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Bank Muamalat Malaysia Berhad: Annual Report 2017

IM Insights
By IM Insights
5 years ago
Bank Muamalat Malaysia Berhad: Annual Report 2017

Amanah, Arif, Fiqh, Islam, Islamic banking, Murabahah, Shariah, Shariah compliant, Shirkah, Sukuk, Takaful, Tawarruq, Waqf, Zakat, Falah, Credit Risk, Financing Assets, Provision, Sales

Amanah, Arif, Dayn, Fatwa, Fiqh, Hadith, Islam, Islamic banking, Miskin, Mufti, Murabahah, Musharakah, Sadaqah, Shariah, Shariah advisor, Shariah compliant, Shirkah, Sukuk, Takaful, Tawarruq, Wakalah, Waqf, Zakat, Falah, Credit Risk, Financing Assets, General Investment Account, Masih, Participation, Provision, Restricted Investment Account, Sales

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    2. Delivering Values Community . Marketplace. Workplace. Environment At Bank Muamalat, we enhance our value based on criteria beyond business results and MARKETPLACE. Our WORKPLACE sets the pace for us to deliver and share our values with the COMMUNITY and ENVIRONMENT. The COMMUNITY is the place we seek for co-prosperity and epitomize our business ingenuity. Our customer service and product offerings result in social and human benefits. The MARKETPLACE is the platform for us to manifest our true grit and sheer determination to succeed as one of the fair and socially-engaged market players. The WORKPLACE is closely guarded for our employees, being our biggest asset, to be nurtured, well-engaged and conducive for work-life balance. We cherish our ENVIRONMENT and vow to care, safeguard and cherish it for our future generations to inherit and restore the beauty of the nature.
    3. CONTENT HIGHLIGHTS AND OVERVIEW 06 07 08 11 12 10 Years Financial Highlights Corporate Information Asset Performance Connected Party Media Highlights LEADERSHIP 16 18 28 29 32 34 36 38 Board of Directors Board of Directors Profile Shariah Committee Shariah Committee Profile Terms of Reference Statement from the Chairman of Shariah Committee Senior Management Senior Management Profile INSIGHTS 48 50 54 58 62 63 65 66 67 68 70 72 Chairman ’s Statement From The CEO’s Blog Consumer Banking Business Banking Division Treasury Capital Market Deposits Wealth Management Investment Banking Muamalat Invest Sdn. Bhd. (MISB) Shariah Calendar of Events 2017 Corporate Responsibility SUSTAINABILITY REPORT 80 86 92 97 Responsible to the Community Responsible to the Workplace Responsible to the Marketplace Responsible to the Environment ACCOUNTABILITY 100 110 112 120 122 Statement on Corporate Governance Statement on Internal Controls Statement on Risk Management Statement on Compliance Code of Conduct & Ethical Principles THE FINANCIAL 123 Financial Statements 318 Basel II – Pillar 3 Disclosures OTHERS 395 Branch Network
    4. VISION & MISSION • To Become the Preferred Islamic Financial Service Provider • To Deliver Best Value to the Stakeholders VALUE • Care • Respect • Integrity • Innovative • Service Oriented 2 2 BANK BANK MUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) • annual| ANNUAL report 2016REPORT 2017 MALAYSIA BERHAD (6175-W)
    5. B ank Muamalat ’s logo and identity are essentially formed by a dynamic line in a continuous motion. The principal objective of efficiency and dynamism are reflected by this single line. The single line signifies an efficient, clear and focused vision. This reflects the strong relationship between Bank Muamalat and its customers. The dome is a basic design element of Islamic architecture. It is used to signify the place for prayers and shelter. This represents the products and services that Bank Muamalat can offer to its customers. The five domes are representative of the five tenets of Islam and the five times Muslims are called to pray. The five points are also used in relation to the five principles of the Rukun Negara, giving a truly Malaysian objective to its existence. The linkage of the five domes with a single line signifies networking of Bank Muamalat and the relationship between Bank Muamalat, customers and its external environment. This networking and togetherness translate the very meaning of Muamalat itself, which is “relationship between mankind”. An hour glass embedded in the centre within the logo design stands for the time which is the essence of a bank. Investments grow over time. Two colours are used within the logo. Sultan blue, a royal colour is used to provide a feeling of strength and confidence. Orange is a warm and exciting colour. It gives light and signifies growth. The orange is used to signify the warmth of Bank Muamalat which is in continuous growth, never static but always dynamic. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 3
    6. HIGHLIGHTS AND OVERVIEW 4 4 BANK BANK MUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) • annual| ANNUAL report 2016REPORT 2017 MALAYSIA BERHAD (6175-W)
    7. MARKET PLACE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 5
    8. 10 YEARS Jan 2009 - Mar 2010 2011 Restated 2012 Restated 2013 2014 702 ,236 1,319,131 1,348,286 1,401,004 1,598,476 1,745,576 1,854,694 1,995,937 2,138,571 Profit/(Loss) Before Tax (RM’000) 64,238 44,068 142,061 186,785 103,006 235,963 208,284 121,966 167,233 170,536 Profit/(Loss) After Tax (RM’000) 48,138 31,951 98,834 120,433 69,244 167,936 151,564 89,280 131, 909 149,907 Total Assets (RM’000) 13,808,090 14,398,645 16,733,420 18,659,940 20,504,037 21,071,590 20,061,690 22,438,036 22,636,889 23,526,342 Total Deposits (RM’000) 12,172,868 12,447,970 14,920,856 16,216,173 18,151,087 18,744,179 17,629,228 19,544,549 19,643,428 19,917,482 Total Financing (RM’000) 5,870,585 6,427,747 7,037,126 7,495,007 9,064,271 10,352,626 11,899,691 13,414,670 14,512,877 14,918,272 48 3 1 1,454 48 5 1 1,419 49 6 1 1,584 51 4 1 1,763 58 2 1 1,929 59 7 1 2,099 59 7 1 2,135 59 7 1 1,987 61 1 1 1,703 62 1 1 1,733 0.47 8.86 0.31 6.12 0.73 11.24 1.06 15.24 0.53 7.49 1.14 15.73 1.01 12.46 0.57 6.78 0.74 8.69 0.74 8.25 2016 2017 2008 737,331 2015 2007 FINANCIAL HIGHLIGHTS _____________________________________________________________________________________________________________________________________________ Total Shareholders Fund (RM’000) _____________________________________________________________________________________________________________________________________________ _____________________________________________________________________________________________________________________________________________ _____________________________________________________________________________________________________________________________________________ _____________________________________________________________________________________________________________________________________________ _____________________________________________________________________________________________________________________________________________ _____________________________________________________________________________________________________________________________________________ No of Branches No of Service Centres/Kiosk No of Offshore Branches/Labuan No of Staff _____________________________________________________________________________________________________________________________________________ Return on Asset (%) - Pretax Return on Equity (%) - Pretax _____________________________________________________________________________________________________________________________________________ Total Shareholders Fund (RM ‘000) Total Asset (RM ‘000) 2,138,571 1,995,937 1,854,694 1,598,476 2013 1,745,576 2014 21,071,590 2015 2016 2017 Total Deposits (RM ‘000) 2013 22,438,036 22,636,889 2015 2016 23,526,342 20,061,690 2014 2017 Profit Before Tax (RM ‘000) 235,963 19,917,482 19,544,549 18,744,179 19,643,428 208,294 17,629,228 167,233 170,536 121,966 2013 6 2014 2015 2016 2017 6 BANK BANK MUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) • annual| ANNUAL report 2016REPORT 2017 MALAYSIA BERHAD (6175-W) 2013 2014 2015 2016 2017
