Update 28 July 2020: The PRA published a ‘Statement by the PRA on EBA Guidelines on reporting and disclosure of exposures subject to measures applied in response to the Covid-19 outbreak’ which sets out how the EBA disclosure requirements are to be implemented and how firms should submit their disclosures, following the previous statements dated Wednesday 24 June and Friday 10 July. The disclosure template was published alongside this statement.
Update 10 July 2020: The PRA has now considered how to apply the disclosure elements of the guidelines.
The PRA considers that there is substantial benefit to disclosure-users from public information about the effects of the measures that UK firms have taken in response to Covid-19. Nevertheless, the PRA intends to exercise the options available in the EBA Guidelines to ensure they are implemented in a proportionate manner.
As a result, the PRA expects that UK banks and building societies which: (i) are, or are controlled by, global or other systemically important institutions designated by the PRA in the most recent list; and (ii) have retail deposits equal to or greater than £50 billion on an individual or consolidated basis, should make disclosures similar to those prescribed by the EBA Guidelines, but incorporating a number of modifications that the PRA will set out. The PRA expects such firms to make these disclosures for the highest level of consolidation in the UK.
The PRA is finalising the design of the disclosure templates, including to ensure they capture the full range of payment moratoria available within the UK, and will share these with relevant firms directly in due course.
The PRA realises there may be practical difficulties caused by the publication of the EBA Guidelines and templates, and the details of the PRA implementation of the EBA Guidelines, close to the Tuesday 30 June 2020 disclosure reference date. With this in mind, the PRA does not expect that firms include these disclosures in the main Pillar 3 disclosures made for the Tuesday 30 June 2020 reporting period, and accepts that firms may need to make disclosures for the Tuesday 30 June 2020 reference date at a later time. Any such delay to the publication of these additional disclosures should be no longer than necessary.
On 2 June 2020, the European Banking Authority published its 'Guidelines to address gaps in reporting data and public information in the context of Covid-19' (‘the Guidelines on Covid-19 reporting and disclosure’).
The PRA has considered how to approach these guidelines in light of the FCA and PRA approach to payment deferrals, and in light of the data the PRA is already collecting from UK credit institutions in relation to payment deferrals.
The PRA does not consider it necessary at this time to extend the supervisory reporting elements of the Guidelines on Covid-19 reporting and disclosure to UK credit institutions. Firms are therefore not expected to prepare or transmit to the PRA the reporting templates contained within the Guidelines on Covid-19 reporting and disclosure.
The PRA is considering how the disclosure elements of the Guidelines on Covid-19 reporting and disclosure are to be applied in a manner reflecting both the proportionality measures in the Guidelines and also the letter from Sam Woods to UK deposit-takers on the IFRS 9 and capital requirements aspects of initial and further payment deferrals and FCA guidance. The PRA will provide further details in due course.