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AmBank Islamic Berhad: Interim Financial Statements - 30 June 2022

IM Insights
By IM Insights
3 weeks ago
AmBank Islamic Berhad: Interim Financial Statements - 30 June 2022

Hibah, Murabahah, Musharakah, Shariah, Shariah compliant, Sukuk, Wakalah, Zakat, Provision, Receivables, Restricted Investment Account


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  1. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) Condensed Interim Financial Statements For the Financial Period 1 April 2022 to 30 June 2022 (In Ringgit Malaysia)
  2. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) UNAUDITED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2022 Note ASSETS Cash and short-term funds Derivative financial assets Financial assets at fair value through profit or loss Financial investments at fair value through other comprehensive income Financial investments at amortised cost Financing and advances Statutory deposit with Bank Negara Malaysia Deferred tax asset Other assets Property and equipment Right-of-use assets Intangible assets TOTAL ASSETS LIABILITIES AND EQUITY Deposits from customers Investment accounts of customers Deposits and placements of banks and other financial institutions Investment account due to a licensed bank Securities sold under repurchase agreements Recourse obligation on financing sold to Cagamas Berhad Derivative financial liabilities Term funding Subordinated Sukuk Other liabilities Provision for zakat TOTAL LIABILITIES A8 A9 A10 A11 A12 A13 A14 A15 A16 A17 A18 Share capital Reserves Equity attributable to equity holder of the Bank TOTAL LIABILITIES AND EQUITY COMMITMENTS AND CONTINGENCIES A35 NET ASSETS PER SHARE (RM) 30 June 2022 RM’000 31 March 2022 RM’000 4,269,306 54,170 2,206,531 3,599,095 51,661 986,968 4,204,136 3,467,653 39,326,101 196,000 71,548 324,807 344 2,222 427 54,123,245 4,450,620 3,033,252 38,653,868 167,000 61,176 286,825 363 2,066 495 51,293,389 40,480,356 50,974 3,699,375 1,558,876 438,772 1,500,003 56,666 834,854 1,300,000 258,182 2,600 50,180,658 37,590,250 377,861 3,634,435 1,710,663 1,500,000 60,038 834,836 1,300,000 409,270 2,130 47,419,483 1,387,107 2,555,480 3,942,587 1,387,107 2,486,799 3,873,906 54,123,245 51,293,389 16,863,971 14,702,448 7.97 7.84 The Unaudited Condensed Interim Financial Statements should be read in conjunction with the audited financial statements of the Bank for the year ended 31 March 2022. 1
  3. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) UNAUDITED STATEMENT OF PROFIT OR LOSS FOR THE FINANCIAL QUARTER ENDED 30 JUNE 2022 Income derived from investment of depositors' funds Income derived from investment of investment account funds Income derived from investment of shareholder's funds Allowance for impairment on financing and advances - net Allowance for impairment on financial investments Writeback of allowance for impairment on other financial assets Provision provision for commitments and contingencies Total distributable income Income attributable to the depositors and others Income attributable to the investment account holders Total net income Other operating expenses Finance cost Profit before zakat and taxation Zakat Taxation Profit for the financial period Basic/Diluted earnings per share (sen) Note Individual Quarter 30 June 30 June 2022 2021 (Restated) (Note A38) RM’000 RM’000 A19 431,817 429,408 431,817 429,408 A20 14,956 10,354 14,956 10,354 A21 43,071 42,089 43,071 42,089 A22 (57,776) (91,430) (57,776) (91,430) A23 (2,746) (1,306) (2,746) (1,306) A24 147 49 Cumulative Quarter 30 June 30 June 2022 2021 (Restated) (Note A38) RM’000 RM’000 147 49 A25 (1,297) 428,172 (708) 388,456 (1,297) 428,172 (708) 388,456 A26 (186,956) (191,532) (186,956) (191,532) A27 (12,608) 228,608 (77,273) (21,988) (9,093) 187,831 (72,264) (24,341) (12,608) 228,608 (77,273) (21,988) (9,093) 187,831 (72,264) (24,341) 129,347 (470) (28,585) 100,292 91,226 (965) (19,215) 71,046 129,347 (470) (28,585) 100,292 91,226 (965) (19,215) 71,046 A28 A29 20.29 14.37 20.29 14.37 The Unaudited Condensed Interim Financial Statements should be read in conjunction with the audited financial statements of the Bank for the year ended 31 March 2022. 2
  4. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) UNAUDITED STATEMENT OF COMPREHENSIVE INCOME FOR THE FINANCIAL QUARTER ENDED 30 JUNE 2022 Individual Quarter 30 June 30 June 2022 2021 RM’000 RM’000 Profit for the financial period Cumulative Quarter 30 June 30 June 2022 2021 RM’000 RM’000 100,292 71,046 100,292 71,046 (48,197) 5,019 12,989 2,070 (48,197) 5,019 12,989 2,070 11,567 (596) (3,144) 11,567 (596) (3,144) (31,611) 11,319 (31,611) 11,319 68,681 82,365 68,681 82,365 Other comprehensive income/(loss): Items that may be reclassified subsequently to statement of profit or loss: Financial investments at fair value through other comprehensive income: Net unrealised (loss)/gain on changes in fair value Changes in expected credit loss Net gain reclassified to statement of profit or loss Income tax effect Other comprehensive (loss)/income for the period, net of tax Total comprehensive income for the financial period The Unaudited Condensed Interim Financial Statements should be read in conjunction with the audited financial statements of the Bank for the year ended 31 March 2022. 3
  5. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) CONFIDENTIAL UNAUDITED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL QUARTER ENDED 30 JUNE 2022 Attributable to Equity Holder of the Bank Distributable Non-distributable Share capital RM'000 Fair value reserve RM'000 Retained earnings RM'000 Total equity RM'000 1,387,107 43,972 2,341,323 3,772,402 - 11,319 11,319 71,046 71,046 71,046 11,319 82,365 At 30 June 2021 1,387,107 55,291 2,412,369 3,854,767 At 1 April 2022 1,387,107 (3,893) 2,490,692 3,873,906 - (31,611) (31,611) 100,292 100,292 1,387,107 (35,504) 2,590,984 At 1 April 2021 Profit for the financial period Other comprehensive income, net of tax Total comprehensive income for the financial period Profit for the financial period Other comprehensive loss, net of tax Total comprehensive (loss)/income for the financial period At 30 June 2022 The Unaudited Condensed Interim Financial Statements should be read in conjunction with the audited financial statements of the Bank for the year ended 31 March 2022. 4 100,292 (31,611) 68,681 3,942,587
  6. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) UNAUDITED CONDENSED STATEMENT OF CASH FLOWS FOR THE FINANCIAL QUARTER ENDED 30 JUNE 2022 30 June 2022 Profit before zakat and taxation Adjustments for non-operating and non-cash items Operating profit before working capital changes Changes in working capital: Net change in operating assets Net change in operating liabilities Taxation paid Net cash generated from/(used in) operating activities Net cash used in investing activities Net cash used in financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the financial period Cash and cash equivalents at end of the financial period Cash and cash equivalents comprise: Cash and short-term funds Allowances for expected credit loss for cash and cash equivalents at end of the financial period RM’000 30 June 2021 (Restated) (Note A38) RM’000 129,347 74,037 203,384 91,226 87,149 178,375 (2,022,391) 2,761,508 (33,937) 908,564 (238,420) (80) 670,064 3,599,246 4,269,310 (2,975,863) (1,628,564) (27,579) (4,453,631) (894,644) (78) (5,348,353) 9,398,883 4,050,530 4,269,306 4,050,505 4 25 4,269,310 4,050,530 The Unaudited Condensed Interim Financial Statements should be read in conjunction with the audited financial statements of the Bank for the year ended 31 March 2022. 5
  7. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) Explanatory Notes A1. BASIS OF PREPARATION These condensed interim financial statements have been prepared in accordance with MFRS 134 Interim Financial Reporting issued by the Malaysian Accounting Standards Board (“MASB”) and complies with the International Accounting Standard ("IAS") 34 Interim Financial Reporting issued by the International Accounting Standards Board. These condensed interim financial statements do not include all of the information required for full annual financial statements, and should be read in conjunction with the annual financial statements of the Bank for the financial year ended 31 March 2022. A1.1 Significant Accounting Policies The accounting policies adopted are consistent with those of the previous financial year except for the adoption of the following amendments to published standards: - Property, Plant and Equipment: Proceeds before Intended Use (Amendments to MFRS 116) Onerous Contracts - Cost of Fulfilling a Contract (Amendments to MFRS 137) Reference to the Conceptual Framework (Amendments to MFRS 3) Annual Improvements to MFRS Standards 2018-2020 The adoption of these amendments to published standards did not have any material impact on the financial statements of the Bank. The Bank did not have to change its accounting policies or make retrospective adjustments as a result of