Samba Financial Group (SAMBA) has reported a reduction in its shareholders’ equity by SAR 2.52 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.
The standard has a direct impact on banks' solvency position and shareholders' equity.
|
Impact of IFRS (9) (SAR mln) |
|
|
Period |
Retained earnings |
|
Closing balance (Dec. 31, 2017) |
9,565 |
|
Expected credit losses |
(2,522) |
|
Reclassifications according to new standards |
2 |
|
Opening balance (Jan. 1, 2018) |
7,043 |
The table below cites the changes in shareholders' equity following the enactment of the standard:
|
Impact of IFRS (9) on Shareholders Equity* (SAR mln) |
||
|
Period |
Before adjustment |
After adjustment |
|
Capital |
20.00 |
20.00 |
|
Reserves |
24.58 |
22.06 |
|
Shareholders’ equity |
44.58 |
42.06 |
* opening balance as of Jan. 1, 2018 
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