AI Summary
Alinma Bank has reported a reduction in its shareholders’ equity by SAR 608 million in Q1 2018, as a result of the application of IFRS 9 standard.
Saudi-based banks applied the IFRS 9 accounting standard as of January 1, 2018, that requires banks to set aside provisions for credit impairment on anticipation of customer default, not when actual default happens.
The standard has a direct impact on banks' solvency positions and shareholders' equity.
|
Impact of IFRS (9) on Retained Earnings(SAR mln) |
|
|
RE closing bal. as of Dec. 31,2017 as per IFRS (39) |
1,896 |
|
Expected credit losses (IFRS 9) |
(723) |
|
Reclassifications |
114 |
|
Opening bal. as of Jan. 1, 2018 as per IFRS (9) |
1,288 |
The table below cites the changes in the bank's shareholders' equity following the enactment of the standard:
|
Impact of IFRS (9) on Shareholders Equity* (SAR mln) |
||
|
Period |
Before adjustment |
After adjustment |
|
Capital |
15.00 |
15.00 |
|
Reserves |
5.60 |
4.99 |
|
Shareholders’ equity |
20.60 |
19.99 |
* opening balance as of Jan. 1, 2018 
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