adopting the amendments to published standards. The nature of the amendments to published standards relevant to the Bank are described below: (a) Property, Plant and Equipment: Proceeds before Intended Use (Amendments to MFRS 116) The amendments clarify that an entity is ‘testing whether the asset is functioning properly’ when it assesses the technical and physical performance of the asset, and prohibit an entity from deducting from the cost of an item of property, plant and equipment any proceeds received from selling items produced while the entity is preparing the asset for its intended use (for example, the proceeds from selling samples produced when testing a machine to see if it is functioning properly). The proceeds from selling such samples, together with the costs of producing them, shall be recognised in profit or loss. The adoption of these amendments did not result in any impact to the financial statements of the Bank. (b) Onerous Contracts - Cost of Fulfilling a Contract (Amendments to MFRS 137) The amendments explain that, for the purpose of determining the unavoidable costs of meeting the entity’s contractual obligations, the direct cost of fulfilling a contract comprises the incremental costs of fulfilling that contract (e.g. direct labour and materials) and an allocation of other costs that relate directly to fulfilling contracts (e.g. an allocation of the depreciation charge for an asset used to fulfil the contract). The amendments also clarify that, before a separate provision for an onerous contract is established, an entity recognises any impairment loss that has occurred on assets used in fulfilling the contract, rather than on assets dedicated to that contract. The adoption of these amendments did not result in any impact to the financial statements of the Bank. 6
  8. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A1. BASIS OF PREPARATION (CONT'D.) A1.1 Significant Accounting Policies (Cont'd.) The nature of the amendments to published standards relevant to the Bank are described below: (Cont'd.) (c) Reference to the Conceptual Framework (Amendments to MFRS 3) The amendments updated MFRS 3 Business Combinations to refer to the revised Conceptual Framework for Financial Reporting ("Conceptual Framework") in order to determine what constitutes an asset or a liability in a business combination. In addition, a new exception is added in MFRS 3 in connection with liabilities and contingent liabilities. The exception specifies that, for some types of liabilities and contingent liabilities, an entity applying MFRS 3 should instead refer to MFRS 137 Provisions, Contingent Liabilities and Contingent Assets or IC Interpretation 21 Levies , rather than the Conceptual Framework. The adoption of these amendments did not result in any impact as there is no business combination or asset acquisition occured during the financial quarter 30 June 2022. (d) Annual Improvements to MFRS Standards 2018-2020 The Annual Improvements to MFRS Standards 2018-2020 include minor amendments as summarised below: (i) MFRS 1 First-time Adoption of Malaysian Financial Reporting Standards When a subsidiary adopts MFRS at a later date than its parent, MFRS 1 permits the subsidiary to measure its assets and liabilities at the carrying amounts that would be included in its parent’s consolidated financial statements, based on the parent’s date of transition to MFRS, if no adjustments were made for consolidation procedures and for the effects of the business combination in which the parent acquired the subsidiary. The amendment expanded the above by allowing the subsidiary to also measure cumulative translation differences using the amounts reported by the parent, based on the parent’s date of transition to MFRS. The adoption of these amendments did not result in any impact to the financial statements of the Bank. (ii) MFRS 9 Financial Instruments The amendment clarified that costs or fees paid to third parties shall not be included in the 10% test for derecognition of financial liabilities. The adoption of these amendments did not result in any impact to the financial statements of the Bank. (iii) MFRS 141 Agriculture The amendment removed the requirement for entities to exclude cash flows for taxation when measuring fair value to align with the requirement in the standard to discount cash flows on a post-tax basis. The adoption of these amendments did not result in any impact as the Bank is not in the agriculture business. 7
  9. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A1. BASIS OF PREPARATION (CONT'D.) A1.1 Significant Accounting Policies (Cont'd.) Standards issued but not yet effective Description - Effective for annual periods beginning on or after MFRS 17 Insurance Contracts Amendments to MFRS 17 Initial Application of MFRS 17 and MFRS 9 - Comparative Information (Amendment to MFRS 17) Classification of Liabilities as Current or Non-Current (Amendments to MFRS 101) Disclosure of Accounting Policies (Amendments to MFRS 101) Definition of Accounting Estimates (Amendments to MFRS 108) Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to MFRS 112) Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to MFRS 10 and MFRS 128) 1 January 2023 1 January 2023 1 January 2023 1 January 2023 1 January 2023 1 January 2023 1 January 2023 To be determined by MASB The nature of the new standard and amendments to published standards that are issued and relevant to the Bank but not yet effective are described below. The Bank is assessing the financial effects of their adoption except for MFRS 17 which is not relevant as the Bank does not issue any insurance contract or investment contract with discretionary participation features. (a) Amendments to published standards effective for financial year ending 31 March 2024 Classification of Liabilities as Current or Non-Current (Amendments to MFRS 101) The amendments clarified that liabilities are classified as either current or non-current, depending on the rights that exist at the end of the reporting period. Liabilities are classified as non-current if the entity has a substantive right to defer settlement for at least 12 months at the end of the reporting period. Classification is unaffected by the expectations or intentions of the entity, as well as events after the reporting date. The amendments are applied retrospectively from annual reporting period beginning on or after 1 January 2023. Early adoption is permitted. The amendments are not expected to result in any impact as the Bank presents all assets and liabilities in the statements of financial position in order of liquidity. Disclosure of Accounting Policies (Amendments to MFRS 101) The amendments require entities to disclose material accounting policies rather than significant accounting policies in the financial statements. Entities are expected to make disclosure of accounting policies specific to the entity and not generic disclosures on MFRS applications. 8
  10. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A1. BASIS OF PREPARATION (CONT'D.) A1.1 Significant Accounting Policies (Cont'd.) Standards issued but not yet effective (Cont'd.) (a) Amendments to published standards effective for financial year ending 31 March 2024 (Cont'd.) Disclosure of Accounting Policies (Amendments to MFRS 101) (Cont'd.) An accounting policy is material if, when considered together with other information included in an entity’s financial statements, it can reasonably be expected to influence decisions that the users make based on those financial statements. Also, accounting policy information is expected to be material if, without it, the users of the financial statements would be unable to understand other material information in the financial statements. Immaterial accounting policy information need not be disclosed. The amendments are applied from annual reporting period beginning on or after 1 January 2023. Early adoption is permitted. Definition of Accounting Estimates (Amendments to MFRS 108) The amendments redefined accounting estimates as “monetary amounts in financial statements that are subject to measurement uncertainty” and provide clarity on how to distinguish changes in accounting policies from changes in accounting estimates. The amendments further clarify that effects of a change in an input or measurement technique used to develop an accounting estimate (for example, expected credit losses, fair value of an asset or liability, and depreciation for property and equipment) is a change in accounting estimate, if they do not arise from prior period errors. The amendments are applied from annual reporting period beginning on or after 1 January 2023. Early adoption is permitted. Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to MFRS 112) The amendments clarified that that the initial exemption rule from recognising deferred taxes does not apply to transactions where both an asset and a liability are recognised at the same time resulting in equal amounts of taxable and deductible temporary differences. This essentially means that lessees would not be able to apply the initial exemption rule in MFRS 112 for the assets and liabilities arising from leases. The amendments are applied from annual reporting period beginning on or after 1 January 2023. Early adoption is permitted. As the Bank currently adopted the policy not to recognise deferred taxes on leases, additional deferred taxes on temporary differences associated with right-of-use assets, lease liabilities and decommissioning obligations would need to be recognised when the amendments become effective. 9
