The Effect of IFRS 9 on the Financial Performance of Commercial Banks in The Gambia (2016–2024)

The introduction of IFRS 9 in 2018 represented a paradigm shift in financial reporting for banks worldwide, particularly in developing economies such as The Gambia. This study investigates the effect of IFRS 9 on the financial performance of commercial banks in The Gambia between 2016 and 2024, using panel data derived from annual reports of seven commercial banks and macroeconomic indicators. A fixed-effects regression model was employed, with Return on Assets (ROA) and Return on Equity (ROE) as dependent variables. Explanatory variables included expected credit loss (ECL) ratios, capital adequacy, bank size, GDP growth, and Treasury-bill yields. Results show that higher ECL provisions significantly reduce profitability (ROA and ROE), while bank size and capital adequacy positively influence performance. GDP growth supports profitability, while higher Treasury-bill yields exert a negative effect. The findings suggest that IFRS 9, while imposing short-term profitability pressures, strengthens resilience and credit risk management in the long run.