# Recovery Plan: [Institution name] [Plan year]

> Recovery plan for a credit institution or investment firm under the
> EU Bank Recovery and Resolution Directive (Directive 2014/59/EU,
> BRRD, Articles 5 to 9 and Section A of the Annex), with content
> structured along Commission Delegated Regulation (EU) 2016/1075 and
> the EBA guidelines on recovery plan indicators (EBA/GL/2021/11) and on
> overall recovery capacity (EBA/GL/2023/06). It covers governance, the
> strategic analysis of the group, recovery indicators and thresholds,
> recovery options with impact and feasibility, scenarios, overall
> recovery capacity, communication, preparatory measures and the
> playbook. The CMDI reform (Directive (EU) 2026/806, published
> 2026-04-20) amends the BRRD from May 2028; check the consolidated
> text. This is a financial recovery plan, not a business continuity or
> disaster recovery plan. Replace every `[bracketed]` value and every
> row marked *Example*. Obtain the law and guidelines for the normative
> text. This is a document format, not financial, legal, regulatory or
> accounting advice.

<!--
Guidance: How to use this template
- The recovery plan is written by the institution (not the resolution
  authority) and shows how it would restore its own financial position
  after a severe deterioration, without extraordinary public support.
  Resolution plans are written by the resolution authority and are out
  of scope.
- The plan must be credible: options that are sized realistically,
  executable in the time the scenario allows, approved in advance and
  rehearsed. Supervisors score credibility through the overall
  recovery capacity (ORC), so show the arithmetic.
- Keep it consistent with the ICAAP Report (`finance/icaap-report`),
  ILAAP Report (`finance/ilaap-report`), Contingency Funding Plan
  (`finance/contingency-funding-plan`), Stress Testing Programme
  (`finance/stress-testing-programme`) and Risk Appetite Statement
  (`finance/risk-appetite-statement`): same metrics, same definitions,
  thresholds that nest (risk appetite, then early warning, then
  recovery indicator, then regulatory minimum).
- The worked example uses "Fernhollow Bank", a fictional mid-sized EU
  credit institution: CET1 EUR 3,000 million on a total risk exposure
  amount (TREA) of EUR 20,000 million (CET1 ratio 15.0%), Tier 1 17.0%,
  total capital 20.0%, leverage ratio 6.8%, LCR 149.0%, NSFR 120.0% at
  2026-12-31. Recovery indicators: CET1 11.0%, LCR 105%. All figures
  are fictional and in EUR million unless stated.
- Institutions under simplified obligations (BRRD Article 4) may submit
  a reduced plan; record the decision and the reduced scope in
  section 1.
-->

## Document control

<!-- Guidance: Record the reference date of the figures, the submission date to the competent authority and the management body approval. The plan is updated at least annually and after material changes, so keep the update log precise. -->

| Field | Value |
|---|---|
| Document ID | [RP-YYYY] *Example:* RP-2027 |
| Institution and perimeter | [Group / entity] *Example:* Fernhollow Bank group, consolidated, including Fernhollow Leasing, Fernhollow Payments and the New York branch |
| Reference date of figures | [YYYY-MM-DD] *Example:* 2026-12-31 |
| Competent authority | [Authority] *Example:* ECB (Fernhollow Bank is a significant institution under direct ECB supervision) |
| Submission date | [YYYY-MM-DD] |
| Obligations regime | [Full / simplified under BRRD Article 4] *Example:* Full |
| Currency and units | [EUR million] |
| Version | [1.0] |
| Status | [Draft / In review / Approved / Submitted] |
| Owner | [@head-of-recovery-planning] |
| Approvers/reviewers | [@cro], [@cfo], [management body] |
| Last updated | YYYY-MM-DD |
| Classification | [Strictly confidential, supervisory] |
| Next scheduled review | [YYYY-MM-DD] |

### Approvals

| Role | Name | Decision | Date |
|---|---|---|---|
| Head of recovery planning (plan owner) | [@name] | [Submitted] | YYYY-MM-DD |
| Chief financial officer | [@name] | [Options and capital figures confirmed] | YYYY-MM-DD |
| Chief risk officer | [@name] | [Indicators and scenarios challenged] | YYYY-MM-DD |
| Internal audit | [@name] | [Review of the process, not of the options' merit] | YYYY-MM-DD |
| Board risk committee | [@chair] | [Recommend] | YYYY-MM-DD |
| Management body | [@chair] | [Approve for submission] | YYYY-MM-DD |

### Revision history

| Version | Date | Author | Change summary |
|---|---|---|---|
| 0.1 | YYYY-MM-DD | [@name] | Figures refreshed to the reference date; indicators recalibrated |
| 0.2 | YYYY-MM-DD | [@name] | Supervisory feedback on the previous plan addressed; dry-run results added |
| 1.0 | YYYY-MM-DD | [@name] | Approved by the management body and submitted |

## Contents

- [1. Summary](#1-summary)
- [2. Governance](#2-governance)
- [3. Strategic analysis](#3-strategic-analysis)
- [4. Recovery indicators](#4-recovery-indicators)
- [5. Recovery options](#5-recovery-options)
- [6. Scenarios and overall recovery capacity](#6-scenarios-and-overall-recovery-capacity)
- [7. Communication and disclosure plan](#7-communication-and-disclosure-plan)
- [8. Preparatory measures](#8-preparatory-measures)
- [9. Playbook and dry-run results](#9-playbook-and-dry-run-results)
- [10. Glossary and references](#10-glossary-and-references)
- [Standard and licence note](#standard-and-licence-note)

