# Collateral Valuation Review: [Collateral ID or property name]

> Bank-side review of a third-party or internal valuation of immovable
> or movable property taken as collateral, and the record of how the
> bank monitors and revalues it: asset and purpose, valuer independence
> and qualification, basis and method of value, assumptions and market
> evidence, reviewer findings, haircuts and lending value, loan to value
> (LTV) and credit risk mitigation eligibility, monitoring and
> revaluation frequency, and sign-off. Built for EU credit institutions
> applying Regulation (EU) No 575/2013 (CRR) Articles 208 and 229 as
> amended by Regulation (EU) 2024/1623 and EBA/GL/2020/06 Section 7
> (valuation of immovable and movable property), with US rows for 12 CFR
> Part 34 Subpart C and the 2010 Interagency Appraisal and Evaluation
> Guidelines. Professional valuation standards (RICS Valuation, Global
> Standards and the International Valuation Standards) are cited by name
> only. Replace every `[bracketed]` value and every row marked *Example*.
> This is a document format, not valuation, financial, legal or
> regulatory advice. Requirements are referenced by number: obtain the
> regulation, guideline or standard for the normative text.

<!--
Guidance: How to use this template
- Use one review per valuation report received (origination,
  revaluation, non-performing classification or enforcement). The
  valuer's report stays the valuation; this document is the bank's
  critical review of it and the decision on the value the bank relies on.
- The reviewer must be independent of the credit decision and of the
  valuer. Do not let the relationship manager complete sections 5 to 8.
- Fill section 1 and 3 from the loan file, sections 4 to 6 from the
  valuation report, then write the challenge in section 7 before you
  conclude in section 8. Use section 10 to set the next monitoring and
  revaluation dates in the collateral system.
- Worked example: the fictional Fernhollow Bank (mid-sized EU credit
  institution, EUR) reviews the valuation of the warehouse that secures
  the fictional Quillmoor Logistics GmbH loan, the same case as Problem
  Loan Workout Plan (`finance/problem-loan-workout-plan`). Amounts are
  EUR thousand unless stated; all figures are invented and every derived
  number has been recomputed.
- Related documents: Credit Memo (`finance/credit-memo`), Annual Credit
  Review (`finance/annual-credit-review`), ECL Methodology
  (`finance/ecl-methodology`), Model Risk Management Policy
  (`finance/model-risk-management-policy`) for statistical valuation
  models, and Model Validation Report (`ai-data/model-validation-report`).
-->

## Document control

<!-- Guidance: Link the review to the collateral ID in the collateral management system and to the valuation report reference, so auditors can trace the value used in capital and provisioning. Pitfall: overwriting the previous review; keep each review as a new version. -->

| Field | Value |
|---|---|
| Document ID | [CVR-YYYY-NNN] *Example:* CVR-2026-031 |
| Collateral ID | [System ID] *Example:* COL-55120 |
| Secured facilities | [Facility IDs] *Example:* FAC-001, FAC-002 (Quillmoor Logistics GmbH) |
| Valuation report reviewed | [Valuer, reference, date] *Example:* [Valuation firm], report V-8841, valuation date 2026-09-15 |
| Purpose of review | [Origination / Periodic revaluation / NPE classification / Enforcement / Portfolio indexation check] *Example:* NPE classification |
| Version | [1.0] |
| Status | [Draft / In review / Approved / Superseded] |
| Owner | [@head-of-collateral-valuation] |
| Reviewer | [@internal-valuation-reviewer] |
| Approvers/reviewers | [@credit-risk], [@workout-manager] (informed) |
| Last updated | YYYY-MM-DD *Example:* 2026-10-08 |
| Classification | [Confidential] |
| Currency and units | [EUR thousand] |

### Approvals

| Role | Name | Decision | Date |
|---|---|---|---|
| Valuation reviewer | [@name] | [Accepted / Accepted with adjustment / Rejected] | YYYY-MM-DD |
| Head of collateral valuation | [@name] | [Approved] | YYYY-MM-DD |
| Credit risk (second line) | [@name] | [Noted] | YYYY-MM-DD |

