Question ID
2024_7175
Legal act
Regulation (EU) No 575/2013 (CRR)
Topic
Credit risk
Article
Article 124
Paragraph
6
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Not applicable
Article/Paragraph
N/A
Type of submitter
Credit institution
Subject matter
CRR3 - ETV calculation
Question

With the CRR3 application, can you please confirm us the way to calculate the ETV ratio?

Background on the question

Following Article 124ยง6, the Exposure-to-value (ETV) ratio shall be calculated by dividing the gross exposure amount by the property value.

The article 124 is related to exposures secured by mortgages on immovable property and the paragraph 2 refers to the non-ADC exposures up to the nominal amount of the lien.

We would like to know if the ETV calculation has to be calculated for the amount up to the nominal of lien and not on the whole amount of the loan.

For example, if we have a loan of 300.000 EUR, the nominal amount of the lien (notary act) is equal to 100.000 EUR and the property value is equal to 200.000 EUR. What will be the ETV?

Submission date
Status
Question under review
Answer prepared by
Answer prepared by the EBA.