interim financial statements for the · pdf fileat 30 june 2017 1,000,000 13,422 (273,799)...
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AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
Registered Office
Ground Floor, East Block
Wisma Selangor Dredging
142-B Jalan Ampang
50450 Kuala Lumpur
FOR THE FINANCIAL HALF YEAR ENDEDINTERIM FINANCIAL STATEMENTS
30 JUNE 2017
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
Unaudited Audited Unaudited Audited
Note 30 June 31 December 30 June 31 December
2017 2016 2017 2016
RM'000 RM'000 RM'000 RM'000
ASSETS
Cash and short-term funds 121,454 120,213 121,454 120,213 Deposits and placements with banks and other
financial institutions 9 406,022 302,977 406,022 302,977 Hedging financial instruments 10 3 - 3 - Securities held-for-trading 11 6,123 5,701 6,123 5,701 Securities held-to-maturity 12 1,464,777 1,468,980 1,464,777 1,468,980 Financing and advances 13 6,450,934 6,002,416 6,450,934 6,002,416 Other assets 28,989 27,902 28,949 27,849 Statutory deposit with Bank Negara Malaysia 261,629 263,529 261,629 263,529 Investment in subsidiary - - - -*Investment properties 105,000 105,000 105,000 105,000 Property and equipment 15,459 14,604 15,459 14,604 Intangible assets 27,596 27,775 27,596 27,775 Deferred tax assets 62,087 62,087 62,087 62,087 Total Assets 8,950,073 8,401,184 8,950,033 8,401,131
- (1)
LIABILITIES AND SHAREHOLDER'S
EQUITY
Liabilities
Deposits from customers 14 6,155,240 6,158,390 6,155,240 6,158,390
Deposits and placements of banks and other -
financial institutions 15 1,589,878 1,120,611 1,589,878 1,120,611
Hedging financial instruments 10 - - - -
Bills and acceptances payable 4,819 1,067 4,819 1,067
Other liabilities 59,757 82,869 59,753 82,869
Subordinated Sukuk 400,720 299,003 400,720 299,003
Total Liabilities 8,210,414 7,661,940 8,210,410 7,661,9401.00
Shareholder's equity
Share capital 1,000,000 1,000,000 1,000,000 1,000,000
Reserves (260,341) (260,756) (260,377) (260,809)
Total Shareholder's Equity 739,659 739,244 739,623 739,191
Total Liabilities and Shareholder's Equity 8,950,073 8,401,184 8,950,033 8,401,131
COMMITMENTS AND CONTINGENCIES 22 3,643,811 3,196,692 3,643,811 3,196,692
CAPITAL ADEQUACY 25
CET 1 / Core capital ratio 10.256% 11.245% 10.256% 11.245%Risk-weighted capital ratio 17.269% 17.363% 17.268% 17.362%
* The amount is significantly below the rounding threshold.
Bank for the year ended 31 December 2016.
INTERIM FINANCIAL STATEMENTS
UNAUDITED STATEMENTS OF FINANCIAL POSITION
AS AT 30 JUNE 2017
Group Bank
The Interim Financial Statements should be read in conjuction with the audited financial statements of the Group and the
1
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
30 June 30 June 30 June 30 June
2017 2016 2017 2016
Group Note RM'000 RM'000 RM'000 RM'000
Revenue 112,984 93,496 222,569 187,616
Income derived from investment of
depositors' funds and others 16 106,046 85,944 206,922 171,391
Income derived from investment of
shareholder's funds 17 6,938 7,552 15,647 16,225
Allowance for impairment on financing 18 1,335 (406) 569 (665)
Other expenses directly attributable to the
investment of the depositors' funds - - - (4)
Total distributable income 114,319 93,090 223,138 186,947
Income attributable to depositors 19 (65,268) (51,533) (126,848) (103,172)
Total Net Income 49,051 41,557 96,290 83,775
Personnel expenses (29,977) (25,489) (60,780) (45,551)
Other overheads and expenditures (16,845) (21,993) (35,080) (43,125)
Profit before zakat and taxation 2,229 (5,925) 430 (4,901)
Zakat - - - -
Taxation (15) - (15) -
Net profit for the financial period, representing total comprehensive income for the financial period 2,214 (5,925) 415 (4,901)
16 1
INTERIM FINANCIAL STATEMENTS
UNAUDITED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE 2ND QUARTER ENDED 30 JUNE 2017
2nd Quarter Ended Period Ended
The Interim Financial Statements should be read in conjuction with the audited financial statements of the Group and the
Bank for the year ended 31 December 2016.
2
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
30 June 30 June 30 June 30 June
2017 2016 2017 2016
Bank Note RM'000 RM'000 RM'000 RM'000
Revenue 112,906 93,382 222,448 187,458
Income derived from investment of
depositors' funds and others 16 106,046 85,944 206,922 171,391
Income derived from investment of
shareholder's funds 17 6,860 7,438 15,526 16,067
Allowance for impairment on financing 18 1,335 (406) 569 (665)
Other expenses directly attributable to the
investment of the depositors' funds - - - (4)
Total distributable income 114,241 92,976 223,017 186,789
Income attributable to depositors 19 (65,268) (51,533) (126,848) (103,172)
Total Net Income 48,973 41,443 96,169 83,617
Personnel expenses (29,952) (25,468) (60,730) (45,508)
Other overheads and expenditures (16,805) (21,965) (35,007) (43,073)
Profit before zakat and taxation 2,216 (5,990) 432 (4,964)
Zakat - - - -
Taxation - - - -
Net profit for the financial period, representing total comprehensive income for the financial period 2,216 (5,990) 432 (4,964)
The Interim Financial Statements should be read in conjuction with the audited financial statements of the Group and the
Bank for the year ended 31 December 2016.
INTERIM FINANCIAL STATEMENTS
UNAUDITED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE 2ND QUARTER ENDED 30 JUNE 2017
2nd Quarter Ended Period Ended
3
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
Share Statutory Accumulated
capital reserve losses Total
RM'000 RM'000 RM'000 RM'000
Group
At 1 January 2016 1,000,000 9,855 (277,365) 732,490
Total comprehensive income for the financial year - - 6,754 6,754
Transfer to statutory reserve - 3,351 (3,351) - At 31 December 2016 1,000,000 13,206 (273,962) 739,244
Group
At 1 January 2017 1,000,000 13,206 (273,962) 739,244
Total comprehensive profit for the financial period - - 415 415
Transfer to statutory reserve - 216 (216) - At 30 June 2017 1,000,000 13,422 (273,763) 739,659
Bank
At 1 January 2016 1,000,000 9,855 (277,365) 732,490
Total comprehensive income for the financial period - - 6,701 6,701
Transfer to statutory reserve - 3,351 (3,351) -
At 31 December 2016 1,000,000 13,206 (274,015) 739,191
Bank
At 1 January 2017 1,000,000 13,206 (274,015) 739,191
Total comprehensive loss for the financial period - - 432 432
Transfer to statutory reserve - 216 (216) -
At 30 June 2017 1,000,000 13,422 (273,799) 739,623
INTERIM FINANCIAL STATEMENTS
UNAUDITED STATEMENTS OF CHANGES IN EQUITY
FOR THE 2ND QUARTER ENDED 30 JUNE 2017
The Interim Financial Statements should be read in conjuction with the audited financial statements of the Group and the Bank for the
year ended 31 December 2016.
4
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
30 June 30 June 30 June 30 June
2017 2016 2017 2016
RM'000 RM'000 RM'000 RM'000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit / (Loss) before zakat and taxation 430 (4,901) 432 (4,964)
Adjustments for:
Depreciation of property and equipment 2,383 2,673 2,383 2,673
Amortisation of intangible assets 5,678 5,877 5,678 5,877
Net gain on disposal of property,plant & equipment - 10 - 10
Allowance for impairment on financing 2,690 4,058 2,690 4,058
Bad debts on financing - Written off 869 483 869 483
Bad debts on financing - Recovered (4,128) (3,876) (4,128) (3,876)
Allowance for doubtful debt - -
Unrealised loss on revaluation of
securities held-for-trading / investment properties (614) 152 (614) 152
Unrealised (gain)/loss from foreign
exchange translations (1,426) 179 (1,426) 179
Operating cashflow before workings capital changes 5,882 4,655 5,884 4,592
(Increase) / decrease in Operating Assets
Deposits and placements with banks and
other financial institutions (206,188) 15,726 (206,188) 15,726
Hedging financial instruments (192) 1,018 (192) 1,018
Financing and advances (447,949) 14,879 (447,949) 14,879
Other assets (1,089) (15,034) (1,100) (14,935)
Statutory deposit with Bank Negara Malaysia 1,900 1,459 1,900 1,459
(Decrease) / increase in Operating Liabilities
Deposits from customers 362,235 267,755 362,235 267,755
Deposits and placements of banks and
other financial institutions 205,598 (257,937) 205,598 (257,937)
Hedging financial instruments - - - -
Bills and acceptances payable 3,752 (14,220) 3,752 (14,220)
Other liabilities (19,891) 4,959 (19,882) 4,923
Net cash (used in)/generated from operating activities (95,942) 23,260 (95,942) 23,260
INTERIM FINANCIAL STATEMENTS
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
FOR THE 2ND QUARTER ENDED 30 JUNE 2017
Group Bank
5
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
30 June 30 June 30 June 30 June
2017 2016 2017 2016
RM'000 RM'000 RM'000 RM'000
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment (3,238) (3,988) (3,238) (3,988)
Purchase of intangible asset (5,499) (5,142) (5,499) (5,142)
Proceeds from sale of fixed assets - - - -
Securities held-to-maturity 4,203 444 4,203 444
Net cash used in investing activities (4,534) (8,686) (4,534) (8,686)
CASH FLOWS FROM FINANCING ACTIVITY
Issuance of Subordinated Sukuk 101,717 - 101,717 -
Net cash generated from financing activities 101,717 - 101,717 -
NET DECREASE IN CASH AND
SHORT-TERM FUNDS 1,241 14,574 1,241 14,574
Cash and short-term funds as at 1 January 120,213 127,806 120,213 127,806
CASH AND SHORT-TERM FUNDS 121,454 142,380 121,454 142,380
-
for the year ended 31 December 2016.
The Interim Financial Statements should be read in conjuction with the audited financial statements of the Group and the Bank
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
FOR THE 2ND QUARTER ENDED 30 JUNE 2017
Bank
INTERIM FINANCIAL STATEMENTS
Group
6
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
1. BASIS OF PREPARATION
2. ACCOUNTING POLICIES
The following MFRSs and IC Interpretations have been issued by the MASB and are not yet effective:
Effective for the financial period beginning on or after 1 January 2018:
MFRS 15: Revenue from Contracts with Customers
Effective for the financial period beginning on or after 1 January 2018:
MFRS 9: Financial Instruments (IFRS 9 Financial Instruments as issued by IASB in July 2014)
Effective for the financial period beginning on or after 1 January 2019:
MFRS 16: Leases
Effective date to be announced:
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134")
AND POLICY DOCUMENT ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS
ISSUED BY BANK NEGARA MALAYSIA
The unaudited condensed interim financial statements have been prepared in accordance with the applicable requirements
of MFRS 134: Interim Financial Reporting in Malaysia issued by Malaysian Accounting Standards Board (MASB), Financial
Reporting for Islamic Banking Institution policy issued by Bank Negara Malaysia (BNM) and Shariah requirements.
