The European Banking Authority (EBA) has published a report setting out the results from its second impact assessment of International Financial Reporting Standard 9 (IFRS 9). In summary, the report shows:
- on the qualitative side, banks have made further progress on the implementation of IFRS 9 but smaller banks are still lagging behind in their preparation compared with larger banks; and
- on the quantitative side, the estimated impact of IFRS 9 is mainly driven by IFRS 9 impairment requirements. The estimated increase of provisions is on average 13% compared to the current levels of provisions under International Accounting Standard 39. The Common Equity Tier 1 ratios are expected to decrease on average by up to 45 basis points. Smaller banks, which mainly use the standardised approach for measuring credit risk, estimate a larger impact on own funds ratios than larger banks in the sample.
View EBA report on results from second EBA impact assessment of IFRS 9, 13 July 2017