  11. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A1. BASIS OF PREPARATION (CONT'D.) A1.2 Significant Accounting judgements, Estimates and Assumptions The preparation of the condensed interim financial statements in accordance with MFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and reported amounts of revenue, expenses, assets and liabilities, the accompanying disclosures and the disclosure of contingent liabilities. Judgements, estimates and assumptions are continually evaluated and are based on past experience, reasonable expectations of future events and other factors. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. In the process of applying the Bank’s accounting policies, management has made the following judgments, estimates and assumptions which have the most significant effect on the amounts recognised in the financial statements. A2. AUDIT QUALIFICATION The auditors’ report on the audited annual financial statements for the financial year ended 31 March 2022 was not qualified. A3. SEASONALITY OR CYCLICALITY OF OPERATIONS The operations of the Bank were not materially affected by any seasonal or cyclical fluctuation in the current financial quarter. A4. UNUSUAL ITEMS DUE TO THEIR NATURE, SIZE OR INCIDENCE Other than as disclosed in Note A1, there were no unusual items during the current financial quarter and period affecting the financial results of the Bank. A5. CHANGES IN ESTIMATES There was no material change in estimates of amounts reported in prior financial years that have a material effect on the financial quarter. A6. ISSUANCE, REPURCHASE AND REPAYMENT OF DEBT AND EQUITY SECURITIES There were no new issuance of debt and equity securities, share buy-backs, share cancellations, shares held as treasury shares nor resale of treasury shares and repayment of debt securities by the Bank during the financial quarter. A7. DIVIDENDS The Directors do not recommend the payment of any dividend in respect of the financial quarter ended 30 June 2022 and no dividends were paid in the current financial quarter. 10
  12. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A8. CASH AND SHORT-TERM FUNDS Note Cash and bank balances Less: Allowances for Expected Credit Loss ("ECL") Deposits and placements maturing within one month with original maturity of three months or less: Licensed islamic banks Other financial institutions Bank Negara Malaysia (a) 30 June 2022 RM’000 41,310 (4) 41,306 31 March 2022 RM’000 79,246 (151) 79,095 4,228,000 4,228,000 450,000 280,000 2,790,000 3,520,000 4,269,306 3,599,095 (a) The movements in allowances for ECL are as follow: Stage 1 12-Month ECL RM’000 30 June 2022 Balance at beginning of the financial period Net writeback of ECL: Financial assets derecognised Net remeasurement of allowances 151 (147) (143) (4) Balance at end of the financial period 4 31 March 2022 Balance at beginning of the financial year Net allowances for ECL: New financial assets originated Financial assets derecognised Net remeasurement of allowances Foreign exchange differences 75 75 142 (61) (6) 1 Balance at end of the financial year 151 11
  13. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A9. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS 30 June 2022 RM’000 31 March 2022 RM’000 1,813,677 250,545 2,064,222 636,310 32,569 668,879 142,309 2,206,531 318,089 986,968 At fair value: Money Market Instruments: Malaysian Islamic Treasury bills Malaysian Government Investment Issues Unquoted Securities: In Malaysia: Sukuk A10. FINANCIAL INVESTMENTS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME 30 June 2022 RM’000 31 March 2022 RM’000 1,369,720 246,885 1,616,605 1,394,227 579,298 1,973,525 2,587,531 4,204,136 2,477,095 4,450,620 At fair value: Money Market Instruments: Malaysian Government Investment Issues Malaysian Islamic Treasury bills Islamic Negotiable Instruments of Deposit Unquoted Securities: In Malaysia: Sukuk 12
  14. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A10. FINANCIAL INVESTMENTS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME (CONT'D.) The Bank had undertaken a fair value hedge on the profit rate risk of unquoted sukuk of RM350.0 million using profit rate swap with AmBank (M) Berhad ("AmBank"). The (loss)/gain arising from the fair value hedge during the current financial period/year is as follows: 30 June 2022 RM'000 Relating to hedged item Relating to hedging instrument (5,806) 5,706 (100) 31 March 2022 RM'000 (9,087) 9,052 (35) The fair value changes on the hedge item is taken up under fair value reserve and the hedging gain or loss on the hedged item is reclassified to profit or loss. Movements in allowances for ECL are as follows: Stage 1 12-Month ECL RM’000 Stage 2 Lifetime ECL not credit impaired RM’000 Total RM’000 30 June 2022 Balance at beginning of the financial period Net (writeback of)/allowances for ECL: New financial assets originated Financial assets derecognised Net remeasurement of allowances 2,497 (303) 392 (542) (153) 6,239 5,322 5,322 Balance at end of the financial period 2,194 11,561 31 March 2022 Balance at beginning of the financial year Net allowances for/(writeback of) ECL: New financial assets originated Financial assets derecognised Net remeasurement of allowances 1,968 529 1,493 (899) (65) 6,827 (588) (588) - 8,795 (59) 1,493 (1,487) (65) Balance at end of the financial year 2,497 6,239 8,736 13 8,736 5,019 392 (542) 5,169 13,755
  15. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A11. FINANCIAL INVESTMENTS AT AMORTISED COST 30 June 2022 RM’000 31 March 2022 RM’000 Money Market Instruments: Malaysian Government Investment Issues 1,517,581 1,280,630 Unquoted Securities: In Malaysia: Sukuk 2,393,436 2,198,259 (443,364) 3,467,653 (445,637) 3,033,252 Note At amortised cost: Less: Allowances for ECL (a) (a) The movements in allowances for ECL are as follows: Stage 1 12-Month ECL RM’000 30 June 2022 Balance at beginning of the financial period Net writeback of ECL: New financial assets originated Net remeasurement of allowances Balance at end of the financial period 1,182 (146) Stage 2 Lifetime ECL Not Credit Impaired RM’000 - 12 - (158) - Stage 3 Lifetime ECL Credit Impaired RM'000 444,455 (2,127) (2,127) Total RM’000 445,637 (2,273) 12 (2,285) 1,036 - 442,328 443,364 977 188,641 - 189,618 205 382 - (188,641) (425) (10,016) 31 March 2022 Balance at beginning of the financial year Net allowances for/(writeback of) ECL: - Transfer to Stage 1 - Transfer to Stage 3 New financial assets originated Financial asset derecognised Changes in model assumptions and methodologies Net remeasurement of allowances Balance at end of the financial year 250 (13) (414) 1,182 14 444,455 444,455 256,019 (43) 434,439 - 250 (13) - (178,200) - - (414) - 444,455 - (178,200) 445,637
  16. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A12. FINANCING AND ADVANCES A12a. Financing and advances by type and Shariah contracts are as follows: 30 June 2022 Bai' Bithaman Ajil RM'000 At amortised cost: Cash lines Term financing Revolving credit Housing financing Hire purchase receivables Bills receivables Credit card receivables Trust receipts Staff financing Claims on customers under acceptance credits Others Gross financing and advances* Less: Allowance for ECL (Note A12(j)) - Stage 1 - 12 months ECL - Stage 2 - Lifetime ECL not credit impaired - Stage 3 - Lifetime ECL credit impaired Net financing and advances Murabahah RM'000 Al-Ijarah Musharakah Thummah Al Mutanaqisah -Bai' ("AITAB") RM'000 RM'000 Bai' Inah RM'000 Others RM'000 Total RM'000 420,536 22,037 2,541,202 3 - 553,811 13,015,437 3,845,510 8,976,114 581,038 471,813 20,047 8,682 43,072 - 4,289,623 - 477,975 995,630 983,840 - 15,122 52,663 449,530 - 1,031,786 14,455,407 4,851,387 11,560,388 4,289,626 633,701 449,530 471,813 20,047 2,983,778 1,876,934 29,340,704 51,754 4,289,623 2,457,445 312,413 14,307 844,035 2,189,347 14,307 39,967,339 (63,288) (412,468) (165,482) 39,326,101 15
