CELEX: 51981PC0084
Language: en
Date: 1981-03-09
Title: PROPOSAL FOR A COUNCIL DIRECTIVE CONCERNING THE ANNUAL ACCOUNTS OF BANKS AND OTHER FINANCIAL INSTITUTIONS

1. 6. 81                             Official Journal of the European Communities                               No C 130/1
                                                             II
                                                    (Preparatory Acts)
                                                COMMISSION
              Proposal for a Council Directive concerning the annual accounts of banks and other financial
                                                        institutions
                            (Submitted by the Commission to the Council on 19 March 1981)
THE COUNCIL OF THE EUROPEAN COMMUNITIES,                          78/660/EEC, but to choose a scope which is in line with
                                                                  that of Council Directive 77/780/EEC relating to the
Having regard to the Treaty establishing the European             taking up and pursuit of the business of credit
Economic Community, and in particular Article 54 (3)              institutions (2);
(g) thereof,
                                                                  Whereas the link with the coordination of legislation
Having regard to the proposal from the Commission,                relating to credit institutions is also important because
                                                                  aspects of the provisions governing annual accounts will
Having regard       to the opinion     of the     European        inevitably have an impact on other areas of such
Parliament,                                                       coordination, such as authorization requirements and the
                                                                  indicators used for supervisory purposes;
Having regard to the opinion of the Economic and Social
Committee,                                                        Whereas although, in view of the specific characteristics
                                                                  of credit institutions, it appears appropriate to propose a
Whereas Council Directive 78/660/EEC (*) concerning               separate Directive on annual accounts for such
the annual accounts of limited companies need not be              undertakings; this must not result in a set of standards
applied to banks and other financial institutions,                being established which is separate from Directive
hereinafter referred to as 'credit institutions', pending         78/660/EEC; whereas such separate standards would be
subsequent coordination; whereas, in view of the central           neither appropriate or consistent with the basic
importance of these undertakings in the Community,                principles underlying the coordination of company law,
such coordination cannot be delayed any longer                    since, given the central place which they occupy in the
following implementation of Directive 78/660/EEC;                 economy of the Community, credit institutions cannot be
                                                                  excluded from the framework of standards devised for
Whereas such coordination has also become urgent                  undertakings generally; whereas, for this reason only the
because more and more credit institutions are operating           particular characteristics of credit institutions are taken
across national frontiers; whereas, for creditors, debtors        into account, and this Directive therefore deals only with
and members and for the general public, improved                  exceptions to the rules contained in Directive
comparability of the annual accounts of these                     78/660/EEC;
institutions is therefore of crucial importance;
                                                                  Whereas in each Member State an essential characteristic
Whereas, in virtually all the Member States of the                of credit institutions is the difference in structure and
Community, institutions of differing legal forms are in           content of their balance-sheets; whereas this Directive
competition with one another in the credit sector;                must therefore lay down the same structure and the same
whereas it is therefore appropriate not to confine                item designations for the balance sheets of all credit
coordination to the legal forms covered by Directive              institutions in the Community;
(J) OJ No L 222, 14. 8. 1978, p. 11.                              (2) OJ No L 322, 17. 12. 1977, p. 30.
 ---pagebreak--- No C 130/2                            Official Journal of the European Communities                                   1. 6. 81
Whereas, if the annual accounts are to be comparable, a          Article 52 of Directive 78/660/EEC; whereas,
number of basic questions regarding the presentation of          nevertheless, when examining problems concerning
certain transactions in the balance sheet must be settled;       credit institutions, the committee will be appropriately
                                                                 constituted;
Whereas, in the interests of greater comparability, it is        Whereas, in view of the complexity of the matter, the
also necessary that the content of certain balance sheet         credit institutions covered by this Directive must be
items be determined precisely;                                   allowed a longer period than usual to implement the
                                                                 provisions thereof; whereas, pending subsequent
                                                                 coordination, the Member States should also be allowed
Whereas the same also applies to the composition and             to defer the application of certain provisions of this
 definition of certain items in the profit and loss account;     Directive to certain specialized credit institutions where
                                                                 immediate application would cause major adjustment
                                                                 problems,
Whereas the comparability of figures in the balance sheet
and profit and loss account also depends crucially on the
values at which assets or liabilities are entered in the
balance sheet; whereas, in view of the principle of
                                                                 HAS ADOPTED THIS DIRECTIVE:
prudence and the need to maintain confidence in the
stability of the credit industry, it is necessary to allow
credit institutions some flexibility in the valuation of
assets, particularly in the valuation of loans and                                        SECTION 1
advances; whereas credit institutions should also be
permitted to show in the profit and loss account only the
balance resulting from the set-off between charges                            Preliminary provisions and scope
corresponding to value adjustments in respect of certain
items and income from the writing-back of such value
adjustments;
                                                                                           Article 1
Whereas, in view of the special nature of credit                 1.    The provisions of Directive 78/660/EEC shall
institutions, certain changes are also necessary with            apply to credit institutions within the meaning of Article
regard to the notes on the annual accounts;                      2 of this Directive, except in the cases expressly provided
                                                                 for in this Directive.