    9. CORPORATE INFORMATION BOARD OF DIRECTORS COMPANY SECRETARY CHAIRMAN Tan Sri Dato ’ Dr. Mohd Munir Abdul Majid Julaida Jufri (LS 9358) MEMBERS Dato’ Sri’ Che Khalib Mohamad Noh Dato’ Haji Mohd Redza Shah Abdul Wahid Dato’ Haji Mohd Izani Ghani Tengku Dato’ Seri Hasmuddin Tengku Othman Dato’ Azmi Abdullah Dato’ Haji Kamil Khalid Ariff Dr Azura Othman Ghazali Darman (appointed w.e.f. 4 January 2017) 20th Floor, Menara Bumiputra Jalan Melaka 50100 Kuala Lumpur Tel: 603-2615 7069 Fax: 603-2693 3367 REGISTERED OFFICE AUDITORS Ernst & Young Level 23A, Menara Milenium Jalan Damanlela, Pusat Bandar Damansara 50490 Kuala Lumpur BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 7
    10. ASSET PERFORMANCE ASSET PORTFOLIO (RM ‘000) 2016 15000000 2017 10000000 14,802,394 15,231,296 5000000 0 GROSS FINANCING 2016 2017 6,027,128 6,470,792 FINANCIAL INVESTMENTS 2016 2017 1,069,101 1,049,925 CASH & SHORT-TERM FUNDS FINANCING BY BUSINESS SEGMENT 2016 SME TREASURY & INVESTMENT 2017 SME CORPORATE CORPORATE CONSUMER CONSUMER COMMERCIAL 8 TREASURY & INVESTMENT 8 BANK BANK MUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) • annual| ANNUAL report 2016REPORT 2017 MALAYSIA BERHAD (6175-W) COMMERCIAL
    11. FINANCING BY ISLAMIC CONTRACT 2016 ISTISNA ’ MURABAHAH 2017 SHIRKAH MUTANAQISAH SHIRKAH AL MILK QARD RAHNU BAI’ BITHAMAN AJIL BAI’ AL-DAYN MURABAHAH ISTISNA’ QARD SHIRKAH MUTANAQISAH SHIRKAH AL MILK RAHNU BAI’ BITHAMAN AJIL IJARAH BAI’ AL-DAYN IJARAH IJARAH THUMMA AL-BAI IJARAH THUMMA AL-BAI INAH TAWARRUQ TAWARRUQ INAH ASSET QUALITY 2016 (RM MIL) 2017 (RM MIL) Gross impaired financing (RM Million) 326.5 351.9 Gross impaired financing ratio (%) 2.2% 2.3% Financing loss reserve ratio (%) 88.7% 89.1% Collective assessment ratio (%) 1.4% 1.6% COMPONENTS 2016 2017 IMPAIRED FINANCING NON-IMPAIRED FINANCING IMPAIRED FINANCING NON-IMPAIRED FINANCING BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 9
    12. ASSET PERFORMANCE IMPAIRED FINANCING BY SECTOR 2017 2016 PURCHASE OF PURCHASE OF TRANSPORT , FINANCE, TAKAFUL TRANSPORT COMMUNITY, TRANSPORT, FINANCE, TAKAFUL TRANSPORT COMMUNITY, SOCIAL AND SOCIAL AND AND BUSINESS STORAGE AND AND BUSINESS VEHICLES STORAGE AND VEHICLES PERSONAL SERVICE PERSONAL SERVICE SERVICES COMMUNICATION SERVICES COMMUNICATION AGRICULTURE AGRICULTURE MANUFACTURING WHOLESALE WHOLESALE MANUFACTURING AND RETAIL AND AND RETAIL AND RESTAURANT RESTAURANT CONSTRUCTION CONSTRUCTION HOUSEHOLD HOUSEHOLD IMPAIRED FINANCING BY BUSINESS SEGMENT 2017 2016 SME TREASURY & INVESTMENT SME TREASURY & INVESTMENT CORPORATE CORPORATE COMMERCIAL CONSUMER COMMERCIAL 10 10 BANK BANKMUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) • annual report 2016REPORT 2017 MALAYSIA BERHAD (6175-W) | ANNUAL CONSUMER
    13. CONNECTED PARTY As at end of FY 2017 , connected parties exposures accounted for 6.5% of total outstanding credit exposures of RM25 billion. The amount stood at 68% against Bank Muamalat’s capital base of RM2.37 billion. Both measurements were well below the threshold limit set by Bank Negara Malaysia. Connected Parties Exposure by Financial Instrument as at March 2017 (RM’Mil) MILLIONS 18,000 16,000 6,245 14,000 13,505 12,000 SECURITIES FINANCING 10,000 8,000 6,000 4,000 2,000 0 171 1,433 CONNECTED PARTIES NON-CONNECTED PARTIES Connected Parties VS Non Connected Parties Exposure as at March 2017 100% 90% 80% 70% 11% 89% 32% 68% 60% SECURITIES FINANCING 50% 40% 30% 20% 10% 0% CONNECTED PARTIES NON-CONNECTED PARTIES Connected Parties Exposure by Sector as at March 2017 TRANSPORT, ELECTRICITY, STORAGE AND GAS AND EDUCATION, HEALTH OTHERS COMMUNICATION WATER CONSTRUCTION AND OTHERS GOVERNMENT, SPV FINANCE, INSURANCE, REAL AGRICULTURE, HUNTING, ESTATE AND BUSINESS SERVICES FORESTRY AND FISHING MANUFACTURING WHOLESALE AND RETAIL TRADE AND RESTAURANTS AND HOTELS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 11
    16. LEADERSHIP 14 14 BANK BANKMUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) • annual report 2016REPORT 2017 MALAYSIA BERHAD (6175-W) | ANNUAL
    17. CORPORATE HIGHLIGHTS COMMUNITY BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 15
    18. BOARD OF DIRECTORS 16 16 BANK BANKMUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) • annual report 2016REPORT 2017 MALAYSIA BERHAD (6175-W) | ANNUAL
    19. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 17
    20. BOARD OF DIRECTORS PROFILE T an Sri Dato ’ Dr. Mohd Munir Abdul Majid is the Chairman of Bank Muamalat and was appointed to the Board of Bank Muamalat on 3 June 2008. He obtained a B.Sc (Econ) from the London School of Economics and Political Science (LSE) in 1971 where he also obtained his Ph.D in International Relations in 1978. He taught at the Department of International Relations in LSE from 1972-1975. He was a research analyst for Daiwa Europe NV in London from 1975-1978. TAN SRI DATO’ DR. MOHD MUNIR ABDUL MAJID CHAIRMAN Dr. Munir joined the New Straits Times (NST) at the end of 1978 as leader writer and progressed to become the Group Editor. During his time at NST, he published numerous articles on national and international politics, and economics. He left NST in 1986 to become the CEO of a small merchant bank, Pertanian Baring Sanwa (PBS), whose name he changed to Commerce International Merchant Bankers (CIMB) which was then transformed into one of Malaysia’s leading merchant banks. He was invited by the Government of Malaysia to establish and become the first and founding Executive Chairman of the Securities Commission in 1993, where he served for two terms until 1999. As the founding Executive Chairman he was instrumental in shaping the legal and regulatory framework of the capital markets, as well as introducing the country’s first code of corporate governance. During this time, he was the chairman of the emerging markets committee of the International Organisation of Securities Commissions (IOSCO). In 1997, he received the Cranfield Management Excellence award. After leaving the Securities Commission, he served as a Senior Independent NonExecutive Director of Telekom Malaysia Berhad for 4 years until June 2004, and was the chairman of its mobile subsidiary 18 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 Celcom (M) Berhad from 2002-2004. In June 2004, Dr. Munir joined Malaysia Airlines Board of Directors and in August he was appointed its Non-Executive Chairman until July 2011. In February 2014 Dr. Munir was appointed Chairman of CIMB Asean Research Institute and also joined the board of the Institute of Strategic and International Studies (ISIS) Malaysia. He is Chairman of the Asean Business Advisory Council – Malaysia Chapter and was 2015 chair of the Council region-wide. He is the President of the Asean Business Club. Dr Munir is also Chairman of the Financial Services Professional Board since 2016. He is a member of the Board of Silverlake Axis Limited. Dr. Munir was the founder President of the Kuala Lumpur Business Club (2003-2008). In May 2004, he was appointed a member of the Court of Fellows of the Malaysian Institute of Management. In December 2005, he was made an Honorary Fellow of the LSE and in 2008 he was appointed Visiting Senior Fellow at LSE IDEAS (Centre for International Affairs, Diplomacy and Strategy) where he started the Southeast Asia International Affairs Programme and headed it until 2012. He has written for IDEAS publications and published in International Politics, a British academic journal. A collection of his articles was published in a book, 9/11 and the Attack on Muslims. Dr. Munir received his early education at St Mark’s Primary School in Butterworth and the Bukit Mertajam High School in the state of Penang. He received his upper secondary education at the Royal Military College in Sungei Besi near Kuala Lumpur where he was awarded the Commandant’s Prize for being the best all-round student in 1967. He left for London the next year.