  17. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A12. FINANCING AND ADVANCES (CONT'D.) A12a. Financing and advances by type and Shariah contracts are as follows (Cont'd.): 31 March 2022 Bai' Bithaman Ajil RM'000 At amortised cost: Cash lines Term financing Revolving credit Housing financing Hire purchase receivables Bills receivables Credit card receivables Trust receipts Staff financing Claims on customers under acceptance credits Others Gross financing and advances* Less: Allowance for ECL (Note A12(j)) - Stage 1 - 12 months ECL - Stage 2 - Lifetime ECL not credit impaired - Stage 3 - Lifetime ECL credit impaired Net financing and advances * Murabahah RM'000 Al-Ijarah Musharakah Thummah Al Mutanaqisah -Bai' ("AITAB") RM'000 RM'000 Bai' Inah RM'000 Others RM'000 Total RM'000 439,860 27,065 2,589,646 3 - 617,679 12,596,186 3,744,672 8,540,970 630,366 381,229 17,862 8,806 43,458 - 4,255,450 - 578,646 1,091,129 1,128,326 - 20,160 40,342 447,758 - 1,196,325 14,156,141 4,900,063 11,174,074 4,255,453 670,708 447,758 381,229 17,862 3,056,574 1,784,824 28,313,788 52,264 4,255,450 2,798,101 353,913 9,102 871,275 2,138,737 9,102 39,347,452 (61,592) (401,419) (230,573) 38,653,868 Included in financing and advances are exposures to the Restricted Investment Account ("RA") arrangement between the Bank and AmBank (M) Berhad ("AmBank") amounting to RM1,561.7 million (31 March 2022: RM1,713.8 million). Under the RA contract, the profit is shared based on a pre-agreed ratio. AmBank is exposed to the risks and rewards on the RA financing and it shall account for all allowance for impairment arising from the RA financing. Further details of the RA are disclosed in Note A17. 16
  18. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A12. FINANCING AND ADVANCES (CONT'D.) A12b. Gross financing and advances analysed by type of customer are as follows: Domestic non-bank financial institutions Domestic business enterprises - Small medium enterprises ("SME") - Others Government and statutory bodies Individuals Other domestic entities Foreign individuals and entities 30 June 2022 RM’000 31 March 2022 RM’000 1,928,014 2,091,347 7,062,838 7,587,868 425,199 22,915,985 600 46,835 39,967,339 7,078,754 7,833,699 102,813 22,193,670 644 46,525 39,347,452 A12c. All financing and advances reside in Malaysia. A12d. Gross financing and advances analysed by profit rate sensitivity are as follows: Fixed rate - Housing financing - Hire purchase receivables - Other financing Variable rate - Base rate and base financing rate plus - Cost plus - Other variable rates 17 30 June 2022 RM’000 31 March 2022 RM’000 163,181 4,237,596 3,601,152 159,912 4,199,966 3,516,511 22,059,467 9,766,505 139,438 39,967,339 21,535,195 9,796,311 139,557 39,347,452
  19. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A12. FINANCING AND ADVANCES (CONT'D.) A12e. Gross financing and advances analysed by sector are as follows: Agriculture Mining and quarrying Manufacturing Electricity, gas and water Construction Wholesale and retail trade and hotel and restaurants Transport, storage and communication Finance and insurance Real estate Business activities Education and health Household of which: - Purchase of residential properties - Purchase of transport vehicles - Others 30 June 2022 RM’000 31 March 2022 RM’000 1,173,737 257,034 4,827,949 336,172 990,312 2,928,573 1,505,890 1,950,786 2,179,868 587,802 266,032 22,963,184 11,628,736 3,962,175 7,372,273 918,053 357,563 4,809,630 273,022 1,050,791 2,947,081 1,495,066 2,107,052 2,184,116 587,875 377,008 22,240,195 11,241,327 3,915,934 7,082,934 39,967,339 39,347,452 A12f. Gross financing and advances analysed by residual contractual maturity are as follows: Maturing within one year Over one year to three years Over three years to five years Over five years 18 30 June 2022 RM’000 31 March 2022 RM’000 10,242,243 1,925,300 1,985,975 25,813,821 39,967,339 10,337,273 2,083,248 2,042,184 24,884,747 39,347,452
  20. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A12. FINANCING AND ADVANCES (CONT'D.) A12g. Movements in impaired financing and advances are as follows: 30 June 2022 RM’000 Balance at beginning of the financial period/year Additions during the period/year Reclassified as non-impaired Recoveries Amount written off Balance at end of the financial period/year Gross impaired financing and advances as % of gross financing and advances Financing loss coverage (including regulatory reserve) 31 March 2022 RM’000 628,542 293,469 (26,814) (114,403) (136,541) 644,253 613,074 718,754 (77,186) (337,277) (288,823) 628,542 1.61% 1.60% 103.6% 114.3% A12h. All impaired financing and advances reside in Malaysia. A12i. Impaired financing and advances by sector are as follows: Agriculture Mining and quarrying Manufacturing Construction Wholesale and retail trade and hotel and restaurants Transport, storage and communication Real estate Business activities Education and health Household of which: - Purchase of residential properties - Purchase of transport vehicles - Others 19 30 June 2022 RM’000 31 March 2022 RM’000 2 76,781 50,227 14,548 78,634 3,929 165,338 593 254,201 179,711 28,555 45,935 2 162,649 51,867 15,724 63,135 3,666 165,929 388 165,182 119,387 20,139 25,656 644,253 628,542
  21. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A12. FINANCING AND ADVANCES (CONT'D.) A12j. The movements in the allowances for ECL are as follows: Stage 1 Stage 2 Lifetime ECL Not Credit Impaired RM'000 Stage 3 Lifetime ECL Credit Impaired RM'000 61,592 1,661 1,775 (2,947) (234) 8,975 (6,338) 401,419 11,035 (13,259) 25,143 (10,739) 8,388 (4,109) 230,573 71,450 (472) (4,504) 26,924 3 56,119 7,357 17,541 (153) (6,774) 35 - (1,217) (10,713) 14 - 249 (6,874) (136,541) (1,121) (24,361) 49 (136,541) 63,288 412,468 165,482 641,238 143,487 401,459 101,634 646,580 (81,909) 2,625 (4,581) (542) 20,276 (37,662) (42) (28,659) 37,018 (18,470) 16,949 26,473 417,762 (1,070) (7,784) 22,179 1,279 426,783 335,811 (27,104) 24,653 3,167 38,504 415,594 (47,158) (13,962) (374) (14,493) 14 - 3,248 (22,639) 2 - (484) (23,141) (288,823) 2,390 (60,273) 16 (288,823) 61,592 401,419 230,573 693,584 12-month ECL RM'000 30 June 2022 Balance at beginning of the financial period Net allowances for ECL: - Transfer to Stage 1 - Transfer to Stage 2 - Transfer to Stage 3 New financial assets originated Net remeasurement of allowances Changes to model assumptions and methodologies Modification of contractual cash flows of financial assets Financial assets derecognised Foreign exchange differences Amount written-off Balance at end of the financial period 31 March 2022 Balance at beginning of the financial year Net (writeback of)/allowances for ECL: - Transfer to Stage 1 - Transfer to Stage 2 - Transfer to Stage 3 New financial assets originated Net remeasurement of allowances Changes to model assumptions and methodologies Modification of contractual cash flows of financial assets Financial assets derecognised Foreign exchange differences Amount written-off Balance at end of the financial year 20 5 - Total RM'000 693,584 84,146 (11,956) 17,692 15,951 17,366 45,672 24,903 (61,120)
  22. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A13. OTHER ASSETS Other receivables, deposits and prepayments Amount due from related companies Profit receivable Tax recoverable Deferred charges A14. 30 June 2022 RM’000 31 March 2022 RM’000 107,142 449 90,426 35,464 91,326 324,807 104,698 70,527 28,916 82,684 286,825 30 June 2022 RM’000 31 March 2022 RM’000 3,703,864 116,385 3,850,631 146,823 8,781,815 555,758 9,587,153 861,168 26,906,749 415,785 40,480,356 22,994,199 150,276 37,590,250 2,667,003 26,403,017 10,543,934 866,402 40,480,356 3,180,849 22,820,946 10,600,240 988,215 37,590,250 DEPOSITS FROM CUSTOMERS (i) By type of deposit: Savings deposit: Commodity Murabahah Qard Demand deposit: Commodity Murabahah Qard Term deposits: Commodity Murabahah Qard Total (ii) The deposits are sourced from the following types of customers: Government and statutory bodies Business enterprises Individuals Others (iii) The maturity structure of all term deposits and negotiable instruments of deposits are as follows: Due within six months Over six months to one year Over one year to three years Over three years to five years 22,936,653 4,047,080 267,132 71,669 27,322,534 21 18,084,514 4,774,000 214,910 71,051 23,144,475
  23. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A15. INVESTMENT ACCOUNTS OF CUSTOMERS 30 June 2022 RM’000 31 March 2022 RM’000 15,780 16,573 35,194 50,974 361,288 377,861 28,525 22,449 50,974 354,618 23,243 377,861 Wakalah RM’000 Mudarabah RM’000 30 June 2022 Interbank placement House financing Total investment 15,780 15,780 35,194 35,194 31 March 2022 Interbank placement House financing Total investment 16,573 16,573 361,288 361,288 Unrestricted investment account: Without maturity - Wakalah With maturity - Mudarabah The investments accounts are sourced from the following types of customers: Business enterprises Individuals Investment assets: 22
  24. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A15. INVESTMENT ACCOUNTS OF CUSTOMERS (CONT'D.) Average Rate of Return and Average Performance Incentive Fee for the investment accounts are as follows: Investment account holder A16. Average rate of return (%) 30 June 2022 Maturity : - less than 3 months - between 3 months to 12 months 55.63 55.00 2.06 2.20 1.88 - 31 March 2022 Maturity : - less than 3 months - between 3 months to 12 months 53.12 54.01 1.92 2.16 1.75 - DEPOSITS AND PLACEMENTS OF BANKS AND OTHER FINANCIAL INSTITUTIONS 30 June 2022 RM’000 31 March 2022 RM’000 299,961 1,895,193 54,857 1,398,227 51,137 3,699,375 379,066 1,519,729 252,836 1,434,174 48,630 3,634,435 30 June 2022 RM’000 31 March 2022 RM’000 Restricted investment account ("RA") - Mudarabah Muqayyadah 1,558,876 1,710,663 Investment asset: Financing Total investment 1,558,876 1,558,876 1,710,663 1,710,663 Non-Mudarabah Licensed Islamic banks Licensed banks Licensed investment banks Other financial institutions Bank Negara Malaysia Total A17. Average performance incentive fee (%) Average profit sharing ratio (%) INVESTMENT ACCOUNT DUE TO A LICENSED BANK 23
