Related provisions for GENPRU 1.3.34
The application of value adjustments to either the secured or the unsecured component of an exposure secured on residential property may be illustrated on the basis of a £110,000 loan on a property valued at £100,000, where £80,000 of the loan is secured, £30,000 of the exposure is unsecured and a value adjustment of £20,000 is taken.
Value adjustment applied to unsecured component:
Value adjustment of £20,000 taken on £30,000 unsecured exposure.
Value adjustment applied to secured component:
Value adjustment of £20,000 taken on £80,000 secured exposure.
Value adjustment applied to unsecured component (MIPRU 4.2F.51 R)
Value adjustment to secured component (MIPRU 4.2F.55 R)
Unsecured component of £30,000
£30,000 risk weighted at 150%
£10,000 risk weighted at 100%
£80,000 risk weighted at 100%
Secured component of £80,000
£60,000 risk weighted at 50%