Al Rajhi Bank discloses impact of IFRS 9 on shareholders' equity
09/05/2018 Argaam Special
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Al Rajhi Bank has reported a reduction in its shareholders’ equity by SAR 2.88 billion in Q1 2018, as a result of the application of IFRS 9 standard.
Saudi-based banks applied the IFRS 9 accounting standard as of Jan. 1, 2018. The standard requires banks to set aside provisions for credit impairment on anticipation of customer default, not when actual default happens.
IFRS 9 has a direct impact on banks' solvency positions and shareholders' equity.
Impact of IFRS (9) (SAR mln)
Closing bal. as of Dec. 31,2017 as per IFRS (39)
Expected credit losses
Reclassifications according to new standards
Opening bal. as of Jan. 1, 2018 as per IFRS (9)
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)