    21. DATO ’ HAJI MOHD REDZA SHAH ABDUL WAHID CHIEF EXECUTIVE OFFICER/EXECUTIVE DIRECTOR D ato’ Haji Mohd Redza Shah Abdul Wahid was appointed to the Board of the Bank on 1 November 2008. He holds a Bachelor of Science in Economics (Industry and Trade) from London School of Economics, University of London and a Master of Science in Economics (International Banking and Finance) from University of Wales, Cardiff. He is also a qualified Chartered Banker. 1994 as a Senior Finance Manager and later moved to Silterra Malaysia Sdn Bhd, as Chief Financial Officer. He left Silterra Malaysia Sdn Bhd to spearhead Tradewinds Corporation Berhad as the Group CEO from September 2002 to November 2005. Prior to joining Bank Muamalat, he was the Executive Director and Group Chief Operating Officer of DRB-HICOM from 1 March 2006 till October 2008. Dato’ Haji Mohd Redza Shah started his career with Touche Ross & Co. London (now known as Deloitte & Touche) in 1988 as Trainee Accountant and qualified as Associate Chartered Accountant (ACA). In 1992 he joined Arab Malaysian Corporation Berhad, in Internal Audit and progressed to become the Corporate Finance Manager. He then joined Khazanah Nasional Berhad when it commenced operations in July Dato’ Haji Mohd Redza Shah is currently the President of the Association of Islamic Banking Institutions Malaysia (AIBIM), and sits on the Board of Islamic Banking & Finance Institute Malaysia (IBFIM) and Raeed Holding Sdn Bhd. He also sits on the Board of General Council for Islamic Banks and Financial Institutions (CIBAFI). BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 19
    22. BOARD OF DIRECTORS PROFILE DATO ’ SRI CHE KHALIB MOHAMAD NOH NON-INDEPENDENT NON-EXECUTIVE DIRECTOR D ato’ Sri Che Khalib Mohamad Noh was appointed as Non-Independent NonExecutive Director of Bank Muamalat nominated by DRB-HICOM Berhad on 27 August 2012. He is a member of Nomination and Remuneration, and Veto Committees. Dato’ Sri Che Khalib is currently the Group Managing Director of MMC Corporation Berhad. He was the former President and Chief Executive Officer of Tenaga Nasional Bhd (TNB), prior to his position as the Chief Operating Officer - Finance, Strategy & Planning of DRB-HICOM Berhad. A qualified accountant, Dato’ Sri Che Khalib is a member of the Malaysian Institute of Accountants (CA, M) and also a Fellow of the Association of Chartered Certified Accountants (FCCA, UK) United Kingdom. 20 Dato’ Sri Che Khalib began his career with Messrs Ernst & Young in 1989 and later joined Bumiputra Merchant Bankers Berhad. He was previously a member of the Board and the Executive Committee of Khazanah Nasional Berhad from year 2000 to 2004. He also served as a Board member within the United Engineers Malaysia (UEM) Group of companies and Bank Industri & Teknologi Malaysia Berhad. He currently sits on the Board of Gas Malaysia Berhad, Zelan Berhad, Malakoff Corporation Berhad, Johor Port Berhad, MMC Engineering Group Berhad, NCB Holdings Bhd, Aliran Ihsan Resources Berhad, Kontena Nasional Berhad, Northport (Malaysia) Berhad and several private limited companies. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
    23. DATO ’ HAJI MOHD IZANI GHANI NON-INDEPENDENT NON-EXECUTIVE DIRECTOR D ato’ Haji Mohd Izani Ghani was appointed as Non-Independent NonExecutive Director of Bank Muamalat nominated by Khazanah Nasional Berhad (Khazanah), on 1 March 2009. He is a member of Nomination and Remuneration, and Board Risk Management Committees of the Bank. He graduated from the London School of Economics and Political Science in 1991 with BSc (Economics) specialising in Accounting and Finance. After graduating from LSE, he pursued his professional accounting qualification from the Association of Chartered Certified Accountants and admitted to fellowship in 2000. He is also a member of Malaysian Institute of Accountants. He was previously the Chief Financial Officer of Khazanah for seven years before assuming a new role as Executive Director of Investments in June 2017. He also oversees Khazanah’s regional office in Istanbul. Apart from Bank Muamalat, he sits on the Board of Malaysia Airports Holdings Berhad and Fajr Capital Limited and chairs Istanbul Sabiha Gokcen Airport. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 21
    24. BOARD OF DIRECTORS PROFILE TENGKU DATO ’ SERI HASMUDDIN TENGKU OTHMAN INDEPENDENT NON-EXECUTIVE DIRECTOR T engku Dato’ Seri Hasmuddin Tengku Othman was appointed as a NonIndependent Non-Executive Director of Bank Muamalat since 18 April, 2006 and was subsequently redesignated to Independent Non-Executive Director by Bank Negara Malaysia on 16 February, 2009. He is the Chairman of Nomination and Remuneration Committee, a member of Board Audit and Risk Management Committees. He graduated from the University of Malaya with a Bachelor of Law (Honours) degree in 1986. He is a practising advocate and solicitor having been admitted to the Malaysian Bar on 14 July 1987. His main areas of practice are corporate and commercial law and Islamic banking and finance. Tengku Dato’ Seri Hasmuddin is among the legal counsel involved in framing the structural framework for Islamic banking documentation in the early stages of that sector’s development in Malaysia. He is a member of the Association of Chartered Islamic Finance Professionals (ACIFP) since 2009. He continues to play an active role in the development of this 22 area of law through his involvement in the organisation of Kuala Lumpur Islamic Finance Forum (KLIFF), an annual forum that gathers prominent personalities, practitioners and industry players of Islamic Finance as well as by presenting papers on the subject both locally and internationally. Currently Tengku Dato’ Seri Hasmuddin sits on the boards of Institut Jantung Negara Sdn Bhd, IJN Holdings Sdn. Bhd., Aliran Ihsan Resources Berhad, Serba Dinamik Holdings Berhad, HSK Corporate Advisory & Consultancy and Rangkaian Hotel Seri Malaysia Sdn Bhd. He is also a member of Jawatankuasa Pemantauan dan Pengawasan Syarikat Jaminan Pembiayaan Perniagaan Berhad. Tengku Dato’ Seri Hasmuddin is also involved in charitable organisations in his capacity as trustee to Tuanku Najihah Foundation, Yayasan Institut Al Quran Kuala Lumpur, Tabung Amanah Pesakit Malaysia, Institut Quran Tuanku Jaafar, Yayasan Kolej Islam Sultan Alam Shah and Yayasan Munarah. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
    25. DATO ’ AZMI ABDULLAH INDEPENDENT NON-EXECUTIVE DIRECTOR D ato’ Azmi Abdullah was appointed as Independent Non-Executive Director of Bank Muamalat since 16 September 2009. He is the Chairman of Board Risk Management Committees and member of Nomination and Remuneration, Board Audit and Veto Committees. Prior to joining the Bank, he was the First Managing Director/Chief Executive Officer of SME Bank for over 4 years and the Managing Director/Chief Executive Officer of Bumiputera-Commerce Bank Berhad, where he served for more than 26 years in various departments. Dato’ Azmi graduated with a B.A. (Hons) Degree in Economics from Universiti Kebangsaan Malaysia (UKM) in 1974. He was conferred Honorary Doctorate in Business Administration from Universiti Kebangsaan Malaysia in 2006. He also sits as a Director in Kumpulan Wang Persaraan (Diperbadankan), ECS Solution Sdn Bhd, Trans National Insurance Broker Sdn Bhd, Ireka Corporation Berhad and a member of the Board and Investment Committee of Amanah Raya Berhad. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 23
    26. BOARD OF DIRECTORS PROFILE DATO ’ HAJI KAMIL KHALID ARIFF INDEPENDENT NON-EXECUTIVE DIRECTOR D ato’ Haji Kamil Khalid Ariff was appointed as Independent NonExecutive Director of Bank Muamalat on 29 September 2011. He is the Chairman of Veto Committee and member of Board Risk Management, Digital Banking Board and Board Audit Committees. He graduated with MBA in International Business from Michigan, USA in 1979. Prior to this, he obtained Bsc in Management from Syracuse University, New York and the Diploma in Public Administration from ITM. His last position was as Managing Director/Chief Executive Officer of Mahkota Technologies Sdn. Bhd. (formerly known as General Electric Company of the UK) – dealing mainly in the electrical engineering/ supply Industry. Upon his recent retirement, he has been retained as Advisor to the Mahkota Group. He is also a 24 Chairman/Director of several other private companies. In the last 30 years, he served in numerous Management and Board positions in several large corporate entities viz, The New Straits Times, Kumpulan Perangsang Selangor Bhd, Kumpulan Guthrie Bhd. and Idris Hydraulic Bhd. During this time, he was exposed to various multi facet industries viz Advertising & Publishing, Trading, Manufacturing and Engineering. He was also a founder Director of the Kuala Lumpur Tin Market, which he, as part of a Government Steering Committee, help set up in the mid 1980s. Dato’ Haji Kamil Khalid is also Chairman of Liberty Insurance Berhad, Gibraltar BSN Life Insurance Berhad, Director of Pramerica BSN Holdings Sdn. Bhd. Awan Inspirasi Sdn Bhd and several other private companies. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
    27. DR . AZURA OTHMAN INDEPENDENT NON-EXECUTIVE DIRECTOR D r. Azura was appointed as Independent Non-Executive Director of Bank Muamalat on 24 April 2015. She is the chairman of Board Audit and a member of Board Risk Management Committees. Dr Azura graduated with a degree in Accounting and Finance from the London School of Economics and Political Science. She is also a Fellow of ACCA (UK), a member of Malaysian Institute of Accountant and a chartered member of the Institute of Chartered Islamic Finance Professionals (CIIF). She received her PhD in Islamic Finance from the International Centre of Education in Islamic Finance (INCEIF). Currently, she is the Chief Executive Officer of the Chartered Institute of Islamic Finance Professionals (CIIF), a professional standard setting body for Islamic finance practitioners. She was a former Executive Director of Pricewaterhouse Coopers Taxation Services, Malaysia. She has over 19 years of experience as a tax consultant and in engagements relating to Islamic Finance, working together with the Malaysian Ministry of Finance, Inland Revenue Board and BNM. Her major assignments include formulating the tax incentives for Malaysia as the International Islamic Financial Centre (MIFC). BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 25