## 1. Summary

<!-- Guidance: Write the summary last, in two pages at most. A supervisor should be able to read the indicator set, the main options, the ORC result and the changes since the last plan without opening the rest. -->

### 1.1 Purpose and legal basis (as of 2026-10, check local law)

This plan describes how [Institution name] would detect a severe
deterioration of its financial position early, decide to act, and
restore its capital, liquidity and profitability through options it
controls. It meets the recovery planning requirement in BRRD Article 5
as transposed in [Member State] law, and is structured so that the
competent authority can assess it under BRRD Article 6. Group plans
follow BRRD Articles 7 and 8. Indicators follow BRRD Article 9 and the
EBA guidelines on recovery plan indicators.

| Jurisdiction | Basis | Status for this plan |
|---|---|---|
| EU | Directive 2014/59/EU (BRRD) Articles 5 to 9, Article 4 (simplified obligations), Article 27 (early intervention); Section A of the Annex (information in recovery plans) | Mandatory |
| EU | Commission Delegated Regulation (EU) 2016/1075 (regulatory technical standards on the content of recovery plans and their assessment) | Mandatory content |
| EU | EBA/GL/2021/11, guidelines on recovery plan indicators | Comply or explain at national level |
| EU | EBA/GL/2023/06, guidelines on overall recovery capacity in recovery planning; used in SREP scoring under EBA/GL/2026/06 (applies 2027-01-01) | Supervisory assessment of the ORC |
| EU | EBA guidelines on the range of scenarios to be used in recovery plans (EBA/GL/2014/06) | Check whether a later revision applies |
| EU | CMDI package: Directive (EU) 2026/806 amending the BRRD, Regulation (EU) 2026/808 amending the SRMR, Directive (EU) 2026/804 amending the DGSD, published 2026-04-20 | Amendments apply from May 2028; check the transposition article and national law |
| UK | PRA Rulebook, Recovery Plans Part; PRA SS9/17 (recovery planning) | Name only; UK entities follow PRA rules |
| US | OCC recovery planning guidelines (12 CFR 30 appendix E) rescinded by final rule of 2026-03-31, effective 2026-05-01 (OCC Bulletin 2026-10) | Not required for the New York branch under OCC rules; the contingency funding plan remains expected |

### 1.2 Key messages

| Item | Summary *(Example)* |
|---|---|
| Starting position (2026-12-31) | CET1 15.0%, Tier 1 17.0%, total capital 20.0%, leverage 6.8%, LCR 149.0%, NSFR 120.0% |
| Recovery indicators | CET1 ratio 11.0%, total capital ratio 14.5%, leverage ratio 4.0%, LCR 105%, NSFR 102%, survival horizon 30 days, plus profitability, asset quality, market and macro indicators in section 4 |
| Number of recovery options | 11 (7 capital, 3 liquidity, 1 profitability); RO-10 and RO-11 added in this plan to close the capital gap found in the 2026 self-assessment |
| Overall recovery capacity, capital | From a near-default point of CET1 5.45% (below the CET1 part of TSCR), a range of +4.21 to +4.83 percentage points of CET1: 10.28% in the idiosyncratic scenario and 9.66% in the system-wide scenario where equity markets are closed; both above the overall CET1 requirement of 9.125%, neither above the 11.0% recovery threshold |
| Overall recovery capacity, liquidity | LCR restored from 95.0% to 177.9% (idiosyncratic) or 153.3% (system-wide) |
| Main changes since last plan | [Changes] *Example:* indicators aligned with the 2027 risk appetite and the ILAAP threshold ladder; near-default point moved below TSCR as EBA/GL/2023/06 expects; options RO-10 and RO-11 added; option RO-02 resized after the leasing portfolio grew |
| Dry run | 2026-09-24, combined scenario, four findings (section 9) |

## 2. Governance

<!-- Guidance: Show who prepares, reviews, approves and maintains the plan, and the escalation path from an indicator breach to a decision. A pitfall is an escalation process that only says "the board decides": name the timeline (for example decision within 48 hours of a breach) and the information the board receives. -->

### 2.1 Preparation, approval and integration

The plan is owned by the head of recovery planning in the risk
function, prepared with treasury, finance, capital management, legal,
communications and the business lines, reviewed by internal audit for
process quality, and approved by the management body. It is updated at
least annually and after any event that materially changes the legal
or organisational structure, the business model or the financial
position. The plan is integrated with the risk management framework:
the same indicators feed the risk appetite statement, the ICAAP, the
ILAAP and the contingency funding plan, with thresholds set at
different levels so that each framework escalates in turn.

Keep a short annual cycle: refresh figures to the reference date in
the first quarter, recalibrate indicators against the new risk
appetite, update option sizes and feasibility with the business owners,
run the dry run, and submit after management body approval by the date
the competent authority sets. Between updates, the plan owner tracks
changes that would make an option obsolete (for example a sale of the
entity that an option relied on) and issues an interim update when
needed. Internal audit reviews the planning process at least every
[two] years, focusing on governance, data and the evidence behind
credibility judgements.

