IFRS 9 to spur 'underperforming' loan sales

Pic© MOs810

Category: NPLs ABS

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The implementation of IFRS 9 is expected to increase provisioning for a new loan category dubbed 'underperforming loans'. As lifetime losses will have to be addressed in this category, it is likely that these assets will become non-core and therefore be subject to increased sales activity.

According to Tony Clifford, partner at Ernst and Young, IFRS 9 will not significantly change the accounting for non-performing loans.

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