    28. BOARD OF DIRECTORS PROFILE GHAZALI HAJI DARMAN INDEPENDENT NON-EXECUTIVE DIRECTOR G hazali Haji Darman was appointed as an Independent Non-Executive Director of Bank Muamalat Malaysia Berhad on 4 January 2017 . He is the Chairman of Digital Banking Board Committee and a member of Nomination and Remuneration and Board Audit Committees of the Bank. He graduated with a Bachelor of Arts in Accounting from University of Canberra, Australia. At present, he is an Independent Non Executive Director of Bursa Malaysia Berhad and a member of the Audit Committee, Risk Management Committee, Market Participation Committee (regulatory committee) and IT Project Steering Committee. 26 Previously, he was the Global Head of Domain for Transportation and System Integration and member of Senior Management Team for DHL IT Services, based in Cyberjaya. His responsibilities covered all four shared IT service centers for DHL Global Operations (located in Cyberjaya, Bonn, Prague and Scottsdale, USA). He was a world-wide partner and director in Accenture, specializing in financial industry and later leads the government market practice. He was the Commissioner for PT Praisindo Teknologi, Jakarta which specialises in Wealth Management and IT Security. He was also an advisor to Outsourcing Malaysia, an initiative of the outsourcing industry and a chapter of PIKOM – the country’s national ICT industry association, is envisioned to promote and develop Malaysia’s outsourcing services industry as a global hub for high-value outsourcing. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
    29. TION A C U ED H E A LT H NT E M I N VEST BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 27
    30. SHARIAH COMMITTEE Ustaz Haji Azizi Che Seman Dr . Wan Marhaini Wan Ahmad Ustaz Engku Ahmad Fadzil Engku Ali SS Datuk Dr. Zulkifli Mohamad Al-Bakri Prof. Madya Dr. Mohamad Sabri Haron 28 Dr. Ab Halim Muhammad BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
    31. SHARIAH COMMITTEE PROFILE USTAZ HAJI AZIZI CHE SEMAN CHAIRMAN Ustaz Haji Azizi Che Seman is currently a lecturer at the Islamic Studies Academy , University of Malaya, a position he has held since 2002. He has been with Bank Muamalat since 1 April 2005. Until now, he is entrusted to be the Chairman for Bank Muamalat’s Shariah Committee. He has also been appointed as Shariah Advisor of AIBIM. In terms of qualification, he is now pursuing his studies in the field of Islamic capital market. He holds a Masters Degree in Economics from International Islamic University of Malaysia in 2001 and a Bachelor of Islamic Studies from University Malaya in 1996. His specialisation areas are in Islamic Capital Market, Islamic Economics, Fiqh Muamalat and Islamic Research Methodology. Besides his function in Shariah advisory, he also contributes his ideas and experiences in the development of Bank Muamalat’s IT system. USTAZ ENGKU AHMAD FADZIL ENGKU ALI Ustaz Engku Ahmad Fadzil Engku Ali has obtained his early education at The Malay College Kuala Kangsar from 1982 until 1986. He later furthered his study in Law and successfully obtained his Bachelor’s Degree in Laws (Second Class Honors Upper) from The International Islamic University of Malaysia in 1993. In the subsequent year, he graduated from the same university with a Bachelor’s Degree in Shariah Law (First Class Honors). He was called to the bar, admitted and enrolled as an Advocate and Solicitor of The High Court of Malaya in 1995. He then pursued his studies at Jordan University and in the year 2000, he successfully obtained a Masters Degree in Islamic Judiciary. Since then until October 2014, he served as a lecturer at the International Islamic University of Malaysia. Some of the subjects that he taught at the university were Probate and the Law of Successions (both Islamic and Civil), Islamic Jurisprudence, Islamic Criminal Law and Malaysian Legal System. He is, since August 2015, a Senior Fellow at Institut Kajian Strategik Islam Malaysia (IKSIM). He has been a member of Bank Muamalat’s Shariah Committee since 2005. PROF. MADYA DR. MOHAMAD SABRI HARON Prof. Madya Dr. Mohamad Sabri bin Haron is a lecturer at Pusat Citra Universiti, National University of Malaysia. He is also a Senior Fellow at The Institute of Malaysian and International Studies (IKMAS) as well as a Senior Fellow of The Institute of Islam Hadhari. He obtained a Diploma in Islamic Studies from Kolej Sultan Zainal Abidin in 1985 and Bachelor of Islamic Studies (al-Quran and al-Sunnah) from National University of Malaysia in 1988. He has completed his Master of Comparative Law at International Islamic University of Malaysia in 1993. He succeeded in obtaining his PhD. in Islamic Law (Fiqh and Usul Fiqh) in 1998 from University of Jordan. He has been with Bank Muamalat since December 2003. His specialization areas are in Islamic Economics and Islamic Civilization. He has also been seconded to the Securities Commission as the Senior Manager in Islamic Capital market starting from 1 June 2009 until 31 May 2010. Currently he is also appointed as a Chairman of Shariah Committee for Apex Investment Services Berhad (Islamic Fund) and also as a Member of Shariah Committee for Koperasi ANGKASA. In addition to that, he serves as a Member of Shariah Committee for Koperasi Pos (KOPONAS) and a Member of Shariah Committee for Koperasi Universiti Kebangsaan Malaysia (Koperasi UNIKEB). He is also active in social and charitable activities and has been appointed as Chairman of Rukun Tetangga Al-Ehsan, Bandar Baru Bangi as well as a committee member to construct Masjid Al-Umm at Bandar Baru Bangi, Bangi selangor. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 29
    32. SHARIAH COMMITTEE PROFILE DR . AB. HALIM MUHAMMAD Dr. Ab. Halim Muhammad graduated in 1972 with a Bachelor’s Degree of Shari’ah from AlAzhar University, Cairo Egypt and completed his studies in PhD. of Shari’ah at St. Andrews University Scotland in 1977. He served as a lecturer and became the Head of Department of Quran & Sunnah, Faculty of Islamic Studies Universiti Kebangsaan Malaysia. Some of the subjects that he taught were Islamic Jurisprudence (Muamalat, Islamic Banking & Islamic Finance and Takaful), Principles of Islamic Jurisprudence and Islamic Criminal Laws. He was the first Chairman of Shariah Committee of Bank Muamalat prior to joining National Shariah Advisory Council of Bank Negara Malaysia in 2004. He has been re-appointed as a member of Bank Muamalat’s Shariah Committee since 30 November 2009. He was also a member of Shariah Committee of Securities Commission and a currently he is Shariah Committee of ASDI Unit Trust Terengganu, Apex Unit Trust and Reit Johor. Recently, he has been appointed as Ahli Jamaah Ulama’ Majlis Agama Islam Negeri Kelantan. YBHG. SS DATUK DR. ZULKIFLI B. MOHAMAD AL-BAKRI YBhg. SS Datuk Dr. Zulkifli B. Mohamad Al-Bakri is a scholar in Malaysia. He obtained his early education at Sek. Men. Agama (Atas) Sultan Zainal Abidin, Terengganu and furthered his study in a Bachelor’s Degree at Universiti Islam Madinah, Arab Saudi prior to entering Universiti Ilmu-Ilmu Islam Dan Arab, Syria to finish his Masters. He succeeded in obtaining his PhD at USM, Pulau Pinang in 2004. He served as a lecturer in Universiti Sains Islam Malaysia from 2006-2009. He is now focusing more on writing and has written many books in Fatwa, Islamic Law and Islamic Jurisprudence. He has a vast experience in Islamic Banking as he was formerly the Chairman of Shariah Committee of Bank Pertanian Malaysia prior to joining Bank on 1 April 2011. He is also an expert and capable in providing fatwa, as he served as a member of Fatwa’s Committee for state of Negeri Sembilan and the Chairman for Shariah Committee in World Fatwa Management and Research Institute (INFAD) at USIM. YBhg. Datuk Dr. Zulkifli B. Mohamad Al-Bakri was proclaimed as Mufti Wilayah Persekutuan on 20 June 2014. However he has resigned from Shariah Committee of BMMB with effect from 31 October 2016 due to being called by Bank Negara Malaysia to serve as Shariah Advisory Council of BNM. DR. WAN MARHAINI WAN AHMAD Dr. Wan Marhaini Wan Ahmad is currently a senior lecturer at the Finance and Banking Department, University of Malaya, a position she has held since 2002. She completed her doctorate in Zakat Investment at the University of Edinburgh, United Kingdom in 2012. She received a Master Degree in Economics from International Islamic University of Malaysia in 2002 and has a degree in Shariah from the Academy of Islamic Studies University of Malaya in 1996. Her research interests lie in the area of Fiqh Muamalat, Islamic Economics, Islamic Finance and Banking. In the University of Malaya, she has experiences teaching both Islamic and conventional economics and finance for both undergraduate and Masters programmes (MBA and MM). Currently, she teaches principles of Islamic economics and Islamic finance as well as the applications of modern Islamic banking, takaful and Islamic capital market. Prior to joining Bank Muamalat Malaysia Berhad, she has served as a Shariah Committee member for EONCAP Islamic Bank Berhad for tenure of April until November 2011. 30 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
    33. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 31
    34. SHARIAH COMMITTEE TERMS OF REFERENCE OBJECTIVE /PURPOSE These terms of references were prepared to inform and notify the appointed Shariah Committee on all relevant matters pertaining to their duties, processes and procedures. AUTHORITY These terms of references are governed by the IFSA 2013 (including any amendment that will be made from time to time)(“Laws and Regulations”). DUTIES, RESPONSIBILITIES & ACCOUNTABILITY OF THE SHARIAH COMMITTEE  (4) The main duties and responsibilities of the Shariah Committee are as follows: (1) (2) (3) 32 Responsibility and accountability The Shariah Committee is expected to understand that in the course of discharging the duties and responsibilities as a Shariah Committee member must be in accordance with Laws and Regulations in respect of duties and obligations of the Shariah Committee member, and responsible and accountable for all Shariah decisions, opinions and views provided by them. Advise to the Board and Bank Muamalat including Bank Muamalat’s subsidiaries The Shariah Committee is expected to advise the Board, Management including Bank Muamalat’s subsidiaries and provide input to Bank Muamalat on Shariah matters in order for Bank Muamalat to comply with Shariah principles at all times. Endorse Shariah policies and procedures The Shariah Committee is expected to endorse Shariah policies and procedures prepared by Bank Muamalat and to ensure that the contents do not contain any element which is not in line with Shariah. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 Endorse and validate relevant documentations To ensure that the products of Bank Muamalat comply with Shariah principles, the Shariah Committee must approve: i. the terms and conditions contained in the forms, contracts, agreements or other legal documentations used in executing the transactions; and ii. the product manual, marketing advertisements, sales illustrations and brochures used to describe the product. (5) Assess work carried out by Shariah review and Shariah audit To assess the work carried out by Shariah review and Shariah audit in order to ensure compliance with Shariah matters which forms part of their duties in providing their assessment of Shariah compliance and assurance information in the annual report. (6) Assist related parties on Shariah matters The related parties of Bank Muamalat such as its legal counsel, auditor or consultant may seek advice on Shariah matters from the Shariah Committee and the Shariah Committee is expected to provide the necessary assistance to the requesting party. (7) Shariah Advisory Council, Bank Negara Malaysia The Shariah Committee may advise Bank Muamalat to consult the Shariah Advisory Council of Bank Negara Malaysia (SAC) on Shariah matters that could not be resolved.
