Question ID:
Legal Act:
Regulation (EU) No 575/2013 (CRR)
Supervisory reporting - COREP (incl. IP Losses)
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations:
Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)
Annex 2
Disclose name of institution / entity:
Type of submitter:
Credit institution
Subject Matter:
Differentiation between specialised lending and sme exposures within exposure class corporates

The exposure class 'corporates' is splitted into sme, specialised lending and other corporates. Where must an institution report specialised lending exposures, that are at the same time exposures to sme? The implemented sme definition only the annualised returns (< 50 mln. EUR). Specialised lending exposures are identified through the rating methodologies, that have been applied to determine a credit quality.

Background on the question:

There is no direct differentiation between sme and specialised lending exposures in regulation 575/2013 and for the purposes of reporting. It is therefor not clear in which exposure class those sme exposures that also have been identified as specialised lending exposures, have to be reported.

Date of submission:
Published as Final Q&A:
Final Answer:
According to Article 147 of Regulation (EU) No 575/2013 (CRR), under the IRB Approach SMEs can be either classified under the retail exposures class, or under the exposures to corporates class, depending on whether they meet the criteria listed in Article 147 (5) CRR. 
Article 147 (8) CRR, on the separate identification of the specialised lending exposures, applies within the corporate exposure class, thus possibly including also exposures to SMEs.
According to Annex II of Regulation (EU) No 680/2014 (ITS on Supervisory Reporting) different sub-exposure classes (sheets of templates C 08.01 and C 08.02 of Annex I to the ITS on Supervisory Reporting) exist for “Corporates — SME” and “Corporates — Specialised Lending”, in each case with or without own estimates of LGD or conversion factors.
In accordance with the approach to calculate own funds requirements, exposures to Corporate SME which have been identified as specialised lending exposures in accordance with Article 147 (8) CRR shall always be reported in the sub-exposure class “Corporates — Specialised lending”.
Final Q&A
Answer prepared by:
Answer prepared by the EBA.