SAMBA discloses impact of IFRS 9 on shareholders' equity

15/05/2018 Argaam Special

 

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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