Bank Aljazira has reported a reduction in its shareholders’ equity by SAR 636 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 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 position and shareholders' equity.
|
Impact of IFRS (9) on Retained Earnings (SAR mln) |
|
|
Item |
Retained Earnings |
|
Closing bal. as of Dec. 31,2017 as per IFRS (39) |
1,527 |
|
Expected credit losses (IFRS 9) |
(636) |
|
Reclassifications |
0 |
|
Opening bal. as of Jan. 1, 2018 as per IFRS (9) |
891 |
The table below shows the changes in shareholders' equity following the enactment of the standard:
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Impact of IFRS (9) on Shareholders Equity* (SAR mln) |
||
|
Period |
Before adjustment |
After adjustment |
|
Capital |
5.20 |
5.20 |
|
Reserves |
3.63 |
2.99 |
|
Shareholders’ equity |
8.83 |
8.19 |
* opening balance as of Jan. 1, 2018
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