Whereas, in line with the intention to cover as many             2.    Where reference is made in Directive 78/660/EEC
credit institutions as possible, as was the case with            to Articles 9 and 10 (balance sheet) or to Articles 23 to
Council Directive 77/780/EEC, derogations are not                26 (profit and loss account) of that Directive, such
provided for small and medium-sized credit institutions,         references shall be deemed to be references to Article 4
such as are provided for under the terms of Directive            (balance sheet) or to Articles 29 and 30 (profit and loss
78/660/EEC; whereas, nevertheless, if, in the light of           account) of this Directive.
experience, such derogations prove necessary, it will be
possible to provide for them in a subsequent measure of
                                                                 3.    Where reference is made in Directive 78/660/EEC
coordination;
                                                                 to balance sheet items which do not appear as separate
                                                                 balance sheet items in this Directive, such references shall
Whereas, taking account of the importance of banking             be deemed to be references to the items in Article 4 of this
networks which extend beyond national frontiers and              Directive which include the assets in question.
their Constant development, it is important that the
annual accounts of a credit institution having its head
office in one Member State, should be published in all the
Member States where it is established and that this                                        Article 2
publication should be made in the official languages of
the Merftber States concerned;                                    1.   The coordination measures prescribed by this
                                                                 Directive shall apply to all credit institutions within the
                                                                 meaning of Article 1 of Directive 77/780/EEC, where
Whereas the examination of problems which arise in               such institutions are companies or firms within the
connection with the present Directive, notably                   meaning of the second paragraph of Article 58 of the
concerning its application, require the cooperation of           Treaty.
representatives of the Member States and the
Commission in the form of a Contact Committee;                   2.    This Directive shall also apply to all other
whereas, in order to avoid the proliferation of such             companies or firms whose principal activity is to receive
committees, it is desirable that the said cooperation be         deposits or other repayable funds, for their own account,
achieved by means of the committee provided for in               or to grant credits (including guarantees), to acquire
 ---pagebreak---   1. 6. 81                             Official Journal of the European Communities                                No C 130/3
 participating interests or make investments, in so far as                                  SECTION 3
 such companies or firms have not been made subject to
 Directive 78/660/EEC                                                               Layout of the balance sheet
3.     This Directive shall not apply to:
                                                                                             Article 4
 (a) the credit institutions listed in Article 2 (2) of
      Directive 77/780/EEC;                                       The Member States shall prescribe the following layout
                                                                  for the balance sheet.
 (b) the following credit institutions:
      — in the Netherlands: credit institutions which by                                       Assets
          virtue of Article 8 of the 'Wet Toezicht
          Kredietwezen' (x) are not subject to Article 11 of        1. Cash in hand, balances with central banks and
          the aforesaid law,                                            postal cheque offices.
      — in the United Kingdom: 'Friendly Societies' and
                                                                   2. Treasury bills and similar debt instruments of
          'Industrial and Provident Societies'.
                                                                        public bodies.
 4.     Member States may defer application of this                3. Loans and advances to credit institutions:
 Directive to:
                                                                        (a) repayable on demand;
  (a) the credit institutions referred to in Article 2 (5) of
      Directive 77/780/EEC, and included in the                         (b) with agreed maturity dates or periods of notice:
      Commission communication of 14 October 1978 (2),                       (ba) of less than three months,
      for so long as the application to them of Directive
      77/780/EEC is deferred;                                                (bb) of three months or more.
 (b) other specialized credit institutions, where, because         4. Bill portfolio.
      of the nature of their business, immediate
      application would create serious problems; in this           5. Loans and advances to customers:
      case, these institutions must be notified to the
      Commission within six months of the notification of               (a) repayable on demand;
      this Directive. Member States may decide to defer
      application of this Directive to these institutions               (b) with agreed maturity dates or periods of notice.
      pending further coordination and until 1 January
      1988 at the latest;                                          6. Debt securities held in portfolio:
                                                                        (a) issued by public bodies;
                                                                        (b) issued by other borrowers, including own debt
                          SECTION 2                                          securities.
General provisions concerning the balance sheet and the
                   profit and loss account                         7. Subordinated claims and debt securities.
                                                                   8. Shares and          other     variable-yield   securities,
                           Article 3                                    including:
                                                                       — participating interests;
1.     Article 4 (2) of Directive 78/660/EEC shall not
apply to credit institutions.                                          — shares in affiliated undertakings.
2.     The possibility of combining items pursuant to              9. Assets as listed in Article 9, Assets B, C I and C II
Article 4 (3) of Directive 78/660/EEC shall, in the case of            (2), (3) and (4) of Directive 78/660/EEC, including:
credit institutions, be restricted to balance sheet and
profit and loss account sub-items preceded by lower case               — formation expenses;
letters and shall be available only within the framework
                                                                       — goodwill, to the extent that it was acquired for
of the appropriate rules laid down by the Member States.
                                                                            valuable consideration;
C1) Adopted on 13 April 1978, 'Staatsblad' 1978, 255.                  — assets listed in Article 9, Assets C II (2), (3) and
(2) OJ No C 244, 14. 10. 1978, p. 2.                                        (4) of Directive 78/660/EEC.
 ---pagebreak--- N o C 130/4                           Official Journal of the European Communities                                   1. 6. 81
10. Land and buildings.                                                 (b) provisions for taxation;
                                                                        (c) other provisions.