### 2.2 Escalation and decision-making

```mermaid
flowchart TD
    M["Daily and monthly indicator monitoring by risk"] --> B{"Recovery indicator breached?"}
    B -->|"No"| W{"Early-warning level breached?"}
    W -->|"Yes"| A["ALCO or CRO review within 5 days"]
    W -->|"No"| M
    B -->|"Yes"| N["Notify CEO, CRO, CFO within 1 business day"]
    N --> S["Notify competent authority without delay"]
    N --> R["Recovery committee assesses situation and options"]
    R --> D{"Management body decision within 5 business days"}
    D -->|"Activate options"| P["Execute playbook, report weekly to supervisor"]
    D -->|"No action, with reasons"| J["Document justification and send to supervisor"]
```

| Step | Owner | Timing *(Example)* | Output |
|---|---|---|---|
| Detect breach | Risk reporting | Same day as data available | Indicator report |
| Notify executives | CRO | Within 1 business day | Breach notice |
| Notify competent authority | Head of regulatory affairs | Without delay after confirmation | Notification letter |
| Assess situation and options | Recovery committee (CEO, CFO, CRO, treasurer, general counsel, head of communications) | Within 3 business days | Situation report and option proposal |
| Decide | Management body | Within 5 business days of breach | Resolution to activate options or to refrain, with reasons |
| Execute and monitor | Option owners | Per playbook timeline | Weekly progress report |

A breach of a recovery indicator does not oblige the institution to
execute a recovery option; it obliges the institution to consider the
situation and decide, and to inform the competent authority of the
decision and its rationale. Record both outcomes.

## 3. Strategic analysis

<!-- Guidance: Describe the group so that the reader understands what can be sold, wound down or recapitalised, and what must be protected. Identify core business lines and critical functions with the criteria used. A pitfall is copying the resolution authority's critical function list without the institution's own analysis. -->

### 3.1 Group structure and business model

Describe the legal entities, branches, ownership, and the main
business model. In the example, Fernhollow Bank is the parent credit
institution, with retail and SME banking in two EU Member States, a
wholly owned leasing subsidiary (Fernhollow Leasing, TREA about EUR
1,800 million), a payments subsidiary (Fernhollow Payments) and a New
York branch that serves
EU corporate clients' US operations. Funding is predominantly retail
deposits, complemented by covered bonds and senior debt.

### 3.2 Core business lines and critical functions

Identify core business lines from the institution's own view of where
revenue, profit and franchise value come from, and critical functions
from the effect their sudden interruption would have on clients and the
wider economy: market share in the relevant region, the number of
clients who depend on the service, how quickly another provider could
take over, and links to payment and settlement systems. Explain the
thresholds used and reconcile the result with any list the resolution
authority has shared. The analysis matters for option design: an
option that sells or shrinks a critical function must show how the
function continues during and after the transaction.

| ID | Business line or function | Core business line? | Critical function? | Rationale *(Example)* |
|---|---|---|---|---|
| CBL-01 *(Example)* | Retail deposits and payments | Yes | Yes | About 51% of liabilities and equity (24,000 of 47,400); 8% regional market share in current accounts; substitution not possible quickly |
| CBL-02 *(Example)* | Mortgage lending | Yes | No | Material revenue; other lenders can substitute within months |
| CBL-03 *(Example)* | SME lending | Yes | Yes (regional) | Regional share above 10% in two provinces |
| CBL-04 *(Example)* | Leasing subsidiary (Fernhollow Leasing) | No | No | Separable, saleable; candidate for divestment option RO-02 |
| CBL-05 *(Example)* | New York branch | No | No | Small; supports corporate clients only |

### 3.3 Interconnections

List the intragroup funding, guarantees, shared services, IT systems,
staff and contracts that link entities, and state for each whether it
would block or delay an option. For example, a sale of the leasing
subsidiary requires a transitional services agreement for IT
and collections, which the preparatory measures in section 8 put in
place in advance. Map external interconnections too: major
counterparties, payment and settlement systems, and outsourcing
providers, with the critical ones identified under the institution's
operational resilience work.

## 4. Recovery indicators

<!-- Guidance: Use the categories in the EBA guidelines (capital, liquidity, profitability, asset quality, and market-based and macroeconomic indicators unless the institution justifies otherwise) and calibrate each threshold early enough to leave time for options to work. A pitfall is a threshold so close to the regulatory minimum that no option can be executed in time; another is one so high that it is breached in normal fluctuations. -->

Indicators trigger the escalation in section 2.2. Calibrate each
threshold so that, in the plan's scenarios, the breach occurs early
enough for the slowest essential option to be executed before the
regulatory minimum or the combined buffer requirement is breached.
Show the calibration logic for every indicator: the distance from the
current value, the distance to the requirement, the speed of decline
in the scenarios and the lead time of options. Keep the early-warning
level (an internal monitoring level below the risk appetite) between
the appetite and the recovery threshold.

