Alawwal Bank has reported a reduction in its shareholders’ equity by SAR 451 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.
|
Impact of IFRS (9) (SAR mln) |
||
|
Period |
Retained earnings |
Other reserves |
|
Closing bal. as of Dec. 31,2017 as per IFRS (39) |
1,298 |
13.1 |
|
Expected credit losses |
(443) |
-- |
|
Reclassifications according to new standards |
(18) |
-- |
|
Opening bal. as of Jan. 1, 2018 as per IFRS (9) |
12.4 |
(12.4) |
The standard has a direct impact on banks' solvency positions and shareholders' equity.
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Impact of IFRS (9) on Shareholders Equity* (SAR mln) |
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|
Period |
Before adjustment |
After adjustment |
|
Capital |
11.43 |
11.43 |
|
Reserves |
2.17 |
1.73 |
|
Shareholders’ equity |
13.60 |
13.16 |
* opening balance as of Jan. 1, 2018
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