7.3.4 Identification of exposures as performing FBEs

Once FBEs are classified as performing, either because they have met the conditions for being reclassified from the non-performing category or because the granting of forbearance measures did not lead to the classification of the exposure as non-performing, they should continue to be identified as forborne until all the conditions for the discontinuation of the classification of exposures as forborne under paragraph 256 of Annex V to Commission Implementing Regulation (EU) No 680/2014 have been met.

Credit institutions’ policies for identifying performing FBEs should specify practices for dispelling concerns regarding the borrower’s financial difficulties. Credit institutions’ policies should require the borrower to have settled, by means of regular payments, an amount equal to all the amounts (principal and interest) that were previously past due or de-recognised at the time of the concession, or to otherwise demonstrate its ability to comply with the post-forbearance conditions under alternative objective criteria that include a repayment of principal.

In accordance with paragraph 260 of Annex V to Commission Implementing Regulation (EU) No 680/2014, new forbearance measures granted to performing FBEs that have been reclassified out of the non-performing category will entail the reclassification of these transactions to the non-performing category. The same should apply when these exposures become more than 30 days past due.