EBA欧洲银行-EBA-BS-2018-358-Final-report-on-GL-on-NPE_FBE_HR_73页_1mb

Summary of EBA/GL/2018/06 Guidelines

1. Compliance Obligations and Reporting

• Status of the Guidelines:
  These guidelines are issued in accordance with Article 16(3) of Regulation (EU) No 1093/2010. Supervisory authorities and credit institutions must make every effort to align with them.

• Reporting Requirements:
  Supervisory authorities must inform the EBA whether they have aligned with or intend to align with these guidelines, or provide reasons for non-compliance by a specified deadline. If no report is submitted, the EBA will assume non-compliance. Reports should be submitted using the available template via the EBA website to compliance@eba.europa.eu with the reference "EBA/GL/201x/xx". Reports must be submitted by persons authorized to report on compliance behalf of their supervisory bodies. Any changes in compliance status must also be reported.

2. Scope, Applicability, and Definitions

• Subject of the Guidelines:
  The guidelines outline best practices for credit institutions in managing non-performing exposures (NPEs), restructured exposures, and impaired assets. They are intended for use in supervisory reviews and assessments (SREP).

• Applicability:
  These guidelines apply in accordance with Article 74 of Directive 2013/36/EU. Credit institutions must apply them on a per-legal-entity, consolidated, and unconsolidated basis. All parts of the guidelines apply to all exposures classified as NPEs and restructured exposures as defined in Annex V of Commission Delegated Regulation (EU) No 680/2014.

• Key Definitions:

  • Non-performing exposure (NPE): Exposures classified as non-performing under Annex V of Regulation (EU) No 680/2014.
  • Impaired assets: Assets acquired by taking collateral, which are recognized in the balance sheet. This includes both financial and non-financial assets, regardless of their accounting classification.
  • Texas ratio: The ratio of non-performing loans to the institution's capital, including the amount of write-downs.
  • EBITDA: Earnings before interest, taxes, depreciation, and amortization.
  • Restructuring: Measures for restructuring as defined in Annex V of Regulation (EU) No 680/2014.
  • Restructured exposures: Exposures subject to restructuring measures.
  • Recovery: Activities related to the recovery of impaired exposures, including legal proceedings and asset recovery.
  • Recovery plan: A plan for the recovery of impaired assets, including the costs associated with liquidation.
  • Risk appetite framework: A framework that includes policies, processes, controls, and systems for managing risk exposure.

3. Implementation

• Effective Date:
  These guidelines become effective on 30 June 2019. Credit institutions must calculate their NPE ratios as of 31 December 2018 for the first application.

• Strategic Objectives:
  Credit institutions must develop and implement a strategy for managing NPEs, including defined quantitative objectives and recovery strategies. The strategy should be based on a comprehensive self-assessment and strategic options analysis. It must be approved by the management body and reviewed at least once a year.

4. Strategy for Non-Performing Exposures

4.1 Development of the Strategy

• Credit institutions should consider a combination of strategies and options for managing NPEs, including:

  • Strategy of Holding/Restructuring: Involves restructuring and options for restructuring.
  • Portfolio Reduction: Includes selling, securitization, or write-offs for non-recoverable NPEs.
  • Change in Exposure Type or Collateral: Such as asset recovery, collateral substitution, or debt restructuring.
  • Legal Options: Including pre-liquidation and liquidation proceedings, or out-of-court solutions.

• The strategy should include medium-term and long-term options for reducing NPEs, especially for those that may not be feasible in the short term.

4.2 Assessment of the Operational Environment

• Credit institutions must evaluate internal and external factors that affect their ability to manage NPEs, including:
  • Internal capabilities and performance in managing NPEs.
  • External conditions and market expectations.
  • Impact on capital and tax implications.
  • Legal and regulatory frameworks.
  • Risk appetite and internal capital adequacy assessment approach (ICAAP).

4.3 Objectives

• Credit institutions must define clear, realistic, and ambitious quantitative objectives for NPE reduction, both before and after write-downs, for each major portfolio and option.
• Objectives should be aligned with the overall risk strategy and business plan, including all relevant costs and potential losses.

4.4 Operational Plan

• The operational plan should support the strategy and include:
  • Time-bound objectives.
  • Activities to be carried out on a portfolio basis.
  • Management processes and reporting mechanisms.
  • Quality standards for activities.
  • Staff and resource requirements.
  • Technical infrastructure needs and improvement plans.
  • Detailed financial requirements for implementing the strategy.
  • Communication plans for internal and external stakeholders.

4.5 Integration of the Strategy

• The strategy must be fully integrated into the institution's risk management processes at all levels, including strategic and operational.
• The strategy should be clearly documented, with defined roles, responsibilities, and reporting lines.
• Employees and management involved in recovery activities should have clear individual or collective objectives and incentives aligned with the strategy and operational plan.
• The strategy must be aligned with the institution’s business plan and recovery plan, ensuring that all relevant elements are included in these documents.