9.2 Frequency of valuations

For prudential purposes, credit institutions should update valuations of all secured exposures in accordance with the requirements of Article 208(3) and Article 210(c) of Regulation (EU) No 575/2013.

The group of collaterals that are subject to individual valuations and revaluations on a regular basis should be updated at the time when the exposure is classified as non-performing and at least annually while it continues to be classified as such. Credit institutions should make sure that, for the collateral subject to indexation or other similar methods, the indexation is updated at least annually.

For properties with an updated individual valuation that has taken place within the past 12 months (in line with all the applicable principles and requirements as set out in this section), the property value may be indexed up to the period of the impairment review.

Credit institutions should carry out more frequent monitoring where the market is subject to significant negative changes and/or where there are signs of significant decline in the value of the individual collateral.

Therefore, credit institutions should define criteria in their collateral valuation policy and procedures for determining if a significant decline in collateral value has taken place. Where possible, these will include quantitative thresholds for each type of collateral, based on the observed empirical data and any relevant qualitative credit institution experience, bearing in mind relevant factors such as market price trends or the opinion of independent appraisers.

Credit institutions should have appropriate processes and systems in place to flag outdated valuations and to trigger valuation reports.