  25. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A17. INVESTMENT ACCOUNT DUE TO A LICENSED BANK (CONT'D.) Average Profit Sharing Ratio and Average Rate of Return for the investment account based on original contractual maturity are as follows: 30 June 2022 Average profit sharing ratio (%) Maturity: - over 2 years to 5 years - more than 5 years Investment account holder 31 March 30 June 2022 2022 Average profit sharing Average rate ratio (%) of return (%) 90 90 90 90 2.69 2.84 31 March 2022 Average rate of return (%) 2.64 2.80 The RA is a contract based on the Shariah concept of Mudarabah between two parties, that is, capital provider and entrepreneur to finance a business venture where the business venture is managed solely by the Bank as the entrepreneur. The profit of the business venture is shared between both parties based on a pre-agreed ratio. The capital provider for the RA contracts is AmBank, a related company. As at 30 June 2022, ECL allowance for the investment asset borne by AmBank amounted to RM1.8 million (31 March 2022: RM2.2 million). As at 30 June 2022, the remaining tenure of the RA contracts is for a period of 5 months to 8 years (31 March 2022: 8 months to 8 years). A18. OTHER LIABILITIES Note Profit payable Other creditors and accruals Lease liabilities Provision for reinstatement for leased properties Deferred income Advance rental Amount due to related companies Allowances for ECL on financing commitments and financial guarantees (a) 24 30 June 2022 RM’000 31 March 2022 RM’000 150,890 41,346 2,256 137,156 40,240 2,092 83 21,803 11,657 4,035 82 16,022 11,354 177,516 26,112 258,182 24,808 409,270
  26. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A18. OTHER LIABILITIES (CONT'D.) (a) The movements in allowances for ECL are as follows: Stage 1 12-month ECL RM'000 30 June 2022 Balance at beginning of the financial period Net allowances for ECL: - Transfer to Stage 1 - Transfer to Stage 2 - Transfer to Stage 3 New exposures originated Net remeasurement of allowances Exposures derecognised/ withdrawn Foreign exchange differences Balance at end of the financial period 31 March 2022 Balance at beginning of the financial year Net (writeback of)/allowances for ECL: - Transfer to Stage 1 - Transfer to Stage 2 - Transfer to Stage 3 New exposures originated Net remeasurement of allowances Financial exposures derecognised Foreign exchange differences Balance at end of the financial year 8,454 424 192 (380) (1) 2,043 Stage 2 Lifetime ECL Not Credit Impaired RM'000 10,567 873 (1,286) 1,130 (98) 1,657 Stage 3 Lifetime ECL Credit Impaired RM'000 Total RM’000 5,787 - 24,808 1,297 (1,094) 750 (99) 3,700 (528) 431 - (97) (902) 5 (961) 2 - (1,863) 7 8,883 11,442 5,787 26,112 9,012 6,804 15 15,831 (558) 185 (318) (10) 3,587 3,761 (2,533) 1,722 (77) 6,110 (1,813) (74) (87) (1,974) (2,189) - (1,387) 2 (8) - (3,584) 2 8,454 10,567 25 5,772 87 5,780 5,787 8,975 (2,348) 1,404 15,477 24,808
  27. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A19. INCOME DERIVED FROM INVESTMENT OF DEPOSITORS' FUNDS Individual Quarter 30 June 30 June 2022 2021 (Restated) RM’000 RM’000 Cumulative Quarter 30 June 30 June 2022 2021 (Restated) RM’000 RM’000 Finance income and hibah: Financing and advances - Financing income* - Financing income on impaired financing Financial assets at fair value through profit or loss Financial investments at fair value through other comprehensive income Financial investments at amortised cost Deposits and placements with banks and other financial institutions Total finance income and hibah 335,760 313,332 335,760 313,332 372 985 372 985 8,891 15,848 8,891 15,848 34,079 36,221 34,079 36,221 32,908 25,973 32,908 25,973 8,808 420,818 21,332 413,691 8,808 420,818 21,332 413,691 Other operating income: Fee and commission income: - Brokerage fees, commission and rebates - Fees on financing, advances and securities - Guarantee fees - Remittances - Service charges and fees - Others Foreign exchange (Loss)/Gain from disposal of financial assets at fair value through profit or loss Loss on revaluation of financial assets at fair value through profit or loss Gain from disposal of financial investments at fair value through other comprehensive income Net loss on derivatives Others Total other operating income Total * - (41) - (41) 10,819 3,893 22 772 1,297 (669) 10,022 3,169 20 605 827 1,571 10,819 3,893 22 772 1,297 (669) 10,022 3,169 20 605 827 1,571 (121) 1,231 (121) 1,231 (2,828) (51) (2,828) (51) (2,170) (16) 10,999 549 (2,217) 32 15,717 (2,170) (16) 10,999 549 (2,217) 32 15,717 431,817 429,408 431,817 429,408 Included the net loss of RM193,000 (30 June 2021: RM3,043,000) from measures implemented in response to COVID-19 pandemic. 26
  28. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A20. INCOME DERIVED FROM INVESTMENT OF INVESTMENT ACCOUNT FUNDS Individual Quarter 30 June 30 June 2022 2021 RM’000 RM’000 Cumulative Quarter 30 June 30 June 2022 2021 RM’000 RM’000 Income derived from investment of: - Restricted investment account Unrestricted investment accounts 12,605 9,870 12,605 9,870 2,351 14,956 484 10,354 2,351 14,956 484 10,354 12,605 12,605 9,870 9,870 Income derived from investment of restricted investment account Finance income and hibah: Financing and advances - Financing income Total finance income and hibah 12,605 12,605 9,870 9,870 Income derived from investment of unrestricted investment accounts Finance income and hibah: Financing and advances - Financing income Deposits and placements with banks and other financial institutions Total finance income and hibah 2,273 408 2,273 408 78 2,351 76 484 78 2,351 76 484 27
  29. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A21. INCOME DERIVED FROM INVESTMENT OF SHAREHOLDER'S FUNDS Individual Quarter 30 June 30 June 2022 2021 (Restated) RM’000 RM’000 Cumulative Quarter 30 June 30 June 2022 2021 (Restated) RM’000 RM’000 Finance income and hibah: Financing and advances - Financing income* - Financing income on impaired financing Financial assets at fair value through profit or loss Financial investments at fair value through other comprehensive income Financial investments at amortised cost Deposits and placements with banks and other financial institutions Total finance income and hibah 29,711 26,565 29,711 26,565 33 83 33 83 787 1,344 787 1,344 3,016 3,071 3,016 3,071 2,912 2,202 2,912 2,202 779 37,238 1,808 35,073 779 37,238 1,808 35,073 3,639 4,283 3,639 4,283 Other operating income: Fee and commission income: - Bancassurance commission - Brokerage fees, commission and rebates - Fees on financing, advances and securities - Guarantee fees - Remittances - Service charges and fees - Others Foreign exchange (Loss)/Gain from disposal of financial assets at fair value through profit or loss Loss on revaluation of financial assets at fair value through profit or loss Gain from disposal of financial investments at fair value through other comprehensive income Net loss on derivatives Others Total other operating income Total * - (4) - (4) 961 344 (471) 807 1,066 (59) 854 269 43 771 706 133 961 344 (471) 807 1,066 (59) 854 269 43 771 706 133 (11) 104 (11) 104 (250) (4) (250) (4) (192) (1) 5,833 46 (188) 3 7,016 (192) (1) 5,833 46 (188) 3 7,016 43,071 42,089 43,071 42,089 Included the net loss of RM17,000 (30 June 2021:RM258,000) from measures implemented in response to COVID-19 pandemic. 28
  30. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A22. ALLOWANCES FOR IMPAIRMENT ON FINANCING AND ADVANCES - NET Individual Quarter 30 June 30 June 2022 2021 (Restated) RM’000 RM’000 Allowance for impairment on financing and advances Impaired financing and advances recovered, net Total A23. 84,146 110,674 84,146 110,674 (26,370) 57,776 (19,244) 91,430 (26,370) 57,776 (19,244) 91,430 ALLOWANCE FOR IMPAIRMENT ON FINANCIAL INVESTMENTS Individual Quarter 30 June 30 June 2022 2021 (Restated) RM’000 RM’000 Financial investments at amortised cost - sukuk Financial investments at fair value through other comprehensive income - sukuk Total A24. Cumulative Quarter 30 June 30 June 2022 2021 (Restated) RM’000 RM’000 (2,273) (764) Cumulative Quarter 30 June 30 June 2022 2021 (Restated) RM’000 RM’000 (2,273) (764) 5,019 2,070 5,019 2,070 2,746 1,306 2,746 1,306 WRITEBACK OF ALLOWANCE FOR IMPAIRMENT ON OTHER FINANCIAL ASSETS Individual Quarter 30 June 30 June 2022 2021 RM’000 RM’000 Cash and short-term funds (147) 29 (49) Cumulative Quarter 30 June 30 June 2022 2021 RM’000 RM’000 (147) (49)
