Analysis of the impact on some Nigerian banks
After the first year of reporting, IFRS 9 has resulted in an
increase in banks' provisioning levels on transition. However,
what still remains unknown is the long term consequences of banks
implementing differing IFRS 9 impairment provision modelling
judgements. This includes, but not limited to, assumptions on the
probability of default, cash/unsecured recovery rates, cure rates,
collateral projections, estimation of EIR and re-default
probabilities.
Consequently, we have carried out a study on the banking
industry using five (5) of the largest commercial banks in Nigeria
as case study. The report highlights the differences in
assumptions, methodology and disclosures. It also shows a
comparatively analysis of the impact of IFRS 9 amongst the selected
banks including impact on capital.
