CRR III and the property business: Removing the brake on new business
NEWS 01/2026
CRR III is shaking things up in the property sector, particularly with regard to ADC and IPRE exposures. However, it need not act as a brake on new business: institutions that classify, assess and document precisely, actively manage key credit parameters and price RWA in line with the underlying risk can limit capital tied up whilst maintaining scope for growth.
CRR III is causing a stir in the property sector, particularly regarding ADC and IPRE1 exposures. Individual cases are already showing noticeable effects on capital ratios. For instance, a major cooperative bank reported a 90-basis-point decline in its total capital ratio in early February, partly as a result of the new ADC/IPRE classification logic with high initial risk weights. In this respect, CRR III is therefore having an impact on the practice of property financing.
However, it need not act as a brake on new business: institutions that classify, review and document precisely, actively manage key credit parameters and price RWA (risk-weighted assets) in line with the underlying risk can significantly limit capital tied up whilst retaining scope for growth.
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