11. Subscribed capital unpaid,
     — called-up capital (unless national law provides             8. Subordinated liabilities.
         for called-up capital to be included under
         liabilities, in which case capital called but not         9. Subscribed capital (unless national law provides for
         yet paid up must be included either in item 11 of              called-up capital to be shown under this item. In
         the assets or in item 14 of the assets).                       that case, the amounts of subscribed capital and
                                                                        paid-up capital must be shown separately).
12. Own shares
                                                                  10. Share premium account.
     — in addition: nominal/accounting par value.
                                                                  11. Reserves.
13. Other assets.
                                                                  12. Profit or loss brought forward.
14. Subscribed capital, called but not paid-up (unless
     national law provides that called-up capital be              13. Profit or loss for the financial year (unless national
     shown as an asset under item 11).                                  law provides for this item to be shown under
                                                                        'Assets' item 16 or 'Liabilities' item 6).
15. Accruals and deferred income.
16. Loss for the financial year (unless national law             Total Liabilities
     provides for its inclusion under item 13 of the
     liabilities).
                                                                                      Below the Line items
                                                                  1. Contingent liabilities:
Total assets
                                                                      (a) endorsements;
                          Liabilities                                 (b) guarantees and indemnities;
 1. Amounts owed to credit institutions:                              (c) assets pledged as collateral security for liabilities
                                                                           of third parties.
     (a) repayable on demand;
     (b) with agreed maturity dates or periods of notice:        2. Commitments arising from forward transactions.
          (ba) of less than three months,                        3. Commitments arising from sale and repurchase
          (bb) of three months or more.                              transactions.
 2. Amounts owed to customers other than credit
                                                                                             Article 5
     institutions:
     (a) repayable on demand;                                    1.      The Member States shall prescribe that the
                                                                 following shall be shown separately in sub-items to the
     (b) with agreed maturity dates or periods of notice;        respective items:
     (c) savings deposits and savings bonds.
                                                                 — claims, whether or not represented by certificates, on
 3. Commitments represented by certificates:                          affiliated undertakings and contained in 'Assets'
                                                                      items 3 to 7;
     (a) debt securities issued;
                                                                 — claims, whether or not represented by certificates, on
     (b) other.
                                                                      undertakings with which the credit institution is
 4. Other liabilities.                                               linked by virtue of a participating interest and
                                                                     contained in 'Assets' items 3 to 7;
 5. Accruals and deferred income.
                                                                 — liabilities, whether or not represented by certificates,
                                                                     to affiliated undertakings and contained in
 6. Profit for the financial year (unless national law
                                                                     'Liabilities' items 1, 2, 3 and 8;
     provides for its inclusion under item 13 of the
     liabilities).
                                                                 — liabilities, whether or not represented by certificates,
 7. Provisions for liabilities and charges:                          to undertakings with which the credit institution is
                                                                     linked by virtue of a participating interest and
     (a) provisions for pensions and similar obligations;            contained in 'Liabilities' items 1, 2, 3 and 8.
 ---pagebreak---  1. 6. 81                                Official Journal of the European Communities                                No C 130/5
 2.     The Member States may, however, permit this                                              Article 9
 information, broken down by the items referred to in
 paragraph 1, to be shown in the notes.
                                                                      1.    The classification by maturity of certain assets and
                                                                     liabilities shall be based on the originally agreed maturity
                                                                     or period of notice. However, where a credit institution
                                                                     has acquired an existing loan not represented by a
                                                                     certificate, it shall classify that loan on the basis of the
                             Article 6                               remaining maturity as at the date on which it was
                                                                      acquired.
 1.     Assets shall be shown under the relevant balance
 sheet headings even where the credit institution drawing
 up the balance sheets has pledged them as security for its          2.     The originally agreed maturity for loans shall be
 own liabilities or for those of third parties or has                the period between the date of first drawing and the date
 otherwise assigned them as security to third parties.               of repayment. The period of notice shall be deemed to be
                                                                     the period between the date on which notice is given and
 2.     The credit institution drawing up the balance sheet          the date on which repayment is to be made.
 shall not include in its balance sheet assets pledged or
 otherwise assigned to it as security unless such assets are         3.     If loans and advances or other claims are
 in the form of cash.                                                redeemable by instalments, the agreed maturity shall be
                                                                     the period between the date on which such loans and
 Such securities other than in the form of cash shall be             advances or other claims arose and the date on which the
 shown as a total in the notes where this is necessary to            last instalment falls due.
 provide a true and fair view of the credit institution's
 assets, liabilities, financial position and profit or loss.
                                                                     4.     Only those amounts which can at any time be
                                                                     withdrawn without notice or for which a maturity or
                                                                     period of notice of not more than 24 hours or one
                                                                     working day has been agreed shall be regarded as
                            Article 7                                repayable on demand.
 1.    Where a Joan has been granted by a syndicate
                                                                     5.     The Member States may permit deviations from the
consisting of a number of credit institutions, each credit
                                                                    provisions of paragraphs 2 to 4 provided that this is
institution participating in the syndicate shall include in
                                                                    necessary to provide a true and fair view of the credit
the balance sheet only that part of the total loan which it
                                                                     institution's assets, liabilities, financial position and
has itself funded.
