Commonwealth Bank hikes loan reserves on accounting switch

The Commonwealth Bank of Australia (CBA) increased loan-loss reserves by A$1.1 billion ($785 million) as fresh accounting rules came into effect.

Cash set aside to cover shaky loans grew 38% to A$3.8 billion as the bank switched to the AASB 9 accounting standard on July 1. The new regime is the Australian equivalent of IFRS 9, which applies to banks that subscribe to international accounting standards, and introduces a new way to size loan provisions that uses future economic forecasts to