The unaudited condensed interim financial statements should be read in conjunction with the audited financial statements
for the year ended 31 December 2016. The explanatory notes attached to the consolidated condensed interim financial
statements provide an explanation of events and transactions that are significant to an understanding of the changes in the
financial position and performance of the Group and of the Bank since the year ended 31 December 2016.
The significant accounting policies and methods of computation applied in the unaudited condensed interim financial
statements are consistent with those adopted in the most recent audited financial statements for the year ended 31
December 2016:
Amendments to MFRS 10 and MFRS 128 Sale or Contribution of Assets between an Investor and its Associate or Joint
Venture
7
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134")
ISSUED BY BANK NEGARA MALAYSIA (CONTINUED)
3. AUDITORS’ REPORT ON PRECEDING ANNUAL FINANCIAL STATEMENTS
4. COMMENTS ABOUT SEASONAL OR CYCLICAL FACTORS
5. UNUSUAL ITEMS DUE TO THEIR NATURE, SIZE OR INCIDENCE
6. CHANGES IN ESTIMATE
7. DEBT AND EQUITY SECURITIES
8. DIVIDENDS PAID
There were no dividends paid during the 2nd Quarter ended 30 June 2017.
There were no issuances, cancellation, repurchases, resale or repayments of debt and equity securities in the 2nd Quarter
ended 30 June 2017.
The auditors’ report on the audited annual financial statements for the financial year ended 31 December 2016 was not
qualified.
The operations of the Group and the Bank were not materially affected by any seasonal or cyclical factors in the 2nd
Quarter ended 30 June 2017.
There were no unusual items affecting the assets, liabilities, equity, net income or cash flows of the Group and the Bank in
the 2nd Quarter ended 30 June 2017.
There were no changes in estimates of amounts reported in prior financial years that have a material effect in the 2nd
Quarter ended 30 June 2017.
AND POLICY DOCUMENT ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS
8
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
9. DEPOSITS AND PLACEMENTS WITH BANKS AND OTHER FINANCIAL INSTITUTIONS
Unaudited Audited
30 June 31 December
2017 2016
RM'000 RM'000
Foreign financial institutions 406,022 302,977
10. HEDGING FINANCIAL INSTRUMENTS
Group and Bank Notional
Amount Assets Liabilities
RM'000 RM'000 RM'000
Unaudited
30 June 2016
Foreign currency forward contracts 10,332 3 -
Audited
31 Decemebr 2016
Foreign currency forward contracts - - -
11. SECURITIES HELD-FOR-TRADING
Unaudited Audited
30 June 31 December
2017 2016
RM'000 RM'000
At fair value
Quoted securities:
Unit Trust 6,123 5,701
- -
12. SECURITIES HELD-TO-MATURITY
Unaudited Audited
30 June 31 December
2017 2016
RM'000 RM'000
At amortised cost
Unquoted :
Islamic government securities in Malaysia 1,417,999 1,418,182
Islamic private debt securities in Malaysia 46,778 50,798
1,464,777 1,468,980
- -
Group and Bank
Group and Bank
Fair Value
Group and Bank
9
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
13. FINANCING AND ADVANCES
(a) Financing and advances analysed by types and Shariah contracts are as follows:
Unaudited
30 June
2017
Group and Bank Bai’ Total net
Bithaman financing and
Ajil Qard advances
RM'000 RM'000 RM'000
At amortised cost
Term Financing:
Corporate financing 4,662,683 - 4,662,683
Personal financing 604,359 - 604,359
Home financing 1,104,215 - 1,104,215
SME financing 38,678 - 38,678
Vehicle financing 81,715 - 81,715
Shop-house financing 32,152 - 32,152
Charge cards - 1,432 1,432
Gross financing and advances 6,523,802 1,432 6,525,234
Less: Impairment allowance
- Collective assessment (73,184)
- Individual assessment (1,116)
Total net financing and advances 6,450,934
-
Audited
31 December
2016
Bai’ Total netBithaman financing and
Ajil Qard advancesRM'000 RM'000 RM'000
At amortised cost
Term Financing:
Corporate financing 4,167,933 - 4,167,933
Personal financing 621,298 - 621,298
Home financing 1,141,875 - 1,141,875
SME financing 42,914 - 42,914
Vehicle financing 79,320 - 79,320
Shop-house financing 36,456 - 36,456
Charge cards - 1,706 1,706
Gross financing and advances 6,089,796 1,706 6,091,502
Less: Impairment allowance
- Collective assessment (81,797)
- Individual assessment (7,289) Total net financing and advances 6,002,416
-
10
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
13. FINANCING AND ADVANCES (Continued)
(b) Financing and advances analysed by type of customers are as follows:
Unaudited Audited
30 June 31 December
2017 2016
RM'000 RM'000
Domestic non-bank financial institutions 173,193 256,876 Domestic business enterprise 3,017,495 2,432,984 Individuals 1,801,286 1,859,987 Foreign entities 1,533,260 1,541,655
6,525,234 6,091,502 - -
(c) Financing and advances analysed by profit rate sensitivity are as follows:
Unaudited Audited
30 June 31 December
2017 2016
RM'000 RM'000
Fixed rate:
Corporate financing 3,153,429 2,658,694
Personal financing 604,359 621,298
SME financing 38,694 42,914
Home financing 9,565 10,574
Vehicle financing 81,715 79,320
Charge card 1,432 1,706
Shop-house financing 817 866
Variable rate:
Home financing 1,094,650 1,131,301
Shop-house financing 31,335 35,590
Corporate financing 1,509,238 1,509,239
6,525,234 6,091,502
- - (d) Financing and advances analysed by maturity structure are as follows:
Unaudited Audited
30 June 31 December
2017 2016
RM'000 RM'000
Due within three months 1,429,736 977,595
More than three months to one year 486,291 567,742
More than one year to five years 2,199,587 2,302,831
More than five years 2,409,620 2,243,334
6,525,234 6,091,502 - -
(e) Financing and advances analysed by geographical distribution are as follows:
Unaudited Audited
30 June 31 December
2017 2016
RM'000 RM'000
Malaysia 4,967,384 4,533,386
Saudi Arabia 1,509,238 1,509,239
Other Countries 48,611 48,877
6,525,234 6,091,502
(0) -
Group and Bank
Group and Bank
Group and Bank
Group and Bank
11
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
13. FINANCING AND ADVANCES (Continued)
(f) Financing and advances analysed by economic purpose are as follows:
Unaudited Audited
30 June 31 December
2017 2016
RM'000 RM'000
Working capital 2,778,540 2,299,470
Purchase of securities 1,509,238 1,509,239
Purchase of property - residential property 1,180,824 1,220,023
Personal use 604,611 621,753
Purchase of commercial complex 146,563 160,286
Purchase of industrial buildings and factories 88,570 39,819
Purchase of vehicles 81,599 79,173
Others 71,087 86,567
Construction 39,725 48,427
Purchase of shop-house 23,045 25,039
Charge card 1,432 1,706
6,525,234 6,091,502
- -
(g) Financing and advances analysed by sectors are as follows:
Unaudited Audited
30 June 31 December
2017 2016
RM'000 RM'000
Household 1,824,220 1,881,700
Telecommunication 1,509,238 1,509,239
Real estate, renting and business activities 867,279 846,681
Wholesale & Retail trade 811,640 587,642
Manufacturing 721,035 606,898
Construction 558,273 353,687
Finance intermediation 173,200 264,395
Transportation 15,987 15,067
Agriculture, hunting and related service activities 23,376 1,931
Hotel & restaurant 20,062 20,063
Other business 924 2,826
- 1,309
Forestry, logging and related services activities - 64
6,525,234 6,091,502
-
(h) Movements in impaired financing and advances
Unaudited Audited
30 June 31 December
2017 2016
RM'000 RM'000
At 1 January 43,144 31,038 Impaired during the financial period / year 46,414 59,075 Reclassified as non impaired (19,859) (4,332) Recoveries (25,475) (30,811) Write-off (20,740) (11,826)
23,484 43,144
(0)
0.34% 0.59%
Group and Bank
Group and Bank
Included in amount classified as impaired during the financial period is profit accrued on impaired financing of RM947,809 (2016:
RM1,798,484).
