and receivables is calculated using the EIR method of accounting. This method seeks to recognise interest income at a constant rate over the life of the loan and will differ from actual cash received. This implies that in any given reporting period the amount of interest recognised will differ from the cash received. However, over the life of the loan, the total cash received in excess of the acquisition value of the loan will, following adjustment for any impairment losses, equal the interest income recognised. No interest income is recognised on the element of any loan balance which is considered to be impaired.

100% of the €1.2 billion interest income on loans and receivables recognised in the year to 31 December 2012 was realised in cash during 2012 (2011: 100%).

Interest income on derivative financial instruments relates to interest received on derivatives acquired from Participating Institutions that were associated with loans acquired.

Interest on cash and cash equivalents comprises interest earned on cash, short-term deposits, exchequer notes and commercial paper held during the year.

Interest on available for sale assets comprises interest earned on short term government bonds held for liquidity purposes.

Fee income from borrowers that is an integral part of calculating the EIR or originating a loan is recognised as part of EIR as described in accounting policy 2.9. Fees earned by the Group that are not part of EIR are recognised immediately in profit or loss as fee income. Fee income recognised in the year includes arrangement fees, restructuring fees and fees earned on overdraft accounts.

(a) Fee income received on IBRC short term facility

On receipt of a Ministerial direction issued on 29 March 2012, the NAMA Board approved a short-term facility with IBRC. This facility was collateralised by an Irish Government bond. The €3.06 billion facility was drawn on 3 April 2012 with a maximum maturity under the Ministerial direction of 90 days. The facility was provided at a margin of 135 basis points over the European Central Bank refinancing rate, resulting in an all-in rate of 2.35% for the duration of the facility. The short-term facility matured on 20 June 2012 with the Group being repaid in full.

Agency	2012 €'000	2011 €'000
Interest income on cash	2	16
Total interest income	2	16