### 4.1 Indicator set

| ID | Category | Indicator | Current *(2026-12-31)* | Early-warning or escalation level | Recovery threshold | Requirement reference |
|---|---|---|---|---|---|---|
| RI-01 *(Example)* | Capital | CET1 ratio | 15.0% | 12.0% (risk appetite floor) | 11.0% | Overall CET1 requirement 9.125% plus P2G 1.0% |
| RI-02 *(Example)* | Capital | Total capital ratio | 20.0% | 16.0% | 14.5% | 8.0% Pillar 1 + 2.0% P2R + 3.5% combined buffer = 13.5% |
| RI-03 *(Example)* | Capital | Leverage ratio | 6.8% | 5.0% | 4.0% | 3.0% |
| RI-04 *(Example)* | Capital | MREL as % of TREA | [x]% | [x]% | [x]% | Resolution authority decision |
| RI-05 *(Example)* | Liquidity | LCR | 149.0% | 115% (CFP activation; ILAAP early warning 130%) | 105% | 100% |
| RI-06 *(Example)* | Liquidity | NSFR | 120.0% | 107% (CFP activation; ILAAP early warning 115%) | 102% | 100% |
| RI-07 *(Example)* | Liquidity | Survival horizon, combined severe scenario SCN-L03 (ILAAP and CFP) | About 80 days | 50 days (CFP activation; appetite 60 days) | 30 days | Internal |
| RI-08 *(Example)* | Profitability | Return on assets, rolling four quarters | 0.55% | 0.10% | -0.30% | Internal |
| RI-09 *(Example)* | Profitability | Quarterly net loss as % of CET1 | Not applicable (profit) | 2% | 5% | Internal |
| RI-10 *(Example)* | Asset quality | Gross NPL ratio | 2.1% | 4.5% | 6.0% | Internal |
| RI-11 *(Example)* | Asset quality | Growth of stage 3 loans, quarter on quarter | 3% | 15% | 30% | Internal |
| RI-12 *(Example)* | Market-based | Senior five-year CDS or bond spread | 85 bp | 200 bp | 300 bp | Internal |
| RI-13 *(Example)* | Market-based | Long-term issuer rating | A- | BBB | BBB- | Internal |
| RI-14 *(Example)* | Macroeconomic | Home-market real GDP growth, year on year | 1.3% | -1.5% | -3.0% | Internal |
| RI-15 *(Example)* | Macroeconomic | Residential property price index, year on year | 2.0% | -8% | -15% | Internal |

Check of the requirement figures: the overall CET1 requirement of
9.125% is 4.5% Pillar 1 plus 1.125% (the CET1 share, 56.25%, of a 2.0%
Pillar 2 requirement) plus the 3.5% combined buffer requirement (2.5%
capital conservation, 0.5% countercyclical and 0.5% O-SII buffer), as
in the ICAAP Report. The total capital requirement of 13.5% is
8.0% Pillar 1 plus 2.0% P2R plus the 3.5% combined buffer. Fernhollow
Bank's CET1 recovery threshold of 11.0% sits 0.875 percentage points
above the overall CET1 requirement plus Pillar 2 guidance
(9.125% + 1.0% = 10.125%), and the early-warning level equals the risk
appetite floor of 12.0%. The liquidity rows use the CFP activation level
as the escalation level, so the ladder is the same as in the ILAAP
Report (`finance/ilaap-report`) section 9: LCR 130 / 120 / 115 / 105%,
NSFR 115 / 110 / 107 / 102% and survival horizon 70 / 60 / 50 / 30
days (early warning, limit, CFP activation, recovery indicator).

### 4.2 Calibration evidence

| Indicator | Speed of decline in the severe scenario *(Example)* | Lead time of the slowest essential option | Conclusion |
|---|---|---|---|
| RI-01 CET1 | About 0.6 points per quarter in the combined scenario | RO-02 sale: 6 to 9 months | 11.0% gives about three quarters before the 9.125% requirement; adequate if RO-02 is prepared in advance |
| RI-05 LCR | Up to 40 points within 2 weeks in a run | RO-06 central bank operation: 1 week | 105% leaves time for central bank funding; CFP activation at 115% gives earlier warning |

## 5. Recovery options

<!-- Guidance: For each option give the description, the impact on capital, liquidity and profitability, the time to execute, the conditions and obstacles, the impact on critical functions, and a credibility assessment. Show impact in amounts and in ratio points at the stressed starting point, not at today's strong position. -->

Recovery options are actions the institution can take on its own
initiative, or with its shareholders, without extraordinary public
financial support. Each option is assessed for financial impact,
feasibility (legal, operational, market), timing, and side effects on
critical functions, the franchise and other options. Options that
depend on the same market (for example two asset sales to similar
buyers) must not be added together without an adjustment.

### 5.1 Option catalogue

Assess each option on the same five dimensions so that the management
body can compare them quickly. Financial impact is stated in euro and
in ratio points at the near-default point, net of costs, taxes and any
loss on sale. Feasibility covers legal steps (shareholder, supervisory
or competition approvals), operational steps (separation of systems,
staff and contracts) and market conditions. Timing runs from the
decision to the moment the effect is recognised in the regulatory
ratios, not to signing. Side effects include the impact on critical
functions, on rating agencies' view of the franchise, on funding costs
and on other options. Credibility is a short judgement (high, medium,
low) supported by evidence such as a past transaction, a recent
investor sounding or a dry-run result.

