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    EBA Proposes Guidelines on Disclosure of Non-Performing Exposures

    April 27, 2018

    EBA proposed guidelines on disclosure of information on non-performing exposures (NPEs) and forborne exposures. The guidelines specify the information related to non-performing exposures and forborne exposures and foreclosed assets that banks should disclose and provide uniform disclosure formats. The consultation ends on July 27, 2018. EBA aims to publish the final guidelines, taking into account the comments received during the consultation, before the end of 2018.

    The guidelines include ten disclosure templates, of which four are applicable to all credit institutions and six apply only to significant institutions with a high level of NPEs. Overall, this uniform disclosure helps provide meaningful information to market participants on the asset quality of credit institutions. In addition, for institutions with high level of NPEs, the guidelines help gain a better insight into the features and distribution of their problematic assets, the quality and value of their collaterals, and the efficiency of their recovery function. The guidelines apply to credit institutions that are subject to all or part of the disclosure requirements specified in the Capital Requirements Regulation (CRR). These requirements, including the frequency of the disclosure, are applied in a proportionate manner based on the significance of the credit institution and the level of NPEs. 

    The content of the uniform templates included in the guidelines has been developed in parallel with the amendments to the reporting framework on NPEs, which EBA will consult on. Although the two consultations will be run separately, EBA will ensure consistency between the disclosure guidelines and the amended FINREP framework. EBA has developed these guidelines following the conclusions reached by the Council in July 2017 to set up an Action Plan to tackle non-performing loans (NPLs) in Europe, wherein EBA was asked to contribute with a number of initiatives. The enhanced disclosure requirements developed in these draft guidelines form a part of these initiatives.

     

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    Comment Due Date: July 27, 2018

    Keywords: Europe, EU, Banking, Non-performing Exposures, NPLs, Disclosures, Proportionality, CRR, EBA

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