  31. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A25. PROVISION FOR COMMITMENTS AND CONTINGENCIES Individual Quarter 30 June 30 June 2022 2021 RM’000 RM’000 Provision for commitments and contingencies - financing commitments and financial guarantee contracts A26. 1,297 708 1,297 708 INCOME ATTRIBUTABLE TO THE DEPOSITORS AND OTHERS Individual Quarter 30 June 30 June 2022 2021 RM’000 RM’000 Non-Mudarabah fund Deposit from customers Deposits and placements of banks and other financial institutions Others Total A27. Cumulative Quarter 30 June 30 June 2022 2021 RM’000 RM’000 Cumulative Quarter 30 June 30 June 2022 2021 RM’000 RM’000 158,469 162,737 158,469 162,737 18,085 176,554 24,592 187,329 18,085 176,554 24,592 187,329 10,402 4,203 10,402 4,203 186,956 191,532 186,956 191,532 INCOME ATTRIBUTABLE TO THE INVESTMENT ACCOUNT HOLDERS Individual Quarter 30 June 30 June 2022 2021 RM’000 RM’000 Unrestricted investment accounts Customers Restricted investment account Licensed bank Cumulative Quarter 30 June 30 June 2022 2021 RM’000 RM’000 1,264 210 1,264 210 11,344 12,608 8,883 9,093 11,344 12,608 8,883 9,093 30
  32. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A28. OTHER OPERATING EXPENSES Individual Quarter 30 June 30 June 2022 2021 RM’000 RM’000 Personnel costs: Salaries, allowances, bonuses and incentives Share granted under AMMB Executives' Share Scheme ("ESS") - charge/(writeback) Contributions to Employees' Provident Fund/Private Retirement Scheme Social security cost Others Establishment costs: Amortisation of intangible assets Cleaning, maintenance and security Computerisation costs Depreciation of property and equipment Depreciation of right-of-use assets Rental of premises Finance cost: - Lease liabilities - Provision for reinstatement for leased properties Others Marketing and communication expenses: Advertising, marketing and communication Others Administration and general expenses: Professional services Others Service transfer pricing expense, net 4,286 72 4,259 (177) Cumulative Quarter 30 June 30 June 2022 2021 RM’000 RM’000 4,286 72 4,259 (177) 684 19 529 5,590 686 20 260 5,048 684 19 529 5,590 686 20 260 5,048 89 95 89 95 11 281 5 332 11 281 5 332 32 35 32 35 71 208 71 146 71 208 71 146 15 17 15 17 1 4 712 4 705 1 4 712 4 705 1,199 8 1,207 764 9 773 1,199 8 1,207 764 9 773 503 2,354 2,857 755 3,885 4,640 503 2,354 2,857 755 3,885 4,640 66,907 61,098 66,907 61,098 77,273 72,264 77,273 72,264 31
  33. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A29. BASIC EARNINGS PER SHARE Basic/Diluted The basic/diluted earnings per share is calculated by dividing the net profit attributable to the equity holder of the Bank by the weighted average number of ordinary shares in issue during the financial period. Individual Quarter 30 June 30 June 2022 2021 Cumulative Quarter 30 June 30 June 2022 2021 Net profit attributable to equity holder of the Bank (RM'000) 100,292 71,046 100,292 71,046 Number of ordinary shares at beginning and end of the financial period representing the weighted average number of ordinary shares in issue ('000) 494,369 494,369 494,369 494,369 20.29 14.37 20.29 14.37 Basic/Diluted earnings per share (sen) 32
  34. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A30. BUSINESS SEGMENT ANALYSIS Segment information is presented in respect of the Bank’s business segments. The business segment information is prepared based on internal management reports, which are regularly reviewed by the Chief Operating Decision Maker in order to allocate resources to a segment and to assess its performance. The Bank comprises the following main business segments: (a) Retail Banking Retail Banking continues to focus on building mass affluent, affluent and small business customers. Retail Banking offers products and financial solutions which includes auto finance, mortgages, personal financing, credit cards, small business financing, priority banking services, wealth management, remittance services and deposits. (b) Business Banking Business Banking (“BB”) focuses on the small and medium sized enterprises segment, which comprises Enterprise Banking and Commercial Banking. Solutions offered to Enterprise Banking customers encompass Capital Expenditure (“CAPEX”) financing, Working Capital financing and Cash Management and while Commercial Banking offers the same suite of products, it also provides more sophisticated structures such as Contract Financing, Development Financing and Project Financing. (c) Wholesale Banking Wholesale Banking comprises Corporate Banking and Group Treasury and Markets: (i) Corporate Banking Corporate Banking offers a full range of products and services of corporate lending, trade finance and cash management solutions to wholesale banking clients. (ii) Group Treasury and Markets Group Treasury and Markets includes proprietary trading as well as providing full range of Shariah compliant products and services relating to treasury activities, including foreign exchange, derivatives and fixed income. It also offers Shariah compliant customised investment solutions for customers. 33
  35. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A30. BUSINESS SEGMENT ANALYSIS (CONT'D.) The Bank comprises the following main business segments (cont'd.): (d) Investment Banking Investment Banking offer Islamic advisory services and a wide range of Shariah-compliant financial and investment solutions that include sukuk origination, Islamic equity or equity related capital markets offerings, Islamic structured finance. (e) Group Funding and Others Group Funding and Others comprise activities to maintain the liquidity of the Bank as well as support operations of its main business units and non-core operations of the Bank. Measurement of Segment Performance The segment performance is measured on income, expenses and profit basis. These are shown after allocation of certain centralised costs, funding income and expenses directly associated with each segment. Transactions between segments are recorded within the segment as if they are third party transactions and are eliminated on aggregation. Note: (i) The Chief Operating Decision Maker relies primarily on the net finance income information to assess the performance of, and to make decisions about resources to be allocated to these operating segments. (ii) The financial information by geographical segment is not presented as the Bank's activities are principally conducted in Malaysia. (iii) The comparatives have been restated with current business reallignment. 34
  36. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A30. BUSINESS SEGMENT ANALYSIS (CONT'D.) For the financial period ended 30 June 2022 Business Banking RM'000 Retail Banking RM'000 Wholesale banking Corporate Group Treasury Banking and Market RM'000 RM'000 Investment Banking RM'000 Group Funding and Others RM'000 Total RM'000 External net income Intersegments net income Net income 190,109 (64,404) 125,705 55,733 (16,871) 38,862 90,692 (39,876) 50,816 (23,576) 58,766 35,190 32 (3) 29 (44,698) 62,388 17,690 268,292 268,292 Net finance income Other operating income/(loss) Net income Other operating expenses of which: 115,540 10,165 125,705 (47,182) 32,932 5,929 38,861 (4,579) 45,236 5,580 50,816 (11,329) 39,731 (4,540) 35,191 (2,351) 5 24 29 (64) 17,511 179 17,690 (11,768) 250,955 17,337 268,292 (77,273) (1) (1) - (32) (71) (87) (32) (71) (89) Profit/(loss) before impairment losses Allowance/(Writeback of) impairment on financing and advances Allowance for impairment on financial investments Writeback of allowance for impairment on other financial assets (Provision)/Writeback of provision for commitments and contingencies 78,523 (22,026) (1,093) 34,282 (19,118) (538) 39,487 908 2,271 334 32,840 (5,017) 147 - (35) - 5,922 (17,540) - 191,019 (57,776) (2,746) 147 (1,297) Profit/(Loss) before zakat and taxation Zakat and taxation Profit/(Loss) for the financial period 55,404 (13,297) 42,107 14,626 (3,510) 11,116 43,000 (10,320) 32,680 27,970 (4,346) 23,624 (35) 8 (27) (11,618) 2,410 (9,208) 129,347 (29,055) 100,292 23,014,214 13,926,685 37.5% 23,217,875 22,921,543 272,594 13,847,794 6,258,626 3,779,261 11.8% 6,333,385 6,256,849 126,171 3,754,138 10,859,309 4,073,936 22.3% 10,419,519 10,190,413 245,488 4,021,028 13,823,321 23,095,229 6.7% 22,452,251 757 >100% - 167,775 5,304,790 66.5% (3,440) (42,704) 104,520 54,123,245 50,180,658 28.8% 39,967,339 39,326,101 644,253 44,179,731 Depreciation of property and equipment Depreciation of right-of-use-assets Amortisation of intangible assets - - Other information Total segment assets Total segment liabilities Cost to income ratio Gross financing and advances Net financing and advances Impaired financing and advances Total deposits Additions to : Property and Equipment Intangible assets - - 35 - - - 8 21 8 21