    35. In cases where there are uncertainties and differences of opinions , Bank Muamalat may seek advice and refer for a ruling from the SAC. The request for advice shall be communicated through the Secretariat of the SAC. Members of the Shariah Committee must not act in a manner that would undermine the rulings and decisions made by the SAC or the committee they represent. They are required to respect and observe the published Shariah rulings issued by the SAC and shall not go against the decisions of the committee that they represent in public. In cases of disputes and court proceedings related to Islamic financial business or any Shariah issues arising from Bank Muamalat’s business operations, both the court and the arbitrator shall take into consideration the published rulings of the SAC or refer such issues to the SAC for its ruling. Any ruling made by the SAC arising from a reference made shall be binding on Bank Muamalat and the court or the arbitrator. In the event where the decision given by Bank Muamalat’s Shariah Committee is different from the ruling given by the SAC, the rulings of the SAC shall prevail. However, the Shariah Committee is allowed to adopt a more stringent Shariah decision. (8) Provide Written Shariah Opinions The Shariah Committee is required to provide written Shariah opinions in circumstances where Bank Muamalat makes reference to the SAC for further deliberation, or where Bank Muamalat submits applications to SAC for new product approval. (9) Provide Bank Muamalat with guidelines and advice on religious matters to ensure that Bank Muamalat’s overall activities are in line with Shariah. (10) Make decisions on matters arising from existing and future activities of Bank Muamalat which have religious repercussions. (11) Report to the shareholders and the depositors that all Bank Muamalat’s activities are in accordance with Shariah. (12) Provide Shariah advisory and consultancy services in all matters relating to Bank Muamalat’s products, transactions and activities as well as other businesses involving Bank Muamalat. (13) Scrutinise and endorse the annual financial report of Bank Muamalat. (14) Provide training to the staff as well as notes or relevant materials for their reference. (15) Represent Bank Muamalat or to attend any meetings with the SAC or other relevant bodies concerning any Shariah issues relating to Bank Muamalat. (16) The Shariah Committee shall maintain the confidentiality of Bank Muamalat’s internal information and shall be responsible for the safe guarding of confidential information. He or she should maintain all information in strict confidence, except when disclosure is authorised by Bank Muamalat or required by law. 17) The Shariah Committee shall ensure the quality and consistency of the Shariah decisions. Most of the issues submitted to the Shariah Committee for deliberation are resolved via meeting. For FYE March 2017, 13 meetings were held. The details of their attendance are as follows: Shariah Committee Member Attendance Tn. Hj. Azizi Che Seman 13/13 YM Engku Ahmad Fadzil Engku Ali 12/13 Prof. Madya Dr Mohamad Sabri Haron 13/13 Dr Ab Halim Muhammad 12/13 Datuk Dr. Zulkifli B. Mohamad Al-Bakri Dr Marhaini Wan Ahmad 1/6 12/13 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 33
    36. “We would like to extend our warmest congratulations to the Board of Directors and the Management for their genuine concern and strong passion to ensure not only the productivity and profitability of Bank Muamalat... ” USTAZ HAJI AZIZI CHE SEMAN CHAIRMAN, SHARIAH COMMITTEE Statement from the Chairman of Shariah Committee In the Name of Allah, the Most Gracious, the Most Merciful Assalamualaikum Warahmatullahi Wabarakatuh A lhamdulillah, all praise to Allah SWT, the salutations and greetings to our Prophet Muhammad SAW and his entire family, companions, tabi’in and tabi’i al-tabi’in, and devout Islamic scholars of allegiance to assemble a great contribution in uplifting the religion of Islam to the last blood droplet. With this Annual Report 2017, we can share our activities and the transparency of the Bank in line to keep up the Islamic da’wah via promoting Islamic banking system, In-sha-Allah. Bank Muamalat Malaysia Berhad (Bank Muamalat) is a full-fledged Islamic Financial Institution operating under the Islamic Financial Services Act 2013 (IFSA), offering Shariah-based financial services and products. As a commercial bank that offers Shariah-based products and services, Bank Muamalat provides a wide range of deposits, financing and various banking products and services to cater the demands of Malaysian market, irrespective of race or religion. 34 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
    37. The fact that Shariah compliance is the core and essence of Islamic banking proves that it is essential for the banking and commercial activities to be in line with Shariah principles and guidelines . Among challenges faced are to review current Bank Muamalat’s product offerings to assure its compliance as issued in Policy Documents for Shariah contracts by Bank Negara Malaysia throughout the year. With the assistance of Shariah Governance Framework organs within Bank Muamalat, we believe that we have played our role to oversee Shariah matters related to Bank Muamalat’s business operations and activities. Prophet Muhammad SAW said, meaning: “A Muslim is a brother of another Muslim, so he should not oppress him, nor should he hand him over to an oppressor. Whoever fulfilled the needs of his brother, Allah will fulfill his needs; whoever brought his (Muslim) brother out of a discomfort, Allah will bring him out of the discomforts of the Day of Resurrection, and whoever screened a Muslim, Allah will screen him on the Day of Resurrection.” (Narrated by Al-Bukhari, No.622) As Shariah Committee of Bank Muamalat, we have given our highest dedication to assure the quality and demonstrated our commitment to ensure Shariah compliance in the products, process, documentations, marketing, IT systems and other related matters. During Financial Year 2016/2017, the Shariah Committee has endorsed new products and services offered by Bank Muamalat, among others; new collaboration under IAP, CASA Tawarruq, Debit Card, and Structured Financing Bai Dayn Bi Sila’. The Muamalat Gold-i has received encouraging response from the public and moving forward Bank Muamalat has planned to expand gold product further through -Muamalat Gold-i Account which allows customers the flexibility to purchase without handling physical gold. In the context of the economic development, Islam presents integrated and proactive approaches for developing and promoting wakaf institutions particularly in collaboration with the financial institutions as the new initiative. Being an ethical bank, Bank Muamalat has been cooperating with Perbadanan Wakaf Selangor (PWS) in managing Wakaf Selangor Muamalat (WSM) to implement cash waqf. Moving forward, Bank Muamalat has also planned to initiate new collaborations with other states in the next financial year, In-sha-Allah. We would like to extend our warmest congratulations to the Board of Directors and the Management for their genuine concern and strong passion to ensure not only the productivity and profitability of Bank Muamalat, but also to assure the dictates and requirements of Shariah are properly observed and adhered to. We are also very thankful to the staff for the cooperation in providing us adequate information in ensuring our deliberations on each and every issue would be resolved accordingly. In-sha-Allah, with a good and excellent banking system, we are able to channel da’wah and call out and attract the people in using Islamic banking and then towards the implementation of the entire Islamic system. Hopefully, good attitude and services to customers will make Bank Muamalat a leader in quality Islamic banking without undermining the never-ending quest for the ultimate goal of gaining Allah’s blessing and pleasure. Thank you Regards Chairman Shariah Committee BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 35
    38. SENIOR MANAGEMENT Syed Alwi Mohamed Sultan Tuan Haji PeerMohamed Ibramsha Chief Operating Officer , Retail Business & Operations Executive Vice President, Corporate Services Division Haji Ismail Ibrahim Executive Vice President, Credit Management Division Adinor Mohamed Yunus Chief Risk Officer 36 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
    39. Hafni Mohd Said Executive Vice President , Finance Division Nor Hamidah Abu Bakar Abdul Razak Mohamed Ismail Senior Vice President, (Business Banking Division) Chief Technology Officer, ICT Division Azliza Abdul Rahman Executive Vice President, Human Capital Division BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 37
    40. SENIOR MANAGEMENT PROFILE TUAN HAJI PEERMOHAMED IBRAMSHA CHIEF OPERATING OFFICER , RETAIL BUSINESS & OPERATIONS P eerMohamed Ibramsha was appointed as the Chief Operating Officer for Retail Business & Operations since December 2016 and his current portfolio covers Operations Division, Consumer Banking Division, Affluent Banking Services, Card Business, Deposit and Wealth Management. He holds a Bachelor’s Degree in Accountancy and is also a member of Malaysian Institute of Accountant and a Fellow Certified Practicing Accountant (FCPA) with CPA 38 Australia. He has been with Bank Muamalat since November 2008 and before his current position, he was the Chief Financial Officer (CFO) of Bank Muamalat until October 2014 and Chief Operating Officer – Operations until November 2016. Prior to this, he was the CFO of Alam Flora Sdn Bhd for approximately 2 years and CFO of Glenmarie Properties Sdn Bhd and its group of companies for approximately 10 years. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
    41. HAJI ISMAIL IBRAHIM EXECUTIVE VICE PRESIDENT , CREDIT MANAGEMENT H aji Ismail Ibrahim joined Bank Muamalat as an Executive Vice President, CEO’s Office in April 2012 and was subsequently redesignated to Executive Vice President, Operations on 1 February 2013 with direct oversight of Business Process & Transformation, Credit Operation, Document Management, Compliance, Treasury Processing & Settlement and Trade Finance Departments. He was redesignated to Executive Vice President, Credit Management Division since 9 September 2014. With this designation he oversees Credit Operations, Collection & Recovery, Document Management, Customer Service, Call Centre and IT Project Management. Prior to joining Bank Muamalat, Haji Ismail was on the Board of Kuwait Finance House (Malaysia) Berhad as an Independent Non-Executive Director. He started his career in Agro Bank Malaysia Berhad (formerly known as Bank Pertanian Malaysia Berhad), and later moved to United Overseas Bank (Malaysia) Berhad and Affin Bank Berhad. In 1992, he joined Public Bank Berhad as the Director, Credit Operations overseeing credit evaluation, credit administration and loan recovery. He was also the pioneer staff in the development of Islamic banking in Public Bank Berhad and played a key role in the establishment of Public Islamic Bank Berhad. He was appointed as the Chief Executive Officer of Public Islamic Bank and remained on the post until his retirement in January 2011. Haji Ismail brings with him a wealth of 44 years of banking experience in areas of credit evaluation, loan recovery, credit administration, branch management and Islamic banking operation. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 39
