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Article (3) Calculation of Transitional Adjustment Amount

C 4/2020 يسري تنفيذه من تاريخ 22/4/2020
  1. 10.All Banks and Finance Companies must apply the transitional arrangements in accordance with this Regulation and add back to their Capital, a portion of the ECL provisions required under IFRS 9, in accordance with the following calculation:

    The IFRS 9 stage 1 and stage 2 provisions at the respective reporting date minus the IFRS 9 stage 1 and stage 2 provisions as at 31 December 2019.

  2. 11.The amount to be added back to the Capital on each reporting period shall be multiplied by a designated factor for each year as stated below.
    • •100% during the period from 1 January 2020 to 31 December 2020;
    • •100% during the period from 1 January 2021 to 31 December 2021;
    • •75% during the period from 1 January 2022 to 31 December 2022;
    • •50% during the period from 1 January 2023 to 31 December 2023;
    • •25% during the period from 1 January 2024 to 31 December 2024.
  3. 12.The amount of the capital relief that shall be added back to Capital calculated as Partial add-back of ECL impact to Capital = (I - t) * K;

    where:

    I = the amount calculated in accordance with paragraph 10

    t = increase of Capital that is due to tax deductibility of the amounts in paragraph 10, if applicable

    K = the applicable factor in accordance with paragraph 11

    Partial add-back is only applicable for positive values calculated herein.