Saudi Investment Bank (SAIB) has reported a reduction of SAR 823 million in its shareholders’ equity 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.
The standard has a direct impact on banks' solvency positions and shareholders' equity.
|
Impact of IFRS (9) (SAR mln) |
||
|
Period |
Retained earnings |
Other reserves |
|
Closing bal. as of Dec. 31,2017 as per IFRS (39) |
1,285 |
204 |
|
Expected credit losses |
(857) |
61 |
|
Impact on affiliates |
(27) |
-- |
|
Reclassifications according to new standards |
10 |
(10) |
|
Opening bal. as of Jan. 1, 2018 as per IFRS (9) |
412 |
255 |
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) |
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|
Period |
Before adjustment |
After adjustment |
|
Capital |
7.50 |
7.50 |
|
Reserves |
5.99 |
5.17 |
|
Shareholders’ equity |
13.49 |
12.67 |
* opening balance as of Jan. 1, 2018
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