The impact of IFRS 9 on the banking industry
Fourth Global IFRS Banking Survey
The major findings of the report:
- Banks require 3 years implementation time so may come under pressure even with a 2018 effective date.
- Over half of banks surveyed believe that the expected loss approach will result in banks’ provisions increasing by up to 50% across all loan asset classes.
- Coordinating multidisciplinary effort including finance, credit, risk and IT and resource constraints cited as the key IFRS 9 implementation challenge.
- Increasing expectations that banks’ pricing will be affected by accounting change.
- 70% of banks surveyed anticipate their IFRS 9 expected loss provision to be higher than current regulatory expected loss. However, capital planning uncertainty is set to continue as regulators’ responses to changes are not yet known.
- 56% of banks surveyed are concerned about credit data reconciliation and credit data quality.