Lima, 19 March 2015

S.B.S. Resolution No. 1782-2015

The Superintendent of Banking, Insurance and
Private Pension Fund Administrators

WHEREAS:

That, by means of SBS Resolution No. 11356-2008 and its amending rules, the Regulation for the Evaluation and Classification of the Debtor and the Provision Requirement was approved, in which are established, among other aspects, the criteria that companies must follow to determine the classification and provision of the debtors that make up their loan portfolio;

That, by means of SBS Resolution No. 14354-2009 and its amending rules, the Regulation for the Effective Equity Requirement for Credit Risk was approved, hereinafter the Regulation, in which is established the methodology that must be applied, as well as the requirements that companies must comply with to calculate the effective equity requirement for credit risk using the standard method or the internal ratings-based methods;

That, it is necessary to make some clarifications related to the treatment of mortgage loans for housing and their guarantees;

That, likewise, it is necessary to incorporate the aforementioned clarifications into the Accounting Manual for companies of the financial system, approved by SBS Resolution No. 895-98 and its amending and supplementary rules;

That, in order to gather the opinions of the general public, the publication of the draft resolution on the matter was ordered on the Superintendency's electronic portal, under the provisions of Supreme Decree No. 001-2009-JUS;

With the approval of the Deputy Superintendencies of Banking and Microfinance, Insurance, Risks, Economic Studies and Legal Counsel; and,

In use of the powers conferred by numerals 7 and 9 of article 349° of the General Law of the Financial System and the Insurance System and Organic Law of the Superintendency of Banking and Insurance, Law No. 26702 and its amending rules;

RESOLVES:

Article One.- To amend the Regulation for the Evaluation and Classification of the Debtor and the Provision Requirement, approved by SBS Resolution No. 11356-2008 and its amending rules, in accordance with the following:

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1. To replace paragraph 9 of numeral 2.1 "General Treatment" of Chapter III "Provision Requirement", in accordance with the following:

"For loans that have the subsidiary responsibility of central governments and their agencies, central banks, International Monetary Fund, European Central Bank, Bank for International Settlements, multilateral development banks listed in article 16° of the Regulation for the Effective Equity Requirement for Credit Risk, companies of the financial system or of the insurance system of the country and abroad, as well as other entities with Risk II in accordance with the Regulation for the Effective Equity Requirement for Credit Risk, instrumented in (i) joint and several letters of guarantee, (ii) sureties, (iii) bank acceptances, iv) surety bonds, v) export credit insurance for pre- and post-shipment financing, (vi) letters of credit, stand-by letters of credit or similar guarantees, provided they are irrevocable with documents negotiated without discrepancies, (vii) credit derivatives (only total return swap and credit default swap); or that have credit insurance coverage extended by a credit insurance autonomous patrimony; or with coverage of a guarantee fund constituted by Law, or with the risk coverage provided by Fondo MIVIVIENDA S.A. that is applicable and in force in accordance with the rules established by said Fund, the provision requirement corresponds to the credit classification of whoever provides the credit protection, for the covered amount, regardless of the classification of the debtor and the type of loan of the original debtor. For the credit classification of the counterparties that provide the credit protection, the criteria indicated in Chapter II of this Regulation must be considered."

2. To replace paragraph 10 of numeral 2.1 "General Treatment" of Chapter III "Provision Requirement", in accordance with the following:

"The portion of the mortgage loan for housing with risk coverage from Fondo MIVIVIENDA S.A. may receive the same treatment as a loan with self-liquidating guarantee provided that the following is complied with:

a) The mortgage loans have been granted with resources from Fondo MIVIVIENDA S.A.; and

b) The risk coverage provided by Fondo MIVIVIENDA S.A. in favor of the company is applicable and in force, in accordance with the rules established by said Fund.

When debtors, regardless of the type of loan and the guarantee they have, remain classified in the Doubtful category for more than 36 months or in the Loss category for more than 24 months, they must constitute provisions in accordance with the rates indicated in Table 1. Said criterion does not apply to debtors whose credit classification is due to the application of the alignment procedure, nor to debtors that have mortgage loans for housing, classified in said categories as a result of the application of literal c) of numeral 5.2 of Chapter I of this Regulation, provided that the mortgage loans for housing are in the accounting situation of current.

3. To amend numeral 3.4 of numeral 3 "Valuation of Guarantees" of Chapter IV "General and Special Provisions", in accordance with the following:

"3.4 In the case of mortgages and movable guarantees that must be registered in accordance with this Regulation, it must be verified whether these have been effectively registered in the corresponding registries and that they have insurance covering the loss of the asset, duly endorsed in favor of the company. If this is not the case, they cannot be considered as preferred guarantees, unless there is a registry block, which is considered as a guarantee constituted for a term of no more than ninety (90) days counted from its registration.