### Revision history

| Version | Date | Author | Change |
|---|---|---|---|
| 0.1 | YYYY-MM-DD | [@author] | Draft review |
| 1.0 | YYYY-MM-DD | [@author] | Approved |

## Contents

- [1. Purpose and scope](#1-purpose-and-scope)
- [2. Legal and supervisory basis](#2-legal-and-supervisory-basis)
- [3. Asset description](#3-asset-description)
- [4. Valuer independence and qualification](#4-valuer-independence-and-qualification)
- [5. Basis and method of value](#5-basis-and-method-of-value)
- [6. Assumptions and market evidence](#6-assumptions-and-market-evidence)
- [7. Reviewer findings](#7-reviewer-findings)
- [8. Value relied on, haircuts and lending value](#8-value-relied-on-haircuts-and-lending-value)
- [9. Loan to value and eligibility](#9-loan-to-value-and-eligibility)
- [10. Monitoring and revaluation](#10-monitoring-and-revaluation)
- [11. Movable property collateral](#11-movable-property-collateral)
- [12. Conclusion and sign-off](#12-conclusion-and-sign-off)
- [13. Glossary and references](#13-glossary-and-references)
- [Standard and licence note](#standard-and-licence-note)

## 1. Purpose and scope

<!-- Guidance: State why the valuation was commissioned and what decision depends on it. The purpose sets the basis of value and the level of review. Pitfall: reusing an origination valuation for an enforcement decision without asking whether the assumptions still hold. -->

Explain the trigger for the review, the exposure the collateral secures and
the decisions that will use the value: credit approval, regulatory capital
(credit risk mitigation), the expected credit loss (ECL) allowance, the
non-performing exposure backstop or an enforcement strategy. Each use may
need a different value: market value for capital eligibility, a prudent
realisable value net of costs for provisioning and enforcement.

| Item | *Example* |
|---|---|
| Trigger | Exposure classified as non-performing on 2026-09-26; individual revaluation required at classification |
| Exposure secured | 20,000 drawn (term loan 18,000, revolving facility 2,000) |
| Decisions depending on the value | Stage 3 allowance, workout options analysis (WO-2026-014), capital treatment, Art. 47c backstop |
| Previous valuation | 21,800 market value, 2023-09-20, same valuation firm, different signing valuer |
| Change since previous valuation | Minus 5,300 (minus 24.3%) |

Choose the depth of review in proportion to the exposure and the risk.
A desktop review checks that the report is complete, that the valuer meets
the panel criteria and that the inputs are within the bank's market data
ranges. A full technical review adds an independent view of rent, yield,
comparables and capital expenditure, and is appropriate for large or
non-performing exposures, for specialised assets and whenever the value
has moved by more than the policy tolerance since the last valuation.
Record which level you performed and why, so that a later reader knows how
much reliance the conclusion can bear.

## 2. Legal and supervisory basis

<!-- Guidance: Cite only what applies to your bank and asset type, with the date you checked it. Pitfall: applying pre-CRR3 article wording; CRR3 amended Art. 208(3)(b), added Art. 208(3a) and rewrote Art. 229(1), so read the consolidated text. -->

The rules below set minimum standards for how collateral is valued,
monitored and revalued. The table is a summary as of 2026-10; check local
law, the consolidated CRR on EUR-Lex and your supervisor's expectations
before relying on it.