                                                                    profit or loss. In such cases, credit institutions shall
                                                                    indicate in the notes the extent to which they have
2.     If, in the case of syndicated loans, the amount of           deviated from these provisions.
funds guaranteed by the credit institution drawing up the
balance sheet exceeds the amount which it has made
available any additional guarantee portion shall be
shown as a contingent liability (in item l b below the
line).                                                                                         Article 10
3.     The above provisions shall also apply to any other
type of transaction carried out by syndicates.                       1.     Sale and repurchase transactions are transactions
                                                                    which involve the transfer by a credit institution or
                                                                    customer (the 'transferor') to another credit institution
                                                                    or customer (the 'transferee') of assets which belong to it,
                                                                     in particular, bills, claims or securities against payment
                            Article 8                               of a specified amount, subject to an agreement that the
                                                                    same assets be repurchased by the transferor, at the
1.     Funds which a credit institution receives for                purchase price or a different amount determined in
retransmitting to third parties in its own name but for the          advance, at a specified or still to be specified date.
account of third parties shall be shown in the balance
sheet only if the credit institution acquires legal title to
                                                                    2.     If the transferee undertakes to return the assets at a
the claims thereby established.
                                                                    date determined in advance or to be determined by the
                                                                    transferor, the transaction in question shall be deemed to
The total amounts of such claims and liabilities shall be           be a genuine sale and repurchase transaction.
shown separately.
2.     Loans granted in the name and for the account of             3.     If, however, the transferee is merely entitled to
third parties shall not be included in the balance sheet.           return the assets at the purchase price or for a different
 ---pagebreak--- No C 130/6                            Official Journal of the European Communities                                  1. 6. 81
amount agreed in advance at a specified or still to be                                     Article 12
specified date, the transaction in question shall be
deemed to be a sale with an option to repurchase.
                                                                  Assets: Item 2
4.    In the case of the genuine sale and repurchase              Treasury bills and similar debt instruments of public
transactions referred to in paragraph 2, the assets               bodies
transferred shall continue to be carried on the balance
sheet of the transferor; the purchase price received by the       1.     This item shall comprise treasury bills, treasury
transferor shall be entered as an amount owed to the              certificates and similar debt instruments of public bodies
transferee.                                                       with an initially agreed maturity of not more than two
                                                                  years which are eligible for rediscount with the central
                                                                  bank.
5.    In the case referred to in paragraph 3, however, the
transferor is not entitled to enter in his balance sheet the      2.     Those debt instruments of public bodies which fail
assets transferred, and these items shall be carried as           to meet one of the two conditions mentioned shall be
assets in the transferee's balance sheet. The transferor          shown under 'Assets' sub-item 6 (a).
shall enter in item 3 below the line a contingent liability
equal to the amount agreed in the event of repurchase.
                                                                                           Article 13
6.    Forward       exchange      transactions,     options,
transactions involving the issue of debentures with a
commitment to repurchase all or part of the issue before          Assets: Item 3
maturity and any similar transactions shall not be
regarded as sale and repurchase transactions within the          Loans and advances to credit institutions
meaning of this Article.
                                                                  1.     Loans and advances to credit institutions shall
                                                                  comprise all types of asset in the form of claims on
                                                                 domestic or foreign credit institutions, which arise from
                                                                  banking transactions, irrespective of their particular
                                                                  designation. The only exception shall be claims on credit
                                                                  institutions represented by commercial bills or debt
                                                                  securities, which shall be shown under 'Assets' items 4
                         SECTION 4                                and 6 respectively.
                                                                 2.      Credit institutions within the meaning of this
Special provisions relating to certain balance sheet items       Article shall include all undertakings which are
                                                                 considered to be credit institutions under Directive
                                                                 77/78 0/EEC, as well as foreign central banks,
                         Article 11                              international organizations with a banking character and
                                                                 all private and public undertakings which have their
Assets: Item 1                                                   registered offices outside the Community and which
                                                                 satisfy the definition in Article 1 of Directive
                                                                 77/780/EEC.
Cash in hand and balances with central hanks and postal
cheque offices                                                   Loans and advances to undertakings which do not satisfy
                                                                 the abovementioned conditions shall be shown under -
                                                                 'Assets' item 5.
1.    Cash in hand shall comprise legal tender including
foreign notes and coin.
                                                                                           Article 14
2.    This item may include only balances with the
central bank and postal cheque offices of the country in         Assets: Item 4
which the registered office of the credit institution
drawing up the balance sheet is located, together with           Bill portfolio
balances of the credit institution's branches with such
bodies in their respective host countries. These balances        This item shall comprise all bills held in portfolio whose
must be readily available at any time. Other claims on           countervalues have been credited to a credit institution
such bodies shall be shown as loans and advances to              or customer, provided that they do not come under
credit institutions ('Assets' item 3) or as loans and            'Assets' item 2 as treasury bills or under 'Assets' items 3
advances to customers ('Assets' item 5).                         or 5 as bills for collection.
 ---pagebreak---  1. 6. 81                              Official Journal of the European Communities                             No C 130/7
                          Article 15                                                        Article 19
 Assets: Item 5                                                    Liabilities: Item 1
 Loans and advances to customers                                  Amounts owed to credit institutions
 Loans and advances to customers shall comprise all types          1.    Amounts owed to credit institutions shall include
 of asset in the form of claims on domestic or foreign            all types of claim, arising from banking transactions, of
 customers (other than credit institutions), irrespective of      other domestic or foreign credit institutions, on the credit
 their particular designation. The only exception shall be         institution drawing up the balance sheet, irrespective of
 claims on customers represented by commercial bills or           their particular designation. The only exception shall be
 debt securities, which shall be shown under 'Assets' items       commitments represented by debt securities evidenced in
4 and 6 respectively.                                             some other form, which shall be shown under
                                                                   'Liabilities' item 3.
