Determination of the exposure fully and completely secured by mortgages for the purposes of Article 47c(1) of CRR

How shall the secured part of a non-performing exposure be calculated regarding the part of the exposure “fully and completely secured by mortgages” under CRR III?

Article 47c(1) states that institutions shall determine the applicable amount of insufficient coverage for the purposes of point (m) of Article 36(1) by subtracting the amount determined in point (b) of Article 47c(1) from the amount determined in point (a) of Article 47c(1). To assess the amount determined in point (a) of Article 47c(1), the secured part of the non-performing exposure needs to be identified. Regarding exposures secured by mortgages on immovable property, the secured part equals the part of the exposure fully and completely secured by mortgages, as stated in the second subparagraph of Article 47c(1). As of 31 December 2024 (before the amendment of CRR by CRR III), the amount fully and completely secured by mortgages was defined in Article 124(1) of CRR as follows: “The part of an exposure that is treated as fully secured by immovable property shall not be greater than the pledged amount of the market value or in those Member States that have laid down rigorous criteria for the assessment of the mortgage lending value in statutory or regulatory provisions, the mortgage lending value of the immovable property in question.” However, this sentence disappeared from Article 124 of CRR in the course of the amendment applying from 1 January 2025 on and was not replaced by another paragraph in another article of CRR as amended. Therefore, we are not sure if the old definition of “exposure fully and completely secured by mortgages” omitted from Article 124(1) of CRR may still be applied for the purposes of Article 47c(1) of CRR and if not, how a different definition would be put.