Treatment of Net Interest Income Stress Outlier Test (NII SOT) in scenarios where breaches occur due to one-off effects (EBA/RTS/2022/10)

Could you please provide guidance on how banks should approach the reporting of such NII SOT breaches arising from such short-term, non-structural events and in addition how is it foreseen that the regulator should govern such cases? Specifically, are there any provisions or considerations that can be applied to account for these temporary effects without misrepresenting the bank's overall NII sensitivity?

We are seeking clarification on the treatment of Net Interest Income Stress Outlier Test (NII SOT) in scenarios where breaches occur due to one-off effects which are not of structural nature, typically observed at the end of the financial year. Specifically, we are interested in understanding how such situations should be considered in the reporting stream and governed by the respective regulator. Some examples of such one-off effects include: Yearly P&L Increase: This often occurs where dividend payments are scheduled for Q1 of the following year, resulting in a temporary increase in the P&L at year-end. Customer Deposit Movements: Year end extraordinary Inflows and movements of customer deposits to current accounts with a zero external rate, which are generally short-term in nature. Question is addressed in connection with point 4 of EBA/RTS/2022/10 - chapter 2 - Background and rationale.