<ul><li>16:30 Vortrag / Presentation </li></ul><ul><li>Gerald KOGLER </li></ul><ul><li>Managing Director, Ernst & Young Ös...
<ul><li>16:30 Vortrag / Presentation </li></ul><ul><li>Janez URANIC </li></ul><ul><li>Country Managing Partner, Ernst & Yo...
Banking in CEE - a deeper insight into Banking in Slovenia <ul><li>Janez Uranič </li></ul><ul><li>Gerald Kogler </li></ul>...
Introduction 18.09.09
Austria and its exposure in CEE countries <ul><li>An important strategic growth market for Austrian financial services </l...
Austrian Investments in CEE <ul><li>12 Austrian banks with 69 fully consolidated subsidiaries </li></ul><ul><li>Operating ...
Market share of Austrian subsidiaries in CEE <ul><li>Austrian banks account for a market share of approximately 20% in the...
Earnings and profitability in 2007/2008 18.09.09 Source: IMF, National Central Banks, OeNB in % SK   CZ   PL   HU   BG   R...
Quality of credits in 2008 18.09.09 Source: IMF, National Central Banks, OeNB Non-performing loans and depreciations in % ...
Development  in CEE Countries Czech Republic, Slovakia, Hungary and Croatia
CEE region not immune to global crisis <ul><li>Since the fall of 2008, the global financial crisis has increased the risk ...
GDP Growth in CEE countries 18.09.09
GDP Growth in CEE countries 2008 <ul><li>GDP growth in the last quarter of 2008  </li></ul><ul><li>Czech Republic:  0.2% <...
Inflation in CEE countries 18.09.09
Inflation in CEE countries <ul><li>In February 2009 (2008):  </li></ul><ul><li>Czech Republic: 2%  (6.3%) </li></ul><ul><l...
Banking sector in CEE 18.09.09
Banking sector in Czech Republic <ul><li>The Czech Republic is hit by the current economic environment in the automotive s...
Banking sector in Slovakia <ul><li>Annual growth of domestic credit volume to the non-government sector declined to 15.4% ...
Banking sector in Hungary <ul><li>The government bond market became illiquid at the beginning of October 2008 and the lend...
Banking sector in Croatia <ul><li>The government adopted a set of anti-recession measures and revised the 2009 budget </li...
Banking in Slovenia – credit risk Janez Uranič
Structure of Slovenian financial system <ul><li>The depth of Slovenian financial system stood at 173% of GDP </li></ul><ul...
Risks in the financial system <ul><li>Over-reliance on the banking system </li></ul><ul><li>Underdeveloped capital market ...
Banking system <ul><li>The banking system total assets stood at 128% of GDP </li></ul><ul><li>This is 2,5 times lower than...
Risks in the banking system <ul><li>In March 2009 banks warned strongly of the risks associated with the deterioration in ...
Credit risk <ul><li>The banks expect a deterioration of the quality of credit portfolio  </li></ul><ul><li>As a result, th...
Financial Instruments Recognition and Measurement Replacement of IAS 39
IAS 39 replacement project <ul><ul><ul><li>Classification and Measurement Exposure Draft (ED) issued on 14 July 2009  </li...
Measurement categories <ul><ul><ul><li>Two measurement categories: </li></ul></ul></ul>18.09.09 Amortised cost Fair Value ...
ED on impairment (1/2) <ul><ul><ul><li>ED on impairment expected in October 2009 </li></ul></ul></ul><ul><ul><ul><li>Chang...
ED on impairment (2/2) <ul><li>The reason for change </li></ul><ul><li>Current incurred model was argued to be pro-cyclica...
Implications for preparers <ul><ul><ul><li>Reduces complexity by having just two categories </li></ul></ul></ul><ul><ul><u...
Implications for users <ul><ul><ul><li>What is attractive? </li></ul></ul></ul><ul><ul><ul><li>Simplification of the stand...
Thank you
Upcoming SlideShare
Loading in …5
×

2009. Gerald Kogler and Janez Uranic. Banking in CEE – a deeper insight into banking in Slovenia. CEE-Wirtschaftsforum 2009. Forum Velden.

