Question ID:
2020_5239
Legal Act:
Regulation (EU) No 575/2013 (CRR)
Topic:
Supervisory reporting - FINREP (incl. FB&NPE)
Article:
99
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations:
Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (as amended)
Article/Paragraph:
Annex V Part 2 Para 360 (a) (ii)
Disclose name of institution / entity:
Yes
Name of institution / submitter:
Banca d’Italia – PUMA cooperation
Country of incorporation / residence:
Italy
Type of submitter:
Competent authority
Subject Matter:
FinRep Table 26: Loans and advances to which forbearance measures were granted in addition to already existing forbearance measures
Question:

It is unclear if the following exposures have to be reported in row 120 of template F 26.00:
- Example A : an exposure was classified as non-performing with forbearance measures and fulfilled all required exit criteria mentioned in paragraph 231. During the 2 year probation period mentioned in paragraph 256 the exposure is granted an additional forbearance measure. At the reference date the exposure is classified as non-performing because the new forberance measure has been extended to a performing forborne exposure under probation that has been reclassified out of non-performing category (according to paragraph 260).
- Example B : a performing exposure is granted a forbearance measure. During the 2 year probation period the exposure is granted an additional forbearance measure. According to Q&A 2014_736 the exposure shall not be automatically reclassified into the "non-performing forborne" category and then at the reference date the exposure is classified as performing.
- Example C: a performing exposure is granted a forbearance measure. During the 2 year probation period the exposure is granted an additional forbearance measure. According to Q&A 2014_736 the exposure shall not be automatically reclassified into the "non-performing forborne" category. Nevertheless, if the bank considers that there exist some conditions of "unlikeliness to pay", the exposure A shall be reclassified into the "non-performing forborne" category. Then at the reference date the exposure is classified as non-performing.

Background on the question:

According to paragraph 360 (a) (ii) « ‘Loans and advances to which forbearance measures were granted in addition to already existing forbearance measures’ shall mean forborne exposures under probation to which forbearance measures were applied in addition to forbearance measures granted at an earlier point in time, without the exposure having cured in between ».
The meaning of this sentence is not clear to us, in particular the phrasing « without the exposure having cured in between ».
It would appear that the paragraph in question requires that in row 120 of template F 26.00 should be reported the exposures that are non performing at the reference date and to which, during the 2 year probation period, forbearance measures were applied in addition to forbearance measures granted at an earlier point in time.

Date of submission:
08/05/2020
Published as Final Q&A:
19/03/2021
EBA Answer:

Paragraph 360(a)(ii) of Annex V to Regulation (EU) No 680/2014 (ITS on Supervisory Reporting),specifies that for an exposure to be classified in row 120 of template F 26.00, it needs to fulfil the following definition: “forborne exposures under probation to which forbearance measures were applied in addition to forbearance measures granted at an earlier point in time, without the exposure having cured in between”.

According to this paragraph, when additional forbearance measures were granted to a performing forborne exposure under probation period without exiting the forborne status, the exposures shall be reported in row 120, regardless of their classification as non-performing or performing forborne exposures.  

For this reason, all examples laid out in the question shall be reported in row 120 of template F 26.00, as the exposures have not exited the forborne status.

Status:
Final Q&A
Answer prepared by:
Answer prepared by the EBA.
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