CRD6: non-EU banks need EU branches for core banking services

A bank based outside the EU can serve EU clients directly across the border or through a branch in an EU country. The sixth Capital Requirements Directive (CRD6), Directive (EU) 2024/1619, requires a non-EU undertaking to establish an authorised branch in a Member State before it provides core banking services there (CRD6 (external site)). Core banking services are taking deposits, lending, and guarantees and commitments, as listed in the first annex to the Capital Requirements Directive.

CRD6 also sets one EU regime for these third-country branches, with common rules on authorisation, capital, liquidity, reporting and supervision (EBA guidelines (external site)).

Under Article 21c, from 11 January 2027 these services need a branch, with exemptions for reverse solicitation, where the client approaches the non-EU firm on its own exclusive initiative, and for interbank and intragroup services (EBA guidelines (external site)). Contracts entered into before 11 July 2026 are not affected (CRD6 (external site)).

Branches fall into class 1 or class 2 under Article 48a. A branch with booked assets of EUR 5 billion or more is class 1, and class 1 branches face stricter requirements (EBA guidelines (external site)).

Each branch holds a capital endowment, capital kept available in the branch itself. For class 2 branches the minimum is 0.5 percent of average liabilities over the three previous annual reporting periods, and at least EUR 5 million (EBA guidelines on capital endowment (external site)). As an example only: a class 2 branch with average liabilities of EUR 600 million would compute EUR 3 million, so the EUR 5 million minimum applies.

Branches report to their supervisor on common templates, quarterly for the capital endowment, with more templates for class 1 (EBA final report (external site)).

The rules apply to banks and other undertakings from outside the EU that provide core banking services to EU clients, and to their EU branches (CRD6 (external site)). The roles most directly concerned:

• Regulatory Change Analyst: maps each service to EU clients against Article 21c and its exemptions.
• Compliance Officer: checks the evidence for reverse solicitation and other exemptions.
• Capital Reporting Analyst: calculates the branch capital endowment by class.
• Regulatory Reporting Analyst: prepares the quarterly third-country branch templates.
• Regulatory Consultant (Banking): explains the authorisation steps and classification rules.

The cut-off for existing contracts was 11 July 2026 (CRD6 (external site)). Supervisors may decide that branch authorisations granted by 10 January 2027 remain valid if they satisfy the new minimum requirements (consolidated CRD (external site)).

Article 21c and the branch regime apply from 11 January 2027, the same date as the EBA guidelines on authorisation (EBA (external site)). Commission Implementing Regulation (EU) 2026/1757 on branch reporting defers the reporting obligations to that date (EUR-Lex (external site)).

Before CRD6, the rules for branches of non-EU banks were set mainly at national level and differed between Member States (Commission proposal (external site)). The Commission proposed the common regime in October 2021, together with the changes that became CRR3 (COM(2021) 663 (external site)).

The EBA was asked to review by 10 July 2025 whether financial sector entities other than banks also need an exemption (CRD6 (external site)).