The impact of IFRS 9 on bank earnings

Nigeria's banking sector has been undergoing a period of transformation with the implementation of the International Financial Reporting Standards 9 (IFRS 9) by the Central Bank. This move has raised concerns about the potential impact on bank earnings and profits, leading to a closer examination of how financial institutions are adapting to the new reporting standard. Ola Warikoru, Equity Research Analyst at Stanbic IBTC, shed light on the implications of IFRS 9 on bank earnings in a recent interview with CNBC Africa. As banks navigate through the challenges posed by the new standard, key points have emerged regarding the allocation of provisions, dividend payouts, and the impact on loan growth. While the implementation of IFRS 9 aims to enhance transparency and comparability across banks, it also brings about a shift in the way financial institutions approach risk management and provisioning. The spotlight is now on how banks will strike a balance between regulatory compliance and sustaining profitability amidst evolving market dynamics.