| Ref | Source | Requirement area | Status (as of 2026-10) |
|---|---|---|---|
| LB-01 | CRR Art. 208 "Requirements for immovable property collateral" | Legal certainty, monitoring of property values, review by a valuer when value may have declined materially, documentation, insurance | In force; Art. 208(3)(b) replaced and Art. 208(3a) added by Regulation (EU) 2024/1623 from 2025-01-01; frequencies in (a) and the EUR 3 million or 5% of own funds review rule unchanged; read the consolidated text |
| LB-02 | CRR Art. 229 "Valuation principles for eligible collateral other than financial collateral" | Valuation of immovable property by an independent valuer at or below market value, excluding expected price increases, with revaluations capped at the higher of the 6-year (residential) or 8-year (commercial) average value and the value at origination, unless a modification unequivocally increases value (paragraph 1, point (e)); receivables (paragraph 2); other physical collateral at market value (paragraph 3) | In force as amended by CRR3 |
| LB-03 | CRR Arts 124 to 126 | Standardised approach risk weights for exposures secured by immovable property, which depend on LTV | In force as amended by CRR3 |
| LB-04 | CRR Arts 199 and 210 | Eligibility of other physical collateral and its requirements | In force |
| LB-05 | EBA/GL/2020/06 Section 7 | 7.1 valuation at origination, 7.2 monitoring and revaluation, 7.3 criteria for valuers, 7.4 criteria for advanced statistical models | Applies to valuations conducted after 2021-06-30 |
| LB-06 | EBA/GL/2018/06 Section 9 | Collateral of non-performing exposures: governance, frequency, methodology, back-testing, foreclosed assets | Applies from 2019-12-31 |
| LB-07 | Directive 2014/17/EU (Mortgage Credit Directive) Art. 19 | Reliable valuation standards for residential property lending to consumers | Transposed in national law; check local law |
| LB-08 | US: 12 CFR Part 34 Subpart C (OCC), with parallel Federal Reserve and FDIC rules | Appraisal by a state certified or licensed appraiser above thresholds; evaluations below them | In force (eCFR checked 2026-10-25) |
| LB-09 | US: Interagency Appraisal and Evaluation Guidelines (Federal Reserve SR 10-16, 2010-12-02) | Appraisal and evaluation programme, independence, review | Supervisory guidance |
| LB-10 | RICS Valuation, Global Standards ("Red Book") and IVSC International Valuation Standards | Professional standards the valuer follows | Names only; the valuer confirms the edition used |

*Example* US thresholds from 12 CFR 34.43 (checked 2026-10-25): an
appraisal is not required for residential real estate transactions of USD
400,000 or less, commercial real estate transactions of USD 500,000 or
less, and business loans of USD 1 million or less that do not depend on the
sale of, or rent from, real estate as the primary repayment source; in
those cases an evaluation consistent with safe and sound practice is
required instead.

## 3. Asset description

<!-- Guidance: Describe the asset as the valuer saw it and confirm it matches the security the bank holds. Questions: is the charged land the same land that was valued, and are there rights of third parties? Pitfall: a valuation of the whole site when the charge covers only part of it. -->

| Item | *Example* |
|---|---|
| Asset type | Logistics warehouse, owner-occupied by the borrower for its own contract-logistics operations |
| Location | [Address], within 5 km of a motorway junction |
| Land and buildings | Site 9.1 hectares; gross internal area 42,000 square metres; built 2012; clear height 12 metres; 48 dock doors |
| Tenure | Freehold (owned by the borrower) |
| Occupancy | Owner-occupied; 78% of capacity used under service contracts with three logistics customers. These are service contracts, not leases: they give no occupation rights and end on enforcement, so they do not support the security value |
| Security held | First-ranking land charge 22,000 registered 2021-03-18 |
| Charge matches valued land | Yes, land register extract 2026-10-02 checked against the valuer's plan |
| Insurance | Buildings insured for reinstatement 31,000, bank noted as loss payee, renewal 2027-01-01 |
| Environmental | Phase I environmental report 2021, no findings; no change reported |
| Energy performance | [Certificate class and date] |

The bank's collateral must be legally enforceable and the bank must be able
to realise it within a reasonable time (CRR Art. 208). Record the legal
review date and any limitation, such as prior-ranking public charges or
tenant pre-emption rights.

## 4. Valuer independence and qualification

<!-- Guidance: Confirm independence from the credit decision and from the borrower, competence for this asset type and location, and rotation. Pitfall: the same valuer signing every revaluation of the same property for years. -->

EBA/GL/2020/06 section 7.3 sets criteria for valuers, and section 7.1
expects a clear and transparent valuation report. Check each criterion and
keep the evidence.

