The revised version of Annex V of Regulation (EU) No 680/2014 – ITS on Supervisory Reporting clarifies the scope of application of paragraph 157 and of paragraph 179.

Paragraph 157 now applies to all non-performing exposures with forbearance measures:

• exposures which have become non-performing due to the application of forbearance measures;
• exposures which were non-performing prior to the extension of forbearance measures;
• forborne exposures which have been reclassified from the performing category, including exposures reclassified in application of paragraph 179.

Paragraph 179 has been focused on performing forborne exposures under probation that have been reclassified out of the non-performing category (see Q&A 2014_736) because they have met the reclassification criteria (exit criteria from the non-performing category) in paragraph 157.

When a performing forborne exposure under probation period that has been reclassified out of the non-performing forborne exposures becomes 30 days past-due, it should be reclassified as non-performing forborne exposure in accordance with paragraph 179 and, for the discontinuation of its non-performing status, the criteria in paragraph 157 apply.

For non-performing exposures other than non-performing forborne exposures, the  discontinuation criteria in paragraph 156 apply.

If for a given debtor, some exposures are non-performing without being forborne and other exposures are non-performing forborne exposures, the criteria in paragraph 156 apply to the former and the criteria in paragraph 157 to the latter.

This application of different discontinuation criteria for different non-performing exposures to the same debtor holds true even when the institution determines non-performance on debtor and not transaction level. Indeed, forbearance measures, and the identification of an exposure as forborne, always apply to specific transactions and not to debtors.

If non-performance is identified at debtor level, a certain debtor can only be reclassified as performing if all individual parts of the overall exposure, be they non-performing forborne or non-performing not forborne, satisfy the respective reclassification criteria applicable in accordance with paragraph 157 (for non-performing forborne parts) and with paragraph 156 (for non-performing parts other than non-performing forborne ones). If at the time of the assessment any part of the exposure fails to meet any of these applicable criteria, the overall exposure to the debtor remains classified as non-performing.