Bank Recovery Plan Template (BRRD Articles 5 to 9)

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.

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Revision history

Contents

• 1. Summary
• 2. Governance
• 3. Strategic analysis
• 4. Recovery indicators
• 5. Recovery options
• 6. Scenarios and overall recovery capacity
• 7. Communication and disclosure plan
• 8. Preparatory measures
• 9. Playbook and dry-run results
• 10. Glossary and references
• Standard and licence note

1. Summary

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.

1.2 Key messages

2. Governance

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

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

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.

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

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

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

5. Recovery options

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.

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%.

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

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.

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

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.

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

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.

8. Preparatory measures

9. Playbook and dry-run results

9.1 First 30 days after a recovery indicator breach

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.

9.3 Requirement coverage map

10. Glossary and references

10.1 Glossary

10.2 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.