The impact of applying the expected credit losses model in accordance to the requirements of IFRS 9 in regulatory capital of traditional banks in Syria "A case study of Banque Bemo Saudi Fransi"

Abstract

This study aimed to reveal the impact of applying the expected credit losses (ECL) model in accordance to IFRS9 in the levels of regulatory capital of Banque Bemo Saudi Fransi listed at Damascus Security Exchange. To achieve the goal of the study, the descriptive analytical method was used, where the researcher collected the quarterly financial data related to the levels of regulatory capital and expected credit losses expense (according to the new model) for the quarterly periods starting from the first quarter of 2019 until the second quarter of 2021 and  then the impact has been revealed using comparative analysis method with the levels of regulatory capital and credit loss expense (according to the old model) for Bank Bemo Saudi Fransi for previous quarterly periods from 2017-2018 (before the application of IFRS9), in addition the impact has been revealed using the time series regression model on the statistical analysis program Eviews and the hypotheses were tested. The study concluded that there is a positive impact of applying the ECL model according to the requirements of the IFRS9, which led to an increase in the net core capital TIER1 and the net supplementary capital TIER2 of Banque Bemo Saudi Fransi for the studied period, which in turn will affect in the capital adequacy ratios, given that the regulatory capital represents the numerator of these ratios.