Banks face IFRS bill of 7.6 bln eu­ros

Kathimerini English - - Focus - YIAN­NIS PAPADOYIANNIS

The ap­pli­ca­tion of the new ac­count­ing stan­dard, the IFRS 9, will cost the Greek sys­temic banks some 7.6 bil­lion eu­ros ac­cord­ing to Mor­gan Stan­ley, due to the ad­di­tional pro­vi­sions it will en­tail.

The Mor­gan Stan­ley re­port notes that the im­pact on Greek lenders is one of the high­est among Euro­pean banks.

The new In­ter­na­tional Fi­nan­cial Re­port­ing Stan­dard will some into force on Jan­uary 1, 2018, but banks will be able to grad­u­ally amor­tize the new bur­den over five years. IFRS 9 obliges banks to make pro­vi­sions not based on losses al­ready in­curred but rather on an­tic­i­pated credit losses, which will lead to more provi- sions, weak­en­ing the banks’ cap­i­tal base. Mor­gan Stan­ley ar­gues that the pres­sure from the In­ter­na­tional Mon­e­tary Fund for Greek banks to un­dergo fresh as­set qual­ity re­views (AQRs) and re­cap­i­tal­iza­tions, as well as the fears that Septem­ber’s Ger­man elec­tion might de­lay the third bailout re­view, gen­er­ated a neg­a­tive cli­mate in the Greek mar­ket, which was ag­gra­vated by con­cerns about the con­se­quences of IFRS 9. How­ever, the re­port stresses that the ex­ter­nal risks have di­min­ished since the Euro­pean Com­mis­sion re­port that con­firmed Greek banks are suf­fi­ciently cap­i­tal­ized after the third re­cap­i­tal­iza­tion, in late 2015.

The gov­ern­ment has ex­tended the dead­line for the dec­la­ra­tion of hid­den in­comes to Novem­ber 25, after tens of thou­sands of tax­pay­ers scram­bled to amend their dec­la­ra­tions, in­cur­ring much lower fines. Over 5 bil­lion eu­ros of un­de­clared in­comes have been re­vealed, with taxes due at more than 500 mil­lion.

Greek banks will have five years to cover the ex­tra pro­vi­sions of 7.6 bil­lion eu­ros from IFRS 9.

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