| ID | Option | Category | Gross impact *(Example)* | Time to execute | Main obstacles | Credibility |
|---|---|---|---|---|---|---|
| RO-01 *(Example)* | Cancel dividend, share buyback and AT1 coupon payments | Capital | +160 CET1 retained in the year (counted only for distributions the MDA would not already block; see section 5.2) | Immediate (next decision) | Maximum distributable amount rules apply anyway near buffers; AT1 investor reaction | High |
| RO-02 *(Example)* | Sell the leasing subsidiary | Capital | +60 CET1 gain, TREA -1,800 | 6 to 9 months | Buyer appetite in a downturn, transitional services, competition clearance | Medium |
| RO-03 *(Example)* | Synthetic securitisation of SME loans with significant risk transfer | Capital | -15 CET1 (costs), TREA -1,400 | 4 to 6 months | Investor appetite, supervisory SRT assessment | Medium |
| RO-04 *(Example)* | Rights issue to existing shareholders | Capital | +400 CET1 | 3 to 4 months | Equity market access; shareholder approval | Medium (idiosyncratic), low (system-wide) |
| RO-05 *(Example)* | Buy back Tier 2 notes below par | Capital | +25 CET1 gain | 1 to 2 months | Supervisory permission to reduce own funds; cash use | Medium |
| RO-10 *(Example)* | Run off EUR 1,000 million of corporate loans at a 100% risk weight (no renewal at maturity) | Capital | TREA -1,000 | 6 to 12 months | Franchise impact on SME clients (CBL-03 is a critical function, so only non-critical corporate exposures run off) | Medium |
| RO-11 *(Example)* | Exchange the EUR 400 million AT1 notes into ordinary shares (liability management offer) | Capital | +400 CET1 (Tier 1 unchanged) | 2 to 3 months | AT1 holder acceptance, shareholder authority (PM-05), dilution, market abuse and prospectus rules | Medium (system-wide), not counted with RO-04 |
| RO-06 *(Example)* | Eurosystem credit operation of more than 30 days on pre-positioned non-HQLA collateral | Liquidity | +2,240 cash (HQLA) | 1 week | Eligibility and collateral data | High |
| RO-07 *(Example)* | Covered bond issuance from cover pool headroom | Liquidity | +1,000 cash | 2 to 4 weeks | Market access | Medium (idiosyncratic), low (system-wide) |
| RO-08 *(Example)* | Sell non-HQLA corporate bond portfolio | Liquidity | +240 cash, loss already in OCI | 1 week | Market liquidity | High |
| RO-09 *(Example)* | Cost reduction programme (branch consolidation, hiring freeze) | Profitability | +45 pre-tax a year from year 2 | 12 to 18 months | Labour law, franchise | Medium |

### 5.2 Impact at the near-default point

The near-default point used to measure capital options is the trough
of the most severe scenario before management action: CET1 EUR 1,200
million on TREA EUR 22,000 million, a CET1 ratio of 5.45%. TREA is the
same as in the ICAAP reverse stress test RST-002 (risk-weight inflation
under stress from 20,000), and the point lies just below that test's
TSCR outcome: the CET1 ratio is below the CET1 part of TSCR of 5.625%
(4.5% Pillar 1 plus 1.125%, the CET1 share of the 2.0% P2R), which at
this TREA is EUR 1,237.5 million. EBA/GL/2023/06 expects the
scenario-specific recovery capacity to be measured from a point at
which the scenario breaches the total SREP capital requirement (TSCR)
or the leverage ratio equivalent; a less severe starting point needs a
detailed justification, which supervisors accept only by exception. At
this point Tier 1 is (1,200 + 400) / 22,000 = 7.27% (below the 7.5%
Tier 1 part of TSCR), total capital is (1,200 + 400 + 600) / 22,000 =
10.0% (at the 10.0% TSCR) and the leverage ratio is 1,600 / about
51,000 = 3.1%, just above 3.0%.

| Option | CET1 after option | TREA after option | CET1 ratio | Change in points |
|---|---|---|---|---|
| Starting point | 1,200 | 22,000 | 5.45% | Not applicable |
| RO-01 alone | 1,360 | 22,000 | 6.18% | +0.73 |
| RO-02 alone (RS-01 price, 20% discount) | 1,260 | 20,200 | 6.24% | +0.78 |
| RO-02 alone (RS-02 price, 35% discount) | 1,160 | 20,200 | 5.74% | +0.29 |
| RO-03 alone | 1,185 | 20,600 | 5.75% | +0.30 |
| RO-04 alone | 1,600 | 22,000 | 7.27% | +1.82 |
| RO-05 alone | 1,225 | 22,000 | 5.57% | +0.11 |
| RO-10 alone | 1,200 | 21,000 | 5.71% | +0.26 |
| RO-11 alone | 1,600 | 22,000 | 7.27% | +1.82 |
| RS-01 idiosyncratic: RO-01 to RO-05 and RO-10 | 1,830 | 17,800 | 10.28% | +4.83 |
| RS-02 system-wide: RO-01, RO-02 at 35% discount, RO-03 at higher cost, RO-05, RO-10 and RO-11 (equity market closed, no RO-04) | 1,720 | 17,800 | 9.66% | +4.21 |

Arithmetic, RS-01: 1,200 + 160 + 60 - 15 + 400 + 25 = 1,830; 22,000 -
1,800 - 1,400 - 1,000 = 17,800; 1,830 / 17,800 = 10.28%, which is 4.83
points above 5.45% (computed on unrounded ratios). RS-02: RO-02 is sold
at a 35% discount, giving a CET1 loss of 40 instead of a gain of 60,
and RO-03 costs 25 instead of 15: 1,200 + 160 - 40 - 25 + 25 + 400 =
1,720; 1,720 / 17,800 = 9.66% (+4.21). RO-11 is not counted in RS-01,
because RO-04 and RO-11 both dilute shareholders and draw on the same
authority, and the bank would choose one of them. Individual ratios use
the same method, for example RO-02 at the RS-01 price: (1,200 + 60) /
(22,000 - 1,800) = 1,260 / 20,200 = 6.24%. Combined impacts are not the
sum of individual point changes because the denominators differ.

