interim financial statements for the · pdf fileat 30 june 2017 1,000,000 13,422 (273,799)...

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




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




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


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


UNAUDITED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE 2ND QUARTER ENDED 30 JUNE 2017

2nd Quarter Ended Period Ended



2





2017 2016 2017 2016

Bank Note RM'000 RM'000 RM'000 RM'000

Revenue 112,906 93,382 222,448 187,458


depositors' funds and others 16 106,046 85,944 206,922 171,391


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)




UNAUDITED STATEMENTS OF COMPREHENSIVE INCOME



3




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


UNAUDITED STATEMENTS OF CHANGES IN EQUITY


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





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


UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS


Group Bank

5





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


Bank


Group

6




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


MFRS 9: Financial Instruments (IFRS 9 Financial Instruments as issued by IASB in July 2014)


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




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




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






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






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







(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







(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)


- -

(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






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






16. INCOME DERIVED FROM INVESTMENT OF DEPOSITORS' FUNDS AND OTHERS


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


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


2017 2016 2017 2016

RM'000 RM'000 RM'000 RM'000


Financing and advances 88,679 69,289 172,598 138,139

Securities held-to-maturity 14,536 14,627 28,996 29,308


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


Group

Group

Group

Group


Group

2nd Quarter Ended

15






16. INCOME DERIVED FROM INVESTMENT OF DEPOSITORS' FUNDS AND OTHERS (Continued)


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


2017 2016 2017 2016

RM'000 RM'000 RM'000 RM'000


Financing and advances 207 200 404 607


financial institutions 8 8 14 18 Total finance income and hibah 215 208 418 625

- - -

(ii) Income derived from investment of other deposits


2017 2016 2017 2016

RM'000 RM'000 RM'000 RM'000


Financing and advances 88,679 69,289 172,598 138,139

Securities held-to-maturity 14,536 14,627 28,996 29,308


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



Bank Bank


16






- - 17. INCOME DERIVED FROM INVESTMENT OF SHAREHOLDERS' FUNDS


2017 2016 2017 2016

RM'000 RM'000 RM'000 RM'000


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- - -


2017 2016 2017 2016

RM'000 RM'000 RM'000 RM'000


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


17






18. ALLOWANCE FOR IMPAIRMENT ON FINANCING


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


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


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






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






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 - - - -


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


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


RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

Group

Audited

31 December 2016

Financial Assets


Deposits and placements with banks and - - -






Other assets 27,902 27,902 - - - -

8,191,718 6,717,037 5,701 1,468,980 - -



Deposits and placements of banks and - -





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






24. FINANCIAL RISK MANAGEMENT (continued)

Carrying Other


RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

Bank

Unaudited

30 June 2017

Financial Assets




Hedging financial instruments 3 - - - 3 -





Other assets 28,949 28,949 - - - -

8,739,891 7,268,988 6,123 1,464,777 3 -








8,210,410 - - - - 8,210,410

Carrying Other


RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

Bank

Audited

31 December 2016

Financial Assets








Other assets 27,849 27,849 - - - -

8,191,665 6,716,984 5,701 1,468,980 - -








7,661,940 - - - - 7,661,942

21






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


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







(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







(c) Credit Risk Management (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









(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








(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







(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








(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








(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/



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/



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








(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)


(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


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






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








Group (Continued) Average


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


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










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



- 59,801 239,202 - - 3,974 - 302,977 3.11



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


FI / Institutions

Non-trading book

5.53

33










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




Hedging financial instruments - - - - - - - -

Bills and acceptance payable - - - - - 1,067 - 1,067

Other liabilities - - - - - 82,869 - 82,869







sensitivity gap (96,283) (1,924,764) (177,044) 1,544,571 1,666,460 (1,018,641) 5,701


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)



34








Bank Average


Unaudited month months months years > 5 years sensitive book Total profit rate


Assets


Hedging financial instruments - - - - - 3 - 3

- 160,288 240,432 - - 5,302 - 406,022 2.70

Securities held-for-trading - - - - - - 6,123 6,123


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


FI / Institutions

5.35

35








Bank (Continued) Average


Unaudited (Continued) month months months years > 5 years sensitive book Total profit rate


Liabilities





Bills and acceptance payable - - - - - 4,819 - 4,819 -

Other liabilities - - - - - 59,754 - 59,754 -







sensitivity gap (359,165) (1,486,403) (428,828) 1,428,772 1,874,406 (1,034,906) 6,123


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)



36








Bank Average


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



- 59,801 239,202 - - 3,974 - 302,977 3.11



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


FI / Institutions

5.53

37








Bank (Continued) Average


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




Hedging financial instruments - - - - - - - -

Bills and acceptance payable - - - - - 1,067 - 1,067

Other liabilities - - - - - 82,869 - 82,869







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)



38







(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


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


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







(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




of banks and other financial - - 61,287 72,977 168,713 - 302,977


Securities available-for-sale - - - - - - -


Financing and advances 117,622 306,758 543,524 1,731,410 1,555,879 1,747,223 6,002,416


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


and other financial institutions 100,386 331,305 552,876 20,539 - 115,505 1,120,611




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 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


Hedging financial instruments - 3 - - - - 3


of banks and other financial - - 164,252 - 57,754 184,017 406,022




Financing and advances 118,438 373,939 945,766 475,686 2,609,994 1,927,111 6,450,934


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


and other financial institutions 240,042 353,110 628,160 368,565 - - 1,589,876




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 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







(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




of banks and other financial - - 61,287 72,977 168,713 - 302,977




Financing and advances 117,622 306,758 543,524 1,731,410 1,555,879 1,747,223 6,002,416


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


and other financial institutions 100,386 331,305 552,876 20,539 - 115,505 1,120,611




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 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






25. CAPITAL ADEQUACY

a)


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:


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






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







(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







(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







(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




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


(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




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


(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


Group and Bank

Disclosure on Off Balance and Counterparty Credit Risk

Unaudited Audited

48






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






26. SEGMENTAL INFORMATION (Continued)

Group (Continued)




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


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






Other segment items

Capital expenditure 1,855 28 141 2,024


20,538




16,691

Other non-cash

(income)/expenses 2,994 - (3,592) (598)

Audited

31 December 2016

50







Bank




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


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






Other segment items

Capital expenditure 597 75 (2) 670


8,737




8,061

Other non-cash

(income)/expenses (189) - (381) (569)

Unaudited

30 June 2017

51







Bank (Continued)




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


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






Other segment items

Capital expenditure 1,855 28 141 2,024


20,538




16,691

Other non-cash

(income)/expenses 2,994 - (3,592) (598)

Audited

31 December 2016

52






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.

53

interim financial statements for the · pdf fileat 30 june 2017 1,000,000 13,422 (273,799)...

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