752 views

Published on

Published in: Business, Economy & Finance
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
752
On SlideShare
0
From Embeds
0
Number of Embeds
8
Actions
Shares
0
Downloads
7
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide
  • The depreciation of local currencies is due to foreign currency debt (in the last year a significant item of the CEE region). Negative impact of the local currency – foreign currency loan represent an important risk factor – also worldwide seen. 2009 (March): consumer loans of 173 billion EUR – 85 billion EUR in foreign currency. Forecasting institutions = IMF
  • The HYPO Group (GE) and Bank Austria (Italy) do not belong to the Austrian banks. 24% amounts to the balance of commission earnings (Provisionserträge) Loan receivables of Austrian banks are high in the CEE
  • BA = Bosnien Herzegowina December 2008 The chart only represents Austrian subisdiaries with an aggregated total asset of 1 billion EUR. The size of the bubble depends on the total exposure of the Austrian banking system to the particular country.
  • The depreciation of currencies and also the recession increased the credit risk for the banking sector The profitability (measured at RoE and RoA) in the banking sector is in most of the countries declining. The risk aversion at the international financial markets has increased facing CEE countries. Der ROE zeigt die Verzinsung des von den Aktionären im Unternehmen eingesetzten Kapitals auf. Er kann durch die Kapitalstruktur der Bank stark beeinflusst werden: Eine Bank mit einer geringeren Eigenkapitaldecke hat bei gleichem Gewinn im Vergleich zu einer Bank mit mehr Eigenkapital automatisch einen höheren ROE. RoE approximately 1% RoA - - - 7%
  • In the last quarter of 2008 the total exposure of loans (local and foreign) to private households and companies came to a standstill in the most of the countries (except Bulgaria and Croatia), in einigen Ländern sank das ausstehende Kreditvolumen sogar. Die grenzüberschreitenden Unternehmenskredite gingen in allen Ländern mit Ausnahme Kroatiens zurück. Die inländischen Unternehmenskredite verringerten sich in der Czech Republic, Hungary, Romania und Russia, die Kredite an private Haushalte in Romania, Russia und Ukraine. Wo diese inländischen Kreditaggregate nicht sanken, schwächte sich ihr Wachstum deutlich ab (mit der Ausnahme Kroatiens, wo auch regulatorische Lockerungen wirkten). Generell dürften für diese Kreditentwicklung sowohl nachfrage- als auch angebotsseitige Faktoren verantwortliche sein. Ende 2008 überstieg das ausstehende Kreditvolumen jenes der Einlagen (gemessen an den gesamten Aktiva) in besonders hohem Ausmaß in Hungary, Bulgaria, Romania and Ukraine. Hingegen erreichten in der Slovakia and Czech Republic die Einlagen ein größeres Volumen als die Kredite. Vor allem in Romania und Ukraine in geringerem Maße auch in Hungary und Bulgaria halten die Banken weiterhin hohe Netto-Auslandsverbindlichkeiten, die primär gegenüber ausländischen Mutterbanken bestehen . Die Währungsabwertungen und vor allem die Rezession erhöhten das Kreditrisiko für die Bankensektoren. Ende 2008 war der Anteil der notleidenden Kredit in allen hier betrachteten Ländern (mit Ausnahme Polens) größer als Ende 2007, mit besonders starkem Anstieg in Rumänien.
  • For 2009 the stagnation and recession is predicted by the IMF. The greatest change of the GDP growth rate is in Romania, where the deepest recession in the CEE region is to be excpected (IMF).
  • Czech Republic: In 2008 real GDP growth slowed noticeably from 4.4% in the first quarter to 0.2% in the last quarter. The Czech Republic also realized a negative stock change. Slovakia is seen as one of the few CESEE countries avoiding stagnation/recession. The annual growth of domestic credit to the nongovernment nonbank sector declined to 15.4% in December 2008 (from 25.3% in April) mainly due to a drastic slowdown in corporate credit growth. Hungary: Since October 2008 Hungary has been affected severely by the global financial crisis. The government bond market became illiquid at the beginning of October 2008. Lending by domestic banks came to a standstill (adjusted for valuation effects, including exchange rate changes). Croatia: The GDP growth declined from 4.3% in the first to only 0.2% in the final quarter of 2008. This development came mainly on the back of marekd slowdown of private consumption.
