Linee guida BCE sulla gestione dei crediti deteriorati (NPL): pubblicato documento integrativo di consultazione

The ECB published for consultation an addendum aimed to supplement and reinforce the ECB guidance to banks on non-performing loans (NPL) of 20 March 2017, in order to foster timely provisioning and write-off practices.

Specifically, the draft addendum supplements the NPL guidance by specifying the quantitative supervisory expectations concerning the minimum levels of prudential provisions expected for non-performing exposures. The expectations are based on the length of time an exposure has been classified as non-performing as well as the collateral held (if any).

The document specifies: the functioning of the minimum levels of prudential provisions; the terms under which banks can deviate from the backstops; types of collateral or other forms of credit risk protection are accepted for either fully or partially securing non-performing exposures; and methods for calculating the vintage count for fully and partially secured and fully unsecured exposures.

The addendum does not substitute or supersede any applicable regulatory or accounting requirement or guidance from existing EU regulations or directives and their national transpositions, applicable national regulation of accounting, binding rules and guidelines of accounting standard setters or equivalent, or guidelines issued by the European Banking Authority (EBA), similar to the NPL guidance and is applicable starting from its publication date.

The addendum applies to all significant banks directly supervised by the ECB. While the addendum is non-binding, banks are expected to explain any deviations and should report on the compliance with the prudential provisioning backstop laid out in the addendum at least annually.

The consultation will close the next 8 December.

Download the Addendum and answers to the FAQs relating to the Addendum.