Group and Bank
Fishing, Operation of Fish Hatcheries, Fish Farms
Ratio of net impaired financing and advances to gross
financing and advances less individual impairment
12
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
13. FINANCING AND ADVANCES (Continued)
(i) Movements in the allowances for impaired financing and advances
Unaudited Audited
30 June 31 December
2017 2016
RM'000 RM'000
Collective assessment allowance
At 1 January 81,797 87,732
Allowance made during the period / year (Note 18 (b)) 1,954 5,456
Amount written off (10,567) (11,391)
Closing balance 73,184 81,797
- -
1.12% 1.34%
Individual assessment allowance
At 1 January 7,289 7,461
Allowance made during the financial year (Note 18(a)) 1,100 379
Amount recovered during the financial year (Note 18(a)) (364) (540)
Amount written off (6,909) (11)
Closing balance 1,116 7,289
- -
(j) Impaired financing analysed by geographical distribution are as follows:
Unaudited Audited
30 June 31 December
2017 2016
RM'000 RM'000
Malaysia 23,484 43,144
23,484 43,144
- -
(k) Impaired financing analysed by economic purpose are as follows:
Unaudited Audited
30 June 31 December
2017 2016
RM'000 RM'000
Working capital 9,504 17,281
Personal use 7,206 10,986
Purchase of properties - residential 5,024 9,662
Purchase of shophouse 1,273 3,444
Purchase of transport vehicles 336 1,561
Charge card 141 210
23,484 14,877
- -
(l) Impaired financing analysed by sector are as follows:
Unaudited Audited
30 June 31 December
2017 2016
RM'000 RM'000
Household 13,963 25,663
Manufacturing 9,489 17,449
Other business 16 16
Financial Intermediation 16 16
23,484 43,144
-
Group and Bank
Group and Bank
Group and Bank
Group and Bank
As % of total gross financing and advances less
individual impairment allowances
13
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
14. DEPOSITS FROM CUSTOMERS
(a) By type of deposit
Unaudited Audited
30 June 31 December
2017 2016
RM'000 RM'000Savings deposits
Qard 211,875 237,798
Demand deposits
Qard 588,417 559,282
Mudarabah 119,876 123,344
Term deposit
Commodity Murabahah 5,191,770 5,176,519
General investment account
Mudarabah 10,751 14,682
Wakalah 32,382 33,531
Other deposits 169 13,234
6,155,240 6,158,390
- -
(b) By type of customer
Unaudited Audited
30 June 31 December
2017 2016
RM'000 RM'000
Business enterprises 1,655,507 1,750,109Government and statutory bodies 780,494 609,898Individuals 392,592 377,402Others 3,326,647 3,420,981
6,155,240 6,158,390- -
(c) By maturity structure
Unaudited Audited
30 June 31 December
2017 2016
RM'000 RM'000
Due within three months 4,001,665 3,957,463More than three months to one year 2,080,973 2,132,316More than one year to five years 72,602 68,611
6,155,240 6,158,390
- -
15. DEPOSITS AND PLACEMENTS OF BANKS AND OTHER FINANCIAL INSTITUTIONS
Unaudited Audited
30 June 31 December
2017 2016
RM'000 RM'000
Non-Mudharabah Funds
Licensed Islamic banks 665,974 662,425Licensed financial institutions 923,904 458,186
1,589,878 1,120,611- -
Group and Bank
Group and Bank
Group and Bank
Group and Bank
14
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
16. INCOME DERIVED FROM INVESTMENT OF DEPOSITORS' FUNDS AND OTHERS
30 June 30 June 30 June 30 June
2017 2016 2017 2016
RM'000 RM'000 RM'000 RM'000
Income derived from investment of:
(i) General investment deposits 215 208 418 625
(ii) Other deposits 105,831 85,736 206,504 170,766
106,046 85,944 206,922 171,391
0.00 - -
(i) Income derived from investment of general investment deposits
30 June 30 June 30 June 30 June
2017 2016 2017 2016
RM'000 RM'000 RM'000 RM'000
Finance income and hibah
Financing and advances 207 200 404 607
Money at call and deposit with
financial institutions 8 8 14 18 Total finance income and hibah 215 208 418 625
- - -
(ii) Income derived from investment of other deposits
30 June 30 June 30 June 30 June
2017 2016 2017 2016
RM'000 RM'000 RM'000 RM'000
Finance income and hibah
Financing and advances 88,679 69,289 172,598 138,139
Securities held-to-maturity 14,536 14,627 28,996 29,308
Money at call and deposit with
financial institutions 2,615 1,819 4,908 3,317
Accretion of discount 1 1 2 2
105,831 85,736 206,504 170,766
- - - -
Period Ended
Group
2nd Quarter Ended Period Ended
Group
Group
Group
Group
2nd Quarter Ended Period Ended
Group
2nd Quarter Ended
15
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
16. INCOME DERIVED FROM INVESTMENT OF DEPOSITORS' FUNDS AND OTHERS (Continued)
30 June 30 June 30 June 30 June
2017 2016 2017 2016
RM'000 RM'000 RM'000 RM'000
Income derived from investment of:
(i) General investment deposits 215 208 418 625
(ii) Other deposits 105,831 85,736 206,504 170,766
106,046 85,944 206,922 171,391
0.00 -
(i) Income derived from investment of general investment deposits
30 June 30 June 30 June 30 June
2017 2016 2017 2016
RM'000 RM'000 RM'000 RM'000
Finance income and hibah
Financing and advances 207 200 404 607
Money at call and deposit with
financial institutions 8 8 14 18 Total finance income and hibah 215 208 418 625
- - -
(ii) Income derived from investment of other deposits
30 June 30 June 30 June 30 June
2017 2016 2017 2016
RM'000 RM'000 RM'000 RM'000
Finance income and hibah
Financing and advances 88,679 69,289 172,598 138,139
Securities held-to-maturity 14,536 14,627 28,996 29,308
Money at call and deposit with
financial institutions 2,615 1,819 4,908 3,317
Accretion of discount 1 1 2 2
105,831 85,736 206,504 170,766
- - - -
Bank
Bank Bank
Bank
2nd Quarter Ended Period Ended
2nd Quarter Ended Period Ended
Bank Bank
2nd Quarter Ended Period Ended
16
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
- - 17. INCOME DERIVED FROM INVESTMENT OF SHAREHOLDERS' FUNDS
30 June 30 June 30 June 30 June
2017 2016 2017 2016
RM'000 RM'000 RM'000 RM'000
Finance income and hibah
Money at call and deposit
with financial institutions 505 532 948 812
Total finance income and hibah 505 532 948 812
Other operating income
- Net gain from foreign exchange translations
- Realised 1,487 10,826 2,574 4,944
- Unrealised 496 (8,549) 1,426 (179)
- Rental income 558 1,140 1,158 2,280
- Realised gain on gold 533 546 825 1,192
- Unrealised loss on revaluation
of securities held-for-trading 64 (152) 614 (152)
- Others 92 94 186 208
Other income
- Service charges 1,221 1,502 2,534 3,201
- Commission received 1,982 1,613 5,382 3,919
6,938 7,552 15,647 16,225- - -
30 June 30 June 30 June 30 June
2017 2016 2017 2016
RM'000 RM'000 RM'000 RM'000
Finance income and hibah
Money at call and deposit
with financial institutions 505 532 948 812
Total finance income and hibah 505 532 948 812
Other operating income
- Net gain from foreign exchange translations
- Realised 1,487 10,826 2,574 4,944
- Unrealised 496 (8,549) 1,426 (179)
- Rental income 558 1,140 1,158 2,280
- Realised gain on gold 533 546 825 1,192
- Unrealised loss on revaluation
of securities held-for-trading 64 (152) 614 (152)
- Others 92 67 186 181
Other income
- Service charges 1,144 1,415 2,413 3,070
- Commission received 1,981 1,613 5,382 3,919
6,860 7,438 15,526 16,067- - -
Group
2nd Quarter Ended
Bank
Period Ended
Group
Bank
2nd Quarter Ended Period Ended
17
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
18. ALLOWANCE FOR IMPAIRMENT ON FINANCING
30 June 30 June 30 June 30 June
2017 2016 2017 2016
RM'000 RM'000 RM'000 RM'000
Impaired financing and advances:
(a) Individual assessment allowance
- provided during the financial period 1,100 (368) 1,100 826
- written back - (224) (364) (526)
(b) Collective assessment allowance
- (write-back) / provided during financial period (944) 2,962 1,954 3,758
156 2,370 2,690 4,058
(c) Bad debts on financing
- recovered (1,901) (1,962) (4,128) (3,876)
- written off 410 (2) 869 483
(1,335) 406 (569) 665
- -
19. INCOME ATTRIBUTABLE TO DEPOSITORS
30 June 30 June 30 June 30 June
2017 2016 2017 2016
RM'000 RM'000 RM'000 RM'000
Deposits from customers
- Non-Mudharabah 41,652 30,155 79,728 61,229
- Mudharabah 426 481 864 1,037
- Wakalah 250 694 502 2,980
42,328 31,330 81,094 65,246
Deposits and placements of banks
and other financial institutions
- Non-Mudharabah 22,940 20,203 45,754 37,926
65,268 51,533 126,848 103,172
- - -
20. SUBSEQUENT EVENTS
21. CHANGES IN THE COMPOSITION OF THE GROUP
There were no changes in the composition of the Group since the last audited financial statements as at 31 December 2016.
Group and Bank
2nd Quarter Ended
Group and Bank
2nd Quarter Ended Period Ended
Group and Bank
Group and Bank
Period Ended
There were no material events subsequent to the end of the reporting date that require disclosure or adjustments to the unaudited interim
financial statements.
18
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
22. COMMITMENTS AND CONTINGENCIES
Credit Risk Credit Risk
Principal equivalent weighted Principal equivalent weighted
amount amount amount amount amount amount
RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Group and Bank
Transaction-related contingent items 282,041 141,021 111,431 321,721 160,861 124,576
Trade-related contingencies 14,596 2,919 2,919 16,291 3,258 3,032
Irrevocable commitments to extend credit: - - -
- Maturity not exceeding one year 3,126,191 625,238 625,238 2,541,065 508,213 508,213
- Maturity exceeding one year 220,983 107,861 105,887 299,675 147,164 144,852
Foreign exchange-related contracts - - - 17,940 - -
3,643,811 877,039 845,475 3,196,692 819,496 780,673
-
23.
Unaudited Audited
30 June 2017 31 Dec 2016
Outstanding credit exposures with connected
parties (RM'000) 43,293 27,557
Percentage of outstanding credit exposures to connected
parties as proportion of capital base 3.8% 2.7%
Percentage of outstanding credit exposures to connected
parties as proportion of total credit exposures 0.5% 0.3%
Percentage of outstanding credit exposures with connected
parties which is non-performing or in default 0.0% 0.0%
The disclosure on Credit Transactions and Exposures with Connected Parties above is presented in accordance with paragraph 9.1 of Bank
Negara Malaysia’s revised policy document on Credit Transactions and Exposures with Connected Parties.
The commitments and contingencies and the related risk-weighted exposures of the Group as are as follows:
The Credit Equivalent and Risk Weighted for the Bank are computed in accordance with BNM's Capital Adequacy Framework for Islamic
Banks (CAFIB): Standardised Approach for Credit and Market Risk, and Basic Indicator Approach for Operational Risk (Basel II) respectively.
In the normal course of business, the Group made various commitments and incurred certain contingent liabilities with legal recourse to their
customers. No material losses are anticipated as a result of these transactions.
Unaudited Audited30 June 2017 31 December 2016
CREDIT EXPOSURE ARISING FROM CREDIT TRANSACTIONS WITH CONNECTED PARTIES
Group and Bank
19
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
24. FINANCIAL RISK MANAGEMENT
(a) Overview
(b) Financial instrument by category
The table below provide an analysis of financial instruments categorised as follows:
i. Financing and receivables (FR);
ii. Securities held-to-maturity (HTM);
iii. Securities held-for-trading (HFT);
iv. Financial assets / liabilities at fair value through profit or loss (FVTPL)
v. Other financial liabilities (Other FL).
