Division 4.2.3.1 Further definitions and considerations

Until HGAA is in a position to report on incremental exposure increases as outlined in 4.2.3(ii) and (iii), exposure increases with existing clients (on a product basis) are considered new business. For clarification: a decrease in the instalment frequency (e.g. from monthly to quarterly) is considered new business.

Marginal/insignificant exposure increases (up to EUR […]) caused by transaction fees, capitalised interest/fees, etc., in particular relating to the transactions listed under 4.2.3.2 (e.g. currency switches, restructurings, consolidations, prolongations, etc.) are not considered new business at any time.

Within the context of exposure-increasing retail business, the existence or otherwise of new business must be determined at the level of individual transactions, so exposure increases on one product (held by the client) are not to be netted against exposure decreases on another product. Netting of client loans against client deposits is not permissible either.

Finance leasing shall be treated as credit financing, and is therefore new business pursuant to 4.2.3, and subject to the restrictions on new business.

Operating leasing shall be treated as new business if it is caught by 4.2.3, and is therefore subject to the restrictions on new business.

Reclassification of leases (e.g. from operating leases to finance leases) is not considered new business, unless it increases the risk exposure of the bank in regulatory or economic terms.