    42. SENIOR MANAGEMENT PROFILE ADINOR MOHAMED YUNUS CHIEF RISK OFFICER A dinor Mohamed Yunus is currently the Chief Risk Officer with direct oversight of Risk Management , Credit Assessment and Retail Approving Center. He is the Chairman for Operational Risk Management Committee, Business Continuity Management Committee and attends the Board Audit Committee and Board Risk Management Committee. He also serves as a member of the Management Committee, Executive Risk Management Committee, IT Steering Committee, Asset Liability Management Committee and Management Audit Committee. As a permanent invitee of the Credit Committee and Investment 40 Committee, he provides the necessary risk oversight and assurance over the decisionmaking process. He has spent more than 20 years in the Treasury and Capital Markets at various banks in Kuala Lumpur and Jakarta. His last appointment was the Head of Group Treasury at Bank Pembangunan Malaysia Berhad, prior to joining Bank Muamalat in 2011. He holds a Bachelor’ of Business Administration (Accounting and Finance) and a Master of Business Administration from Loyola University, USA BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
    43. SYED ALWI MOHAMED SULTAN EXECUTIVE VICE PRESIDENT , STRATEGIC PLANNING AND SERVICES DIVISION S yed Alwi is the Executive Vice President, Strategic Planning and Services Division at Bank Muamalat. The Strategic Planning and Services Division’s scope covers strategic planning and support services covering all business aspects of the bank including consumer banking, business banking, treasury and investment banking with the responsibility to design, structure, innovate, implement, monitor and supervise all products, services, transactions and business offerings of the bank, including managing Shariah advisory services. The division has direct oversight of Strategy, Product Development and Innovation Department and Shariah Department. Syed Alwi also serves as a member of the Management Committee, Executive Risk Management Committee, Investment Committee, Management Audit Committee and Asset-Liability Committee (ALCO). He is the management representative in the Shariah Committee and has direct oversight on all Shariah governance matters. He also sits as a Board member of Muamalat Ventures Sdn Bhd, a wholly owned subsidiary of Bank Muamalat involved in private equity and investments. Prior to joining Bank Muamalat, Syed Alwi served as Managing Director and Head of Islamic Banking, Asia Pacific at BNP Paribas, Director of Islamic Origination at Standard Chartered Saadiq Malaysia Berhad and Vice President, Corporate Banking-Asia at The Islamic Bank of Asia Limited, Singapore. Syed Alwi has more than eighteen (18) years of working experience in the Islamic financial services industry, both as a consultant and a banker. He is an Accounting graduate and also holds a MBA-Islamic Finance (First Class) from the International Islamic University Malaysia (IIUM). BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 41
    44. SENIOR MANAGEMENT PROFILE HAFNI MOHD SAID EXECUTIVE VICE PRESIDENT , FINANCE DIVISION H afni Mohd Said is currently the Executive Vice President (EVP) of Finance Division, Bank Muamalat. He holds a Bachelor of Commerce (Accounting) from Dalhousie University, Halifax, Canada, and in 2008 he completed his Master in Business Administration (Finance) from Universiti Putra Malaysia. Prior to joining Bank Muamalat, Hafni started his working career with RHB Bank Berhad as a Management Trainee upon completing his bachelor degree in 1992, and his last position at RHB Bank Berhad was as the Vice President, Head of Islamic Banking & Subsidiaries Audit Department. 42 Hafni joined Bank Muamalat Malaysia Berhad in July 2010 as the Chief Internal Auditor and has been given a new role in Finance Division of the Bank since October 2014. The operational functions involving tax management, regulatory and financial reporting, management of General Ledgers and management accounts, BASEL and liquidity reporting, financial planning and analysis, and reporting and monitoring of the Bank’s strategies are currently under the purview of EVP, Finance. In December 2016, the functions of Treasury Processing and Settlement as well as Data Quality have also been assigned to report under the purview of EVP, Finance. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
    45. ABDUL RAZAK BIN MOHAMED ISMAIL CHIEF TECHNOLOGY OFFICER , INFORMATION COMMUNICATION TECHNOLOGY DIVISION A bdul Razak joined Bank Muamalat in May 2016 as the Chief Technology Officer, Information Communication Technology Division. Abdul Razak also serves as a member of Management Committee (MANCO) and Information Technology Steering Committee (ITSC). Abdul Razak started his career in Bank of America Singapore from 1982 till 1996. In 1996 he joined RHB Bank Malaysia (DCB Bank then) until 2015. During this period, he served as Head of Information Technology Division for about 8 years. His last position at RHB Bank Malaysia was Executive Vice President of Project Monitoring Office. He brings with him thirty four (34) years of working experience in the area of Information Technology (IT). BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 43
    46. SENIOR MANAGEMENT PROFILE AZLIZA ABDUL RAHMAN EXECUTIVE VICE PRESIDENT , HUMAN CAPITAL DIVISION P uan Azliza Abdul Rahman joined Bank Muamalat on 1st June 2016. She holds a Master of Arts in Human Resource Management from the University of Hull, United Kingdom in 1996 and obtained an Advanced Diploma in Business Administration (Transport) from Universiti Teknologi MARA (UiTM) in 1985. Azliza garnered 27 years of solid experience in Human Resources Management, covering HR Strategy and Communications, Total Remuneration Management, Succession Planning and Leadership Development. Prior to joining Bank Muamalat, Puan Azliza was the Group Head-Human Capital KLAS Group (now known as Pos Aviation Sdn Bhd), a subsidiary of DRB HICOM, from 2014 to 2016. She held the position of General Manager of Human Capital of DRB HICOM Group from 2012 to 2014 and was responsible in supervising Human Capital of subsidiaries in the sectors of 44 Manufacturing, Automotive, Properties, Services, Education and Aviation & Defence, spanning more than 60 companies and 60,000 employees. She was a member of the Group Risk Management Committee, OSH Council and Steering Committee for International College of Automotive Malaysia (ICAM) (now known as DRBHICOM University of Automotive Malaysia). From 1997 to 2011, Puan Azliza was the Head of Human Resources & Administration with Uni Asia Life Assurance Berhad (now known as Gibraltar BSN Life Berhad). Puan Azliza started her career in the automotive industry as a Management Trainee with Federal Auto Holdings Berhad in 1985 and was the Head Human Resources and Administration before she left the company in 1995. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
    47. NOR HAMIDAH BINTI ABU BAKAR SENIOR VICE PRESIDENT , BUSINESS BANKING DIVISION N or Hamidah graduated from International Islamic University, Malaysia with a Bachelor’s Degree in Economics. She has over 20 years experience in banking, with a career starting in RHB Bank Berhad Corporate Banking Division. She joined Bank Muamalat as Head, Syndication, a section that was set-up on her arrival where she successfully structured and arranged syndicated and club deals in excess of RM2.1 billion. She progressed to become the Acting Head of Business Banking Division in 2015 and was subsequently promoted to Head, Business Banking Division in 2016 and now oversees 5 departments, namely Corporate Banking, Regional & Commercial Banking, Trade Finance, Investment Banking and Business Development, Strategic Liaison and Cooperative. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 45
    48. INSIGHTS 46 46 BANK BANKMUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) • annual report 2016REPORT 2017 MALAYSIA BERHAD (6175-W) | ANNUAL
    49. CORPORATE HIGHLIGHTS COMMUNITY BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 47
    50. CHAIRMAN ’S STATEMENT The global economy in 2016 continued to experience uncertainty and volatility caused by fundamental shifts in political and social dynamics as seen in the US Presidential Election, referendum for UK to exit EU (Brexit) and China’s economic rebalancing initiatives. These events have added to the existing risks prevailing in the domestic financial sector which has been experiencing thinning margins, rising costs, heightened requirements on compliance, all of which have had a dragging effect on yields and returns. Malaysia’s economic growth in 2016 edged lower to 4.2% (2015: 5.0%), dragged down by slower growth prolonged low oil prices, lackluster global demand, volatile international financial markets and weakened ringgit exchange rate. Inflation rate remained at 2.1% in 2016, an impact from lower global energy and commodity prices, offsetting the effects from the government’s Goods & Services Tax (GST). Whilst the banking sector remained intact with strong capital and liquidity buffers, consumer sentiment was pessimistic and the business sector continued to be cautious in expanding their business capacity, reflecting weak economic factors and the depreciating value of the Malaysian Ringgit (MYR). Growth in the banking system’s loans and financing for 2016 had moderated to 5.3% (2015: 7.9%). To support liquidity in the domestic financial markets, the Statutory Reserve Rates (SRR) was reduced from 4.00% to 3.50% in February 2016 which helped to ease conditions in the interbank markets. Furthermore, monetary policy rate was adjusted to 3.00% in July 2016 from 3.25% to support the Malaysian economy while maintaining price stability. TAN SRI DATO’ DR. MOHD MUNIR ABDUL MAJID CHAIRMAN Dear Stakeholders, I am heartened to share with you the performance of Bank Muamalat Malaysia Berhad for the Financial Year ended March 31, 2017. Bank Muamalat has demonstrated its resilience during these trying times and delivered a respectable financial result despite the challenging domestic and global economic environment. 48 The Islamic financing sector continued to be resilient with total Islamic banking sector assets (including DFIs) growing by 11.4% to account for 26.8% of total banking system assets in 2016. Total financing also grew strongly by 15.7% to RM495 billion, accounting for 31.3% of total banking system. FINANCIAL PERFORMANCE While facing a dynamic and challenging operating environment in 2016, I am pleased to report that Bank Muamalat Malaysia Berhad nevertheless recorded a respectable performance with Profit Before Tax (PBT) edging up slightly by 2% from the year before at RM170.5million (FY2016: RM 167.2 million), on the back of total revenue of RM1.2 billion. Total assets remained above RM20billion with the financing base growing to RM14.9 billion during the financial year. In terms of capital adequacy measures, Bank Muamalat’s key capital ratio remained at a healthy level, with core capital ratio at 14.44% and total capital ratio at 16.68%, both of which remained above the industry average of 13.0% and 16.6% respectively. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