  • This is a predetermined divider slide and should not be modified
  • Czech Republic: Since the beginning of 2008 inflation continuously declined. The inflation rate relevant for CNB monetary policy, dropped well below the inflation target of 3%. Slovakia: HICP inflation declined from 4.5% in September 2008 to 2.4% in February 2009. The introduction of the euro seems to have had little impact on general price developments so far. Hungary: As a result of the economic downturn and helped by base effects, inflation declined considerably in recent months (to 2.9% year on year in February 2009, from around 7% in mid-2008). The weak economic environment seems to have helped contain the pass-through to inflation of the sharp weakening of the forint over the past few months Croatia: Inflation accelerated to 4.2% in February 2009, mainly due to tax regulated price adjustments, but the recent depreciation of the kuna may have played some role too.
  • This is a predetermined divider slide and should not be modified
  • Inflation declined since the beginning of 2008 Changes to indirect taxes Lowered key interest rate in November 2008 On the revenue side, tax burden will be gradually lowered and tax system will be simplified. Reduced personal and corporate taxation along with transparent and business-friendly tax administration are the main factors supporting economic growth. In coming years, growth in tax revenues will decelerate due to a cooling of the Czech economy.
  • Tweedie speech to the ECOFIN (9 June) The IASB has acted on each of the four issues raised by the European Commission, on behalf of member states and EU stakeholders, in the fourth quarter of last year. The Commission called for a standard-setting response on the following issues: (1) the need for guidance about fair value measurement in illiquid markets; (2) the desire for clarification regarding whether credit derivative obligations (CDOs) include embedded derivatives to ensure consistency between IFRSs and US GAAP; (3) the existing impairment rules related to available-for-sale instruments; and (4) the possibility of reclassification out of the fair value option into other categories. we have completed work on fair value in illiquid markets. We are working with the US standard-setter, the FASB, to ensure consistency in the accounting of embedded derivatives. This will entail a FASB clarification to be in place for 2009 financials. This leaves us with the issues of the impairment rules and reclassification out of the fair value option. These are the issues, particularly the impairment issue, where the Council recommended urgent action. Our original plan, based upon significant input from stakeholders in Europe and elsewhere, was to resolve these two issues through a comprehensive revision of IAS 39. This has always been a priority. The recent US FASB Staff Positions (FSPs) regarding fair value measurement and impairment caused the IASB to accelerate the timing of the approach announced on 1 April. We have now prioritised – in advance of other topics covered in the IAS 39 replacement – the portion of the comprehensive project concerning classification, measurement, and related impairment issues. We believe that our approach is a superior one to one that would merely adopt the US FASB Staff Position on impairment for the following reasons. First and foremost, our work on impairment directly addresses the specific nature of EU concerns. Second, our approach responds directly to the G20 call for reduced complexity. The proposal will see a much needed reduction of the number of categories of financial assets and will leave us with only one impairment method.
  • The objective of classification is to ensure that FI are allocated to measurement categories in such a way that the resulting information is useful to users. That means information should assist in assessing the amounts, timing and uncertainty of future cash flows.
  • 2009. Gerald Kogler and Janez Uranic. Banking in CEE – a deeper insight into banking in Slovenia. CEE-Wirtschaftsforum 2009. Forum Velden.

    1. 1. <ul><li>16:30 Vortrag / Presentation </li></ul><ul><li>Gerald KOGLER </li></ul><ul><li>Managing Director, Ernst & Young Österreich/Austria, Österreich/Austria </li></ul>
    2. 2. <ul><li>16:30 Vortrag / Presentation </li></ul><ul><li>Janez URANIC </li></ul><ul><li>Country Managing Partner, Ernst & Young Slowenien/Slovenia, Slowenien/Slovenia </li></ul>