Carrying Other
amount FR HFT HTM FVTPL FL
RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Group
Unaudited
30 June 2017
Financial Assets
Cash and short term funds 121,454 121,454 - - - -
Deposits and placements with banks and
other financial institutions 406,022 406,022 - - - -
Hedging financial instruments 3 - - - 3 -
Financing and advances 6,450,934 6,450,934 - - - -
Securities held-to-maturity 1,464,777 - - 1,464,777 - -
Securities held-for-trading 6,123 - 6,123 - - -
Statutory deposits with BNM 261,629 261,629 - - - -
Other assets 28,989 28,989 - - - -
8,739,931 7,269,028 6,123 1,464,777 3 -
Financial Liabilities
Deposits from customers 6,155,240 - - - - 6,155,240
Deposits and placements of banks and
other financial institutions 1,589,878 - - - - 1,589,878
Hedging financial instruments - - - - - -
Bills and acceptances payable 4,819 - - - - 4,819
Other liabilities 59,757 - - - - 59,757
Subordinated Sukuk 400,720 - - - - 400,720
8,210,414 - - - - 8,210,414
Carrying Other
amount FR HFT HTM FVTPL FL
RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Group
Audited
31 December 2016
Financial Assets
Cash and short term funds 120,213 120,213 - - - -
Deposits and placements with banks and - - -
other financial institutions 302,977 302,977 - - - -
Financing and advances 6,002,416 6,002,416 - - - -
Securities held-to-maturity 1,468,980 - - 1,468,980 - -
Securities held-for-trading 5,701 - 5,701 - - -
Statutory deposits with BNM 263,529 263,529 - - - -
Other assets 27,902 27,902 - - - -
8,191,718 6,717,037 5,701 1,468,980 - -
Financial Liabilities
Deposits from customers 6,158,390 - - - - 6,158,390
Deposits and placements of banks and - -
other financial institutions 1,120,611 - - - - 1,120,611
Bills and acceptances payable 1,067 - - - - 1,067
Other liabilities 82,869 - - - - 82,871
Subordinated Sukuk 299,003 - - - - 299,003
7,661,940 - - - - 7,661,942
The Group’s risk management practice seeks to ensure that adequate financial resources are available for the development of the Group’s
businesses whilst managing its key areas of credit, market, liquidity and operational risks.
20
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
24. FINANCIAL RISK MANAGEMENT (continued)
Carrying Other
amount FR HFT HTM FVTPL FL
RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Bank
Unaudited
30 June 2017
Financial Assets
Cash and short term funds 121,454 121,454 - - - -
Deposits and placements with banks and
other financial institutions 406,022 406,022 - - - -
Hedging financial instruments 3 - - - 3 -
Financing and advances 6,450,934 6,450,934 - - - -
Securities held-to-maturity 1,464,777 - - 1,464,777 - -
Securities held-for-trading 6,123 - 6,123 - - -
Statutory deposits with BNM 261,629 261,629 - - - -
Other assets 28,949 28,949 - - - -
8,739,891 7,268,988 6,123 1,464,777 3 -
Financial Liabilities
Deposits from customers 6,155,240 - - - - 6,155,240
Deposits and placements of banks and
other financial institutions 1,589,878 - - - - 1,589,878
Bills and acceptances payable 4,819 - - - - 4,819
Other liabilities 59,753 - - - - 59,753
Subordinated Sukuk 400,720 - - - - 400,720
8,210,410 - - - - 8,210,410
Carrying Other
amount FR HFT HTM FVTPL FL
RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Bank
Audited
31 December 2016
Financial Assets
Cash and short term funds 120,213 120,213 - - - -
Deposits and placements with banks and
other financial institutions 302,977 302,977 - - - -
Financing and advances 6,002,416 6,002,416 - - - -
Securities held-to-maturity 1,468,980 - - 1,468,980 - -
Securities held-for-trading 5,701 - 5,701 - - -
Statutory deposits with BNM 263,529 263,529 - - - -
Other assets 27,849 27,849 - - - -
8,191,665 6,716,984 5,701 1,468,980 - -
Financial Liabilities
Deposits from customers 6,158,390 - - - - 6,158,390
Deposits and placements of banks and
other financial institutions 1,120,611 - - - - 1,120,611
Bills and acceptances payable 1,067 - - - - 1,067
Other liabilities 82,869 - - - - 82,871
Subordinated Sukuk 299,003 - - - - 299,003
7,661,940 - - - - 7,661,942
21
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
24. FINANCIAL RISK MANAGEMENT (Continued)
(c) Credit Risk Management
(i) Credit Risk management overview
(ii) Maximum exposure to credit risk
Group and Bank Unaudited Audited
30 June 2017 31 Dec 2016
RM'000 RM'000
Credit risk exposure relating to on-balance sheet assets:
Cash and short term funds 121,454 120,213
Deposits and placements with banks and
other financial institutions 406,022 302,977
Hedging financial instruments 3 -
Securities held-for-trading 6,123 5,701
Securities held-to-maturity 1,464,777 1,468,980
Financing and advances 6,450,934 6,002,416
Statutory deposit with Bank Negara Malaysia 261,629 263,529
Other assets 9,016 6,829
8,719,958 8,170,645
Credit risk exposure of off-balance sheet items:
Commitment and contingencies 3,643,811 3,196,692
Total maximum credit risk exposure 12,363,769 11,367,337
(iii) Credit Risk Concentration
The financial effect of collateral (quantification of the extent to which collateral and other credit enhancements mitigate credit risk)
held for financing and advances as at 30 June 2017 for the Bank is 35.2% (31 Dec 2016: 37.0%). The financial effect of collateral
held for the other financial assets is not significant.
A concentration of credit risk exists when a number of counterparties are engaged in similar activities and have similar economic
characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic and
other conditions. The Group analysed the credit risk concentration by industry and geographic segments in which the customer is
engaged.
Credit risk is the potential loss of revenue as a result of defaults by borrowers or counterparties through the Group’s and the Bank’s
lending, hedging, trading and investing activities. The primary exposure to credit risk arises through its financing and advances as
well as financial transactions with counterparties including interbank money market activities and debt securities. The amount of
credit exposure is represented by the carrying amounts of the assets in the statement of financial position.
The management of credit risk is governed by credit policies and POLICY DOCUMENT documenting the lending standards,
discretionary power for financing approval, credit risk rating, collateral and valuation, review, and restructuring of problematic and
delinquent financing. The management of counterparties are guided by counterparty limit, counterparty ratings, tenure and types of
permissible transactions and these are subject to regular review.
The maximum exposure to credit risk at the statement of financial position date is the amount on the statement of financial position
as well as off balance sheet financial instruments, without taking into account of any collateral held or credit enhancements. For
contingent liabilities, the maximum exposure to credit risk is the maximum that the Bank would have to pay if the obligations of the
instruments issued are called upon. For credit commitments, the maximum exposure to credit risk is the full amount of the undrawn
credit facilities granted to customers.
22
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
24. FINANCIAL RISK MANAGEMENT (Continued)
(c) Credit Risk Management (Continued)
(iii) Credit Risk Concentration (Continued)
(a) Credit Risk - Credit Risk Concentration - By Industry Analysis
Agricultural,
manufacturing,
Transport, utility,
tele- research &
communication, development,
education wholesale &
Government and other retail trade, Construction Motor Other
and Central Financial business hotel and and Real Residential vehicle consumer
Banks services services restaurant estate mortgages financing financing Total
Group and Bank RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Unaudited
30 June 2017
Short term funds 8,196 113,258 - - - - - - 121,454
Deposits and placements with
banks and other financial
institutions - 406,022 - - - - - - 406,022
Hedging financial instruments - 3 - - - - - - 3
Securities held-for-trading - 6,123 - - - - - - 6,123
Securities held-to-maturity 1,015,011 402,988 - 46,778 - - - - 1,464,777
Net financing and advances - 98,206 1,526,149 1,576,113 1,425,552 1,104,215 81,824 638,874 6,450,933
Statutory deposits with BNM 261,629 - - - - - - - 261,629
Other assets - - 9,016 - - - - - 9,016
Total 1,284,836 1,026,600 1,535,165 1,622,891 1,425,552 1,104,215 81,824 638,874 8,719,957
23
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
24. FINANCIAL RISK MANAGEMENT (Continued)
(c) Credit Risk Management (continued)
(iii) Credit Risk Concentration (Continued)
(a) Credit Risk - Credit Risk Concentration - By Industry Analysis
Agricultural,
manufacturing,
Transport, utility,
tele- research &
communication, development,
education wholesale &
Government and other retail trade, Construction Motor Other
and Central Financial business hotel and and Real Residential vehicle consumer
Banks services services restaurant estate mortgages financing financing Total
Group and Bank RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Audited
31 December 2016
Short term funds 8,066 112,147 - - - - - - 120,213
Deposits and placements with
banks and other financial
institutions - 302,977 - - - - - - 302,977
Hedging financial instruments - - - - - - - - -
Securities held-for-trading - 5,701 - - - - - - 5,701
Securities available-for-sale - - - - - - - - -
Securities held-to-maturity 1,015,078 403,103 - 50,799 - - - - 1,468,980
Net financing and advances - 264,395 1,527,132 1,217,907 1,200,368 1,141,875 79,173 571,566 6,002,416
Statutory deposits with BNM 263,529 - - - - - - - 263,529
Other assets - - 6,829 - - - - - 6,829
Total 1,286,673 1,088,323 1,533,961 1,268,706 1,200,368 1,141,875 79,173 571,566 8,170,645
24
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
24. FINANCIAL RISK MANAGEMENT (Continued)
(c) Credit Risk Management (Continued)
(iii) Credit Risk Concentration (Continued)
(b) Credit Risk - Credit Risk Concentration - By Geographical Analysis
Saudi Other
Malaysia Arabia countries Total
Group and Bank RM'000 RM'000 RM'000 RM'000
Unaudited
30 June 2017
Cash and short term funds 85,564 12,082 23,808 121,454
Deposits and placements with banks and other
financial institutions - - 406,022 406,022
Hedging financial instruments - - 3 3
Securities held-for-trading 6,123 - - 6,123
Securities held-to-maturity 1,464,777 - - 1,464,777
Net financing and advances 4,893,083 1,509,238 48,611 6,450,933
Statutory deposits with BNM 261,629 - - 261,629
Other assets 9,016 - - 9,016
Total 6,720,192 1,521,321 478,444 8,719,957
Saudi Other
Malaysia Arabia countries Total
Group and Bank RM'000 RM'000 RM'000 RM'000
Audited
31 December 2016
Cash and short term funds 41,883 26,017 52,313 120,213
Deposits and placements with banks and other
financial institutions - - 302,977 302,977
Hedging financial instruments - - - -
Securities held-for-trading 5,701 - - 5,701
Securities held-to-maturity 1,468,980 - - 1,468,980
Net financing and advances 4,444,298 1,509,239 48,879 6,002,416
Statutory deposits with BNM 263,529 - - 263,529
Other assets 6,829 - - 6,829
Total 6,231,220 1,535,256 404,169 8,170,645
25
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
24. FINANCIAL RISK MANAGEMENT (Continued)
(c) Credit Risk Management (Continued)
(iv) Collateral
• for personal housing financing : mortgages over residential properties
• for commercial property financing : charges over the properties being financed
• for vehicle financing : charges over the vehicles financed
• for other financing : charges over business assets such as
premises, inventories, trade receivables
or deposits
There are no assets held by the Bank as at 30 June 2016 as a result of taking possession of collaterals held as securities.
(v) Credit quality of financial assets
- neither past due nor impaired
- past due but not impaired
- impaired
Internal ratings Description
- Investment grade
- Non-Investment grade
- AAA to AA3
- A1 to A3
- Baa1 to Baa3
- P1 to P3
- Non rated
The main types of collateral obtained by the Group and the Bank to mitigate credit risk are as follows:
For the purposes of disclosure relating to MFRS 7, all financial assets are categorized into the following:
Repossessed properties are made available for sale in an orderly fashion, with the proceeds used to reduced or repay the
outstanding indebtedness. The Bank generally does not occupy the premises repossessed for its business use.