                                                                  2.     Credit institutions within the meaning of this
                          Article 16                              Article shall include all undertakings which are
                                                                   considered to be credit institutions under Directive
Assets: Item 6                                                     77/780/EEC, as well as domestic and foreign central
                                                                   banks, international organizations with a banking
Debt securities held in portfolio                                 character and all private and public undertakings which
                                                                  have their registered offices outside the European
 1.    This item shall comprise fixed-interest marketable         Community and which satisfy the definition in Article 1
 debt securities issued by credit institutions, by other           of Directive 77/780/EEC.
undertakings or by public bodies; debt securities issued
by the latter, however, shall be included only if they are
 not to be shown under 'Assets' item 2.
                                                                                            Article 20
2.     Instruments carrying interest rates that vary in line
with a specific factor, in particular the interest rate on the    Liabilities: Item 2
inter-bank market or on the Euromarket, shall also be
regarded as fixed-interest debt securities.                       Amounts owed           to customers   other   than    credit
                                                                  institutions
3.     Only those own debt securities which are intended
to be resold on the market may be included in sub-item            1.     This item shall comprise amounts, irrespective of
6(b).                                                             their particular designation, owed to undertakings which
                                                                  are not credit institutions within the meaning .of
                                                                  Article 19. The only exception shall be commitments
                          Article 17                              represented by debt securities evidenced in some other
                                                                  form, which shall be shown under 'Liabilities' item 3.
Assets: Item 7
                                                                  2.     Only deposits satisfying the conditions laid down
Subordinated claims and debt securities                           in law by the Member State concerned shall be treated as
                                                                  savings deposits.
Where it has been agreed that, in the event of winding up
or of bankruptcy, claims arising from loans and advances
or debt securities are to be repaid only after the claims of
all other creditors have been met, the loans and advances                                   Article 21
or debt securities in question shall be shown under
'Assets' item 7.
                                                                  Liabilities: Item 3
                         Article 18                               Debts represented by certificates
Assets: Item 12                                                   1.     This item shall include both debt securities and
                                                                  commitments for which negotiable certificates have been
Own shares                                                        issued, notably certificates of deposit, 'bons de caisse'
                                                                  and commitments from own acceptances and promissory
Own shares shall be shown in the balance sheet only if            notes.
national law so permits. Besides the balance sheet value,
there shall be indicated the nominal value or, in the             2.     Only commitments in respect of which the credit
absence of a nominal value, the accounting par value of           institution is the first party liable ('drawee') shall be
the own shares.                                                   treated as commitments from own acceptances.
 ---pagebreak--- N o C 130/8                             Official Journal of the European Communities                                   1. 6. 81
 3.     Savings deposits, even if savings books or similar         All personal guarantee obligations incurred for the
 certificates are issued in respect of them, savings bonds         account of third parties, particularly in respect of sureties
 and other registered debt securities shall not be included        and irrevocable letters of credit, shall be entered
 in this item but under 'Liabilities' item 2.                      under (b).
                                                                   Assets which the credit institution drawing up the
                           Article 22                              balance sheet has pledged as security for liabilities of
                                                                   third parties shall be shown under (c); assets which the
                                                                   credit institution drawing up the balance sheet has
 Liabilities: Item 8                                               pledged as security for its own liabilities shall be shown
                                                                   in the notes on the accounts.
Subordinated liabilities
 Where it has been agreed that, in the event of winding up                                   Article 26
 or of bankruptcy, liabilities, whether or not represented
 by certificates, are to be repaid only after the claims of all    Item 2 below the line
 other creditors have been met, the liabilities in question
 shall be shown under 'Liabilities' item 8.                        Commitments arising from forward transactions
                                                                   This item shall comprise all liabilities — broken down by
                           Article 23                              obligations to sell and to purchase - which exist on the
                                                                   balance sheet date and which the credit institution
Liabilities: Item 9                                                drawing up the balance sheet has incurred by way of
                                                                   forward transactions in foreign currencies, precious
Subscribed capital                                                 metals, securities, certificates of deposit or goods.
This item shall comprise all amounts, irrespective of their
particular designation, which, in accordance with the                                        Article 27
legal structure of the credit institution, are regarded
under the national law of the Member State concerned as            Item 3 below the line
equity capital subscribed by the shareholders or other
proprietors.                                                       Commitments      arising    from    sale  and    repurchase
                                                                   transactions
                           Article 24                              This item shall be restricted to contingent liabilities
                                                                   which the credit institution drawing up the balance sheet
                                                                   has incurred by way of optional sale and repurchase
Liabilities: Item 11                                               agreements within the meaning of Article 10 (3).
Reserves
This item shall comprise all the types of reserves listed in                                SECTION 5
Article 9 of Directive 78/660/EEC under liabilities A (III)
and (IV), as defined therein. Member States may also
require other types of reserves to be shown where this is                    Layout of the profit and loss account
necessary in relation to credit institutions having a legal
structure not covered by Directive 78/660/EEC.
