SAIB's provisions exceed 180% on IFRS 9 adoption: CEO

Saudi Investment Bank (SAIB) has recorded provisions of more than 180 percent in Q3 2018, due to the implementation of the International Financial Reporting Standard (IFRS) 9, Chief Executive Officer Musaed Mohammad Al-Mineefi told CNBC Arabia.

"The IFRS 9 stipulates that banks should set aside higher additional provisions," Al-Mineefi said, adding that provisions should be also allocated for performing loans.

As of Jan. 1, 2018, Saudi-based banks began to apply the IFRS 9 accounting standard, under which provisions are to be set aside for credit impairment on anticipation of customer default, not when actual default happens.

Accounting for previously-applied standards, provisions for non-performing loans (NPLs) would not have exceeded 180 percent, he noted.

"SAIB currently focuses on home mortgage loans, and not on retail credit facilities", Al-Mineefi said while commenting on the bank's strategy, adding that such a strategy would eliminate credit risks.

SAIB reported net earnings of SAR 362 million in Q3 2018, almost flat year-on-year (YoY) compared to SAR 358 million in year-earlier period.