    51. I would also like to extend my gratitude to our customers for their continued support and loyalty . May Allah bless our efforts and provide us with His continued sustenance.” PROSPECTS Since October 2016, Bank Muamalat embarked on its 5-Year Strategic Business Plan 2017-2021 based on five main pillars – harnessing digital technologies, becoming the preferred investment solutions provider, positioning Bank Muamalat as the banker of choice for localised communities, being recognised as a socially responsible bank and winning at customer service excellence. We have outlined several action plans and initiatives that will be geared towards improving cost efficiencies, enhancing yield through asset quality improvements, identifying newer sources of fee-based income and diversification of sources of funding and liquidity. KEY DEVELOPMENTS For the year 2016, in promoting a cashless society, Bank Muamalat had successfully launched a unique Shariah compliant Waqf Debit Card named “Aisya”, after the Prophet Muhammad (SAW)’s wife, Saidatina Aisya. The card comes with the unique feature of Waqf where a portion of the fee income which the bank earns from the card utilisation will be channeled to the Wakaf Selangor Muamalat fund. It is thefirst-of-its-kind Waqf debit card to be launched, incorporating elements of social responsibility in financial transactions. This reflects Bank Muamalat’s innate belief system in championing socio-economic distributive justice and a sustainable environment. With the Malaysian economy expected to grow its 4%-5% for 2017 (GDP growth was 5.8% in Q2 2017), the domestic banking sector is expected to remain resilient though the operating environment remains intense and tough. As recognition of our initiatives, Bank Muamalat was awarded two prestigious awards during the year. In June 2016, Bank Muamalat was awarded with the “Best Private Bank (Malaysia) - Editor’s Award” held in Singapore by ClearView Financial Media, a leading news provider of business intelligence. This was recognition of our ground-breaking initiatives in growing our wealth management business and investment solutions. In October 2016, Bank Muamalat was awarded the “Pioneer of Islamic Banking Award 2016” by Global Islamic Finance Awards (GIFA) held in Jakarta, an event which was attended by His Excellency President Joko Widodo. The objective of GIFA is to highlight best practices in Islamic banking and celebrate the success of institutions in promoting social responsibility and commitment to Islamic banking. Bank Muamalat’s pioneering initiatives in launching the first ever Investment Account Platform (IAP) deal, the innovative CASA Tawarruq product, first ever Waqf-based Debit Card and efforts in promoting Muamalat Gold-i, were credited for this prestigious recognition. Bank Muamalat continued to expand its operations in ArRahnu business by enabling all branches within the bank’s branch network to offer Ar-Rahnu financial services to our customers. Additionally during the year, Bank Muamalat opened three new branches; one each in Tanah Merah and Gua Musang in Kelantan and one in Gemas, Negeri Sembilan. This reflects Bank Muamalat’s mission to be the banker of choice for the communities that we serve by enhancing accessibility to our target markets. ACKNOWLEDGEMENT In July 2016, Dato’ Ahmad Fuaad Mohd Kenali resigned from the board following his appointment as the Chief Executive Officer (CEO) of Proton Holdings Berhad which demanded more of his time and attention. We wish him the best in his new endeavour. In October 2016, Tn Hj Abdul Jabbar bin Abdul Majid retired as a member of the Board upon the end of his term. We have benefited from his vast experience and expertise in the fields of finance, accounting and audit. Our deep appreciation goes to him for his immense contributions. We have fortified the Board with one new director, En. Ghazali Hj Darman, whose tenure as Independent Non-Executive Director was effective beginning January 2017. We are fortunate to benefit from his experience of more than 20 years in the fields of technology and digital business consultancy. On behalf of the Board, I like to sincerely express thanks to the management team and all members of staff for their leadership, commitment and dedication in the mission to make Bank Muamalat the preferred Islamic financial institution and a premier financial services provider. I am counting on them for their continued contribution in the years ahead. I would also like to record my appreciation to my fellow Board members for their counsel, insights and support. I wish to thank the relevant authorities, in particular Bank Negara Malaysia, the Securities Commission and the Ministry of Finance for their guidance and assistance. I would also like to extend my gratitude to our customers for their continued support and loyalty. May Allah bless our efforts and provide us with His continued sustenance. Yours Sincerely, Tan Sri Dato’ Dr. Mohd Munir Abdul Majid BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 49
    52. FROM THE CEO ’S BLOG DATO’ HAJI MOHD REDZA SHAH ABDUL WAHID CHIEF EXECUTIVE OFFICER APR-16 TOUGH TIMES DON’T LAST, TOUGH PEOPLE DO There is an old Chinese saying that goes: “If you live with a problem long enough, it could eventually become a blessing.” Within every adversity in life, there is always a seed of an equivalent or greater benefit. Here is an extract from the book “Tough times don’t last, tough people do”. Another fabulous read I can recommend. “People are like potatoes. After they have been harvested they have to be spread out and sorted in order to get the maximum market dollar. They are divided according to size. It is only after potatoes have been sorted and bagged that they are loaded onto trucks. This is the method that all Idaho potato farmers use, all but one. One farmer never bothered to sort the potatoes. Yet he seemed to be making the most money. When asked what is his secret he said. “It’s simple. I just load up the wagon with potatoes and take the roughest road to town. During the eight mile trip, the little potatoes always fall to the bottom. The medium ones land in the middle while the big potatoes rise to the top.” That is not only true of potatoes. It is a law of life. Big potatoes rise to the top on rough roads, and tough people rise to the top in rough times. Tough times never last, but tough people do. 50 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 JUNE-16 AKU BENCI ABANG - A SHORT STORY DEDICATED TO BROTHER REDZUAN When Holy months of Ramadhan and Syawal come, often it is a time for us to not only step up our prayers but remember the unfortunate. The orphans, the handicapped, the single mothers and our parents are often the remembered ones but not usually the siblings, your own brother or sisters. The story of Abang Redzuan is a reminder for all of us to do this... We, at the Bank, were inspired to do this video after our trip to Langkawi 2 months ago to give a specially made wheelchair for him. Redzuan lost his mother in 2012, then the following year his dad passed away. Subsequently, he met with a motorcycle accident and is now paralysed from shoulder below. He and his siblings are taken care of by his grandmother and uncle, whose job is selling kueh. Despite his disability, Redzuan, 20, is a cheerful character, thanks to the motivation by people around him especially The Pink Squad Charity Team. When I asked him of his ambition, he said it is to complete his higher education. The wheelchair gift by Tabung Mawaddah is meant to help him be more independent and meet his goal. The story of Redzuan is one of determination and willpower in facing adversity. Not many of us, including myself could
    53. possibly face the challenges that Allah has given to him . Indeed he is an inspiration to all of us. The official video is released today on our Facebook - Bank Muamalat Malaysia Berhad. Please take time to not only LIKE it but SHARE this with friends and relatives during this holy month. We would like to see this video trending and go viral in the cyberspace. Many thanks to the Corporate Communications staff and The Tabung Mawaddah team who has eased the burden of Redzuan. Also a special mention to Saudara Saiful Nang and his team to make this first Social Media Project of us a reality. #AkuBenciAbang AUGUST-16 CASA TAWARRUQ | A GAME CHANGER The most basic service a bank can provide to members of the public is to act as a depository for their moneys. This is the essence of commercial banking. The public generally holds its deposits with banks in the form of accounts. The most basic account is the savings account and the current account. In Malaysia, under the previous Islamic Banking Act (IBA 1983), Islamic banks used to offer demand deposit accounts through two Shariah contracts, the Mudarabah and Wadiah Yad Dhamanah. However, with the coming into effect of the Islamic Financial Services Act (IFSA) in 2013, Mudarabah has been phased out from being offered as a deposit product whilst Wadiah Yad Dhamanah will be phased out by July 2018 (refer to the Shariah Policy Document on Qard dated August 3, 2016). Pursuant to that, I am pleased to note that the Product Development and Innovation Department together with the Deposit Department supported by all internal stakeholders especially the IT Department and Branch Operations have worked laboriously over the past 6 months to develop and launch an innovative current account and savings account product which is based on the contract of Tawarruq. These products are going to be simply called Savings Account-i Tawarruq and Current Account-i Tawarruq, however the simplicity elements end there. The Tawarruq-based CASA product is actually groundbreaking and quite remarkable for its diligent structuring and design that allows us to scale up our CASA strategy and strike a balance between commercial viability and Shariah and regulatory compliance. We can expect the Deposit Department to roll-out innovative deposit campaigns and promotions following the launch of this product and I encourage all of you to subscribe to and become ambassadors in promoting this product through friends and relatives and social media. Of course, please make sure that you consult with the respective product specialists or download the product disclosure sheet to understand the product design and features better. This is part of our on-going strategy to roll-out new, innovative and relevant products to the market to enable us to cater for and capture newer markets and customer segments while retaining existing customer base. The Tawarruq-based CASA will possibly be a game changer in the Islamic banking industry. I can confidently say that Malaysia has pioneered the Tawarruq-based CASA and Bank Muamalat is among the very few banks that has launched this product. Well done to the working committee involved in making this happen, now let’s make the best out of this new product launch! NOV-16 DIGITALIZATION - WHAT’S IN IT FOR ME? Did you know that our WHOLE lives are already digital? We used to use calculators, alarm clocks, compasses, radios, Walkmans, cameras, notebooks, diaries, torchlight, photo albums and prayer time calendars to make our lives easier. Now we carry ALL that in just ONE device! What are left are our wallets and purses! In order for us to be better as employees and thus more importantly, better care-givers to our families, we must try our very best to embrace technology in every way so that we can do better for our lives and our family. We are currently going through a transformation; to a digital era by changing processes that we use here in the Bank from manual to automation and digital solution of the future. Don’t worry, as we move forward on our digital journey, adequate training will be provided. We understand the importance of providing education and we assure that no staff will be left behind. With that in mind; Do you like shopping? I hear; in fact I know that many of us do! I do too. I am sure that at some point, some of you have looked at popular shopping websites and applications like MUDAH, Lazada and Zalora, just to name a few. Some of us buy and some of us just tengok-tengok sahaja. How would YOU feel if you had the chance to easily do your own tiny internet-based business, without disrupting your day-job? BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 51
