Question ID
2023_6897
Legal act
Regulation (EU) No 575/2013 (CRR)
Topic
Transparency and Pillar 3
Article
449a
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Regulation (EU) 2022/2453 - ITS on ESG disclosures
Article/Paragraph
Annex 1 - Template 2
Type of submitter
Credit institution
Subject matter
ITS ESG P3 - Template 2 - Should loan/collateral ratio (loan-to-value) be taken into account?
Question

We have interpreted column a in Template 2 to be filled in with the gross carrying amount of the loan collateralized with commercial and residential immovable property and of repossessed real estate collaterals. What if the collateral value is less than the gross carrying amount of the loan? Should we in this case fill in the gross carrying amount of the loan or use the amount of the loan that is actually collateralized with commercial/residential immovable property in Template 2? 

Background on the question

The guidance given in the ITS is misleading in some way. It refers to Annex V of CIR (EU) 2021/451; that is, the instructions for Finrep. The Part 1 of Annex V is the general part where you find the definition of gross carrying amount etc. However, it does not give guidance on what should be done if the loan is undercollateralised. 

Submission date
Final publishing date
Final answer

According to EBA Q&A 6714 and the reviewed Q&A 6517, Annex II - Instructions for disclosure of ESG risks of Regulation (EU) 2022/2453 (ITS on ESG disclosures) shall be followed. The instructions state that the gross carrying amount is to be reported as defined in Part 1 of Annex V of Commission Implementing Regulation (EU) 2021/451. Therefore, the amounts reported as “loans collateralized by immovable property” in template 2 (and template 5) shall match the gross carrying amount of the loans collateralized by immovable property reported in FINREP.

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

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