| Check ID | Criterion | Evidence | Result *(Example)* |
|---|---|---|---|
| VAL-01 | Valuer is on the bank's approved panel for this asset type and region | Panel list version 2026-01 | Met |
| VAL-02 | Professional qualification and experience with logistics property | Membership number, CV | Met (chartered surveyor, 11 years in industrial valuation) |
| VAL-03 | No involvement in the credit decision, loan processing or underwriting | Valuer declaration | Met |
| VAL-04 | No interest in the property, the borrower or the outcome; fee not linked to value | Engagement letter | Met (fixed fee) |
| VAL-05 | Instructed by the bank, not the borrower | Instruction letter | Met |
| VAL-06 | Rotation: number of sequential individual valuations by the same valuer within policy | Collateral history | Met (new signing valuer since 2023) |
| VAL-07 | Professional indemnity insurance adequate for the value | Certificate | Met |
| VAL-08 | Inspection type appropriate (full internal and external inspection) | Report section 2 | Met |

Set the rotation rule in your valuation policy. EBA/GL/2018/06 (paragraph
196) expects rotation after two sequential individual valuations of the
same property by the same appraiser; EBA/GL/2020/06 asks the bank to define
the number. Record the rule you apply here.

If a check fails, do not simply note it. Decide whether the failure
undermines the value: a lapsed professional indemnity policy may be
cured by evidence of renewal, while a valuer who was instructed by the
borrower or whose fee depended on the outcome cannot be cured, and the
bank should commission a new valuation. Conflicts that arise inside the
bank matter as much as those of the valuer. An internal valuer who reports
to the business line that originated the loan is not independent of the
credit decision, and a relationship manager who selects the valuer from
the panel for a specific deal weakens the control the panel is meant to
provide. Route instructions through the collateral valuation team.

## 5. Basis and method of value

<!-- Guidance: Confirm the basis (market value or the bank's property value under CRR3) and the method, and check that the method suits the asset. Pitfall: accepting a replacement-cost-only valuation for an income-producing property. -->

State the basis of value the valuer used and the one the bank needs. For
CRR purposes, value immovable property under CRR Art. 229(1) as amended by CRR3. The
"property value" used for capital must not exceed market value and must
exclude expected price increases. On revaluation it may not exceed the
higher of the average value over the last six years (residential) or
eight years (commercial) and the value at origination, unless a
modification unequivocally increases the value, for example better
energy performance or resilience to physical risks (point (e)). Read the
consolidated text for the exact conditions. For accounting and
enforcement, the bank also needs an estimate of the net amount it would
realise in a sale within a stated period.

For an owner-occupied operational property, the security is the building
without the borrower's business. Value it with vacant possession, using a
notional market rent for the whole building, never the borrower's service
revenue or its customer contracts, which end when the bank enforces.

| Item | *Example* |
|---|---|
| Basis of value in report | Market value with vacant possession (owner-occupied; version 2 of the report, see CVR-F-03) |
| Professional standard stated | RICS Valuation, Global Standards, current edition (name only) |
| Primary method | Income approach: notional market rent on the whole 42,000 m2, net of owner's costs, capitalised at an all-risks yield, less an allowance for letting void, incentives and fees |
| Cross-check | Comparable sales, price per square metre |
| Methods not used and why | Cost approach used only for insurance reinstatement, not for value |
| Special assumptions | None |
| Material uncertainty clause | None |

The capitalisation calculation used in the *Example*:

$$
V = \frac{\text{NOI}}{y}
$$

where $V$ is value before the letting allowance, NOI the stabilised net
operating income on the notional market rent and $y$ the all-risks
capitalisation yield. The value with vacant possession is $V$ less the
letting allowance.

| Line | *Example* | Note |
|---|---|---|
| Notional market rent, whole building | 1,260 | 42,000 m2 at EUR 30.00 per m2 a year |
| Less non-recoverable owner's costs | (63) | 5% of rent |
| **Net operating income** | **1,197** | 1,260 less 63 |
| Capitalisation yield | 7.00% | Valuer's choice |
| Capitalised value, as if let | 17,100 | 1,197 / 0.07 |
| Less letting void, incentives and fees | (600) | About six months of market rent (1,260 / 12 x 6 = 630), rounded by the valuer |
| **Market value with vacant possession** | **16,500** | 17,100 less 600 |
| Value per square metre | EUR 393 | 16,500,000 / 42,000 |

## 6. Assumptions and market evidence

<!-- Guidance: Test each key assumption against independent evidence: comparable transactions, market reports, the bank's own data. Pitfall: comparables that are old, distant or of a different quality without adjustment. -->

