Riyad Bank has reported a drop in its shareholders’ equity by SAR 2.12 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 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) |
2,874 |
687 |
|
Expected credit losses |
(2,180) |
55 |
|
Reclassifications according to new standards |
172 |
(172) |
|
Opening bal. as of Jan. 1, 2018 as per IFRS (9) |
865 |
570 |
The standard has a direct impact on banks' solvency positions and shareholders' equity.
|
Impact of IFRS (9) on Shareholders Equity* (SAR mln) |
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|
Period |
Before adjustment |
After adjustment |
|
Capital |
30.00 |
30.00 |
|
Reserves |
8.62 |
6.50 |
|
Shareholders’ equity |
38.62 |
36.50 |
* opening balance as of Jan. 1, 2018
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