Close The EBA website will be migrated to a new platform. The migration will take place between 16 October and 22 October. Please note that any content uploaded during this period will be received only after 22 October.

 

Single Rulebook Q&A

Question ID: 2014_1087
Legal act : Regulation (EU) No 575/2013 as amended by Regulation (EU) 2019/876 – CRR2
Topic : Supervisory reporting
Article: 26
Paragraph: 2
Subparagraph:
COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 183/2014 - RTS for the calculation of specific and general credit risk adjustments
Article/Paragraph : 1
Name of institution / submitter: Croatian National Bank
Country of incorporation / residence: Croatia
Type of submitter: Competent authority
Subject matter : Specific credit risk adjustments
Question: Which item in the CA1 report should be used for reporting "immediate reduction in Common Equity Tier 1 capital" as described under Article 1 paragraph 1 second subparagraph of the Commission Delegated Regulation (EU) No 183/2014, in order to reduce the amount of exposure for specific credit risk adjustments for the purposes of calculation of risk-weighted assets?
Background on the question: According to Article 1 paragraph 1 second subparagraph of the Commission Delegated Regulation (EU) No 183/2014, in the event of interim profits or year-end profits that have not been approved in accordance with Article 26(2) of Regulation (EU) No 575/2013, impairments, value adjustments or provisions for off-balance sheet items which have been recognised during the financial year may be included in the calculation of general and specific credit risk adjustments if the respective amounts have been deducted from an institution’s Common Equity Tier 1 capital (CET1), by way of a corresponding immediate reduction in CET1 capital for the determination of own funds. The "immediate reduction of Common Equity Tier 1 capital" described by the Commission Delegated Regulation (EU) No 183/2014 is not one of the items of the CET1 capital or deductions from the CET1 capital (as stated in part two of the CRR).Therefore we want to be sure that it is possible to report this reduction the CA1 template.
Date of submission: 22/04/2014
Published as Final Q&A: 06/11/2015
EBA answer:
The reporting of the reductions of CET1 capital according to Article 1 (1) second subparagraph of Commission Delegated Regulation (EU) No 183/2014 depends on the profit situation of the reporting institution.
 
If the impairments, value adjustments or provisions for off-balance sheet items (corresponding to general and specific credit risk adjustments), form part of an overall loss in the current financial year (Article 36 (1) (a) CRR), the amount is already reflected in row 160 of template C 01.00 (Annex II of Regulation (EU) 680/2014 - ITS on reporting).
 
In the specific case of impairments, value adjustments or provisions for off-balance sheet items reflected in interim profits or year-end profits that have not been approved by the competent authority in accordance with Article 26 (2) of the Regulation (EU) No. 575/2013 (CRR), for the general and specific credit risk adjustments to be recognised, a reduction of CET1 shall be reported in C 01.00, row 529 ( "CET1 capital elements or deductions - other") in accordance with the requirements of the second subparagraph of Article 1(1) of Commission Delegated Regulation (EU) No 183/2014.
Status: Final Q&A
Permanent link: link