List the assumptions that drive the value and the evidence behind each.
Then check the comparable transactions the valuer used: date, distance,
size, lease profile and yield. Give your own view of whether the evidence
supports the chosen inputs.

| Comparable ID | Date | Distance | Size (m2) | Lease profile | Yield | Reviewer comment |
|---|---|---|---|---|---|---|
| CMP-01 *(Example)* | 2026-05 | 12 km | 38,000 | Single-let, 8 years | 6.80% | Better lease security; yield should be lower than subject |
| CMP-02 *(Example)* | 2026-02 | 30 km | 45,000 | Multi-let, 4 years | 7.10% | Closest comparable |
| CMP-03 *(Example)* | 2025-11 | 55 km | 40,000 | Multi-let, 2 years | 7.40% | Older and weaker location |
| **Average** | | | | | **7.10%** | (6.80 + 7.10 + 7.40) / 3 |

| Assumption | Valuer | Evidence | Reviewer view *(Example)* |
|---|---|---|---|
| Market rent | EUR 30.00 per m2 a year | Two lettings of comparable warehouses in the region in 2026 at EUR 29 to 31 per m2 | Supported |
| Letting allowance | About six months of rent, incentives and fees after a sale with vacant possession | Agent letter, local vacancy 6% | Plausible but optimistic in a falling market |
| Yield | 7.00% | Comparables 6.80% to 7.40% | Slightly low for a vacant building that a buyer must re-let; 7.25% also defensible |
| Capex | Roof repair in 3 years | Technical survey | Supported |

Weigh the evidence rather than counting it. A recent transaction of a
similar building in the same submarket is worth more than several older or
distant sales, and a sale with a long single-tenant lease says little about
a multi-let asset with short leases. Adjust for time using a market index,
and for quality, size and lease security with explicit, documented
reasoning. Where evidence is thin, say so, and widen the sensitivity range
you pass on to credit decisions. Compare the result with the bank's own
data on recent recoveries and with the trend of the regional index since
the previous valuation; a value that moved against the market needs an
explanation in the report.

## 7. Reviewer findings

<!-- Guidance: Record each challenge, the valuer's answer and your conclusion. Rate the finding and say whether it changes the value relied on. Pitfall: a review that only checks the report is complete, without challenging the numbers. -->

Review the report for completeness, clarity of method and assumptions,
prudence of inputs and plausibility of the result. EBA/GL/2020/06 section
7.1 lists what a clear and transparent report should document, such as
the approaches, key parameters and any circumstances that may affect value
in the short term. Rate each finding and decide its effect.

| Finding ID | Area | Finding | Valuer response | Rating | Effect on value |
|---|---|---|---|---|---|
| CVR-F-01 *(Example)* | Yield | 7.00% at the low end of the evidence for a vacant building | Location premium justified by motorway access | Medium | Sensitivity run (below); no adjustment |
| CVR-F-02 *(Example)* | Vacancy | Six-month letting allowance may be short in the current market | Agent evidence provided | Low | None |
| CVR-F-03 *(Example)* | Basis | Version 1 valued the property subject to "leases" at the borrower's customer revenue of 1,540; the customers hold service contracts, not leases | Re-issued as version 2 on a vacant possession basis with notional market rent | High | Version 2 value relied on |
| CVR-F-04 *(Example)* | Trend | Value fell 24.3% since 2023 | Rent loss and yield expansion explained | Info | None |

*Example* sensitivity: at the reviewer's alternative yield of 7.25% the
value would be 1,197 / 0.0725 - 600 = 16,510.3 - 600 = 15,910.3, which is
3.6% below the valuer's 16,500. The bank's policy tolerance for adjusting
an external value is 5%, so the reviewer accepts 16,500 and records the
sensitivity for the workout options analysis. At 7.50% the value would be
15,960 - 600 = 15,360, and at 6.50% it would be 18,415.4 - 600 = 17,815.4.

Escalate a disagreement that the valuer does not resolve. The policy should
say who decides between the valuer's figure and the reviewer's figure, and
in which cases the bank orders a second valuation from another panel firm.
Never change the valuer's report yourself: the bank may rely on a lower
value than the report shows, with reasons, but the report stays as issued.

