Regulatory Alerts2024-11-28
Added · Updated
Circular Letter No. CC/2024/00000050: Supervisory Expectations on Prudential Coverage for Real Estate Acquired via Loan Repayment
Credit institutions must apply progressive minimum prudential coverage to real estate acquired through loan repayment, starting at 16.7% in the fourth year and reaching 100% by the ninth year. Institutions must prioritize accounting impairments to meet these thresholds, with any shortfall deducted from Common Equity Tier 1 (CET1) capital. For less significant institutions, compliance is assessed in the Supervisory Review and Evaluation Process (SREP) from December 31, 2025, with specific supervisory measures applied if risks are inadequately covered.
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