Regulatory Alerts2023-06-05
Banking Circular 3 of 2023 - End of IFRS 9 Transition Period
The Kenyan Central Bank (CBK) has ended the five-year transition period for implementing International Financial Reporting Standards (IFRS) 9 on financial instruments for commercial banks, mortgage finance companies, and microfinance banks. This means that institutions must now fully adhere to IFRS 9's methodology for computing regulatory capital without adding back provisions relating to performing loans from previous years. To assist with this change, CBK has revised various reporting templates that institutions previously used during the transition period. These changes involve the removal of certain fields and adjustments to others, such as those measuring core capital and total risk-weighted assets. The purpose of this circular is to inform stakeholders about the lapse of the IFRS 9 transition period and to provide updated reporting templates for compliance with the new guidelines.