The Impact of IFRS9 Implementation on the Profitability and Capital Adequacy of Russian Banks

Student: Gilev Evgenii

Educational Programme: Economics (Bachelor)

Year of Graduation: 2021

The implementation of the IFRS 9 in Russian banks is one of the most significant developments in the field of banking regulation over the past few years. The key innovation of the standard is the transition from the model of incurred losses to the model of expected losses when assessing provisions for credit losses. The purpose of this study is to show that the implementation of the new standard has a significant impact on the capital adequacy and profitability of banks, and to measure the volume of this impact. The paper uses a regression analysis based on a sample of panel data for 149 banks with a universal license for the period 01.01.2015-01.01.2021 (a total of 24 quarters); total 3576 observations. The main results of the study: the implementation of IFRS 9 has a statistically significant impact on the capital adequacy and profitability of banks. The impact on capital adequacy is positive, and the impact on profitability is negative.

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