## 8. Value relied on, haircuts and lending value

<!-- Guidance: Separate the value relied on (for capital and policy LTV) from the haircut values used for credit decisions, provisioning and enforcement. Document every haircut and its evidence. Pitfall: haircuts set once and never back-tested against actual recoveries. -->

Record the value the bank relies on and the internal haircuts the policy
applies to it. Back-test haircuts against realised sale prices at least
annually (EBA/GL/2018/06 section 9.5) and update them when recoveries
differ.

| Measure | *Example* | Use |
|---|---|---|
| Market value relied on | 16,500 | Policy LTV, provisioning and workout |
| Property value (CRR Art. 229(1)) | 16,500 | Capital: not above market value; the revaluation cap (higher of the 8-year average and the value at origination) is not binding because the value has fallen below both |
| Internal lending haircut | 30% | Lending value 11,550 for credit limits |
| Forced-sale discount | 20% | 13,200 gross in enforcement |
| Selling costs | 5% of gross (660) | Net 12,540 |
| Time to sale | 24 months | Discounting in workout and ECL |
| Back-testing result | Logistics property 2019 to 2025: average realised discount 18% to last market value, 14 sales | Supports 20% |

$$
\text{Net realisable value} = V \times (1 - d_{\text{forced}}) \times (1 - c_{\text{sale}})
$$

With $V$ = 16,500, $d_{\text{forced}}$ = 20% and $c_{\text{sale}}$ = 5%, the
net realisable value is 16,500 x 0.80 x 0.95 = 12,540, which matches the
recovery assumption in the workout plan.

Set haircuts by collateral type, location and loan status, and derive them
from evidence: realised sale prices compared with the last market value,
time from default to cash, and the costs of enforcement in each
jurisdiction. Where the bank has little data, use conservative values and
say so. Keep the haircut used for credit limits separate from the
assumptions used in provisioning, because accounting estimates must be
unbiased while credit policy may build in a deliberate margin of prudence.

## 9. Loan to value and eligibility

<!-- Guidance: Compute LTV on the value relied on and check whether the collateral still meets every eligibility requirement for credit risk mitigation. Pitfall: claiming capital relief for collateral that fails a requirement (for example insurance lapsed or monitoring overdue). -->

$$
\text{LTV} = \frac{\text{Exposure secured}}{\text{Value relied on}}
$$

| Measure | *Example* | Calculation |
|---|---|---|
| LTV on market value | 121.2% | 20,000 / 16,500 |
| LTV on lending value | 173.2% | 20,000 / 11,550 |
| Policy maximum LTV for logistics property at origination | 65% | Credit policy CP-07 |
| Uncovered exposure on market value | 3,500 | 20,000 less 16,500 |

Eligibility checklist for immovable property collateral. Confirm each item
against the consolidated CRR and record the evidence; a failed item can
remove capital recognition.

| Check ID | Requirement area (paraphrased) | Basis | Result *(Example)* |
|---|---|---|---|
| ELG-01 | Charge legally enforceable in all relevant jurisdictions, realisable in a reasonable time | CRR Art. 208(2) | Met (legal review 2026-10-02) |
| ELG-02 | Property value monitored at the required frequency | CRR Art. 208(3)(a) | Met |
| ELG-03 | Review by an independent valuer when information (including ESG-related limitations) shows a possible material decline in value; valuer review at least every three years above EUR 3 million | CRR Art. 208(3)(b) | Met (this review) |
| ELG-04 | Types of property accepted and lending policies documented | CRR Art. 208(4) | Met (policy CP-07) |
| ELG-05 | Property adequately insured against damage and insurance monitored | CRR Art. 208(5) | Met (renewal 2027-01-01) |
| ELG-06 | Valuation by an independent valuer at or below market value, within the revaluation cap | CRR Art. 229(1) | Met |

For portfolios valued by indexation or statistical models, show the
calculation per loan. *Example* (residential mortgage, EUR thousand): loan
240.0, value at origination 320.0 when the regional house price index was
112.0; index now 103.6, a change of minus 7.5%; indexed value 320.0 x
103.6 / 112.0 = 296.0; LTV moves from 240.0 / 320.0 = 75.0% to 240.0 /
296.0 = 81.1%. A move across an LTV band can change the standardised risk
weight (CRR Arts 124 and 125) and the bank's LTV-based limits.

