Question ID:
2022_6517
Legal Act:
Regulation (EU) No 575/2013 (CRR)
Topic:
Transparency and Pillar 3
Article:
Article 449a CRR
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations:
Not applicable
Article/Paragraph:
EBA/ITS/2022/01, Final draft implementing technical standards on prudential disclosures on ESG risks in accordance with Article 449a CRR
Disclose name of institution / entity:
No
Type of submitter:
Credit institution
Subject Matter:
Multiple collaterals reporting for Pillar 3 ESG risks disclosure, Template 2 and 5
Question:

In case a loan has multiple collaterals (of which immovable property and also other collateral types) should the entire gross carrying amount be reported as collateralised by the immovable property or should the amount be pro-rated?

Background on the question:

In Template 2 of Annex XXXIX to the Final draft implementing technical standards on prudential disclosures on ESG risks in accordance with Article 449a CRR we are asked to report on our loans collateralised by immovable property. 

Guidance is given for loans collateralised by multiple immovable properties but no guidance is given for those loans collateralised by both immovable property and other collateral types. 

Date of submission:
13/07/2022
Published as Final Q&A:
25/11/2022
Final Answer:

The general treatment of a loan with multiple collaterals is explained or addressed in ANNEX XL - Instructions for disclosure of ESG risks of Final draft implementing technical standards (EBA/ITS/2022/01) on prudential disclosures on ESG risks in accordance with Article 449a CRR, even though the developed example refers to a loan with two immovable collaterals. Therefore, the instructions in Paragraph 15 apply: “More specifically, institutions shall calculate the share of each collateral in the gross carrying amount of exposure on the basis of the value of the collateral”. As a result, when dealing with a loan collateralized by both immovable property and other types of collaterals, the gross carrying amount of the exposure shall be computed pro-rata, i.e. on the basis of the market value of the immovable property part of the collaterals only. Therefore, the value to be indicated as the gross carrying amount of exposure is the carrying amount of the loan minus the market value of the collaterals that are not immovable property collaterals.

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