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- Collateral during ECL calculatio
FlexFinance considers the collateral values allocated during- ECL calculation using statistical methods in stage 1 and 2 as well as non-significant deals assigned to stage 3
- ECL calculation using individual recovery cash flows for stage 3 significant deals
- For details of the calculation for stages 1 and 2, please refer to Impairment IFRS 9 Stages 1 and 2.
- For stage 3, non-significant deals in a lump-sum specific approach, an ECL model needs to be defined in the Collective Impairment Workbench that calculates the ECL on the basis of an adjusted EAD
- For stage 3 significant deals in a specific provision approach, collateral is a source for recovery cash flows besides other recovery types. These recovery cash flows are discounted and compared with the total exposure.
- For details of the calculation for stage 3, please refer to Impairment IFRS 9 Stage 3.
The different scenarios lead to a probability-weighted ECL for stage 3 impaired significant deals.
Figure: ECL calculation results at individual deal level for specific provisioning