## 10. Monitoring and revaluation

<!-- Guidance: Set the next monitoring date and the next revaluation date, the method for each and the triggers that bring them forward. Pitfall: indexation used as the only method for large exposures or when a material decline is suspected. -->

CRR Art. 208(3) as amended by CRR3 requires the bank to monitor property
values at least once a year for commercial and once every three years for
residential property (point (a)), with more frequent monitoring where the
market is subject to significant changes. Point (b) requires a review by
an independent valuer when information indicates that the value may have
declined materially relative to general market prices, and CRR3 added
that ESG-related limitations count as such an indication; it also keeps
a valuer review at least every three years for loans above EUR 3 million
or 5% of own funds. New Art. 208(3a) allows advanced statistical models,
developed independently of the credit decision, to be used for monitoring
and for identifying properties that need revaluation, under conditions.
Read the consolidated text before you set your policy.
EBA/GL/2020/06 section 7.2 asks the bank to set monitoring frequency by
property type, credit quality, development status, value, appraisal
assumptions and market conditions, with higher frequency for properties
under development, high LTV and weaker loans. EBA/GL/2018/06 section 9.2
expects an individual valuation when an exposure becomes non-performing
and at least annually while it remains so, and an annual update of any
indexation.

| Policy row | Monitoring | Revaluation | Method | Trigger to accelerate |
|---|---|---|---|---|
| CRE performing, value below policy threshold *(Example)* | Annual, index | Every 3 years | Desktop valuation or validated statistical model | Index decline above 10% in 12 months |
| CRE performing, above EUR 3 million or high LTV *(Example)* | Semi-annual, index | Every 3 years at least, valuer | Full inspection | Index decline above 5%, covenant breach |
| Residential performing *(Example)* | Annual, index | On trigger | Validated statistical model | LTV above 90% on indexed value |
| Under development *(Example)* | Quarterly, monitoring surveyor | On each drawdown stage | Inspection | Cost overrun or delay |
| Non-performing, any type *(Example)* | Quarterly | At classification and annually | Full individual valuation | Market decline, enforcement start |

Statistical models used for monitoring or revaluation must meet the
conditions in CRR Art. 208(3a) and the criteria in EBA/GL/2020/06
section 7.4, be sufficiently granular and
back-tested, and should not be the sole means of revaluation when a valuer
review is required. Govern them under Model Risk Management Policy
(`finance/model-risk-management-policy`) and validate them using Model
Validation Report (`ai-data/model-validation-report`).

*Example* next dates for COL-55120: quarterly index check 2026-12-31;
individual revaluation 2027-09-15 (NPE annual); earlier if the regional
logistics index falls more than 5% or if enforcement starts.

## 11. Movable property collateral

<!-- Guidance: Use this section for vessels, aircraft, vehicles, plant and machinery, inventory or receivables. The principles are the same; the evidence and the risks differ. Pitfall: valuing specialised equipment at cost when there is no secondary market. -->

For movable property, the bank values at market value (CRR Art. 229(3)),
checks liquidity and price volatility, and confirms legal enforceability
(CRR Arts 199 and 210). EBA/GL/2020/06 section 7.1.2 expects a panel of
external valuers for large and complex assets such as vessels, aircraft
and plant, and section 7.2.2 allows statistical models and indices for
monitoring. Record the asset-specific factors below.

| Factor | Question | *Example* (forklift fleet, not relied on) |
|---|---|---|
| Identification | Serial numbers, registry entries | 64 units, serial list attached |
| Market | Is there an active secondary market? | Yes, dealer auctions |
| Condition and life | Age, maintenance, remaining useful life | Average age 5 years |
| Location and control | Can the bank locate and take possession? | Single site, yes |
| Legal | Is the security registered and enforceable? | Not charged; excluded |
| Value | Market value and source | 900 dealer quote; not counted |

For receivables, check debtor concentration, dilution, ageing, set-off
rights and notification to debtors, and apply the bank's haircut grid.

