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Non-Performing Exposures

Commission Implementing Regulation (EU) laying down implementing technical standards with regard to supervisory reporting of institutions defines "non-performing exposures" and lays down new rules on the management of forborne exposures.

The new definition of exposures is broader than that of loans, as it includes all debt instruments (loans and advances and debt securities), as well as off-balance-sheet exposures.  

In addition to exposures past due over 90 days, the new definition of "non-performing exposures" also includes exposures that are "unlikely to pay", which are designated as "non-performing" on the basis of qualitative criteria, although they are either performing or are less than 90 days past due.

In May 2014, the Bank of Greece adopted Executive Committee Act 42/30 May 2014 laying down a specific framework of requirements for the management of exposures in arrears and non-performing exposures by credit institutions. This framework imposes the following main obligations on credit institutions:

(a) to establish an independent arrears and NPL management (ANPLM) function;
(b) to develop a separate, documented ANPLM strategy, the implementation of which will be supported by appropriate Management Information Systems (MIS) and procedures; and
(c) regular reporting to the management of the credit institution and the Bank of Greece.

In February 2015, the Bank of Greece adopted Executive Committee Act 47/9 February 2015 introducing modifications/improvements to reporting templates under ECA 42/30 May 2014. Some key points of the modified templates include:

  • Detailed segmentation of portfolios in accordance with the general principle of "mutually exclusive" segments.
  • Detailed information by portfolio segment and arrears bucket.
  • Establishment of a new sub-category of denounced exposures under non-performing exposures, due to the need to monitor these exposures separately, and a detailed account of legal workout activities.
  • Breakdown of collateral by type of collateral.
  • Sectoral breakdown of corporate loans.
  • Minimum standardisation and classification of widely applied forbearance measures and resolution and closure solutions in 22 indicative types.

In August 2016, under Executive Committee Act 102/30.8.2016, the Bank of Greece introduced modifications/improvements to reporting templates, in order to include data allowing the monitoring of the following: 

  • Operational targets and Key Performance Indicators (KPIs) regarding banks' actions to deal with their non-performing exposures.
  • Actions to manage loans in arrears in accordance with the Code of Conduct.

In March and April 2018, under Executive Committee Acts 134/05.03.2018 and 136/02.04.2018, the Bank of Greece introduced new modifications/improvements to reporting templates (Greek only) , in order to include new data allowing the monitoring of the following:

      • Auction procedures.

      • Collateral obtained by taking possession.

      • Participation to Out-of-Court Workout (OCW).

Reporting tables under the new template COR 25 shall be submitted every quarter on a solo basis by liable credit institutions having their head office in Greece, for submissions concerning data from 31.12.2016 onwards, according to the relevant Reporting Instructions. The first table shall also be submitted every quarter on a consolidated basis.

The Bank of Greece publishes on a quarterly basis an aggregate Report on Operational Targets for Non-Performing Exposures.