RO-01 and the MDA: at the near-default point the CET1 ratio is below
the combined buffer and even below TSCR, so the maximum distributable
amount is zero and dividends, buybacks and AT1 coupons are already
prohibited by law; counting them again would double count. The +160 is
counted only because the scenario path assumes the final dividend and
buyback for the year were declared before the recovery indicator breach
and would have been paid while CET1 was still above the overall
requirement; RO-01 is the voluntary cancellation decided at the breach.
An institution whose scenario path reaches the buffer before the
payment date counts zero for RO-01.

## 6. Scenarios and overall recovery capacity

<!-- Guidance: Use at least an idiosyncratic, a system-wide and a combined scenario, severe enough to breach recovery indicators and to bring the institution close to failure without action. Then show which options remain feasible in each scenario and the resulting overall recovery capacity. A pitfall is reusing the ICAAP adverse scenario, which is usually not severe enough for recovery planning. -->

### 6.1 Scenario set

Design the scenarios backwards from the indicators: each must breach at
least the main capital or liquidity recovery threshold and, without
action, take the institution to the near-default point. Use the
institution's own vulnerabilities (for Fernhollow Bank, concentration
in home-market property lending, reliance on online savings deposits
and a leasing subsidiary with higher fraud and credit risk, such as
double financing of the same equipment)
rather than a generic downturn. Cover a fast event and a slow one,
because options that work in a slow scenario often fail in a fast one.
Describe each scenario's path quarter by quarter (or week by week for
liquidity) in the annex, so that indicator breach dates can be checked.

| ID | Type | Narrative *(Example)* | Indicators breached | Time to breach |
|---|---|---|---|---|
| RS-01 *(Example)* | Idiosyncratic | Large fraud in the leasing subsidiary (EUR 450m loss), two-notch downgrade, deposit outflows of 8% over one month | RI-01, RI-05, RI-12, RI-13 | CET1 below 11.0% in month 2; LCR below 105% in week 2 |
| RS-02 *(Example)* | System-wide | Deep home-market recession, property prices -20%, sovereign spread shock, equity markets closed for bank issuance | RI-01, RI-10, RI-14, RI-15 | CET1 below 11.0% in quarter 4 |
| RS-03 *(Example)* | Combined, fast | RS-01 and RS-02 together, front-loaded | All capital and liquidity indicators | LCR below 105% in week 1; CET1 below 11.0% in month 3 |
| RS-04 *(Example)* | Combined, slow | Gradual margin compression and credit losses over two years | RI-01, RI-08, RI-09 | CET1 below 11.0% in quarter 6 |

The ICAAP adverse scenario, with a CET1 trough of 11.9% in 2028 (12.35%
after management actions), stays above the 11.0% recovery threshold by
design: recovery scenarios must go further and reach the near-default
point described in section 5.2 (CET1 5.45%, below the CET1 part of
TSCR, as EBA/GL/2023/06 expects) and, for liquidity, an LCR
of 95.0% (stressed HQLA EUR 3,990 million against net outflows of EUR
4,200 million).

### 6.2 Feasibility of options by scenario

| Option | RS-01 idiosyncratic | RS-02 system-wide | RS-03 combined fast | RS-04 combined slow |
|---|---|---|---|---|
| RO-01 | Feasible | Feasible | Feasible | Feasible |
| RO-02 | Feasible, price discount 20% assumed (CET1 +60) | Feasible at a 35% discount (CET1 -40) | Too slow for the first months | Feasible |
| RO-03 | Feasible | Feasible, higher cost (CET1 -25) | Too slow for the first months | Feasible |
| RO-04 | Feasible | Not feasible (markets closed) | Doubtful | Feasible |
| RO-05 | Feasible | Feasible | Cash needed elsewhere; deferred | Feasible |
| RO-10 | Feasible | Feasible | Too slow for the first months | Feasible |
| RO-11 | Not counted (RO-04 chosen) | Feasible, needs AT1 holder acceptance | Doubtful | Feasible |
| RO-06 | Feasible | Feasible | Feasible | Feasible |
| RO-07 | Feasible | Not feasible | Not feasible | Feasible |
| RO-08 | Feasible (20% haircut, +240) | Feasible at a 30% haircut (+210) | Feasible | Feasible |
| RO-09 | Long-term only | Long-term only | Long-term only | Feasible |

### 6.3 Overall recovery capacity

Under EBA/GL/2023/06 the institution determines its overall recovery
capacity as the range of the scenario-specific recovery capacities,
explains it, and makes a self-assessment; the competent authority then
assigns the ORC score (satisfactory, adequate with potential room for
improvement, or weak) as part of its assessment. Read the guideline for
the exact criteria; the summary below is the institution's own view.

| Dimension | Starting point (near default) | After feasible options, RS-01 | After feasible options, RS-02 | Institution's self-assessment against the EBA/GL/2023/06 score levels (the competent authority assigns the score) |
|---|---|---|---|---|
| Capital (CET1 ratio) | 5.45% | 10.28% (+4.83 points) | 9.66% (+4.21 points) | Range +4.21 to +4.83 points. Adequate with potential room for improvement: both scenarios restore CET1 above the overall CET1 requirement (9.125%) but not above the 11.0% recovery threshold |
| Liquidity (LCR) | 95.0% | 177.9% | 153.3% | Satisfactory: both scenarios restore the LCR above the 115% CFP activation level |

Liquidity arithmetic: in RS-01, stressed HQLA of 3,990 plus RO-06
(2,240), RO-07 (1,000) and RO-08 (240) gives 7,470; 7,470 / 4,200 =
177.9%. In RS-02, RO-07 is not feasible and RO-08 is sold at a 30%
haircut instead of 20% (300 x 70% = 210): 3,990 + 2,240 + 210 = 6,440;
6,440 / 4,200 = 153.3%. Net outflows are held at the reference-date
LCR figure for simplicity; a full plan projects them along the
scenario path.