The Bank assesses credit quality of financing and advances using internal rating techniques tailored to the various
categories of products and counterparties. These techniques have been developed internally and combine statistical
analysis with credit officers' judgment.
The credit quality of financial assets other than financing and advances are determined based on the ratings of
counterparties as defined by Moody’s or equivalent ratings of other international rating agencies as defined below:
Strong(est) credit quality which associated with general
standards of investment grade as per defined by international
rating agency such as Standard and Poor's (S&P), Moody's,
Fitch, and Japan Credit Rating Agency (JCR).
Weaker credit quality which associated with general standards
of non-investment grade as per defined by international rating
agency such as Standard and Poor's (S&P), Moody's, Fitch,
and Japan Credit Rating Agency (JCR).
26
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
24. FINANCIAL RISK MANAGEMENT (Continued)
(c) Credit Risk Management (continued)
(vi) Credit quality of financial assets - net financing and advances
Unaudited Audited
30 June 2017 31 Dec 2016
RM'000 RM'000
Neither past due nor impaired 6,268,199 5,855,581
Past due but not impaired 233,552 192,777
Impaired 23,484 43,144
Gross financing and advances 6,525,234 6,091,502
Less:
Collective impairment allowance (73,184) (81,797)
Individual impairment allowance (1,116) (7,289)
Net financing and advances 6,450,934 6,002,416
Unaudited Audited
30 June 2017 31 Dec 2016
RM'000 RM'000
Current 6,268,199 5,855,581
Past due 1-30 days 163,757 129,554
Past due 31-90 days 69,795 63,223
Past due more than 90 days 23,484 43,144
6,525,234 6,091,502
Collective impairment (73,184) (81,797)
Individual impairments (1,116) (7,289)
Net financing and advances 6,450,934 6,002,416
Group and Bank
The ageing of financing and advances as at the end of the financial period / year are as follows:
Group and Bank
27
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
24. FINANCIAL RISK MANAGEMENT (Continued)
(c) Credit Risk Management (Continued)
(vii) Credit quality of financial assets - securities portfolio and other financial assets
Deposits and
placement
of banks Financial
and other Hedging assets/ Statutory
Short term financial financial investments deposit Other
funds institutions instruments portfolios with BNM assets
RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Unaudited
30 June 2017
Neither past due nor impaired 121,454 406,022 3 1,470,900 261,629 9,016
121,454 406,022 3 1,470,900 261,629 9,016
Audited
31 December 2016
Neither past due nor impaired 120,213 302,977 - 1,474,681 263,529 6,829
120,213 302,977 - 1,474,681 263,529 6,829
(a) Analysed by rating agency designation are as follows:
Deposits and
placement
of banks Financial
and other Hedging assets/ Statutory
Short term financial financial investments deposit Other
funds institutions instruments portfolios with BNM assets
RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Unaudited
30 June 2017
AAA to A- 85,042 - - 1,417,999 - -
BBB+ to B- 243 - - - - -
Unrated 36,168 406,022 3 52,901 261,629 9,016
121,454 406,022 3 1,470,900 261,629 9,016
Audited
31 December 2016
AAA to A- 76,314 - - 1,418,183 - -
BBB+ to B- 9,499 - - - - -
Unrated 34,400 302,977 - 56,498 263,529 6,829
120,213 302,977 - 1,474,681 263,529 6,829
28
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
24. FINANCIAL RISK MANAGEMENT (Continued)
(c) Credit Risk Management (Continued)
(viii) Credit quality of impaired financial assets
(a) Impaired financial assets analysed by geographic purpose are as follows:
Financial
assets/
Financing & investments
advances portfolios Total
RM'000 RM'000 RM'000
Unaudited
30 June 2017
Malaysia 23,484 - 23,484
23,484 - 23,484
Audited
31 December 2016
Malaysia 43,144 - 31,038
43,144 - 31,038
(b) Impaired financial assets analysed by industry sector are as follows:
Financial
assets/
Financing & investments
advances portfolios Total
RM'000 RM'000 RM'000
Unaudited
30 June 2017
Household 13,963 - 13,963
Manufacturing 9,489 - 9,489
Wholesale & retail trade 16 - 16
Other business 16 - 16 23,484 - 23,484
Financial
assets/
Financing & investments
advances portfolios Total
RM'000 RM'000 RM'000
Audited
31 December 2016
Household 25,663 - 25,663
Manufacturing 17,449 - 17,449
Finance intermediation 16 - 16
Other business 16 - 16
43,144 - 43,144
29
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
24. FINANCIAL RISK MANAGEMENT (Continued)
(c) Credit Risk Management (Continued)
(ix) Reconciliation of allowance
Unaudited Audited
30 June 2017 31 Dec 2016
RM'000 RM'000
At 1 January 89,086 95,193
Impairment loss recognised during the period 3,054 5,835
Impairment loss reversed (364) (540)
Impairment written-off (17,476) (11,402)
Closing balance 74,300 89,086
(i) Profit rate sensitivity analysis
Group and Bank
Impact on Impact on
profit after Impact on profit after Impact on
tax equity tax equity
RM'000 RM'000 RM'000 RM'000
+ 100 basis
points (2,828) (57,294) (3,697) (72,411)
- 100 basis 2,828 57,294 3,697 72,411
points
(ii) Foreign currency sensitivity analysis
Impact on Impact on
profit after Impact on profit after Impact on
tax equity tax equity
RM'000 RM'000 RM'000 RM'000
Group and Bank
+5% 451 451 318 318
- 5% (451) (451) (318) (318)
30 June 2017 31 December 2016
The foreign currency sensitivity represents the effect of the appreciation or depreciation of the foreign currency rates on the
consolidated currency position, while other variables remain constant.
Unaudited Audited
30 June 2017 31 December 2016
Group and Bank
The movements in the allowance for impairment losses of financing and advances during the financial period / year are as
follows:
Unaudited Audited
30
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
24. FINANCIAL RISK MANAGEMENT
(d) Market Risk Management (continued)
(i) Profit Rate Risk
Group Average
Up to 1 > 1 -3 > 3 - 12 1 - 5 Non-profit Trading effective
Unaudited month months months years > 5 years sensitive book Total profit rate
30 June 2017 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 %
Assets
Cash and short term funds 41,121 - - - - 80,333 - 121,454 0.98
Hedging financial instruments - - - - - 3 - 3 -
- 160,288 240,432 - - 5,302 - 406,022 2.70
Securities held-for-trading - - - - - - 6,123 6,123 -
Securities held-to-maturity - - 12,000 832,570 600,000 20,207 - 1,464,777 3.99
Financing and advances
- performing 1,603,982 930,049 1,991,566 668,804 1,274,406 32,942 - 6,501,749
- Non performing(1)
- - - - - (50,816) - (50,816)
Other assets(2)
- - - - - 500,761 - 500,761Total assets 1,645,103 1,090,337 2,243,998 1,501,374 1,874,406 588,732 6,123 8,950,073
Market risk sensitivity assessment is based on the changes in key variables; such as profit rates while all other variables remain unchanged. The sensitivity factors used are
assumptions based on parallel shifts in the key variables and the impact on the re-priced mismatches of assets and liabilities position of the bank.
The Group is exposed to various risks associated with the effects of fluctuations in the prevailing levels of yield/profit rate on its financial position. The rate of return risk is the potential
impact of market factors affecting rates on returns in comparison with the expected rates of return for investment account holders. Yield/profit rate is monitored and managed by the
ALCO to protect the income of its operations. The assets and liabilities at carrying amount are categorised by the earlier of the next contractual repricing dates and maturity dates as
follows:
Non-trading book
Deposit and placement with other
FI / Institutions
5.35
31
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
24. FINANCIAL RISK MANAGEMENT (Continued)
(d) Market Risk Management (continued)
Group (Continued) Average
Up to 1 > 1 -3 > 3 - 12 1 - 5 Non-profit Trading effective
Unaudited (Continued) month months months years > 5 years sensitive book Total profit rate
30 June 2017 (Continued) RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 %
Liabilities
Deposits from customers 1,416,084 1,790,818 2,067,394 72,602 - 808,342 - 6,155,240 2.49
Deposits and placements of banks
and other financial institutions 588,183 625,634 365,000 - - 11,060 - 1,589,877 3.58
Hedging financial instruments - - - - - - - 0 -
Bills and acceptance payable - - - - - 4,819 - 4,819 -
Other liabilities - - - - - 59,758 - 59,758 -
Subrodinated Sukuk - 160,288 240,432 - - - - 400,720
Total liabilities 2,004,267 2,576,740 2,672,826 72,602 - 883,979 - 8,210,414
Shareholders' fund - - - - - 739,659 - 739,659
Total liabilities and
shareholders' fund 2,004,268 2,576,739 2,672,826 72,602 - 1,623,637 - 8,950,073
-
On-balance sheet profit
sensitivity gap (359,165) (1,486,402) (428,828) 1,428,772 1,874,406 (1,034,905) 6,123
Off-balance sheet profit
sensitivity gap - - - - - 3,643,811 -
Total profit
sensitivity gap (359,165) (1,486,402) (428,828) 1,428,772 1,874,406 2,608,906 6,123
Note:(1)
(2)Other assets include property and equipment, deferred tax assets and statutory deposits with Bank Negara Malaysia.
This is arrived at after deducting the collective and individual impairment allowance from the outstanding gross non performing financing.