  37. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A30. BUSINESS SEGMENT ANALYSIS (CONT'D.) For the financial period ended 30 June 2021 (Restated) Business Banking RM'000 Retail Banking RM'000 Wholesale banking Corporate Group Treasury Banking and Market RM'000 RM'000 Investment Banking RM'000 Group Funding and Others RM'000 Total RM'000 External net income Intersegments net income Net income 165,891 (53,108) 112,783 51,028 (15,331) 35,697 100,695 (43,515) 57,180 (19,887) 51,514 31,627 264 (29) 235 (41,106) 60,469 19,363 256,885 256,885 Net finance income Other operating income Net finance income/(loss) Other operating expenses of which: 103,266 9,517 112,783 (44,267) 31,204 4,494 35,698 (3,180) 50,943 6,236 57,179 (10,524) 28,670 2,957 31,627 (2,105) 18 217 235 (27) 19,151 212 19,363 (12,161) 233,252 23,633 256,885 (72,264) (2) (4) (1) - (33) (71) (90) (35) (71) (95) Depreciation of property and equipment Depreciation of right-of-use-assets Amortisation of intangible assets Profit before impairment losses and provision Allowance for impairment on financing and advances Impairment writeback on financial investments Impairment writeback on other financial assets (Provision)/Writeback of provision for commitments and contingencies Profit before zakat and taxation Zakat and taxation Profit for the financial period - - 68,516 6,599 43 32,518 (13,599) (557) 46,655 (33,689) (3,640) (194) 29,522 (1,866) 49 - 208 - 7,202 (50,741) 4,200 - 184,621 (91,430) (1,306) 49 (708) 75,158 (18,038) 57,120 18,362 (4,407) 13,955 9,132 (2,191) 6,941 27,705 (4,282) 23,423 208 (50) 158 (39,339) 8,788 (30,551) 91,226 (20,180) 71,046 19,545,786 13,297,235 39.2% 19,774,942 19,463,464 189,044 13,227,492 5,684,308 3,750,013 8.9% 5,730,105 5,682,603 115,688 3,717,227 11,668,898 4,155,550 18.4% 10,853,327 10,646,400 315,399 4,125,800 14,643,187 21,010,196 6.7% 20,820,377 19,963 541 11.5% - (72,937) 5,420,903 62.8% (4,395) (153,302) 59,864 51,489,205 47,634,438 28.1% 36,353,979 35,639,165 620,131 41,950,760 Other information Total segment assets Total segment liabilities Cost to income ratio Gross financing and advances Net financing and advances Impaired financing and advances Total deposits Additions to : Property and Equipment Intangible assets 4 11 11 36 11 - - 16 4 49
  38. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A31. PERFORMANCE REVIEW FOR THE FINANCIAL PERIOD ENDED 30 JUNE 2022 The Bank reported a higher profit before zakat and taxation of RM129.3 million for the financial period ended 30 June 2022 compared to the corresponding period ended 30 June 2021 of RM91.2 million. The higher profit was mainly due to lower net allowance for impairment on financing and advances of RM33.7 million and higher net finance income of RM17.7 million, offset by lower other operating income of RM6.3 million, higher other operating expenses of RM5.0 million, higher ECL of financial investments of RM1.4 million and higher ECL on financing commitments and financial guarantee contracts of RM0.6 million. In the opinion of the directors, the results of operations of the Bank for the financial period have not been substantially affected by any item, transaction or event of a material and unusual nature. A32. PROSPECTS FOR THE FINANCIAL YEAR ENDING 31 MARCH 2023 Malaysia's gross domestic product ("GDP") improved further in the second quarter of 2022. While the market was expecting a 6.7% year-on-year ("YoY") growth, the actual GDP grew by 8.9% YoY after expanding 5.0% YoY in the previous quarter. This brings the average first half 2022 GDP to 6.9% YoY. Looking at the monthly economic performance, the economy expanded by 5.6% YoY in April 2022, 5.0% YoY in May 2022 and 16.5% YoY in June 2022, signalling robust improvement. The better performance in the second quarter of 2022 was due to the full reopening across all sectors in the economy, the high vaccination and booster rates, and also the opening of international borders in April 2022. Following the strong first half 2022 performance, we now expect second half 2022 GDP to also perform well. Besides the low base, we foresee the economy to continue benefiting from strong export earnings backed by firm commodity prices, a still healthy global semiconductor environment, resource-based exports, and Foreign Direct Investment inflows. Also, domestic activities, primarily private expenditure, a pick-up in tourism activities, and improving employment will continue to lend support to the overall economic performance. However, the upside to the economy is being contained by shortages of entry-level foreign workers and talents, on top of supply chain disruptions and high input costs. Besides domestic challenges, the Malaysian economy is still vulnerable to external shocks such as slower-than-expected economic growth, and some knock-on impact from the ongoing geopolitical risk. On that note, we have revised upwards our projection. Our base case GDP growth target for 2022 is now 6.4% with the upside at 6.7% and downside of 5.9%. Malaysia's inflation is starting to gain some steam, accelerating from 2.3% in January 2022 to 3.4% in June 2022. This brings the average of inflation for the first half of 2022 to 2.5% (2.3% January to June 2021). Upwards pressure remains from cost-push dynamics induced by higher commodity prices and a weaker ringgit, which had fed into the inflation reading. Also, we may see low base effects in July, August, and September of 2022 readings as the local economy suffered the reintroduction of MCO 3.0 in 2021. In addition, the notion of demand-pull inflation is starting to pick up. Unemployment has dipped to 3.8% in June 2022, the lowest level since the pandemic started, while core inflation has reached 3.0% YoY, the highest since 2016. This is further bolstered by other spending indicators such as credit card spending (jumped 49.9%) and debit card spending (surged 105.5%), and double-digit growth in retail spending at 31.3%. For the year 2022, we expect the annual inflation rate to hover around 2.8% to 3.0% with an upside surprise of 3.3%. 37
  39. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A32. PROSPECTS FOR THE FINANCIAL YEAR ENDING 31 MARCH 2023 (CONT'D.) Meanwhile, the overall banking system financing grew 5.6% YoY in June 2022 and marking the new 3-year high. Household financing increase faster by 5.9% YoY, while non-household financing climbed 5.3% YoY supported by working capital financing. Overall, we envisaged the industry's financing growth to reach 5.0% to 6.0% for the full year of 2022. The overall banking system remains healthy in 2022 underpinned by strong liquidity. Despite some dips, the liquidity coverage ratio stayed above the 100% regulatory requirement in June 2022 at 148.4%. Correspondingly, the sector's funding profile was well-diversified with June 2022's financingto-fund ratio and financing-to-fund-and-equity ratio at 81.8% and 71.1% respectively. Meanwhile, Bank Negara Malaysia ("BNM") has made its first rate hike move this year in May 2022, beating the market's expectation, on the back of a firming labour market and recovering domestic economy. In the subsequent Monetary Policy Committee meeting in July, BNM raised the overnight policy rate ("OPR") by another 25 basis points ("bps") to 2.25%. The hike was due to Malaysia’s positive growth outlook coming from firm domestic demand, improving labour market, and transition into endemicity. Expectations are that the OPR will continue trending upwards and likely to stabilise at 2.50% to 2.75% in 2022 and settle at 3.25% in 2023. On that note, we have baked in another 25bps OPR rate hike in September 2022 with a probability of 40% for another 25bps in November 2022 supported by healthy potential incoming data that reflects a pick-up in demand pressures. AMMB Group started its financial year 2023 ("FY2023") stronger on the back of positive economic momentum across all sectors. The AMMB Group remains committed in growing revenue, rebuilding capital and shoring up liquidity levels while closely monitoring asset quality and exerting cost discipline. At the same time, the AMMB Group continues to extend financial assistance to customers who are still in need. The AMMB Group’s ongoing efforts remain focused on creating sustainable long-term value for all its stakeholders. While there remain uncertainties and near-term volatilities amid growing concerns of global recession as well as the conflict in Ukraine, AMMB Group continues to forge ahead with the execution of its Focus 8 strategy. The AMMB Group’s key focus in FY2023 include accelerating its digital transformation, forming strategic partnerships and embedding Environmental, Social and Governance ("ESG") considerations into its strategies, business and operations. These areas, once enhanced, will allow the AMMB Group to deliver more competitive integrated value propositions to its customers. A33. VALUATION OF PROPERTY AND EQUIPMENT The Bank’s property and equipment are stated at cost less accumulated depreciation and accumulated impairment losses (if any). A34. SIGNIFICANT EVENT DURING THE FINANCIAL PERIOD There was no significant event during the current financial quarter. 38
