[F1 [F129. NON-PERFORMING EXPOSURES (18) U.K.
145. For the purpose of template 18, non-performing exposures are those that satisfy any of the following criteria: U.K.
material exposures which are more than 90 days past due;
the debtor is assessed as unlikely to pay its credit obligations in full without realisation of collateral, regardless of the existence of any past due amount or of the number of days past due.
146. That categorisation as non-performing exposures shall apply notwithstanding the classification of an exposure as defaulted for regulatory purposes in accordance with Article 178 of CRR or as impaired for accounting purposes in accordance with the applicable accounting framework. U.K.
147. Exposures in respect of which a default is considered to have occurred in accordance with Article 178 CRR and exposures that have been found impaired in accordance with the applicable accounting framework shall always be considered as non-performing exposures. Exposures with ‘ collective allowances for incurred but not reported losses ’ referred to in paragraph 38 of this Annex shall not be considered as non-performing exposures unless they meet the criteria to be considered as non-performing exposures. U.K.
148. Exposures shall be categorised for their entire amount and without taking into account the existence of any collateral. Materiality shall be assessed in accordance with Article 178 of CRR. U.K.
149. For the purpose of template 18, ‘ exposures ’ includes all debt instruments (loans and advances and debt securities) and off-balance sheet exposures, except those held for trading exposures. Off-balance sheet exposures comprise the following revocable and irrevocable items: U.K.
loan commitments given;
financial guarantees given;
other commitments given.
150. For the purpose of template 18, an exposure is ‘ past-due ’ when any amount of principal, interest or fee has not been paid at the date it was due. U.K.
151. For the purpose of template 18, ‘ debtor ’ means an obligor within the meaning of Article 178 of CRR. U.K.
152. A commitment shall be considered as a non-performing exposure for its nominal amount where, when drawn down or otherwise used, it would lead to exposures that present a risk of not being paid back in full without realisation of collateral. U.K.
153. Financial guarantees given shall be considered as non-performing exposures for their nominal amount where the financial guarantee is at risk of being called by the counterparty ( ‘ guaranteed party ’ ), including, in particular, where the underlying guaranteed exposure meets the criteria to be considered as non-performing, referred to in paragraph 145. Where the guaranteed party is past-due on the amount due under the financial guarantee contract, the reporting institution shall assess whether the resulting receivable meets the non-performing criteria. U.K.
154. Exposures classified as non-performing in accordance with paragraph 145 shall be categorised as either non-performing on an individual basis ( ‘ transaction based ’ ) or as non-performing for the overall exposure to a given debtor ( ‘ debtor based ’ ). For the categorisation of non-performing exposures on an individual basis or to a given debtor, the following categorisation approaches shall be used for the different types of non-performing exposures: U.K.
for non-performing exposures classified as defaulted in accordance with Article 178 of CRR, the categorisation approach of Article 178 shall be applied;
for exposures that are classified as non-performing due to impairment under the applicable accounting framework, the recognition criteria for impairment under the applicable accounting framework shall be applied;
for other non-performing exposures that are neither classified as defaulted nor as impaired, the provisions of Article 178 of CRR for defaulted exposures shall be applied.
155. Where an institution has on-balance sheet exposures to a debtor that are past due by more than 90 days and the gross carrying amount of the past due exposures represents more than 20 % of the gross carrying amount of all on-balance sheet exposures to that debtor, all on- and off-balance sheet exposures to that debtor shall be considered as non-performing. When a debtor belongs to a group, the need to also consider exposures to other entities of the group as non-performing shall be assessed, where they are not already considered as impaired or defaulted in accordance with Article 178 of CRR, except for exposures affected by isolated disputes that are unrelated to the solvency of the counterparty. U.K.
156. Exposures shall be considered to have ceased being non-performing when all of the following conditions are met: U.K.
the exposure meets the exit criteria applied by the reporting institution for the discontinuation of the impairment and default classification;
the situation of the debtor has improved to the extent that full repayment, according to the original or when applicable the modified conditions, is likely to be made;
the debtor does not have any amount past-due by more than 90 days.
An exposure shall remain classified as non-performing while those conditions are not met, even though the exposure has already met the discontinuation criteria applied by the reporting institution for the impairment and default classification according to the applicable accounting framework and Article 178 of CRR respectively.
157. Where forbearance measures are applied to non-performing exposures, those exposures shall be considered to have ceased being non-performing where all the following conditions are met: U.K.
the application of forbearance measures does not lead to the recognition of impairment or default;
one year has passed since the forbearance measures were applied;
there is not, following the forbearance measures, any past-due amount or concern regarding the full repayment of the exposure according to the post-forbearance conditions. The absence of concerns shall be determined after an analysis of the debtor’s financial situation by the institution. Concerns may be considered as no longer existing where the debtor has paid, via its regular payments in accordance with the post-forbearance conditions, a total equal to the amount that was previously past-due (where there were past-due amounts) or that has been written-off (where there were no past-due amounts) under the forbearance measures or the debtor has otherwise demonstrated its ability to comply with the post-forbearance conditions.
Those specific exit conditions shall apply in addition to the criteria applied by reporting institutions for impaired and defaulted exposures according to the applicable accounting framework and Article 178 of CRR respectively.
158. Past due exposures shall be reported separately within the performing and non-performing categories for their entire amount. Performing exposures past due by less than 90 days shall be reported separately for their entire amount. U.K.
159. Non-performing exposures shall be reported broken down by past due time bands. Exposures that are not past due or are past due by 90 days or less but nevertheless are identified as non-performing due to the likelihood of non-full repayment shall be reported in a dedicated column. Exposures that present both past due amounts and a likelihood of non-full repayment shall be allocated by past-due time bands consistent with the number of days that they are past due. U.K.
160. The following exposures shall be identified in separate columns: U.K.
exposures which are considered to be impaired in accordance with the applicable accounting framework, except where they are exposures with incurred but not reported losses;
exposures in respect of which a default is considered to have occurred in accordance with Article 178 of CRR.
161. ‘ Accumulated impairment ’ and ‘ accumulated changes in fair value due to credit risk ’ figures shall be reported in accordance with paragraph 46. ‘ Accumulated impairment ’ means the reduction in the carrying amount of the exposure either directly or through the use of an allowance account. Accumulated impairment reported on non-performing exposures shall not include incurred but not reported losses. Incurred but not reported losses shall be reported in accumulated impairment on performing exposures. ‘ Accumulated changes in fair value due to credit risk ’ shall be reported for exposures designated at fair value through profit and loss in accordance with the applicable accounting framework. U.K.
162. Information on collateral held and financial guarantee received on non-performing exposures shall be reported separately. Amounts reported for collateral received and financial guarantees received shall be calculated in accordance with paragraphs 79 to 82. Therefore, the sum of the amounts reported for both collateral and financial guarantees shall be capped at the carrying amount of the related exposure.] ] U.K.
Textual Amendments
F1 Substituted by Commission Implementing Regulation (EU) 2015/227 of 9 January 2015 amending Implementing Regulation (EU) No 680/2014 laying down implementing technical standards with regard to supervisory reporting of institutions according to Regulation (EU) No 575/2013 of the European Parliament and of the Council (Text with EEA relevance).