32
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
24. FINANCIAL RISK MANAGEMENT (Continued)
(d) Market Risk Management (continued)
Group (Continued) Average
Up to 1 > 1 -3 > 3 - 12 1 - 5 Non-profit Trading effective
Audited month months months years > 5 years sensitive book Total profit rate
31 December 2016 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 %
Assets
Cash and short term funds 25,716 - - - - 94,497 - 120,213 1.02
Hedging financial instruments - - - - - - - - -
- 59,801 239,202 - - 3,974 - 302,977 3.11
Securities held-for-trading - - - - - - 5,701 5,701 -
Securities held-to-maturity - - 4,000 844,570 600,000 20,410 - 1,468,980 3.99
Financing and advances -
- performing 1,571,052 540,884 2,072,909 768,612 1,066,460 28,441 - 6,048,358
- Non performing(1)
- - - - - (45,942) - (45,942)
Other assets(2)
- - - - - 500,897 - 500,897 Total assets 1,596,768 600,685 2,316,111 1,613,182 1,666,460 602,277 5,701 8,401,184
Deposit and placement with other
FI / Institutions
Non-trading book
5.53
33
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
24. FINANCIAL RISK MANAGEMENT (Continued)
(d) Market Risk Management (continued)
Group (Continued) Average
Up to 1 > 1 -3 > 3 - 12 1 - 5 Non-profit Trading effective
Audited (Continued) month months months years > 5 years sensitive book Total profit rate
31 December 2016 (Continued) RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 %
Liabilities
Deposits from customers 1,263,051 1,915,648 2,118,953 68,611 - 792,127 - 6,158,390 3.28
Deposits and placements of banks
and other financial institutions 430,000 550,000 135,000 - - 5,611 - 1,120,611 3.50
Hedging financial instruments - - - - - - - -
Bills and acceptance payable - - - - - 1,067 - 1,067
Other liabilities - - - - - 82,869 - 82,869
Subrodinated Sukuk - 59,801 239,202 - - - - 299,003
Total liabilities 1,693,051 2,525,449 2,493,155 68,611 - 881,674 - 7,661,940
Shareholders' fund - - - - - 739,244 - 739,244
Total liabilities and
shareholders' fund 1,693,051 2,525,449 2,493,155 68,611 - 1,620,918 - 8,401,184
On-balance sheet profit
sensitivity gap (96,283) (1,924,764) (177,044) 1,544,571 1,666,460 (1,018,641) 5,701
Off-balance sheet profit
sensitivity gap - - - - - 3,196,692 -
Total profit
sensitivity gap (96,283) (1,924,764) (177,044) 1,544,571 1,666,460 2,178,051 5,701
Note:(1)
(2)Other assets include property and equipment, deferred tax assets and statutory deposits with Bank Negara Malaysia.
This is arrived at after deducting the collective and individual impairment allowance from the outstanding gross non performing financing.
34
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
24. FINANCIAL RISK MANAGEMENT (Continued)
(d) Market Risk Management (continued)
Bank Average
Up to 1 > 1 -3 > 3 - 12 1 - 5 Non-profit Trading effective
Unaudited month months months years > 5 years sensitive book Total profit rate
30 June 2017 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 %
Assets
Cash and short term funds 41,121 - - - - 80,332 - 121,454 0.98
Hedging financial instruments - - - - - 3 - 3
- 160,288 240,432 - - 5,302 - 406,022 2.70
Securities held-for-trading - - - - - - 6,123 6,123
Securities held-to-maturity - - 12,000 832,570 600,000 20,207 - 1,464,777 3.99
Financing and advances
- performing 1,603,982 930,049 1,991,566 668,804 1,274,406 32,942 - 6,501,749
- Non performing(1)
- - - - - (50,816) - (50,816)
Other assets(2)
- - - - - 500,721 - 500,721 Total assets 1,645,103 1,090,337 2,243,998 1,501,374 1,874,406 588,691 6,123 8,950,033
-
Non-trading book
Deposit and placement with other
FI / Institutions
5.35
35
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
24. FINANCIAL RISK MANAGEMENT (Continued)
(d) Market Risk Management (continued)
Bank (Continued) Average
Up to 1 > 1 -3 > 3 - 12 1 - 5 Non-profit Trading effective
Unaudited (Continued) month months months years > 5 years sensitive book Total profit rate
30 June 2017 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 %
Liabilities
Deposits from customers 1,416,084 1,790,818 2,067,394 72,602 - 808,342 - 6,155,240 2.49
Deposits and placements of banks
and other financial institutions 588,184 625,634 365,000 - - 11,060 - 1,589,878 3.58
Hedging financial instruments - - - - - - - - -
Bills and acceptance payable - - - - - 4,819 - 4,819 -
Other liabilities - - - - - 59,754 - 59,754 -
Subrodinated Sukuk - 160,288 240,432 - - - - 400,720
Total liabilities 2,004,268 2,576,740 2,672,826 72,602 - 883,975 - 8,210,411
Shareholders' fund - - - - - 739,622 - 739,622
Total liabilities and
shareholders' fund 2,004,268 2,576,740 2,672,826 72,602 - 1,623,597 - 8,950,033
On-balance sheet profit
sensitivity gap (359,165) (1,486,403) (428,828) 1,428,772 1,874,406 (1,034,906) 6,123
Off-balance sheet profit
sensitivity gap - - - - - 3,643,811 -
Total profit
sensitivity gap (359,165) (1,486,403) (428,828) 1,428,772 1,874,406 2,608,905 6,123
Note:(1)
(2)Other assets include property and equipment, deferred tax assets and statutory deposits with Bank Negara Malaysia.
This is arrived at after deducting the collective and individual impairment allowance from the outstanding gross non performing financing.
36
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
24. FINANCIAL RISK MANAGEMENT (Continued)
(d) Market Risk Management (continued)
Bank Average
Up to 1 > 1 -3 > 3 - 12 1 - 5 Non-profit Trading effective
Audited month months months years > 5 years sensitive book Total profit rate
31 December 2016 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 %
Assets
Cash and short term funds 25,716 - - - - 94,497 - 120,213 1.02
Hedging financial instruments - - - - - - - - -
- 59,801 239,202 - - 3,974 - 302,977 3.11
Securities held-for-trading - - - - - - 5,701 5,701 -
Securities held-to-maturity - - 4,000 844,570 600,000 20,410 - 1,468,980 3.99
Financing and advances - - - - - - - -
- performing 1,571,052 540,884 2,072,909 768,612 1,066,460 28,441 - 6,048,358
- Non performing(1)
- - - - - (45,942) - (45,942)
Other assets(2)
- - - - - 500,844 - 500,844 Total assets 1,596,768 600,685 2,316,111 1,613,182 1,666,460 602,224 5,701 8,401,131
Non-trading book
Deposit and placement with other
FI / Institutions
5.53
37
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
24. FINANCIAL RISK MANAGEMENT (Continued)
(d) Market Risk Management (continued)
Bank (Continued) Average
Up to 1 > 1 -3 > 3 - 12 1 - 5 Non-profit Trading effective
Audited (Continued) month months months years > 5 years sensitive book Total profit rate
31 December 2016 (Continued) RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 %
Liabilities
Deposits from customers 1,263,051 1,915,648 2,118,953 68,611 - 792,127 - 6,158,390 3.28
Deposits and placements of banks
and other financial institutions 430,000 550,000 135,000 - - 5,611 - 1,120,611 3.50
Hedging financial instruments - - - - - - - -
Bills and acceptance payable - - - - - 1,067 - 1,067
Other liabilities - - - - - 82,869 - 82,869
Subrodinated Sukuk - 59,801 239,202 - - - - 299,003
Total liabilities 1,693,051 2,525,449 2,493,155 68,611 - 881,674 - 7,661,940
Shareholders' fund - - - - - 739,191 - 739,191
Total liabilities and
shareholders' fund 1,693,051 2,525,449 2,493,155 68,611 - 1,620,865 - 8,401,131
On-balance sheet profit
sensitivity gap (96,283) (1,924,764) (177,044) 1,544,571 1,666,460 (1,018,641) 5,701
Off-balance sheet profit -
sensitivity gap - - - - - 3,196,692 -
Total profit
sensitivity gap (96,283) (1,924,764) (177,044) 1,544,571 1,666,460 2,178,051 5,701
Note:(1)
(2)Other assets include property and equipment, deferred tax assets and statutory deposits with Bank Negara Malaysia.
This is arrived at after deducting the collective and individual impairment allowance from the outstanding gross non performing financing.
38
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
24. FINANCIAL RISK MANAGEMENT (Continued)
(e) Operational Risk Management
(f) Liquidity Risk
The table below analyses assets and liabilities based on the remaining behavioural maturity on the requirement of BNM guidelines:
Group Up to 7 > 7 days - > 1 - 3 > 3 - 6 > 6 - 12
Unaudited days 1 month months months months > 1 year Total
30 June 2017 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Assets
Cash and short term funds 80,318 41,136 - - - - 121,454
Hedging financial instruments - 3 - - - - 3
Deposits and placements
of banks and other financial - - 164,252 - 57,754 184,017 406,022
Securities held-for-trading 6,123 - - - - - 6,123
Securities available-for-sale - - - - - -
Securities held-to-maturity - - 12,000 - 832,570 620,207 1,464,777
Financing and advances 118,438 373,939 945,766 475,686 2,609,994 1,927,111 6,450,934
Statutory deposits with BNM 261,629 - - - - - 261,629
Other assets 14,605 231 2,239 4,607 1,304 216,145 239,131 Total assets 481,113 415,308 1,124,257 480,293 3,501,621 2,947,481 8,950,073
Liabilities
Deposits from customers 1,409,431 885,633 1,700,138 1,302,072 221,585 636,381 6,155,240
Deposits and placements of banks
and other financial institutions 240,046 353,110 628,160 368,565 - - 1,589,880
Hedging financial instruments - - - - - - -
Bills and acceptance payable 4,819 - - - - - 4,819
Other liabilities 57,818 - 1,937 - - - 59,755
Subordinated Sukuk - - - - - 400,720 400,720 Total liabilities 1,712,114 1,238,743 2,330,234 1,670,637 221,585 1,037,101 8,210,415
Shareholders' fund - - - - - 739,658 739,658
Total liabilities and
shareholders' fund 1,712,114 1,238,743 2,330,234 1,670,637 221,585 1,776,759 8,950,073
Net maturity mismatch (1,231,001) (823,435) (1,205,978) (1,190,344) 3,280,036 1,170,721
Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events.
This risk is managed through established operational risk management processes, proper monitoring and reporting of the business units’
adherence to established risk policies, procedures and limits by independent control and support units, and oversight provided by the
management and the Board.
The operational risk management processes encompass appropriate documentation of processes and procedures within the framework
of system of internal controls, regular disaster recovery and business continuity planning and simulations, self-compliance audit and
internal audit.
Liquidity risk relates to the ability of the Group and of the Bank to maintain sufficient liquid assets to meet financial commitments and
obligations when they fall due at a reasonable cost. The Assets and Liabilities Management Committee is the primary party responsible
for liquidity management based on POLICY DOCUMENT approved by the Risk Management Committee. The management of the
liquidity risk is aligned to the New Liquidity Framework issued by Bank Negara Malaysia supplemented by liquidity risk management
control and limits and a liquidity stress testing program. Liquidity limits are set for cash flow mismatches. In addition, liquidity trigger limits
and concentration ratios are in place to serve as liquidity early warning indicators.
