Mortgage & Lending

What Changed

Introduces precise definitions for CRR Article 126a(2) terms, enabling 100% risk weight (instead of 150%) for ADC exposures to residential property if conditions are met: at least 50% of total contracts as pre-sale/pre-lease agreements with substantial cash deposits (e.g., ≥10% of sale price for sales, ≥3x monthly lease for leases), or equivalent financing/sale-lease combos; plus obligor equity ≥25% of completed property value. Mandates "sound standards for lending and credit monitoring" alongsi

What You Need To Do

• Review and classify ADC exposures against EBA-defined criteria (e
• Update internal policies, risk assessment models, and credit approval processes to incorporate "sound lending standards" and EBA specifications, including social housing carve-outs
• Recalculate capital requirements under standardized credit risk approach; report changes via CRR disclosures
• Maintain documentation proving compliance (e
• Institutions must "make every effort to comply" per EBA Regulation Article 16(3)

Key Dates

References

• [1] banking.vision
• [2] finanssivalvonta.fi
• [3] regulationtomorrow.com
• [4] cssf.lu
• [5] jdsupra.com
• [6] cssf.lu
• [7] cssf.lu
• [8] eba.europa.eu

What Changed

Full deletion of SS20/15: Removes all expectations on treasury and lending activities, including the "Treasury Approaches" framework, without replacement. Consequential amendments: Updates SS31/15 (Internal Capital Adequacy Assessment Process and Supervisory Review and Evaluation Process) to excise references to SS20/15. Alignment with broader policy: Addresses inconsistencies with PRA's approach for banks, improved sector risk management maturity, and proportionality for smaller firms; supports

What You Need To Do

• Review and update policies
• Assess risk management
• Update governance documents
• Engage supervisors
• Monitor related reforms

References

• [1] addleshawgoddard.com
• [2] regulationtomorrow.com
• [3] bankofengland.co.uk
• [4] pwc.co.uk
• [5] regulationtomorrow.com
• [6] bankofengland.co.uk
• [7] bankofengland.co.uk
• [8] fca.org.uk

What Changed

Retail deposits threshold raised from £50 billion to £75 billion, adjusted upward from the CP2/25 proposal of £70 billion to account for further GDP growth to Q2 2025 (rounded to nearest £5 billion). Introduction of a three-year moving average for calculating retail deposits metric, replacing point-in-time values to mitigate volatility and aid capital planning, particularly for building societies. Non-UK assets threshold remains unchanged at £10 billion. Modifications by consent disapplying leve

What You Need To Do

• Review and update internal retail deposits calculations to incorporate three-year moving average methodology starting 1 January 2026
• Assess current and projected retail deposits against £75 billion threshold (and £10 billion non-UK assets) to determine leverage ratio applicability and adjust capital planning accordingly
• Prepare to meet 3
• For firms with modifications by consent
• Update governance, risk models, and board reporting to reflect changes; conduct gap analysis against PRA Rulebook appendices in PS22/25

Key Dates

References

• [1] regulationtomorrow.com
• [2] bankofengland.co.uk
• [3] bankofengland.co.uk
• [4] addleshawgoddard.com
• [5] jdsupra.com
• [6] lexisnexis.co.uk
• [7] jdsupra.com
• [8] innovatefinance.com