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13 July 2017

EBA updates on the impact of IFRS 9 on banks across the EU and highlights current implementation issues


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The exercise has confirmed the EBA's initial observations on the stage of preparation for the implementation of IFRS 9 and the estimated impact of IFRS 9 on regulatory own funds.


On the qualitative side, the Report highlights that banks have made further progress on the implementation of IFRS 9 since the previous exercise, but smaller banks are still lagging behind in their preparation compared with larger banks.

Also, the Report confirms that banks have reduced their plans for parallel runs of IFRS 9 and IAS 39.

Banks will use various data, processes and models to estimate expected credit losses. This may affect comparability among banks and, therefore, disclosures will be key.

On the quantitative side, the responses received show that 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 IAS 39.

The Common Equity Tier 1 (CET1) ratios are expected to decrease on average by up to 45 basis points (bps).

Smaller banks, which mainly use the Standardised Approach (SA) for measuring credit risk, estimated a larger impact on own funds ratios than larger banks of the sample.

Press release

EBA_report



© EBA


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