39
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
24. FINANCIAL RISK MANAGEMENT (Continued)
(f) Liquidity Risk (Continued)
Group (continued) Up to 7 > 7 days - > 1 - 3 > 3 - 6 > 6 - 12
Audited days 1 month months months months > 1 year Total
31 December 2016 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Assets
Cash and short term funds 94,494 25,719 - - - - 120,213
Hedging financial instruments - - - - - - -
Deposits and placements
of banks and other financial - - 61,287 72,977 168,713 - 302,977
Securities held-for-trading 5,701 - - - - - 5,701
Securities available-for-sale - - - - - - -
Securities held-to-maturity - - 4,000 - 844,570 620,410 1,468,980
Financing and advances 117,622 306,758 543,524 1,731,410 1,555,879 1,747,223 6,002,416
Statutory deposits with BNM 263,529 - - - - - 263,529
Other assets 8,384 575 1,696 10,202 5,921 210,590 237,368 Total assets 489,730 333,052 610,507 1,814,589 2,575,083 2,578,223 8,401,184
Liabilities
Deposits from customers 527,127 802,613 1,908,656 1,531,128 158,239 1,230,627 6,158,390
Deposits and placements of banks
and other financial institutions 100,386 331,305 552,876 20,539 - 115,505 1,120,611
Hedging financial instruments - - - - - - -
Bills and acceptance payable 1,067 - - - - - 1,067
Other liabilities 36,161 - 46,708 - - - 82,869
Subordinated Sukuk - - - - - 299,003 299,003 Total liabilities 664,741 1,133,918 2,508,240 1,551,667 158,239 1,645,135 7,661,940
Shareholders' fund - - - - - 739,244 739,244
Total liabilities and
shareholders' fund 664,741 1,133,918 2,508,240 1,551,667 158,239 2,384,379 8,401,184
Net maturity mismatch (175,011) (800,866) (1,897,733) 262,922 2,416,844 193,844
Bank Up to 7 > 7 days - > 1 - 3 > 3 - 6 > 6 - 12
Unaudited days 1 month months months months > 1 year Total
30 June 2017 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Assets
Cash and short term funds 80,318 41,136 - - - - 121,454
Hedging financial instruments - 3 - - - - 3
Deposits and placements
of banks and other financial - - 164,252 - 57,754 184,017 406,022
Securities held-for-trading 6,123 - - - - - 6,123
Securities available-for-sale - - - - - - -
Securities held-to-maturity - - 12,000 - 832,570 620,207 1,464,777
Financing and advances 118,438 373,939 945,766 475,686 2,609,994 1,927,111 6,450,934
Statutory deposits with BNM 261,629 - - - - - 261,629
Other assets 14,564 231 2,239 4,607 1,304 216,146 239,091 Total assets 481,072 415,308 1,124,257 480,293 3,501,621 2,947,482 8,950,033
-
Liabilities
Deposits from customers 1,409,431 885,633 1,700,138 1,302,072 221,585 636,381 6,155,240
Deposits and placements of banks
and other financial institutions 240,042 353,110 628,160 368,565 - - 1,589,876
Hedging financial instruments - - - - - - -
Bills and acceptance payable 4,819 - - - - - 4,819
Other liabilities 57,818 - 1,937 - - - 59,755
Subordinated Sukuk - - - - - 400,720 400,720
Total liabilities 1,712,110 1,238,743 2,330,234 1,670,637 221,585 1,037,101 8,210,411
Shareholders' fund - - - - - 739,622 739,622
Total liabilities and
shareholders' fund 1,712,110 1,238,743 2,330,234 1,670,637 221,585 1,776,723 8,950,033
Net maturity mismatch (1,231,038) (823,435) (1,205,978) (1,190,344) 3,280,036 1,170,758
40
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
24. FINANCIAL RISK MANAGEMENT (Continued)
(f) Liquidity Risk (Continued)
Bank (continued) Up to 7 > 7 days - > 1 - 3 > 3 - 6 > 6 - 12
Audited days 1 month months months months > 1 year Total
31 December 2016 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Assets
Cash and short term funds 94,494 25,719 - - - - 120,213
Hedging financial instruments - - - - - - -
Deposits and placements
of banks and other financial - - 61,287 72,977 168,713 - 302,977
Securities held-for-trading 5,701 - - - - - 5,701
Securities available-for-sale - - - - - - -
Securities held-to-maturity - - 4,000 - 844,570 620,410 1,468,980
Financing and advances 117,622 306,758 543,524 1,731,410 1,555,879 1,747,223 6,002,416
Statutory deposits with BNM 263,529 - - - - - 263,529
Other assets 8,329 575 1,696 10,202 5,921 210,592 237,315 Total assets 489,675 333,052 610,507 1,814,589 2,575,083 2,578,225 8,401,131
-
Liabilities
Deposits from customers 527,127 802,613 1,908,656 1,531,128 158,239 1,230,627 6,158,390
Deposits and placements of banks
and other financial institutions 100,386 331,305 552,876 20,539 - 115,505 1,120,611
Hedging financial instruments - - - - - - -
Bills and acceptance payable 1,067 - - - - - 1,067
Other liabilities 36,160 - 46,709 - - - 82,869
Subordinated Sukuk - - - - - 299,003 299,003
Total liabilities 664,740 1,133,918 2,508,241 1,551,667 158,239 1,645,135 7,661,940
Shareholders' fund - - - - - 739,191 739,191
Total liabilities and
shareholders' fund 664,740 1,133,918 2,508,241 1,551,667 158,239 2,384,326 8,401,131
Net maturity mismatch (175,065) (800,866) (1,897,734) 262,922 2,416,844 193,899
(g) Capital Management Policy
• Enhance our economic capital management;
• Refine risk based pricing methods for the products and services; and
• Improve asset quality across the businesses of the Group.
Capital risk is defined as the risk that the Group has insufficient capital to provide a sufficient resource to absorb predetermined levels of
losses or that the capital structure is inefficient.
Capital risk appetite is set by the Board and reported through various metrics that enable the Group to manage capital constraints and
shareholder expectations. The Assets and Liabilities Management Committee regularly revise performance against risk appetite.
A capital exposure arises where the Group has insufficient regulatory capital resources to support its strategic objectives and plans, and
to meet external shareholder requirements and expectations. The Group’s capital management policy is focused on optimising value for
shareholders.
Capital Management and Basel II
The infrastructure implementation that has been completed has already yielded significant benefits to the Group and puts the businesses
on an advanced footing to:
The Group continues to develop sustainable capabilities for continuous improvements in the use and adoption of the advanced
approaches of the Basel II capital accord. The Bank had obtained BNM’s approval to apply the Standardised Approach for Credit Risk.
41
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
25. CAPITAL ADEQUACY
a)
Unaudited Audited Unaudited Audited
30 June 31 December 30 June 31 December
2017 2016 2017 2016
RM'000 RM'000 RM'000 RM'000
CET 1/ Tier I capital
Paid-up share capital 1,000,000 1,000,000 1,000,000 1,000,000
Accumulated losses (260,341) (260,756) (260,377) (260,809)
739,659 739,244 739,623 739,191
Less: Deferred tax (62,087) (62,087) (62,087) (62,087)
Total Tier-I capital 677,572 677,157 677,536 677,104
Tier-II capital
62,538 69,384 62,538 69,384
400,720 299,003 400,720 299,003
Total Tier-II capital 463,258 368,387 463,258 368,387
Capital base 1,140,830 1,045,544 1,140,794 1,045,491
CET 1 / Core capital ratio 10.256% 11.245% 10.256% 11.245%
Risk-weighted capital ratio 17.269% 17.363% 17.268% 17.362%
(b) The breakdown of risk-weighted assets ("RWA") by each major risk category is as follows:
Unaudited Audited Unaudited Audited
30 June 31 December 30 June 31 December
2017 2016 2017 2016
RM'000 RM'000 RM'000 RM'000
Credit risk 6,146,694 5,569,081 6,146,694 5,569,081
Market risk 126,272 122,785 126,272 122,785
Operational risk 333,360 329,719 333,360 329,719
6,606,326 6,021,585 6,606,326 6,021,585
The capital adequacy ratios of the Group and the Bank below are disclosed pursuant to the requirements of Bank Negara
Malaysia's Risk Weighted Capital Adequacy Framework (Basel II) - Disclosure Requirements (Pillar 3):
Bank
Bank
Group
Collective impairment for impairment loss on non-impaired
financing
Subordinated Sukuk
Group
42
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
25. CAPITAL ADEQUACY (Continued)
(b) The breakdown of risk-weighted assets ("RWA") by each major risk category is as follows (Continued):
Risk
Gross Net weighted Capital
exposures exposures assets requirements
Exposure Class RM'000 RM'000 RM'000 RM'000
Credit Risk
On-Balance Sheet Exposures
Sovereigns/Central
Banks 1,689,260 1,689,260 - -
Banks, Development
Financial Institutions
("DFIs") & MDBs 493,703 493,703 98,740 7,899
Corporate 4,706,179 4,623,857 4,066,574 325,326
Regulatory Retail 699,754 699,204 524,403 41,952
Residential Real Estate
(RRE) Financing 1,105,086 1,105,086 535,632 42,851
Other assets 82,449 82,449 46,778 3,742
Defaulted Exposures 21,184 21,184 29,093 2,327
Total for On-Balance
Sheet Exposures 8,797,616 8,714,745 5,301,219 424,097
Off-Balance Sheet Exposures
Off-balance sheet
exposures other than
OTC derivatives or
credit derivatives 877,038 877,038 845,474 67,638
Total for Off-Balance
Sheet Exposures 877,038 877,038 845,474 67,638
Total On and Off-Balance
Sheet Exposures 9,674,654 9,591,782 6,146,694 491,735
Large Exposures Risk
Requirement - - - -
Long Short
Market Risk position position
Foreign Currency
Risk 126,272 - 126,272 10,102
Operational Risk - - 333,360 26,669
Total RWA and Capital Requirements 6,606,326 528,506
Group and Bank
30 June 2017
43
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
25. CAPITAL ADEQUACY (Continued)
(b)
Risk
Gross Net weighted Capital
exposures exposures assets requirements
Exposure Class RM'000 RM'000 RM'000 RM'000
Credit Risk
On-Balance Sheet Exposures
Sovereigns/Central
Banks 1,689,777 1,689,777 - -
Banks, Development
Financial Institutions
("DFIs") & MDBs 377,471 377,471 75,494 6,040
Corporate 4,208,664 4,182,474 3,560,104 284,808
Regulatory Retail 710,996 710,191 532,643 42,611
Residential Real Estate - - - -
(RRE) Financing 1,132,214 1,132,214 538,693 43,095
Other assets 84,473 84,474 50,798 4,064
Defaulted Exposures 21,873 21,873 30,676 2,454
Total for On-Balance
Sheet Exposures 8,225,468 8,198,474 4,788,408 383,072
Off-Balance Sheet Exposures
Off-balance sheet
exposures other than
OTC derivatives or
credit derivatives 819,633 819,496 780,673 62,454
Total for Off-Balance
Sheet Exposures 819,633 819,496 780,673 62,454
Total On and Off-Balance
Sheet Exposures 9,045,101 9,017,970 5,569,081 445,526
Large Exposures Risk
Requirement - - - -
Long Short
Market Risk position position
Foreign Currency
Risk 122,785 - 122,785 9,823
- - - -
Operational Risk - - 329,719 26,378