  40. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A35. COMMITMENTS AND CONTINGENCIES (CONT'D.) In the normal course of business, the Bank makes various commitments and incurs certain contingent liabilities with legal recourse to its customers. No material losses are anticipated as a result of these transactions. The commitments and contingencies are not secured against the Bank’s assets. The principal amounts of the commitments and contingencies of the Bank and notional contracted amounts of derivatives are as follows: Commitments Other commitments, such as formal standby facilities and credit lines, with an original maturity of up to one year Other commitments, such as formal standby facilities and credit lines, with an original maturity of over one year Unutilised credit card lines Forward asset purchase Contingencies Direct credit substitutes Transaction related contingent items Short-term self liquidating trade-related contingencies Obligations under on-going underwriting agreements Derivative Financial Instruments Foreign exchange related contracts - One year or less - Over one year to five years Profit rate related contracts - Over one year to five years Commodity related contracts - Over one year to five years Total 39 30 June 2022 RM'000 31 March 2022 RM'000 7,218,309 5,992,817 965,588 1,483,978 40,765 9,708,640 896,617 1,430,460 10,114 8,330,008 638,820 894,541 614,836 905,845 99,758 81,317 120,000 1,753,119 130,000 1,731,998 3,342,384 1,635,020 2,636,545 1,582,530 350,000 350,000 74,808 5,402,212 71,367 4,640,442 16,863,971 14,702,448
  41. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A36. FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS Determination of fair value and fair value hierarchy The Bank uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique: Level 1 : quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 : other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly; Level 3 : techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data. For assets and liabilities measured at fair value that are recognised on a recurring basis, the Bank determines whether transfers have occurred between Levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. Financial assets and liabilities measured using a valuation technique based on assumptions that are supported by prices from observable current market transactions are assets and liabilities for which pricing is obtained via pricing services, but where prices have not been determined in an active market, financial assets with fair values based on broker quotes, investments in private equity funds with fair values obtained via fund managers and assets that are valued using the Bank’s own models whereby the majority of assumptions are market observable. Non market observable inputs means that fair values are determined, in whole or in part, using a valuation technique (model) based on assumptions that are neither supported by prices from observable current market transactions in the same instrument, nor are they based on available market data. The main asset classes in this category are unlisted equity investments and debt instruments. Valuation techniques are used to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. However, the fair value measurement objective remains the same, that is, an exit price from the perspective of the Bank. Therefore, unobservable inputs reflect the Bank's own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). These inputs are developed based on the best information available, which might include the Bank's own data, as well as financial information of the counterparties. The Bank does not have any financial assets or liabilities measured at level 3 as at the end of the reporting period and 31 March 2022. 40
  42. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A36. FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS (CONT'D.) a) The following table provides the fair value measurement hierarchy of the Bank’s assets and liabilities. Valuation techniques Level 1 Level 2 RM'000 RM'000 Level 3 RM'000 Total RM'000 30 June 2022 Assets measured at fair value Derivative financial assets Financial assets at fair value through profit or loss - Money market securities - Unquoted sukuk Financial investments at fair value through other comprehensive income - Money market securities - Unquoted sukuk Liabilities measured at fair value Derivative financial liabilities - 54,170 - 54,170 - 2,064,222 142,309 - 2,064,222 142,309 - 1,616,605 2,587,531 6,464,837 - 1,616,605 2,587,531 6,464,837 - 56,666 56,666 - 56,666 56,666 - 51,661 - 51,661 - 668,879 318,089 - 668,879 318,089 - 1,973,525 2,477,095 5,489,249 - 1,973,525 2,477,095 5,489,249 - 60,038 60,038 - 60,038 60,038 31 March 2022 Assets measured at fair value Derivative financial assets Financial assets at fair value through profit or loss - Money market securities - Unquoted sukuk Financial investments at fair value through other comprehensive income - Money market securities - Unquoted sukuk Liabilities measured at fair value Derivative financial liabilities There were no transfers between Level 1 and Level 2 during the current financial period and previous financial year for the Bank. 41
  43. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A37. CAPITAL ADEQUACY (a) The capital adequacy ratios of the Bank are as follows: 30 June 2022 Under transitional arrangement (Note(i)) Common Equity Tier 1 ("CET 1") Capital Ratio Tier 1 Capital ratio Total Capital ratio 12.201% 12.201% 17.068% 31 March 2022 12.489% 12.489% 17.292% Notes: (i) Pursuant to the revised BNM policy document, Capital Adequacy Framework for Islamic Banks (Capital Components) issued on 9 December 2020, the capital ratios of the Bank had been computed applying transitional arrangement on provision for ECL. Had the transitional arrangement not been applied, the capital ratios of the Bank as at 30 June 2022 and 31 March 2022 are as follow: Common Equity Tier 1 Capital Ratio Tier 1 Capital Ratio Total Capital Ratio (ii) 30 June 2022 11.628% 11.628% 16.701% 31 March 2022 11.763% 11.763% 16.948% Pursuant to BNM's Capital Adequacy Framework for Islamic Banks (Capital Components), financial institutions are required to maintain minimum Common Equity Tier 1 (“CET1”) Capital Ratio of 4.5%, Tier 1 Capital Ratio of 6.0% and Total Capital Ratio of 8.0% at all times. The Bank is also required to maintain the following capital buffers: (a) a Capital Conservation Buffer ("CCB") of 2.5%; (b) a Countercyclical Capital Buffer ("CCyB") determined as the weighted-average of the prevailing CCyB rates applied in the jurisdictions in which the Bank has credit exposures; and (c) a Higher Loss Absorbency ("HLA") requirement for a financial institution that is designated as a domestic systemically important bank ("D-SIB"). 42
  44. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A37. CAPITAL ADEQUACY (CONT'D.) (b) The components of CET 1 Capital, Tier 1 Capital, Tier 2 Capital and Total Capital of the Bank are as follows: 30 June 2022 RM’000 31 March 2022 RM’000 1,387,107 2,590,984 (35,504) 1,387,107 2,490,692 (3,893) (427) (71,625) (495) (61,249) (98) (92) CET 1 Capital Ordinary shares Retained earnings Fair value reserve Less : Regulatory adjustments applied on CET 1 Capital - Intangible assets - Deferred tax assets - Unrealised fair value gains on financial liabilities due to changes in own credit risk - Other CET 1 regulatory adjustment specified by BNM CET 1 Capital/ Tier 1 Capital 190,766 4,061,203 235,578 4,047,648 Tier 2 Capital Tier 2 Capital instruments meeting all relevent criteria for inclusion General provisions* Tier 2 Capital 1,300,000 320,111 1,620,111 1,300,000 256,523 1,556,523 Total Capital 5,681,314 5,604,171 The breakdown of the risk-weighted assets ("RWA") in various categories of risk are as follows: Credit RWA Less : Credit RWA absorbed by Investment Account Total Credit RWA Market RWA Operational RWA Total Risk Weighted Assets * Consists of stage 1 and stage 2 loss allowances. 43 30 June 2022 RM’000 31 March 2022 RM’000 32,692,702 32,508,336 (1,596,909) 31,095,793 394,788 1,795,753 33,286,334 (2,075,074) 30,433,262 215,113 1,760,237 32,408,612
  45. Registration No . 199401009897 (295576–U) AmBank Islamic Berhad (Incorporated in Malaysia) A38. RESTATEMENT OF COMPARATIVE INFORMATION In March 2022, the Bank conducted a review on the classification of its unrated bonds and sukuk and reclassified the instruments from financing and advances to financial investments at amortised cost to align the presentation of its debt securities as financial investments. The reclassification resulted in changes to the comparative financial information to conform with current period's presentation, which resulted in the following financial effects to the statements of the Bank: As previously reported RM’000 Reclassification RM’000 As restated RM’000 (90,870) (560) (91,430) (1,866) 560 (1,306) (3,026,037) 50,174 (2,975,863) 30 June 2021 Reconciliation of statements of profit or loss: Individual quarter/cumulative quarter Allowances for impairment on financing and advances, net Allowances for impairment losses on financial investments 30 June 2021 Reconciliation of statements of cash flows: Changes in working capital: Net change in operating assets Net cash used in investing activities (844,470) 44 (50,174) (894,644)