                                                                                            Article 28
These reserves shall be shown separately, as sub-items to
'Liabilities' item 11, in the balance sheets of the credit         For the presentation of the profit and loss account,
institutions concerned.                                            Member States shall prescribe one or both of the layouts
                                                                   contained in Articles 29 and 30. If a Member State
                                                                   prescribes both layouts it may allow credit institutions to
                          Article 25                               choose between them.
Item 1 below the line                                                                       Article 29
Contingent liabilities
                                                                   Vertical layout
Endorsement liabilities arising from rediscounted bills
shall be shown under (a) only if national law does not               1. Interest receivable, including that derived from
require otherwise.                                                      fixed-interest securities.
 ---pagebreak--- 1. 6. 81                              Official Journal of the   >ean Communities                             No C 130/9
 2. (a) Income from shares and other variable-yield                                     Article 30
          securities;
      (b) Income from participating interests;                Horizontal layout
      (c) Income from shares in affiliated undertakings.      A. Charges
 3. Commissions receivable.                                         1. Interest payable.
 4. Interest payable.                                               2. Commissions payable.
                                                                    3. Staff costs:
 5. Commissions payable.
                                                                        (a) wages and salaries;
 6. Other operating income.                                             (b) social security costs, with a separate
                                                                             indication of those relating to pensions.
 7. Staff costs:
                                                                    4. Charges for value adjustments in respect of
      (a) wages and salaries;                                           loans and advances to credit institutions and
                                                                        customers and provisions for guarantees in
      (b) social security costs, with a separate indication
                                                                        credit transactions with credit institutions and
          of those relating to pensions.
                                                                        customers.
 8. Charges for value adjustments in respect of loans               5. Charges for value adjustments in respect of
     and advances to credit institutions and customers                  securities, participating interests, and shares in
     and provisions for guarantees in credit transactions               affiliated undertakings.
     with credit institutions and customers. Income from
     the writing-up of loans and advances to credit                 6. Value adjustments in respect of 'Assets' items 9
     institutions and customers and from the                            and 10.
     writing-back of provisions for guarantees in credit
     transactions, with credit institutions and customers.          7. Other operating charges.
                                                                    8. Tax on profit or loss on ordinary activities.
 9. Charges for value adjustments in respect of
     securities, participating interests and shares in
                                                                    9. Extraordinary charges.
     affiliated    undertakings/Income        from    value
     adjustments in respect of securities, participating
                                                                   10. Tax on extraordinary profit or loss.
     interests and shares in affiliated undertakings.
                                                                   11. Other taxes not shown under the above items.
10. Value adjustments in respect of 'Assets' items 9 and
     10.                                                           12. Profit for the financial year.
11. Other operating charges.
                                                              B. Income
12. Tax on profit or loss on ordinary activities.
                                                                  1. Interest receivable, including that derived from
                                                                      fixed-interest securities.
13. Profit or loss on ordinary activities after tax.
                                                                  2. (a) Income from shares and other variable-yield
14. Extraordinary income.                                                  securities;
                                                                      (b) Income from participating interests;
15. Extraordinary charges.
                                                                      (c) Income       from      shares    in    affiliated
                                                                           undertakings.
16. Extraordinary profit or loss.
                                                                  3. Commissions receivable.
17. Tax on extraordinary profit or loss.
                                                                  4. Income from the writing up of loans and
                                                                      advances to credit institutions and customers and
18. Other taxes not shown under the above items.                      from the writing-back of provisions for
                                                                      guarantees in credit transactions with credit
19. Profit or loss for the financial year.                            institutions and customers.
 ---pagebreak--- No C 130/10                             Official Journal of the European Communities                                 1. 6. 81
    5. Income from value adjustments in respect of                 Income from shares in investment companies shall also
          securities, participating interests, and shares in       be included under this item.
          affiliated undertakings.
    6. Other operating income.                                                              Article 33
    7. Profit or loss on ordinary activities after tax.             Article 29, items 3 and 5 (vertical layout) and Article 30,
                                                                   items A. 2 and B. 3 (horizontal layout).
     8. Extraordinary income.
     9. Loss for the financial year.                               Commissions receivable and commissions payable
                                                                   Commissions receivable shall include income in respect
                                                                   of all services supplied for the account of third parties,
                                                                   and commissions payable shall include charges for the
                           SECTION 6
                                                                   use of services of third parties, notably:
Special provisions relating to certain items in the profit         — commissions for guarantees, loans administration for
                       and loss account                                 the account of other lenders and securities
                                                                        transactions for the account of third parties;
                                                                   — commissions and other charges and income in
                           Article 31                                   respect     of   payment      transactions,   account
                                                                        administration charges and commissions for the safe
Article 29, items 1 and 4 (vertical layout) and Article 30,             custody and administration of securities;
items A. 1 and B. 1 (horizontal layout)
                                                                   — commissions for foreign currency transactions and
                                                                        for the sale and purchase of coin and precious metals
Interest receivable and interest payable                                for the account of third parties;
                                                                   — commissions earned for brokerage services in
1.     Interest receivable shall include all income arising             connection with loans, savings or insurance
from the assets shown in 'Assets', items 1 to 7, of the                 contracts.
balance sheet regardless of the form in which such
income is calculated. Interest receivable shall also include
income arising, through the spreading of the discount on
a time basis, in the case of assets acquired below par                                      Article 34
value.