    3. 3. Banking in CEE - a deeper insight into Banking in Slovenia <ul><li>Janez Uranič </li></ul><ul><li>Gerald Kogler </li></ul><ul><ul><li>16.09.2009 </li></ul></ul>
    4. 4. Introduction 18.09.09
    5. 5. Austria and its exposure in CEE countries <ul><li>An important strategic growth market for Austrian financial services </li></ul><ul><li>The financial development of the credit volume is still below the Western industry countries: </li></ul><ul><ul><li>CEE 40-50% of the GDP </li></ul></ul><ul><ul><li>Austria 110% of the GDP </li></ul></ul><ul><li>The economic performance is declining considerably </li></ul><ul><ul><li>Declining demand of foreign and local investments </li></ul></ul><ul><ul><li>Reduced foreign loans </li></ul></ul><ul><ul><li>Depreciation of local currencies </li></ul></ul><ul><li>CEE countries are on the long-term a growth region for Europe </li></ul><ul><li>IMF expects that after accomplishing the credit crunch, members of EU in the CEE region will balance their growth in 2011 </li></ul>18.09.09 Source: Austrian National Bank OeNB
    6. 6. Austrian Investments in CEE <ul><li>12 Austrian banks with 69 fully consolidated subsidiaries </li></ul><ul><li>Operating revenue of 7 billion EUR in 2008 </li></ul><ul><li>In 2008 5.1 billion EUR loan loss depreciation </li></ul><ul><li>In 2008 the foreign commitments worldwide amounted to 360 billion EUR (121% of GDP) </li></ul><ul><ul><li>199.5 billion EUR in the CEE and CIS region </li></ul></ul><ul><ul><li>Direct loan exposure of Austrian subsidiaries increased of 24.7% to 68.5 billion EUR </li></ul></ul>18.09.09 Source: Austrian National Bank OeNB
    7. 7. Market share of Austrian subsidiaries in CEE <ul><li>Austrian banks account for a market share of approximately 20% in the region </li></ul>18.09.09 Aggregated national total assets (bill. EUR) Market share of Austrian subsidiaries Source: OeNB, National Central Banks, Moody‘s BIH
    8. 8. Earnings and profitability in 2007/2008 18.09.09 Source: IMF, National Central Banks, OeNB in % SK CZ PL HU BG RO HR UA RU
    9. 9. Quality of credits in 2008 18.09.09 Source: IMF, National Central Banks, OeNB Non-performing loans and depreciations in % of the total loans at 2008
    10. 10. Development in CEE Countries Czech Republic, Slovakia, Hungary and Croatia
    11. 11. CEE region not immune to global crisis <ul><li>Since the fall of 2008, the global financial crisis has increased the risk aversion significantly especially according to emerging economies </li></ul><ul><li>Forecasts for CEE countries predicted that the readiness to accept credit risk has fallen significantly. </li></ul><ul><li>2009 is forecasted to bring a stagnation in Poland and recession in Czech Republic and Hungary </li></ul>18.09.09 Source: Austrian National Bank OeNB and IMF
    12. 12. GDP Growth in CEE countries 18.09.09
    13. 13. GDP Growth in CEE countries 2008 <ul><li>GDP growth in the last quarter of 2008 </li></ul><ul><li>Czech Republic: 0.2% </li></ul><ul><li>Slovakia: 2.5% </li></ul><ul><li>Hungary: - 2.3% </li></ul><ul><li>Croatia: 0.2% </li></ul>18.09.09 Source: IMF (World Economic Outlook), April 2009 in constant prices, year-on-year change in %
    14. 14. Inflation in CEE countries 18.09.09
    15. 15. Inflation in CEE countries <ul><li>In February 2009 (2008): </li></ul><ul><li>Czech Republic: 2% (6.3%) </li></ul><ul><li>Slovakia: 2.4% (3.9%) </li></ul><ul><li>Hungary: 2.9% (6%) </li></ul><ul><li>Croatia: 4.2% (6.1%) </li></ul>18.09.09 Annual change in % Source: eurostat
    16. 16. Banking sector in CEE 18.09.09
    17. 17. Banking sector in Czech Republic <ul><li>The Czech Republic is hit by the current economic environment in the automotive sector </li></ul><ul><li>Strongly affected by the downturn in foreign demand of investments </li></ul><ul><li>Economic policy environment dominated by reducing inflationary and emerging recession risks </li></ul><ul><li>Inflation declined since the beginning of 2008 </li></ul>18.09.09 Source: Austrian National Bank OeNB [European Economic Integration Q2/2009]
    18. 18. Banking sector in Slovakia <ul><li>Annual growth of domestic credit volume to the non-government sector declined to 15.4% in December 2008 mainly due to a drastic slowdown in corporate credit growth </li></ul><ul><li>This is also related to the decline in the export-oriented industrial sector </li></ul><ul><li>The short-term impact of the global financial crisis on the economy has arguably been mitigated by the euro adaption, in particular as regards exchange rate developments </li></ul>18.09.09 Source: Austrian National Bank OeNB [European Economic Integration Q2/2009]
