EBA Q&A · 2015_1717
Exit from forbearance classification in non-performing status if forbearance measures failed.
Final Q&Afiled under Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed) (repealed)Submitted 09/01/2015 · published 05/02/2016
Question · verbatim
In the bank we have a question on forbearance exit rules. While the exit from forbearance in case of upgrade from default is clearly defined, the exit from forbearance classification in case of legal proceeding seems non existing. In EBA final draft on forbearance is no clear rule on reporting of non-performing forbearance when forbearance measures failed and a court procedure, e.g. compulsory settlement, bankruptcy or foreclosure, takes place.
Background provided by the submitter · verbatim
Based on the notion of forbearance action on the debt of the obligor with financial difficulties we consider that the move to compulsory settlement, bankruptcy or foreclosure status are not any more the concessions to obligor and therefore should not be in the scope of reported non-performing forbearance exposure reporting
Answer · verbatim
The discontinuation of the forbearance status follows the provisions of paragraph 176 of Regulation (EU) No 680/2014 – ITS on Supervisory Reporting of institutions (ITS). To cease being identified as forborne, an exposure shall, among other requirements, be considered as performing.
The discontinuation of the non-performing status of a forborne exposure is governed by the provisions of paragraph 157, as specified by Q&A
2014_735
. It follows from this paragraph that the non-performing classification of a forborne exposure cannot be discontinued when the exposure is classified as impaired or defaulted, or where there is any past-due amount or concern regarding the full repayment of the exposure according to the post-forbearance conditions.
In case forbearance measures do not result in an improvement in the situation of the debtor but in a court procedure, leading to a compulsory settlement, bankruptcy or foreclosure, the exposure to which forbearance measures is related should remain classified as non-performing forborne exposure and reported as such in FINREP. Indeed, the court procedure can be considered as a default event in application of Article 178(3)(e) and (f) of Regulation (EU) 575/2013 (CRR), and even if it were not identified as a default event, it evidences a concern regarding the full repayment of the exposure according to the post-forbearance conditions.
Source: EBA Single Rulebook Q&A 2015_1717 · text as published, not rephrased · collected on 2026-10-08