Effects of TFRS 9 Financial Instruments Standard on Banks’ Non-Cash Credit Provisions: A Research on Credit Cards

Mustafa Süner; Levent Çinko

Article Details

Effects of TFRS 9 Financial Instruments Standard on Banks’ Non-Cash Credit Provisions: A Research on Credit Cards

Authors:

Mustafa Süner | Levent Çinko

Publisher:

Artvin Çoruh University

Main Topics:

Bankacılık Denetleme ve Düzenleme | Finansal Muhasebe

Journal:

Artvin Çoruh Üniversitesi Uluslararası Sosyal Bilimler Dergisi Vol.9 Issue 2, pp.446-463

Document Type:

Article

Publication Date:

12/2023

Document Language:

Turkish

Document ID (Org No.):

2001307399

pISSN:

2458-8385

Keywords:

Abstract:

 The application of the TFRS 9 standard have caused alterations to non-cash credit provisions and their accounting. Prior to TFRS 9, general provisions were made for 1st and 2nd group loans and non-cash loans based on the risk balance and for that a specific rate was determined in accordance with the related regulation. With the implementation of TFRS 9, both the risk is reduced by credit conversion rate over the total risk and the expected credit loss provision is allocated separately for credit card available limits and utilized limits. The aim of the study is to contribute to the literature by analyzing the changes in accounting and provision practices before and after TFRS 9. In this study, the data of 4 listed banks in Turkey, ranked high in terms of the number of credit cards and committed spending limits, are used for the 2016-2020 period. Although these four banks have seen an increase in both non-cash credit provisions and reserve ratios after TFRS 9, there is no similar rise in credit card provisions account, and there is even a decline in credit card reserve ratios. No significant change was observed in the NPL ratio of non-cash loans and credit cards.

 The application of the TFRS 9 standard have caused alterations to non-cash credit provisions and their accounting. Prior to TFRS 9, general provisions were made for 1st and 2nd group loans and non-cash loans based on the risk balance and for that a specific rate was determined in accordance with the related regulation. With the implementation of TFRS 9, both the risk is reduced by credit conversion rate over the total risk and the expected credit loss provision is allocated separately for credit card available limits and utilized limits. The aim of the study is to contribute to the literature by analyzing the changes in accounting and provision practices before and after TFRS 9. In this study, the data of 4 listed banks in Turkey, ranked high in terms of the number of credit cards and committed spending limits, are used for the 2016-2020 period. Although these four banks have seen an increase in both non-cash credit provisions and reserve ratios after TFRS 9, there is no similar rise in credit card provisions account, and there is even a decline in credit card reserve ratios. No significant change was observed in the NPL ratio of non-cash loans and credit cards.

 The application of the TFRS 9 standard have caused alterations to non-cash credit provisions and their accounting. Prior to TFRS 9, general provisions were made for 1st and 2nd group loans and non-cash loans based on the risk balance and for that a specific rate was determined in accordance with the related regulation. With the implementation of TFRS 9, both the risk is reduced by credit conversion rate over the total risk and the expected credit loss provision is allocated separately for credit card available limits and utilized limits. The aim of the study is to contribute to the literature by analyzing the changes in accounting and provision practices before and after TFRS 9. In this study, the data of 4 listed banks in Turkey, ranked high in terms of the number of credit cards and committed spending limits, are used for the 2016-2020 period. Although these four banks have seen an increase in both non-cash credit provisions and reserve ratios after TFRS 9, there is no similar rise in credit card provisions account, and there is even a decline in credit card reserve ratios. No significant change was observed in the NPL ratio of non-cash loans and credit cards.

 TFRS 9 standardının uygulanması neticesinde gayrinakit kredileri karşılıklarında ve bunların muhasebeleştirilmesinde farklılıklar meydana gelmiştir. TFRS 9 öncesindeki uygulamada genel karşılık 1. Ve 2.grup kredileri ile gayrinakdi krediler risk bakiyesi üzerinden ayrılmakta, ilgili yönetmelik nezdinde maktu bir oran belirlenmekteydi. TFRS 9 uygulamasıyla hem toplam risk kredi dönüşüm oranıyla azaltılmakta, hem de kredi kartı kullanılabilir limit ve kullanılan limitler için ayrı ayrı beklenen kredi zarar karşılığı ayrılmaktadır. Çalışmanın amacı, TFRS 9 standardının öncesi ve sonrası muhasebe ve karşılık uygulamalarındaki değişiklikler ele alınmak suretiyle literatüre katkıda bulunmaktır. Bu çalışmada 2016-2020 dönemini kapsayacak şekilde kredi kartı adet ve taahhüt edilen harcama limiti açısından üst sıralarda bulunan Türkiyede halka açık 4 adet borsaya kote bankanın verileri kullanılmıştır. TFRS 9 sonrasında 4 bankanın da gayri nakdi kredi karşılık bakiyeleri ve rezerv oranları artmış olsa da kredi kartı karşılık bakiyelerinde benzer bir artış görülmemiş, kredi kartı rezerv oranlarında ise düşüş görülmüştür. Gayrinakdi kredilerin ve kredi kartlarının NPL oranında kayda değer bir değişiklik gözlemlenmemiştir.

Article Details

Effects of TFRS 9 Financial Instruments Standard on Banks’ Non-Cash Credit Provisions: A Research on Credit Cards

Authors:

Mustafa Süner | Levent Çinko

Publisher:

Artvin Çoruh University

Main Topics:

Bankacılık Denetleme ve Düzenleme | Finansal Muhasebe

Journal:

Artvin Çoruh Üniversitesi Uluslararası Sosyal Bilimler Dergisi Vol.9 Issue 2, pp.446-463

Document Type:

Article

Publication Date:

12/2023

Document Language:

Turkish

Document ID (Org No.):

2001307399

pISSN:

2458-8385

Credit Card Provisions

Non-Cash Credit

Banking SectorKredi Kart Karşılıkları

Gayri Nakdi Kredi

Bankacılık Sektörü

Issues

Article Details

Effects of TFRS 9 Financial Instruments Standard on Banks’ Non-Cash Credit Provisions: A Research on Credit Cards

Authors: Mustafa Süner | Levent Çinko

Publisher: Artvin Çoruh University

Main Topics: Bankacılık Denetleme ve Düzenleme | Finansal Muhasebe

Journal: Artvin Çoruh Üniversitesi Uluslararası Sosyal Bilimler Dergisi Vol.9 Issue 2, pp.446-463

Document Type: Article

Publication Date: 12/2023

Document Language: Turkish

Document ID (Org No.): 2001307399

pISSN: 2458-8385

Credit Card Provisions

Non-Cash Credit

Banking SectorKredi Kart Karşılıkları

Gayri Nakdi Kredi

Bankacılık Sektörü

Issues

Authors:

Mustafa Süner | Levent Çinko

Publisher:

Artvin Çoruh University

Main Topics:

Bankacılık Denetleme ve Düzenleme | Finansal Muhasebe

Journal:

Artvin Çoruh Üniversitesi Uluslararası Sosyal Bilimler Dergisi Vol.9 Issue 2, pp.446-463

Document Type:

Article

Publication Date:

12/2023

Document Language:

Turkish

Document ID (Org No.):

2001307399

pISSN:

2458-8385