    19. 19. Banking sector in Hungary <ul><li>The government bond market became illiquid at the beginning of October 2008 and the lending by domestic banks came to a standstill </li></ul><ul><li>In 2009 Hungary is falling into a steeper and longer recession owing to more pronounced macro-financial weaknesses </li></ul><ul><ul><li>Public sector debt </li></ul></ul><ul><ul><li>High share of foreign currency loans </li></ul></ul><ul><li>EU and World Bank jointly provided 20 billion EUR in financial assistance </li></ul><ul><li>The government decided to inject through loans a combined 1.4 billion EUR into two major banks by mid 2009. </li></ul><ul><li>The Magyar Nemzeti Bank (MNB) decided to improve the foreign currency liquidity of Hungarian banks </li></ul><ul><ul><li>Long-term foreign exchange swaps </li></ul></ul>18.09.09 Source: Austrian National Bank OeNB [European Economic Integration Q2/2009]
    20. 20. Banking sector in Croatia <ul><li>The government adopted a set of anti-recession measures and revised the 2009 budget </li></ul><ul><ul><li>The new budget proposes a deficit of 1.5% of GDP (targeted deficit of 0.9% of GDP) </li></ul></ul><ul><li>Net FDI coverage decreased and access to debt finance has become more difficult/expensive </li></ul><ul><ul><li>Croatia’s foreign debt increased considerably to 82% of GDP in 2008 </li></ul></ul><ul><ul><li>The corporate sector continued to borrow directly from abroad </li></ul></ul><ul><ul><li>Cross-border funding for corporations largely dried up </li></ul></ul><ul><ul><li>Banks gradually reduced their foreign liabilities (credit restrictions) </li></ul></ul>18.09.09 Source: Austrian National Bank OeNB [European Economic Integration Q2/2009]
    21. 21. Banking in Slovenia – credit risk Janez Uranič
    22. 22. Structure of Slovenian financial system <ul><li>The depth of Slovenian financial system stood at 173% of GDP </li></ul><ul><li>The depth of Slovenian financial system represents 40% of average in EURO area </li></ul><ul><li>77% of the financial system represent banks </li></ul><ul><li>Investments funds represent only 3% and have decreased from 7% in 2007 </li></ul>18.09.09
    23. 23. Risks in the financial system <ul><li>Over-reliance on the banking system </li></ul><ul><li>Underdeveloped capital market </li></ul><ul><li>The market capitalisation declined by 57% in 2008 </li></ul><ul><li>While volumes were down by 67% </li></ul><ul><li>Demand for Slovenian shares by foreign investors was down in 2008 </li></ul>18.09.09
    24. 24. Banking system <ul><li>The banking system total assets stood at 128% of GDP </li></ul><ul><li>This is 2,5 times lower than EU average </li></ul><ul><li>Bank concentration is higher than in EURO area, although it is diminishing with the growth of foreign owned banks </li></ul>18.09.09
    25. 25. Risks in the banking system <ul><li>In March 2009 banks warned strongly of the risks associated with the deterioration in the macroeconomic climate </li></ul><ul><li>This comprise of credit cycle, decline in economic growth and deterioration in international environment </li></ul><ul><li>The economic crisis is leading to worsening clients financial position, hence reducing the quality of credit portfolio </li></ul><ul><li>Second important risk is liquidity risk and refinancing risk </li></ul><ul><li>This is primarily due to high foreign borrowings to finance the expenses in lending in prior years </li></ul>18.09.09
    26. 26. Credit risk <ul><li>The banks expect a deterioration of the quality of credit portfolio </li></ul><ul><li>As a result, the banks expect significant increase in impairment charges in 2009 </li></ul><ul><li>Impairment charges in Slovenia are done in accordance with IAS 39, based on an incurred loss model </li></ul>18.09.09
    27. 27. Financial Instruments Recognition and Measurement Replacement of IAS 39
    28. 28. IAS 39 replacement project <ul><ul><ul><li>Classification and Measurement Exposure Draft (ED) issued on 14 July 2009 </li></ul></ul></ul><ul><ul><ul><li>Comments due by 14 September 2009 </li></ul></ul></ul>18.09.09 October 2009: ED on impairment of financial assets <ul><li>During 2010: </li></ul><ul><li>IASB to complete replacement of IAS 39 by issuing final guidance on : </li></ul><ul><ul><li>Impairment </li></ul></ul><ul><ul><li>Derecognition </li></ul></ul><ul><ul><li>Hedge accounting </li></ul></ul>Q4/2009: Final IFRS on classification and measurement of financial instruments ED on hedge accounting 1 January 2012: Expected mandatory effective date of successor standard to IAS 39