4. Incorporate numeral 3.10.5 into numeral 3 "Valuation of Guarantees" of Chapter IV "General and Special Provisions", in accordance with the following:

"3.10.5 Letters of guarantee issued by companies supervised by the Superintendency that guarantee the completion of a property, its independence and subsequent constitution of mortgage in favor of the company (applicable only for mortgage loans for housing, when it is not possible to constitute the mortgage because they are future assets)."

5. Incorporate literal d) into numeral 3.12 of numeral 3 "Valuation of Guarantees" of Chapter IV "General and Special Provisions", in accordance with the following:

"d) Credit risk coverage provided by the Fondo MIVIVIENDA S.A. The portion of the mortgage loan for housing with risk coverage from the Fondo MIVIVIENDA S.A. may receive the same treatment as a loan with self-liquidating guarantee, provided that the following is met: i) the mortgage loans have been granted with resources from the Fondo MIVIVIENDA S.A.; and ii) the risk coverage provided by the Fondo MIVIVIENDA S.A. in favor of the company is applicable and remains in force, in accordance with the rules established by said Fund."

6. Incorporate as Seventh Final and Transitory Provision, the following:

"SEVENTH.- In relation to the modifications to the Regulation established by SBS Resolution No. 1782-20151, the following must be specified:

a. In the event a company chooses to treat the credit risk coverage provided by the Fondo MIVIVIENDA as a self-liquidating guarantee, it may do so for mortgage loans disbursed as of 01.07.2010.

b. The letters of guarantee referred to in numeral 3.10.5 of numeral 3 "Valuation of Guarantees" of Chapter IV "General and Special Provisions" are accepted as preferred guarantees, regardless of the disbursement date of the mortgage loan for housing."

Article Second.- Modify the Regulation for the Requirement of Effective Equity for Credit Risk, approved by SBS Resolution No. 14354-2009 and its amending norms, in accordance with the following:

1. Incorporate as literal nn) in article 2 "General definitions", the following:

"nn) Real estate trust: Trust whose purpose is the management of a real estate project in accordance with the stipulations of the constitutive act, through the generation of an autonomous patrimony that allows reducing the risk of non-completion of work and that provides coverage to the guaranteed obligations of the trustors and the holders of participation certificates. Said management comprises the administration of real estate, of the resources from the sale of the real estate units, of the financings to the promoter, of the contributions of the promoter and of other assets and resources that form part of the real estate project (such as descriptive reports, plans, among others). The management also includes making

[1] Errata of SBS Resolution No. 1782-2015, published in the newspaper El Peruano dated 26.03.2015.

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the payments associated with the development and completion of the project charged to the funds in the trust patrimony; as well as the regulation for the physical delivery and legal transfer of the constructed real estate units to those who have acquired them."

2. Replace paragraphs 5 and 6 of article 21 "Mortgage loans for housing", with the following:

"Article 21.- Mortgage loans for housing

(…)

Below are indicated the weighting factors applicable to mortgage loans for housing considering the established thresholds of the prudential indicator and the residual terms.

Mortgage Loans for Housing	Residual terms
	Up to 20 years	More than 20 up to 30 years	More than 30 years
Loan with registered guarantee below the prudential indicator	50%	75%	100%
Loan with registered guarantee that exceeds the prudential indicator	100%	150%	200%
Loan without registered guarantee below the prudential indicator, when the construction of the financed property is administered through real estate trust(s) and the trustee is a company supervised by the Superintendency	50%	75%	100%
Loan without registered guarantee that exceeds the prudential indicator, when the construction of the financed property is administered through real estate trust(s) and the trustee is a company supervised by the Superintendency	100%	150%	200%
Loan without registered guarantee below prudential indicator	100%	150%	200%
Loan without registered guarantee that exceeds the prudential indicator	150%	200%	250%

In the case of loans that do not have a registered mortgage because they are future assets but have letters of guarantee issued by companies supervised by the Superintendency that guarantee the completion of the property, its independence and subsequent constitution of mortgage in favor of the company, the treatment is similar to that of a loan with registered mortgage.

Mortgage loans for housing that have coverage from the Fondo MIVIVIENDA S.A. receive the following treatment:

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a) First, the prudential indicator is calculated considering the entirety of the loan.

b) The part of the mortgage loan for housing that has credit risk coverage provided by the Fondo MIVIVIENDA S.A. may receive the same treatment as an exposure that has a real movable guarantee, provided that the following is met:

• The mortgage loans have been granted with resources from the Fondo MIVIVIENDA S.A.; and

• The risk coverage provided by Fondo MIVIVIENDA S.A. in favor of the company is applicable and in force, in accordance with the rules established by said Fund.