                                                                   Article 29, item 8 (vertical layout) and Article 30, items
2.     Interest payable shall include all charges for              A. 4 and B. 4 (horizontal layout)
liabilities shown under 'Liabilities', items 1 to 3,
regardless of the form in which such charges are                   Charges for value adjustments in respect of loans and
calculated. Interest payable shall also include charges            advances to credit institutions and customers and
arising, through the spreading of the premium on a time            provisions for guarantees in credit transactions with
basis, in the case of liabilities entered into above par           credit institutions and customers
value.                                                             and
3.     Fees and commissions computed on a time basis               income from the writing-up of loans and advances to
and by reference to the amount of the claim or liability           credit institutions and customers and from the
shall also be regarded as interest.                                writing-back of provisions for guarantees in credit
                                                                   transactions with credit institutions and customers.
                           Article 32                              1.     These items shall include charges for value
                                                                   adjustments in respect of loans and advances and
Article 29, item 2 (vertical layout) and Article 30, item          provisions for guarantees to be shown under 'Assets',
B. 2 (horizontal layout)                                           items 3 and 5, and below the line, or, as appropriate,
                                                                   income from the recovery of written-off loans and
Income from shares and other variable-yield securities,            advances and from the writing-back of earlier value
from participating interests, and from shares in affiliated        adjustments in credit transactions and provisions for
undertakings                                                       guarantees.
This item shall comprise all dividends and other income            2.     The charges and income covered by these items
from variable-yield securities, from participating                 may be set off one against the other, so that only a net
interests and from shares in affiliated undertakings.              item (income or charge) is shown.
 ---pagebreak--- 1. 6. 81                              Official Journal of the European Communities                           No C 130/11
                         Article 35                                    and that which would result from the application of
                                                                       the provisions mentioned above must not be greater
Article 29, item 9 (vertical layout) and Article 30, items             than 5 % .
A. 5 and B. 5 (horizontal layout)
                                                                  2. The valuations thus established may be maintained
Charges for value adjustments in respect of securities,                until the credit institution drawing up the balance
participating interests and shares in affiliated                      sheet wishes to write up the items in order to avoid
undertakings                                                          undue fluctuations in value adjustment charges.
and
income from value adjustments in respect of securities,                                    Article 38
participating interests and shares in affiliated
undertakings.                                                     1.     The conversion.into national currency of foreign
                                                                  currency assets and liabilities and unmatured forward
 1.    These items shall include, in respect of the assets to     exchange contracts which do not have to be shown in the
be shown in 'Assets', items 6 and 8, all the charges for          balance sheet and the recording of the results of foreign
value adjustments and all the income from value                   exchange transactions shall be carried out in accordance
adjustments in respect of securities, participating               with the provisions of paragraphs 2 to 4.
interests, and shares in affiliated undertakings.
                                                                  2.     Assets and liabilities denominated in foreign
2.     The charges and income covered by these items              currencies and unmatured forward exchange contracts
may be set off one against the other so that only a net           shall be converted to national currencies at the spot rate
item (income or charge) is shown.                                 ruling at the balance sheet date. However, the Member
                                                                  States may stipulate that in converting unmatured
                                                                  forward exchange contracts the forward rate ruling at
                                                                  the balance sheet date shall be used.
                                                                  3.     The difference between the book value of assets
                        SECTION 7                                 and liabilities denominated in foreign currencies and of
                                                                  unmatured forward exchange contracts, and the amount
                      Valuation rules                             resulting from conversion in accordance with paragraph
                                                                  2 shall be included in the profit and loss account.
                                                                  However, the Member States may stipulate that, where
                         Article 36                               forward exchange contracts are not covered by specific
                                                                  foreign exchange swaps or by assets or liabilities
                                                                  denominated in foreign currencies, any conversion gains
1.     'Assets', item 9, shall always be valued as fixed          shall not be included in the profit and loss account.
assets. The assets included in other balance sheet items
shall be valued as fixed assets where they are intended for       4.     The charges and income resulting from specially
use on a continuing basis in the normal course of the             covered forward exchange contracts shall be included in
credit institution's activities.                                  the profit and loss account pro rata temporis.
2.    Where reference is made to 'Financial fixed assets'
in Section 7 of Directive 78/660/EEC, this term shall in
the case of credit institutions be taken to mean
participating interests, shares in affiliated undertakings
and securities intended for use on a continuing basis in                                  SECTION 8
the normal course of the credit institution's activities.
                                                                            Contents of the notes on the accounts
                         Article 37
                                                                                          Article 39
 Article 39 of Directive 78/660/EEC shall be applied in
 the valuation of credit institutions' loans and advances
 subject to the following provisions:                            1.     Article 43 of Directive 78/660/EEC shall apply
                                                                 subject to the following provisions.
 1. Loans and advances to credit institutions and
     customers ('Assets', items 3 and 5), may be shown at        2.     In place of the information required under Article
     a lower value than permitted under Article 39 (1) (b)       43 (1) (6) of Directive 78/660/EEC, credit institutions
     and (c) of Directive 78/660/EEC, where this is              shall in the notes on the accounts provide an analysis of
     necessary in view of the prudence dictated by the           fixed term claims and liabilities in respect of credit
     particular risks attaching to banking business.             institutions and customers other than credit institutions
     Nevertheless, the difference between this lower value       'Assets', items 3 (b) (bb) 5 (b) and 7 and 'Liabilities',
 ---pagebreak---  N o C 130/12                           Official Journal of the European Communities                                  1. 6. 81
items 1 (b) (bb) 2 (b) and (c) 3 (b) and 8) in accordance               into securities which, pursuant to Article 36 of this
with the following periods:                                             Directive, were or were not valued as fixed assets;
 — up to and including one year;                                   (b) information on the value of leasing transactions
                                                                         apportioned between the relevant balance sheet
— more than one year but less than five years;                          items;
— five years and over.