Total RWA and Capital Requirements 6,021,585 481,726
Group and Bank
31 December 2016
The breakdown of risk-weighted assets ("RWA") by exposures in each major risk category for the current financial year are as
follows: (continued)
44
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
25. CAPITAL ADEQUACY (Continued)
(c) The breakdown of credit risk disclosed by risk-weights (including deducted exposures) are as follows:
Group and Bank
Unaudited
30 June 2017 Total
exposure Total
Sovereigns/ Banks, DFIs Regulatory Residential Equity Other after netting weighted
Risk weights Central Bank & MDBs Corporate Retail Real Estate exposures assets and CRM assets
RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Performing
Exposures
0% 1,689,260 - - - - - 35,671 1,724,931 -
20% - 493,708 202,656 - - - - 696,364 139,273
35% - - - - 377,720 - - 377,720 132,202
50% - - 35,697 - 640,638 - - 676,335 338,168
75% - - 1,509,238 822,300 17,612 - - 2,349,150 1,761,863
100% - - 3,627,060 - 72,259 - 46,778 3,746,097 3,746,097
150% - - - - - - - - -
Total 1,689,260 493,708 5,374,651 822,300 1,108,229 - 82,449 9,570,597 6,117,602
Defaulted
Exposures
35% - - - - - - - - -
50% - - - - - - - - -
100% - - - - 5,368 - - 5,368 5,368
150% - - 14,208 825 783 - - 15,816 23,724
Total - - 14,208 825 6,151 - - 21,184 29,092
Total Performing
and Defaulted 1,689,260 493,708 5,388,859 823,125 1,114,380 - 82,449 9,591,781 6,146,694
Exposures after netting and credit risk mitigation ("CRM")
45
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
25. CAPITAL ADEQUACY (Continued)
(c) The breakdown of credit risk disclosed by risk-weights (including deducted exposures) are as follows (Continued):
Group and Bank
Audited
31 December 2016 Total
exposure Total risk
Sovereigns/ Banks, DFIs Regulatory Residential Equity Other after netting weighted
Risk weights Central Bank & MDBs Corporate Retail Real Estate exposures assets and CRM assets
RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Performing
Exposures
0% 1,689,777 - - - - - 33,676 1,723,453 -
20% - 378,420 230,419 - - - - 608,839 121,768
35% - - - - 375,980 - - 375,980 131,593
50% - - 121,451 - 690,113 - - 811,564 405,782
75% - - 1,509,239 855,228 23,529 - - 2,387,996 1,790,997
100% - - 2,987,656 - 49,812 - 50,798 3,088,266 3,088,265
150% - - - - - - - - -
Total 1,689,777 378,420 4,848,765 855,228 1,139,434 - 84,474 8,996,098 5,538,405
Defaulted
Exposures
35% - - - - - - - - -
50% - - - - - - - - -
100% - - - - 4,268 - - 4,268 4,268
150% - - 14,964 2,096 545 - - 17,605 26,408
Total - - 14,964 2,096 4,813 - - 21,873 30,676
Total Performing
and Defaulted 1,689,777 378,420 4,863,729 857,324 1,144,247 - 84,474 9,017,971 5,569,081
Exposures after netting and credit risk mitigation ("CRM")
46
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134
(“MFRS 134”) AND POLICY DOCUMENT ON FINANCIAL REPORTING FOR LICENSED ISLAMIC
BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
25. CAPITAL ADEQUACY (Continued)
(d) The breakdown of risk-weighted assets by risk-weights are as follows:
Principal Risk-weighted
RM'000 RM'000
0% 1,724,931 -
20% 696,364 139,273
35% 377,720 132,202
50% 676,335 338,168
75% 2,349,150 1,761,863
100% 3,751,465 3,751,465
150% 15,816 23,724
Risk-weighted assets for credit risk 9,591,781 6,146,694
Large exposure risk-weighted assets for equity holdings -
Risk-weighted assets for market risk 126,272
Risk-weighted assets for operational risk 333,360
Total risk-weighted assets 6,606,326
Principal Risk-weighted
RM'000 RM'000
0% 1,723,453 -
20% 608,839 121,768
35% 375,980 131,593
50% 811,564 405,782
75% 2,387,996 1,790,997
100% 3,092,534 3,092,534
150% 17,605 26,407
Risk-weighted assets for credit risk 9,017,971 5,569,081
Large exposure risk-weighted assets for equity holdings -
Risk-weighted assets for market risk 122,785
Risk-weighted assets for operational risk 329,719
Total risk-weighted assets 6,021,585
Group and Bank
Unaudited
30 June 2017
Audited
31 December 2016
Group and Bank
47
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT ON
FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
25. CAPITAL ADEQUACY (Continued)
(e) Disclosure on off balance sheet and counterparty credit risk are as follows:
Credit Risk Credit Risk
Principal equivalent weighted Principal equivalent weighted
amount amount amount amount amount amount
RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Direct credit substitutes
Transaction-related contingent items 282,041 141,021 111,431 321,721 160,861 124,576
Short term self liquidating trade related contingencies 14,596 2,919 2,919 16,291 3,258 3,032
Foreign exchange related contracts
- One year or less - - 17,940 - -
Other commitments, such as formal standby facilities and
credit lines, with an original maturity of over one year 212,214 107,861 105,887 290,763 147,164 144,852
Other commitments, such as formal standby facilities and
credit lines, with an original maturity up to one year 3,126,191 623,484 623,923 2,541,065 506,431 506,876
Unutilised credit card lines 8,769 1,754 1,315 8,912 1,782 1,337
3,643,811 877,039 845,475 3,196,692 819,496 780,673
30 June 2017 31 December 2016
Group and Bank
Disclosure on Off Balance and Counterparty Credit Risk
Unaudited Audited
48
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
26. SEGMENTAL INFORMATION
Group
Retail Treasury & Corporate
banking money investment
market banking Total
RM'000 RM'000 RM'000 RM'000
Total revenue 60,153 107,432 54,984 222,569
Result
Segment result 35,543 17,441 44,317 97,301
Unallocated corporate
expenses (96,871)
Profit before zakat and taxation 430
Zakat and taxation (15)
Net profit for the financial period 415
Other information
Segment assets 1,809,658 347,415 5,082,969 7,240,042
Unallocated corporate assets 1,710,031
Total assets 8,950,073
Segment liabilities 2,187,670 5,557,447 - 7,745,117
Unallocated corporate liabilities 465,297
Total liabilities 8,210,414
Other segment items
Capital expenditure 597 75 (2) 670
Unallocated capital expenditure 8,067
8,737
Depreciation and amortisation 1,796 154 184 2,134
Unallocated depreciation
and amortisation 5,927
8,061
Other non-cash
(income)/expenses (189) - (381) (570)
Unaudited
30 June 2017
49
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
26. SEGMENTAL INFORMATION (Continued)
Group (Continued)
Retail Treasury & Corporate
banking money investment
market banking Total
RM'000 RM'000 RM'000 RM'000
Total revenue 171,366 167,051 51,517 389,934
Result
Segment result 90,013 39,089 54,597 183,699
Unallocated corporate
expenses (176,967)
Profit before zakat and taxation 6,732
Zakat and taxation 22
Net profit for the financial year 6,754
Other information
Segment assets 1,856,950 350,066 4,482,119 6,689,135
Unallocated corporate assets 1,712,049
Total assets 8,401,184
Segment liabilities 2,907,290 4,371,712 - 7,279,002
Unallocated corporate liabilities 382,938
Total liabilities 7,661,940
Other segment items
Capital expenditure 1,855 28 141 2,024
Unallocated capital expenditure 18,514
20,538
Depreciation and amortisation 4,599 335 662 5,596
Unallocated depreciation
and amortisation 11,095
16,691
Other non-cash
(income)/expenses 2,994 - (3,592) (598)
Audited
31 December 2016
50
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
26. SEGMENTAL INFORMATION (Continued)
Bank
Retail Treasury & Corporate
banking money investment
market banking Total
RM'000 RM'000 RM'000 RM'000
Total revenue 60,032 107,432 54,984 222,448
Result
Segment result 35,422 17,441 44,317 97,180
Unallocated corporate
expenses (96,748)
Profit before zakat and taxation 432
Zakat and taxation -
Net profit for the financial period 432
Other information
Segment assets 1,809,657 347,415 5,082,967 7,240,039
Unallocated corporate assets 1,709,994
Total assets 8,950,033
Segment liabilities 2,187,671 5,557,447 - 7,745,118
Unallocated corporate liabilities 465,292
Total liabilities 8,210,410
Other segment items
Capital expenditure 597 75 (2) 670
Unallocated capital expenditure 8,067
8,737
Depreciation and amortisation 1,796 154 184 2,134
Unallocated depreciation
and amortisation 5,927
8,061
Other non-cash
(income)/expenses (189) - (381) (569)
Unaudited
30 June 2017
51
AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
26. SEGMENTAL INFORMATION (Continued)
Bank (Continued)
Retail Treasury & Corporate
banking money investment
market banking Total
RM'000 RM'000 RM'000 RM'000
Total revenue 171,118 167,051 51,518 389,687
Result
Segment result 89,765 39,087 54,598 183,450
Unallocated corporate
expenses (176,785)
Profit before zakat and taxation 6,665
Zakat and taxation 36
Net profit for the financial year 6,701
Other information
Segment assets 1,856,950 350,066 4,482,120 6,689,136
Unallocated corporate assets 1,711,995
Total assets 8,401,131
Segment liabilities 2,907,290 4,371,712 - 7,279,002
Unallocated corporate liabilities 382,938
Total liabilities 7,661,940
Other segment items
Capital expenditure 1,855 28 141 2,024
Unallocated capital expenditure 18,514
20,538
Depreciation and amortisation 4,599 335 662 5,596
Unallocated depreciation
and amortisation 11,095
16,691
Other non-cash
(income)/expenses 2,994 - (3,592) (598)
Audited
31 December 2016
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AL RAJHI BANKING AND INVESTMENT CORPORATION (MALAYSIA) BHD.
(Incorporated in Malaysia)
Company No. 719057-X
EXPLANATORY NOTES PERSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARDS 134 (“MFRS 134”) AND POLICY DOCUMENT
ON FINANCIAL REPORTING FOR LICENSED ISLAMIC BANKING INSTITUTIONS ISSUED BY BANK NEGARA MALAYSIA
27. REVIEW OF PERFORMANCE FOR THE FINANCIAL QUARTER ENDED 30 JUNE 2017 AGAINST THE CORRESPONDING
FINANCIAL QUARTER OF THE PRECEDING YEAR
28. PROSPECTS FOR 2017
The Banking sector outlook is expected to remain challenging, reflected by the tougher operating environment and higher risk.
Credit growth is expected to slowdown with household debt risen strongly which would lead to an asset quality problem and a
rise in unemployment and interest rate.
Nevertheless the Bank is geared to face the challengers and to grow the business selectively and continue to strengthen its
governence.
For the financial period ended 30 June 2017, the Group and Bank recorded a net gain of RM0.4 million as compared to a net
loss of RM4.9 million in the preceding year’s corresponding period.
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