Prudential Treatment of Problem Assets
| No: 381000099757 | Date(g): 17/6/2017 | Date(h): 23/9/1438 | Status: In-Force |
Translated Document
The global financial crisis highlighted the difficulties in identifying and comparing banking data, particularly regarding the quality and types of bank assets and how they are monitored in supervisory reports and disclosures. The Basel Committee on Banking Supervision recognized significant differences in practices among countries.
Therefore, the Committee issued guidelines for managing non-performing assets, particularly non-performing loans and loans subject to forbearance, concerning the scope of evaluation standards and the level of application by banks within the current accounting and regulatory framework. These guidelines will be applied to several topics, including:
- Monitoring and supervision of asset quality to ensure more consistent comparability across countries.
- Internal Rating-Based (IRB) credit classification systems for banks for credit risk management purposes.
- Pillar 3 disclosure regarding asset quality.
- Published data related to asset quality indicators.
Based on the above, SAMA emphasizes the importance of banks adhering to the guidelines for managing non-performing assets issued by the Basel Committee on Banking Supervision.