The Banque Saudi Fransi (BSF) has reported a reduction in its shareholders’ equity by SAR 862.8 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.
The standard has a direct impact on banks' solvency positions and shareholders' equity.
|
Impact on Retained Earnings (SAR mln) |
|
|
Retained Earnings (Closing balance - Dec. 31,2017) |
6628.9 |
|
Expected Credit Losses |
(862.8) |
|
Opening balance (Jan. 1, 2018) |
5766.1 |
The table below cites the changes in the bank's shareholders' equity following the enactment of the standard:
|
Impact on Shareholders Equity* (SAR mln) |
||
|
Period |
Before Application of Standard |
After Application |
|
Capital |
12.05 |
12.05 |
|
Reserves |
19.89 |
19.03 |
|
Shareholders’ equity |
31.94 |
31.08 |
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