{"id":"circulars/cssf-22-803","title":"Circular CSSF 22/803","type":"circular","date":"2022-03-18","kind":"circular","html":"<p>Circular CSSF 22/803 is a CSSF circular on the introduction of a semi-annual data collection on lending indicators related to commercial real estate, published 18 March 2022 and updated 21 March 2022.</p>\n<p>Relevant for: Credit institutions.</p>\n<p>Keywords: Macroprudential instrument, Real estate market.</p>\n<h2>Text</h2>\n<p>Circular CSSF 22/803 Re: Introduction of a semi-annual data collection on lending indicators related to commercial real estate</p>\n<p>Luxembourg, 18 March 2022</p>\n<p>Ladies and Gentlemen,</p>\n<p>To all credit institutions and</p>\n<p>21 March 2019 amending Recommendation ESRB/2016/14 on closing real</p>\n<p>to all branches of EU and non-EU credit institutions, granting commercial real estate loans (hereinafter “lenders”)</p>\n<p>Following-up on the Recommendation of the European Systemic Risk Board of estate data gaps (ESRB/2019/3), the CSSF, as the national designated authority, aims at introducing a semi-annual data collection on lending indicators related to commercial real estate in Luxembourg. The collection of data and indicators will help identifying the build-up of systemic risks and assessing the potential need for macroprudential intervention. Granular and consistent data are necessary to capture market developments and to analyse systemic risks adequately. The circular introduces the definitions of these indicators, which are collected via a dedicated template available on the CSSF website.</p>\n<p>Key information</p>\n<p>Addressee</p>\n<p>Scope</p>\n<p>To all credit institutions and to all branches of EU and nonEU credit institutions, granting commercial real estate loans Loans aimed at acquiring a CRE property or secured by a CRE property</p>\n<p>threshold</p>\n<p>EUR 250 million, based on FINREP at the lowest solo level, Table 18, row 0140, column 010; to be computed in the month of December of the year preceding the submission date</p>\n<p>Frequency</p>\n<p>Semi-annual</p>\n<p>Reporting</p>\n<p>Submission date</p>\n<p>15 April and 15 October of each year</p>\n<p>Template</p>\n<p>Available on CSSF website</p>\n<p>Contact</p>\n<p>Scope and definitions Lenders are required to report the information requested in the template. The template is composed of six sheets: 1. A cover page, which asks for general information about the reporting institution; 2. A sheet describing the scope, to guide reporting institutions filling in the template; 3. A sheet on data related to the stock of existing CRE loans, non-performing loans (NPLs) and loan loss provisions (LLPs); 4. A sheet on data related to lending indicators on the stock of existing CRE loans; 5. A sheet on data related to the new production of CRE loans, NPLs and LLPs; 6. A sheet on data related to lending indicators on the new production of CRE loans; Lenders are required to report the information at the lowest solo level of consolidation (i.e. reporting on an individual level, excluding the foreign branches).</p>\n<p>1.1</p>\n<p>CRE loans, non-performing loans and loan loss provisions</p>\n<p>CRE loans are defined as loans aimed at acquiring a CRE property (or set of CRE properties) or secured by a CRE property (or set of CRE properties). This definition is composed of two scopes, referred to as “scope 1” and “scope 2”: -</p>\n<p>Scope 1: loans with a CRE purpose Scope 1 includes loans extended to a legal entity aimed at: (i) acquiring income-producing real estate (or a set of properties defined as income-producing real estate), either existing or under development, or (ii) acquiring real estate used by the owners of the property for conducting their business, purpose or activity (or a set of such properties), either existing or under construction.</p>\n<p>Scope 2: loans with a CRE collateral Scope 2 includes loans extended to a legal entity secured by a commercial real estate property (or set of commercial real estate properties).</p>\n<p>In this framework, lenders are asked to report the requested information in the various sheets according to these two scopes. For stock data, lenders should provide information on existing CRE loans, NPLs and LLPs, as at the end of the reporting period, while flow data are defined as all new production of loans, NPLs or LLPs, over the 6-month reporting period for the entire existing CRE portfolio.</p>\n<p>The text above is the opening of the document; the PDF carries the whole.</p>\n<p><a href=\"https://www.cssf.lu/en/Document/circular-cssf-22-803/\" target=\"_blank\" rel=\"noreferrer\">Document page</a>, <a href=\"https://www.cssf.lu/wp-content/uploads/cssf22_803eng.pdf\" target=\"_blank\" rel=\"noreferrer\">PDF</a>. Source: Commission de Surveillance du Secteur Financier (CSSF), reproduced with the CSSF's consent. The French text prevails.</p>"}