Quantified impacts of IFRS 9: initial findings

At the end of February 2018, all the major European banks published information on the impact of the implementation of the new standard IFRS 9.

IFRS 9 introduces numerous changes (classification, impairment, hedging, etc.). Their impacts at the transition date vary widely from one bank to another. They are negative in most cases, but for some banks are virtually nil or even positive. The indicators used are also variable: though the impact on the CET1 ratio is a firm common indicator, the level of further detail reported varies significantly from one institution to another.

To take stock and uncover the initial trends, we chose to conduct this study on the 30 first European banks publishing their accounts under IFRS. This deliberately brief study provides a rapid overview of the estimated impacts of IFRS 9 and the approach to reporting adopted by the banks.

Sample of European Banks

30 leading STOXX Europe 600 banks preparing their consolidated accounts under IFRS

Key Indicators

90% of the banks in the sample reported the impact of IFRS 9 on their CET1 ratio, either quantitatively, or by indicating that the expected impact was not significant

Analysis of IFRS 9 impacts by phase

Phase 1 of the standard introduced new requirements for the classification and measurement of financial instruments;

Phase 2 of the standard introduced new impairment principles;

Phase 3 of the standard introduced new rules for hedge accounting.

73% of the banks in our sample reported on the impacts of IFRS 9 by phase.

Article provided by:
Mazars Malta