EBA standardises information requirements to support sales and transfers of non-performing loans

16 December 2022

  • The EBA introduces information standardisation to increase the efficiency of secondary markets for sales of non-performing loans (NPL) and to reduce entry barriers for smaller banks and smaller investors.
  • The proposed NPL transaction data templates are built on previous voluntary templates and consider the experience of market participants from the sell- and buy-side and other stakeholders.
  • The NPL transaction data templates are the linchpin for numerous initiatives under the December 2020 European Commission’s action plan for NPL in the aftermath of the COVID-19 pandemic.

The European Banking Authority (EBA) today published its final draft Implementing Technical Standards (ITS) specifying the requirements for the information that credit institutions selling NPL shall provide to prospective buyers. The objective of the draft ITS is to provide a common data standard for the NPL sales or transfers across the EU enabling cross-country comparison and thus reducing information asymmetries between the sellers and buyers of NPL, thus improving the functioning of NPL secondary markets.

The draft ITS are built around the templates to be used for the provision of loan-by-loan information for the sales or transfers of NPL portfolios. The templates cover information regarding counterparties related to the loan, contractual characteristics of the loan itself, any collateral and guarantee provided, any legal procedures and enforcement procedures in place, and the historical collection of loan repayment. The NPL transaction data templates are also complemented by a data glossary and the instructions for filling in the templates.

The draft ITS are based on strong proportionality arrangements, focusing on the sales of portfolios of NPL and setting different information requirements depending on the nature of the borrowers and of the loans included in the portfolios to be sold, by specifying mandatory data fields. Proportionality is further reinforced by allowing all data fields to be treated as not mandatory for certain types of transactions.

These draft ITS have been submitted to the European Commission for adoption.


Article 16(1) of the Directive on credit servicers and credit purchasers (Directive (EU) 2021/2167) mandates the EBA to develop draft ITS to specify the templates to be used by credit institutions for the provision of information to credit purchasers when selling or transferring NPL for the purposes of financial due diligence and valuation of NPL.

The EBA has developed the draft ITS leveraging on the experience gained with the voluntary use of the NPL data templates, which it had developed in 2017 and reflecting the industry feedback on the use of these templates and wider market practices. The EBA collected this input while developing the discussion paper that was published in May 2021.

Through these draft ITS the EBA is not promoting sales or transfers of NPL as the main NPL reduction strategy and sees them as just one possible tool available to credit institutions. The EBA notes that it is for the credit institutions to determine best NPL reduction strategy in accordance with the EBA Guidelines on management of non-performing and forborne exposures.

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Franca Rosa Congiu

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