Credit pricing in the light of IFRS 9 regulations

The impact of the IFRS 9 impairment model on the financial statement will be correlated to the adequacy of the pricing assessment at the time of disbursement.

The IFRS 9 accounting standard presents an impairment model where the coverage of expected losses, through provisioning, is a dynamic process which starts right from the time when credit is granted. This requires the adoption of a differentiated pricing policy based on the risk profile of the borrower, incorporating a lifetime aspect to the risk assessment. In fact, the pricing algorithms can incorporate the multi-period probability of default curves necessary to implement the IFRS 9 rules for loss assessment.