                                                                   (c) the book values, separately, of land and buildings,
 In addition, credit institutions shall indicate, in respect of         included in 'Assets', item 10, occupied by the credit
the balance sheet items specified above and also in                     institution and land and buildings held for resale;
 respect of 'Assets', item 6, debt securities held in
portfolio, and 'Liabilities', item 3 (a), debt securities          (d) a breakdown of 'Assets', item 13, 'Liabilities',
issued, what proportion of assets and liabilities with an               item 4, charges items 11 and 15 in the vertical layout
original maturity of five years or more will become due                 or A.7 and 9 in the horizontal layout and income
within one year of the balance sheet date.                              items 6 and 14 in the vertical layout or B.6 and 8 in
                                                                        the horizontal layout into their main component
The Member States may stipulate that this information                   amounts, where such amounts are important for the
 be given in the balance sheet.                                         purpose of assessing the annual accounts, as well as
                                                                        explanations of their nature and amount;
 Lastly, credit institutions shall provide information on
the assets which have been pledged as security for their           (e) information on the amounts of interest which the
own liabilities (including contingent liabilities); the                 credit institutions have received for subordinated
information should be in sufficient detail to indicate, for             assets in the year under review or have expended for
each item under 'Liabilities' and for each item below the               surbordinated liabilities.
line, the total amount of the assets pledged as security.
 3.     Where credit institutions         have to provide
information within the meaning of        Article 43 (1) (7) of
Directive 78/660/EEC in the items        below the line, such
                                                                                             SECTION 9
 information need not be repeated        in the notes on the
 accounts.
                                                                                 Certain provisions not applicable
4.      In place of the information required under
Article 43 (1) (8) of Directive 78/660/EEC, credit
institutions shall indicate in the notes the proportion of                                   Article 41
their operating income (items 1 to 3 and 6 of the profit
 and loss account) which arises from domestic and foreign
 markets respectively.                                             Articles 11, 12, 27, 44, 45 (2), second subparagraph, 47
                                                                    (2) and (3) and 51 (2) and (3) of Directive 78/660/EEC
 5.     By way of derogation from Article 43 (1) (13) of           shall not apply to credit institutions.
 Directive 78/660/EEC, credit institutions need indicate
only the amounts of advances and credits granted to the
 members of their administrative, managerial and
 supervisory bodies, and the commitments entered into on
 their behalf by way of guarantees of any kind.
                                                                                            SECTION 10
                                                                                            Publication
                          Article 40
                                                                                             Article 42
1.     The information required under Article 15 (3) of
Directive 78/660/EEC shall apply to fixed assets as
defined in Article 36 of this Directive.                           1.     The properly authorized annual accounts of credit
                                                                   institutions, together with the annual report and the
2.     The Member States shall require credit institutions         opinion of the person responsible for auditing the
to give in addition the following information in the notes         accounts shall be published in the manner required by
on the accounts:                                                   the legislation in each Member State in accordance with
                                                                   Article 3 of Council Directive 68/151/EEC (l).
(a) a breakdown of the securities included in 'Assets',
     items 6,7 and 8 into listed and unlisted securities and       (^ OJ No L 65, 14. 3. 1968, p. 8.
 ---pagebreak---  1. 6. 81                              Official Journal of the European Communities                           N o C 130/13
 However, for credit institutions not having one of the               application of this Directive through regular
 legal forms specified in Article 1 (1) of Directive                  meetings dealing in particular with practical
 78/660/EEC and not subject to the national legislation               problems arising in connection with its application;
 concerning publication referred to above, Member States
 shall lay down appropriate requirements which will at            (b) to advise the Commission, if necessary, on additions
 least make the abovementioned documents available to                 or amendments to this Directive.
 the public, on demand and without charge, at the
 registered office of the credit institution.
 2.    The annual accounts of a credit institution shall be                                Article 44
 published in all Community countries where the credit
 institution has branches as defined by Article 1, third
 indent of Directive 77/780/EEC, in the official language          1.    The Member States shall bring into force the laws,
 of each country concerned.                                       regulations and administrative provisions necessary for
                                                                  them to comply with this Directive by           They shall
                                                                  forthwith inform the Commission thereof.
                         SECTION 11                               2.    The Member States may stipulate that the
                                                                  provisions referred to in paragraph 1 shall not apply
                                                                  until two years after the end of the period provided for in
                       Final provisions                           that paragraph.
                                                                  3.    The Member States shall ensure that they
                          Article 43                              communicate to the Commission the texts of the main
                                                                  provisions of national law which they adopt in the field
                                                                  covered by this Directive.
 1.    The Contact Committee established in accordance
with Article 52 of Directive 78/660/EEC shall, when
 constituted appropriately, also have the following
 functions:                                                                               Article 45
(a) to facilitate, without prejudice to the provisions of
     Articles 169 and 170 of the Treaty, harmonized               This Directive is addressed to the Member States.