## 12. Conclusion and sign-off

<!-- Guidance: State the value relied on, any adjustment and the conditions. Keep the conclusion short and unambiguous. Pitfall: an "accepted" conclusion with open findings that change the value. -->

| Item | Entry |
|---|---|
| Conclusion | [Accepted / Accepted with adjustment / Rejected, new valuation ordered] *Example:* Accepted |
| Value relied on | [Amount, date] *Example:* 16,500 market value at 2026-09-15 |
| Lending value and net realisable value | *Example:* 11,550 and 12,540 |
| Open findings | *Example:* None affecting value; CVR-F-01 sensitivity passed to workout |
| Next monitoring and revaluation dates | *Example:* 2026-12-31 and 2027-09-15 |
| Reviewer signature | [@name], YYYY-MM-DD |
| Approver signature | [@name], YYYY-MM-DD |

Common errors found in reviews of this kind include a valuation date that
is later than the review date, a value that uses rents from leases not yet
signed, comparables that the valuer did not verify, insurance cover below
reinstatement cost, a charge registered over a different land parcel from
the one valued, and indexation applied to a valuation that was already out
of date. Check each of them before you sign, and update the collateral
system on the same day so that capital, provisioning and limit monitoring
all use the value you approved.

## 13. Glossary and references

<!-- Guidance: Keep definitions consistent with the bank's collateral policy. Pitfall: using "market value", "lending value" and "property value" as synonyms. -->

### 13.1 Glossary

| Term | Meaning in this review |
|---|---|
| All-risks yield | Capitalisation rate that converts net operating income into value |
| Evaluation | US term for a valuation below appraisal thresholds that is not a full appraisal |
| Forced-sale discount | Reduction from market value expected in a constrained sale |
| Indexation | Updating a past valuation with a price index |
| Lending value | Market value less the bank's internal haircut |
| LTV | Loan to value |
| Market value | Estimated price between a willing buyer and seller at arm's length on the valuation date |
| Net realisable value | Expected sale proceeds after forced-sale discount and costs |
| NOI | Net operating income |
| Property value | The value used for CRR purposes under the CRR3 rules |

### 13.2 References

| Reference | Version or date checked | Use |
|---|---|---|
| Regulation (EU) No 575/2013 (CRR) Arts 124 to 126, 199, 208, 210, 229, as amended by Regulation (EU) 2024/1623 | Article titles checked on the EBA Interactive Single Rulebook 2026-10-25; text to be read on EUR-Lex | Capital eligibility and valuation |
| EBA/GL/2020/06 Guidelines on loan origination and monitoring, Section 7 | Final report 2020-05-29; applies 2021-06-30 | Valuation, monitoring, valuers, models |
| EBA/GL/2018/06 Guidelines on management of non-performing and forborne exposures, Section 9 | Final report 2018-10-31; applies 2019-12-31 | NPE collateral |
| Directive 2014/17/EU Art. 19 | Name and article only | Residential valuation standards |
| 12 CFR 34.43 | eCFR, checked 2026-10-25 | US appraisal thresholds |
| Interagency Appraisal and Evaluation Guidelines, Federal Reserve SR 10-16 | 2010-12-02 | US appraisal programme |
| RICS Valuation, Global Standards; IVSC International Valuation Standards | Names only | Valuer's professional standards |

## Standard and licence note

Based on Regulation (EU) No 575/2013 as amended, the EBA Guidelines
EBA/GL/2020/06 and EBA/GL/2018/06 (EBA material may be reproduced with
acknowledgement of the source; no text is reproduced here), Directive
2014/17/EU, 12 CFR Part 34 Subpart C and the US Interagency Appraisal and
Evaluation Guidelines (US government works). RICS and IVSC standards are
cited by name only; no content from them is reproduced or adapted, and
this template is not affiliated with or endorsed by RICS, the IVSC, the EBA
or any supervisor. The structure, wording, worked example and all figures
are original; Fernhollow Bank and Quillmoor Logistics GmbH are fictional.
Check the current official and consolidated versions of every cited text
before use. Template licence: MIT.