- Question ID
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2023_6714
- Legal act
- Regulation (EU) No 575/2013 (CRR)
- Topic
- Transparency and Pillar 3
- Article
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449a
- COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
- Regulation (EU) 2022/2453 - ITS on ESG disclosures
- Article/Paragraph
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n/a
- Type of submitter
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Other
- Subject matter
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ESG P3 - Template 2 and 5 - Gross carrying amount for loans collateralized by RRE/CRE and multiple collaterals
- Question
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Question 1: For loans collateralised by CRE and/or RRE, to be reported in template 2 & 5, does the regulation allow to have their gross carrying amount not matching the gross carrying amount of the same loans reported in FINREP?
Question 2: Does Q&A 6517 apply for both template 2 and 5 or only for template 5?
- Background on the question
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Q&A 6517 indicates: “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”
ITS 2022/2453 indicates:
Template 2:
This template shows the gross carrying amount, as referred to in Part 1 of Annex V to Implementing Regulation (EU) 2021/451, of loans collateralised with commercial and residential immovable property and of repossessed real estate collaterals …
Template 5:
Institutions shall disclose the gross carrying amount as defined in Part 1 of Annex V to Implementing Regulation (EU) 2021/451 of those exposures towards non-financial corporates (including loans and advances, debt securities and equity instruments), classified under the accounting portfolios in the banking book in accordance with that Implementing Regulation
As soon as Q&A 2022_6517 is applied the amount reported in templates 2 and 5 will not match anymore with the amount reported in FINREP.
Example: 75.000 € loan collateralized by RRE and a cash deposit of 10.000 €. By applying the Q&A, the amount to be reported in Template 2 column a will be 65.000 € and the amount reported in Template 5 column b will be 65.000 €, while for FINREP the entire amount of 75.000 € is reported.
Moreover, we are wondering if it is really the spirit of the regulation to decrease in the template 2 the gross carrying amount by the value of collateral(s) which are not RRE or CRE. Concrete example: In France, for RRE mortgage loan, the bank practice is often to ask a collateral with the financed immovable property himself and in addition a guarantee. For such case you could have a loan with gross carrying amount of 75.000 € with a RRE collateral with market value equal to 100.000 € and a guarantee of 70.000 €. By applying QA 2022_6517, the amount discloses in template 2 will be 5.000 (75.000 – 70.000).
- Submission date
- Final publishing date
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- Final answer
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Question 1 :
The general treatment of loans collateralised by immovable property collateral is explained in Annex II - Instructions for disclosure of ESG risks of Regulation (EU) 2022/2453 (ITS on ESG disclosures). According to the instructions, the gross carrying amount is to be reported as defined in Part 1 of Annex V of Commission Implementing Regulation (EU) 2021/451. Q&A 6517 has been reviewed, and when a loan collateralized by both immovable property and other types of collaterals, the entire gross carrying amount of the exposure shall be computed for templates 2 and 5 of the ITS on ESG disclosures. Therefore, the amounts reported as “loans collateralized by immovable property” in templates 2 and 5 should match the carrying amount of the loans collateralized by immovable property reported in FINREP.
Question 2:
The above-mentioned instructions apply for both templates 2 and 5 of the ITS on ESG disclosures, as also stated in the updated Q&A_6517.
- Status
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Final Q&A
- Answer prepared by
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Answer prepared by the EBA.
Disclaimer
The Q&A refers to the provisions in force on the day of their publication. The EBA does not systematically review published Q&As following the amendment of legislative acts. Users of the Q&A tool should therefore check the date of publication of the Q&A and whether the provisions referred to in the answer remain the same.