    29. 29. Measurement categories <ul><ul><ul><li>Two measurement categories: </li></ul></ul></ul>18.09.09 Amortised cost Fair Value Fair Value Option <ul><li>Basic loan features, AND </li></ul><ul><li>Managed on a contractual yield basis </li></ul><ul><li>All other instruments </li></ul><ul><li>Fair Value Through P/L (FVTPL) </li></ul><ul><li>Non-trading equity instruments  elective OCI presentation (FVTOCI) </li></ul>
    30. 30. ED on impairment (1/2) <ul><ul><ul><li>ED on impairment expected in October 2009 </li></ul></ul></ul><ul><ul><ul><li>Change in approach from incurred loss to expected loss </li></ul></ul></ul>18.09.09
    31. 31. ED on impairment (2/2) <ul><li>The reason for change </li></ul><ul><li>Current incurred model was argued to be pro-cyclical </li></ul><ul><li>Reporting profits when times are good and losses when times are bad </li></ul><ul><li>Regulators argued that accounting standards should promote financial stability </li></ul><ul><li>Hence more prudence to be built into financial reporting </li></ul><ul><li>Expected standard to be issued in 2010 </li></ul>18.09.09
    32. 32. Implications for preparers <ul><ul><ul><li>Reduces complexity by having just two categories </li></ul></ul></ul><ul><ul><ul><li>Eliminates the complex rules on embedded derivatives </li></ul></ul></ul><ul><ul><ul><li>No tainting rules for debt securities at amortised cost </li></ul></ul></ul><ul><ul><ul><li>Reduced impairment charge for debt securities if the instrument now qualifies as amortised cost </li></ul></ul></ul><ul><ul><ul><li>Hedge accounting possible for securities held at amortised cost, not previously permitted if ‘held to maturity’ </li></ul></ul></ul><ul><ul><ul><li>Can reverse fair value losses on some equity instruments through profit or loss as equity markets recover </li></ul></ul></ul><ul><ul><ul><li>Opportunity to reverse previous FVO designations (provided the amortised cost criteria are met) </li></ul></ul></ul><ul><ul><ul><li>Opportunity to re-apply the FVO for instruments (provided there is an accounting mismatch) </li></ul></ul></ul>18.09.09 <ul><ul><ul><li>Early adopters will not know the final changes to be made during impairment and hedge accounting (Phases II and III) </li></ul></ul></ul><ul><ul><ul><li>All equity instruments will be at FVTPL  additional volatility (unless designated as FVTOCI on initial recognition) </li></ul></ul></ul><ul><ul><ul><li>Structured investment vehicles  all tranches at FVTPL except most senior tranche </li></ul></ul></ul><ul><ul><ul><li>Many instruments reclassified from FV to amortised cost using the October 2008 amendment may need to be reclassified back to FV (eg. securitisation tranches) </li></ul></ul></ul><ul><ul><ul><li>Many liabilities containing embedded derivatives now at fair value in their entirety, including changes due to own credit risk </li></ul></ul></ul><ul><ul><ul><li>Once a classification is determined, no further reclassifications </li></ul></ul></ul><ul><ul><ul><li>Loans acquired at a discount  not at amortised cost </li></ul></ul></ul>What is attractive? What are the challenges?
    33. 33. Implications for users <ul><ul><ul><li>What is attractive? </li></ul></ul></ul><ul><ul><ul><li>Simplification of the standard  many of the current complexities will be eliminated  better understanding amongst users </li></ul></ul></ul><ul><ul><ul><li>No more diverse impairment rules for available-for-sale investments  increased comparability </li></ul></ul></ul><ul><ul><ul><li>No reclassifications between categories  better comparability </li></ul></ul></ul>18.09.09 <ul><ul><ul><li>What are the challenges? </li></ul></ul></ul><ul><ul><ul><li>Instruments reclassified from FV to amortised cost </li></ul></ul></ul><ul><ul><ul><ul><li>Operational challenge -> calculating impairment in future </li></ul></ul></ul></ul><ul><ul><ul><ul><li>No retrospective benefit of hedge accounting, P&L mismatch </li></ul></ul></ul></ul><ul><ul><ul><li>Entities may transit to the new standard at any point from October 2009 until 1 January 2012  potential difficulties with comparability over the next four years </li></ul></ul></ul>
    34. 34. Thank you

    ×