If the coverage of Fondo MIVIVIENDA S.A. is treated as a movable real guarantee, an adjustment is applied to reduce its value by 5%. To the amount of the mortgage loan for housing net of the adjusted movable real guarantee, the corresponding factor is applied in accordance with the previous table, considering the prudential indicator calculated in item a).

c) If the mortgage loans for housing have not been granted with resources from Fondo MIVIVIENDA, but the risk coverage provided by Fondo MIVIVIENDA S.A. in favor of the company is in force, in accordance with the rules established by said Fund, the weighting factor for the covered portion of the loan is the one corresponding to Fondo MIVIVIENDA S.A., in accordance with the provisions of Article 17°.

To the balance of the loan not considered in the previous paragraph, the corresponding weighting factor is assigned in accordance with the previous table, considering the prudential indicator calculated in item a).”

3. Replace item d) of Article 43° “Eligible personal guarantees”, with the following:

“d) Risk coverage provided by Fondo MIVIVIENDA S.A. in favor of the company that is applicable and in force, in accordance with the rules established by said Fund.”

4. Replace the third and fourth paragraphs of the Ninth Final Provision, with the following:

“For mortgage loans for housing recorded accounting-wise up to 31 December 2012, the portion covered by the net realizable value of the mortgage guarantee has a weighting factor of 50%, while the portion above the net realizable value of the mortgage guarantee has a weighting factor of 100%.

In the case of MIVIVIENDA loans recorded accounting-wise up to 31 December 2012, the part covered by Fondo MIVIVIENDA may receive the same treatment as an exposure that has a movable real guarantee, provided that the following is met:

• The mortgage loans have been granted with resources from Fondo MIVIVIENDA S.A.; and

• The risk coverage provided by Fondo MIVIVIENDA S.A. in favor of the company is applicable and in force, in accordance with the rules established by said Fund.

If the coverage of Fondo MIVIVIENDA S.A. is treated as a movable real guarantee, an adjustment is applied to reduce its value by 5%. To the portion covered by the net realizable value of the mortgage guarantee, net of the coverage of Fondo MIVIVIENDA S.A., the weighting factor of 50% is applied. To the balance of the loan, the weighting factor of 100% is applied.

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If the mortgage loans for housing recorded accounting-wise up to 31 December 2012 have not been granted with resources from Fondo MIVIVIENDA S.A., but the risk coverage provided by Fondo MIVIVIENDA S.A. in favor of the company is in force, in accordance with the rules established by said Fund, to the part of the mortgage loan for housing covered by said fund, the weighting factor is applied in accordance with the provisions of Article 17° and Seventh Final Provision of this Regulation. To the portion covered by the net realizable value of the mortgage guarantee, net of the coverage of Fondo MIVIVIENDA S.A., the weighting factor of 50% is applied. To the balance of the loan, the weighting factor of 100% is applied.

To non-revolving consumer exposures and to mortgage loans for housing recorded accounting-wise as of 1 January 2013, as well as to revolving consumer exposures whose contracts have been signed as of 1 January 2013, the weighting factors indicated in Articles 20° and 21° of this Regulation are applied. The modifications incorporated by Resolution SBS N° 1782-2015 2 are applicable to mortgage loans for housing recorded accounting-wise as of 1 January 2013.”

Article Third.- Modify the Accounting Manual for financial system companies, approved by Resolution SBS N° 895-98 and amending and complementary rules, in accordance with the provisions of Annex “A”, which is published on the Institutional Portal (www.sbs.gob.pe), in accordance with the provisions of Supreme Decree N° 001-2009-JUS.

Article Fourth.- This Resolution enters into force as of the first day of the month following its publication in the Official Gazette El Peruano.

Register, communicate and publish,

DANIEL SCHYDLOWSKY ROSENBERG
Superintendent of Banking, Insurance and
Private Administrators of Pension Funds

[2] Errata of Resolution SBS N° 1782-2015, published in the newspaper El Peruano dated 26.03.2015.

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ANNEX A

MODIFICATIONS TO THE ACCOUNTING MANUAL FOR FINANCIAL SYSTEM COMPANIES

I. Modify Chapters III “Chart of Accounts” and IV “Description and Dynamics of Accounts” of the Accounting Manual for Financial System Companies, in accordance with the following:

1. Incorporate the following analytical accounts, as well as their description:

8404.02.22	Letters of guarantee that back future constitution of mortgage Letters of guarantee issued by companies supervised by the Superintendency that guarantee the completion of a property, its subdivision and subsequent constitution of mortgage in favor of the company (applicable only for mortgage loans for housing, when it is not possible to constitute the mortgage because they are future assets).
8404.04.03	Gold in ingots in custody of the lending company
8404.04.04	Risk coverage provided by Fondo MIVIVIENDA S.A. The portion of the mortgage loan for housing with risk coverage from Fondo MIVIVIENDA S.A. may receive the same treatment as a loan with self-liquidating guarantee provided that the following is met: i) the mortgage loans have been granted with resources from Fondo MIVIVIENDA S.A.; and ii) the risk coverage provided by Fondo MIVIVIENDA S.A. in favor of the company is applicable and remains in force, in accordance with the rules established by said Fund.