Circular NBB_2019_21 / EBA guidelines on management of nonperforming and forborne exposures

NBB_2019_21 - 26th July 2019 Circular - Page 1 boulevard de Berlaimont 14 – BE-1000 Brussels Phone +32 2 221 53 33 Company number: 0203.201.340 RPM (Trade Register) Brussels www.nbb.be Circulaire Brussels, 26th July 2019 Reference: NBB_2019_21 Contact person:
Patrick VAN ROY tel. +32 2 221 53 33 patrick.vanroy@nbb.be Updated version of 22nd October 2019 European Banking Authority (EBA) guidelines of 31 October 2018 on management of non￾performing and forborne exposures (EBA/GL/2018/06) Scope Credit institutions governed by Belgian law and branches of credit institutions from third countries. Summary/Objectives The purpose of this circular is to implement the guidelines of the European Banking Authority (EBA) of 31 October 2018 on management of non-performing and forborne exposures (EBA/GL/2018/06). Dear Sir or Madam, This circular aims to implement the guidelines of the European Banking Authority (hereinafter referred to as “the EBA”) of 31 October 2018 on management of non-performing and forborne exposures. The English version of the EBA’s text is attached to this circular. It can be consulted on the National Bank of Belgium’s website. Motivation and overview of the guidelines Following the action plan developed by the European Council in July 2017 to address non-performing exposures (hereinafter “NPEs”) in Europe, the EBA took the initiative to draw up guidelines on management of non-performing and forborne exposures (hereinafter the “EBA guidelines”). One of the objectives of the EBA guidelines is to specify sound risk management practices for credit institutions for managing NPEs, forborne exposures and foreclosed assets. The guidelines also provide competent authorities with guidance on assessing credit institutions’ risk management practices, policies, processes and procedures for managing NPEs and forborne exposures as part of the supervisory review and evaluation process (SREP). The EBA Guidelines present a series of key elements on:
a) development and implementation of an NPE strategy; b) governance and operations for the NPE restructuring framework; c) governance and operations with respect to forborne exposures; d) governance and operations in relation to NPE accounting; e) governance and operations in relation to NPE impairment measurement and write-offs; f) valuation of immovable and movable property given as collateral for NPEs.