Without RO-10 and RO-11, which this plan adds, the system-wide result
would have been 1,200 + 160 - 40 - 25 + 25 = 1,320 on TREA 18,800, a
CET1 ratio of 7.02%, below the overall CET1 requirement: a likely
"weak" outcome. That gap is why the two options were developed in the
2026 cycle. A remediation item remains open: to restore the 11.0%
recovery threshold in RS-02 the bank needs a further 11.0% x 17,800 -
1,720 = 238 of CET1, or a further TREA reduction of about 2,164 (to
1,720 / 11.0% = 15,636). Candidates are a sale of a performing
mortgage portfolio to an insurer and a second synthetic securitisation;
their franchise impact and feasibility in a closed market are to be
validated before the next plan. Because the capital ORC in RS-02 also
depends on a sale and a securitisation that take several months,
section 8 lists preparatory measures that shorten them.

## 7. Communication and disclosure plan

<!-- Guidance: Plan internal and external communication for the recovery phase, including market disclosure obligations, and how options will be explained to staff, clients, investors and authorities. A pitfall is ignoring that executing some options (such as a rights issue) triggers disclosure duties on its own timetable. -->

Communication in recovery aims to maintain confidence while options
are executed. Prepare the messages, approvers and channels in advance,
and coordinate with disclosure counsel because inside information
rules under the EU Market Abuse Regulation apply to listed issuers,
including decisions to delay disclosure. Align with the communication
plan in the contingency funding plan, which covers the liquidity stage
before recovery.

| Audience | Message focus | Channel | Owner | Timing |
|---|---|---|---|---|
| Competent and resolution authorities | Breach, assessment, decision, progress | Formal notification, weekly calls | CRO and regulatory affairs | Without delay after breach; weekly |
| Management body | Situation report, options, decisions | Extraordinary meeting | CEO | Within 5 business days |
| Staff | What is happening, what not to say externally | Intranet, managers' briefing | Head of HR and communications | Same day as decision |
| Depositors and clients | Safety of deposits, continuity of service | Website, branches, relationship managers | Head of communications | When the situation becomes public |
| Investors and rating agencies | Capital and liquidity position, actions | Market disclosure, calls | CFO and investor relations | As required by disclosure rules |
| Counterparties and infrastructures | Continuity of payments and settlement | Direct contact | Treasurer and COO | When needed |

## 8. Preparatory measures

<!-- Guidance: List the actions taken in normal times that make options faster or more likely to succeed, with owner and status. Supervisors look for evidence that the hard work has started, such as data rooms, legal separability and pre-positioned collateral. -->

| ID | Measure | Option supported | Owner | Status *(Example)* | Due |
|---|---|---|---|---|---|
| PM-01 *(Example)* | Maintain a vendor data room for the leasing subsidiary | RO-02 | Corporate development | In place, refreshed semi-annually | Ongoing |
| PM-02 *(Example)* | Draft transitional services agreement for IT and collections | RO-02 | COO | Draft complete | 2027-03-31 |
| PM-03 *(Example)* | Loan-level data tape for SME portfolio meeting securitisation standards | RO-03 | Treasury and data office | 80% complete | 2027-06-30 |
| PM-04 *(Example)* | Pre-position credit claims with the central bank | RO-06 | Collateral management | EUR 3,200m credit claims pre-positioned (EUR 2,240m after haircuts, as in the CFP CBC-05) | Ongoing |
| PM-05 *(Example)* | Shareholder authorisation to issue shares without pre-emption up to a limit | RO-04, RO-11 | Company secretary | Approved at last AGM | Renew annually |
| PM-06 *(Example)* | Valuation capability to produce option valuations within 10 days | RO-02, RO-03, RO-08 | Finance | Tested in dry run | Ongoing |

## 9. Playbook and dry-run results

<!-- Guidance: Turn the plan into a sequenced playbook for the first 30 days after a breach, and test it at least annually with a dry run. Record findings and fix them. A pitfall is a dry run that tests only the meeting, not the data, valuation and execution steps. -->

### 9.1 First 30 days after a recovery indicator breach

| Day | Action | Owner | Deliverable |
|---|---|---|---|
| 0 | Confirm breach and data quality | Risk reporting | Validated indicator report |
| 1 | Notify executives; convene recovery committee | CRO | Meeting notice |
| 1 to 2 | Notify competent authority | Regulatory affairs | Notification |
| 1 to 3 | Situation analysis, refreshed projections, option feasibility | CFO, CRO, treasurer | Situation report |
| 5 | Management body decision | Chair | Resolution |
| 5 to 10 | Launch fast options (RO-01, RO-06, RO-08) | CFO, treasurer | Execution records |
| 10 to 30 | Mandate advisers for RO-02, RO-03, RO-04 or RO-11 as decided; stop renewals for RO-10 | Corporate development and business lines | Mandates signed; run-off list approved |
| Weekly | Progress report to management body and supervisor | Plan owner | Weekly report |

### 9.2 Dry-run log

A dry run (also called a simulation or fire drill) tests whether the
plan works with real people, data and systems under time pressure.
Use a scenario that the participants have not seen, inject events
during the exercise (a rating action, a media story, a supervisory
request), and require the actual deliverables: the indicator report,
the refreshed capital and liquidity projection, the option valuation
and the draft notification. Ask an independent observer, often from
internal audit, to record timings and decisions. Every finding gets an
owner and a due date, and the next plan reports whether it was closed.

| Dry run ID | Date | Scenario | Participants | Findings | Status |
|---|---|---|---|---|---|
| DR-2026-01 *(Example)* | 2026-09-24 | RS-03 combined fast | Recovery committee, management body chair, communications | F1: CET1 projection took 6 days instead of 3; F2: no deputy for the head of regulatory affairs; F3: data room for RO-02 missing tax data; F4: RO-05 needs prior supervisory permission not shown in the timeline | F2 and F4 closed; F1 and F3 due 2027-03-31 |

### 9.3 Requirement coverage map

| Element | Section |
|---|---|
| Summary and key elements of the plan | 1 |
| Governance, escalation and decision-making | 2 |
| Strategic analysis, core business lines and critical functions | 3 |
| Indicators under BRRD Article 9 and EBA/GL/2021/11 | 4 |
| Options, impact and feasibility | 5 |
| Scenarios and overall recovery capacity (EBA/GL/2023/06) | 6 |
| Communication and disclosure | 7 |
| Preparatory measures | 8 |
| Testing and playbook | 9 |

## 10. Glossary and references

<!-- Guidance: Define the recovery planning terms used and list the versions of the rules relied on, with the date checked. -->

### 10.1 Glossary

| Term | Meaning in this plan |
|---|---|
| Recovery plan | The institution's own plan to restore its financial position after a significant deterioration |
| Resolution plan | The resolution authority's plan for orderly resolution if recovery fails; out of scope |
| Recovery indicator | A metric with a threshold whose breach triggers the escalation process |
| Recovery option | An action the institution can take to restore capital, liquidity or profitability |
| Overall recovery capacity (ORC) | The capacity to restore the financial position across all credible options in a scenario |
| Near-default point | The scenario trough used to measure option impact; it breaches TSCR (or the leverage ratio equivalent) as EBA/GL/2023/06 expects |
| TREA | Total risk exposure amount (risk-weighted assets) |
| P2R and P2G | Pillar 2 requirement (binding) and Pillar 2 guidance (expectation) set in the SREP |
| Combined buffer requirement | The sum of the applicable capital buffers on top of own funds requirements |
| Critical function | An activity whose disruption would harm the real economy or financial stability, and cannot be replaced quickly |
| Significant risk transfer (SRT) | Recognition of credit risk transfer in a securitisation for capital purposes |

### 10.2 References

| Reference | Version or date checked | Use |
|---|---|---|
| Directive 2014/59/EU (BRRD), Articles 4 to 9, 27 and Annex Section A | Check consolidated text; amended by Directive (EU) 2026/806 | Legal basis |
| Directive (EU) 2026/806, Regulation (EU) 2026/808, Directive (EU) 2026/804 (CMDI) | Published 2026-04-20; application in May 2028, check the transposition article | Upcoming changes |
| Commission Delegated Regulation (EU) 2016/1075 | Check consolidated text | Content and assessment of recovery plans |
| EBA/GL/2021/11, recovery plan indicators | Check eba.europa.eu | Indicator categories |
| EBA/GL/2023/06, overall recovery capacity in recovery planning | Referenced in EBA/GL/2026/06 (2026-06-26) | ORC scoring |
| EBA/GL/2014/06, range of scenarios in recovery plans | Check for later revision | Scenario design |
| EBA/GL/2026/06, revised SREP guidelines | Final report 2026-06-26, applies 2027-01-01 | Link between ORC and SREP scores |
| OCC Bulletin 2026-10 | Final rule 2026-03-31, effective 2026-05-01 | US status |
| PRA Rulebook Recovery Plans Part; PRA SS9/17 | Name only | UK entities |
| Related templates: ICAAP Report (`finance/icaap-report`), ILAAP Report (`finance/ilaap-report`), Contingency Funding Plan (`finance/contingency-funding-plan`), Stress Testing Programme (`finance/stress-testing-programme`), Risk Appetite Statement (`finance/risk-appetite-statement`), Business Continuity Plan (`compliance/business-continuity`), Disaster Recovery Plan (`ops/disaster-recovery-plan`) | Not applicable | Cross-references |

## Standard and licence note

Based on Directive 2014/59/EU (BRRD) Articles 4 to 9, Commission
Delegated Regulation (EU) 2016/1075, the CMDI package (Directive (EU)
2026/806 and related acts) and EBA guidelines cited by number (EU texts
reused with acknowledgement of the source), and on OCC Bulletin 2026-10
(US federal work in the public domain). PRA material is cited by name
only. The structure, indicators, options, scenarios and all wording are
original to this template and do not reproduce any supervisory
template. Fernhollow Bank and every figure are fictional and are not a
calibration recommendation. Check the current consolidated texts, the
national transposition and the latest EBA guidelines before use.
Template licence: MIT.