    54. FROM THE CEO ’S BLOG Exciting, kan? answer the reasons as to why we are here for. Let’s make our lives better by participating in our new digital initiative. As for Arwah Intan Maizura, she always remarked that she is so lucky as she has the best husband she could ask for. She is buried now in a grave with her most loved one side by side, could you get anything closer than this...? Allahu Akbar, May the two of them be at peace in Barzagh. Intan Maizura ...Terima Kasih for your contributions to the Bank ....from all of us Goodbye God Bless...! Details coming soon! DEC-16 GOODBYE GOD BLESS..! The last weeks of December is always a busy period as we clear our desks to hastily take the final days of the year off and think of our New Year resolutions. A busy year indeed as we had a Business Plan to prepare and new regulations to meet. At the same time managing the year end turbulance where corporates try to scramble the best rates and some Banks attempt to window dress their Balance Sheet. Added to that is the unexpected water woes in the Klang valley that needed to be managed in each household. The whatsapp messages keeps pounding in till the noise becomes irritating. Finally, I decided to read them. Surprisingly, one of the many was from Rohaida in the HOD group that informed us a major accident had occurred in Slim River and it involved fatalities to our staff. Reading through the message it then hit to me that we had lost Intan Maizura, our Assistant Manager, Compliance. The heart sank and and the eyes drooled. The planned goodbye to 2016 had turned to an unplanned goodbye to a young and hardworking staff. To know that her husband who was from POS Malaysia also passed away made it even more sad as two staff from our DRB-HICOM family departed at the same time. Her family said they were on the way back from her dad’s Thalil arwah when a lorry crossed from the opposite side and hit their car head on at the NKVE. Such is Allah’s fate, one minute you are praying for the dead, and next you suddenly join them. It brings to reality the objective of life. What are we here for and where are we heading....? Whilst we spend our daily lives over work and family, how much time is spent towards pleasing the Almighty. If our lives were taken, how ready are we to face the hereafter and leave our loved ones to care for their own...? The departure of Intan Maizura would certainly put a pause in our lives as we really have not planned for an unexpected but certain event. As we say Goodbye to 2016 perhaps we should plan for the unexpected and be better citizens of the world and leave a mark by contributing to Islamic Banking industry, for this is the place where our expertise is and the arena where the good deeds would be counted in the Hereafter. This is our Jihad to make this world a better place, perhaps that could 52 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 We are currently going through a transformation; to a digital era by changing processes that we use here in the Bank from manual to automation and digital solution of the future.”
    56. CONSUMER BANKING CONSUMER BANKING IN FY2017 The past few years have proven challenging for the banking sector . The year 2016 was no exception. During this time of global economic uncertainty and domestic challenges, the sector experienced very modest growth. The introduction of new regulations together with funding pressures has compelled banks especially Consumer Banking to implement competitive pricing on deposits. At the same time, banks have had to intensify competitive pricing on financings due to the need to grow in a market that is constrained. REVENUE (IN RM MILLION) 655.4 611.6 555.8 476.3 434.8 Consumer Banking’s revenue increased by RM43.7 million or 7% driven by an 8% growth in funded income. The growth in funded income was primarily attributed to the 8% growth in financing income mainly from personal and mortgage products following the introduction of several initiatives in personal financing under 3PS in May 2016 and mortgage financing under SMART Mortgage in July 2016. A significant growth of 58.2% y-o-y in Ar-Rahnu income from RM6.7 to RM10.6 million in FY2017 has also contributed to the achievement of Non Funded Income. However, overall Non Funded Income for FY2017 decreased by RM1.4 million or 4% due to lower fee income from Wealth Management & Banking Transaction Services Commission. + 7% 0 FINANCING INCOME (IN RM MILLION) 575.1 2012 2013 2014 2015 2016 NON-FUNDED INCOME (IN RM MILLION) 655.2 511.1 399.7 444.9 36.7 33.98 36.6 35.2 31.42 + 8% 2012 54 2013 2014 2015 - 4% 2016 0 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 2012 2013 2014 2015 2016
    57. CONSUMER FINANCING MORTGAGE FINANCING Despite the challenging market conditions underpinned by intense competition and margin erosion , consumer banking experiences a slight financing growth of 1% YoY. With total assets of RM9.81 billion, consumer banking remain the biggest contributor to Bank Muamalat both in asset and as well as income portfolio. Mortgage financing continued to be the biggest portion of consumer banking financing asset with 53% share followed by personal financing of 37% share. In the property sector, the demand for properties experienced slower growth following various property cooling measures introduced by the Government, responsible financing guidelines issued by Bank Negara Malaysia (“BNM”) to promote sustainable household debts, and the subdued consumer sentiment as a result of the implementation of Goods and Services Tax (“GST”), higher cost of living and the weakened ringgit. Notwithstanding stiff competition, narrowing margins and stricter regulations, Bank Muamalat’s domestic lending to the residential property sector grew by 4% from RM5.01 billion to RM5.19 billion for FY2017, accounting for 53% of the consumer’s total financing asset portfolio. TOTAL FINANCING ASSET (IN RM MILLION) 9.71 7.02 9.81 8.97 8.16 Bank Muamalat remained focused on the lower risk mass market segment with the majority of the mortgage financings extended for financing of residential properties is costing between RM150,000 to RM500,000. Notwithstanding the market dynamics, we remained focused on our segment-led approach and continued to target the mass affluent segment through SMART 1Hutang product. This is a mortgage financing consolidation proposition that gives customers the control, convenience, and flexibility over their monthly financing obligations. By consolidating their various financings into this one mortgage account, customers now have the option of paying less each month, saving on total profit or financing costs, or having more cash in hand. + 1% 0 2012 2013 Personal 37% 2014 Auto 7% 2015 Ar Rahnu 2% 2016 MORTAGE FINANCING OUTSTANDING (IN RM MILLION) Others 1% 4.58 Mortgage 53% 3.08 5.00 5.19 3.85 TOTAL FINANCING RM9.81 BILLION + 4% 0 2012 2013 2014 2015 2016 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 55
    58. CONSUMER BANKING PERSONAL FINANCING AUTOMOBILE FINANCING Bank Muamalat ’s personal financing is mainly driven by Pembiayaan Pengurusan Kewangan (PPK) and Pembiayaan Pengurusan Persaraan (3P) products. Both products are tailored for staff of government agencies, statutory bodies, government linked corporations and large corporations. Bank Muamalat’s passenger vehicle hire purchase financing portfolio continued to shrink from last 3 years in line with Bank Muamalat’s strategy to balance the asset profile, improve financing yield with more selective financing acquisitions and maximising funding allocation. In FY2017, auto finance disbursements were only at RM84.3 million as compared to FY2016 at RM96.2 million. Total auto finance outstanding stood at RM694 million, 14% lower from RM803 million than recorded in FY2016. In recent years, new policies and guidelines introduced by BNM which are designed to reign in household debt have continued to shape the personal financing segment. For FY2017, total personal financing outstanding stood at RM3.63 billion, a 0.3% rise from FY2016 in line with Bank Muamalat’s adopting more stringent lending criteria which is consistent with BNM’s prudential measures. Bank Muamalat continued to drive volume and business through marketing initiatives and business collaborations with DRB Group Automotive business especially our national car, PROTON and several programmes with reputable and established big bike dealers to generate business referrals in order to achieve business growth. Bank Muamalat will continue to support personal financing products with marketing and awareness campaigns to ensure our competitive edge. Consumer banking will also work on developing personal financial education programmes to highlight the importance of managing personal finances. The automotive industry remained challenging with sluggish market sentiment affecting the business community as a result of global and domestic issues whilst consumer sentiment remain dampened, especially the middle and low-income groups, due to higher cost of living. Most car distributors have also announced imminent rise in vehicle prices in 2016 amid the weakening ringgit and higher cost environment. Despite the challenging operating environment, we believed that the execution of Bank Muamalat’s new business strategy will continue to drive domestic vehicle hire purchase financing growth. PERSONAL FINANCING OUSTANDING (IN RM MILLION) 3.18 2.71 3.62 3.63 2.97 AUTOMOBILE FINANCING OUTSTANDING (IN RM MILLION) 0.97 + 0.3% 1.05 0.94 0.80 0 0.69 2012 2013 2014 2015 2016 - 14% 0 56 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 2012 2013 2014 2015 2016
    59. AR RAHNU Ar Rahnu is a micro credit instrument for individual , small business operators and small traders with low credit standing particularly those in financial predicament who are in urgent need for cash and capital. Only gold and jewelry made of gold can be pawned. The Ar-Rahnu industry has been established since 25 years ago and is currently regulated by the Pawnbrokers Act which was enacted in 1972 and Malaysia government has regulated the Islamic Pawnbroking industry under Ar-Rahnu Act. In 2016, the total Islamic pawn broking transaction industry in Malaysia has grown almost RM5 billion a year. Bank Muamalat’s Ar Rahnu marhun outstanding grew by 63% to stand at RM131.0 million in FY2017 and contributed a significant growth to Ar Rahnu income which expanded 58.2% y-o-y or by RM10.6 million. Ar-Rahnu services were available at 47 branches out of 62 Bank Muamalat’s branches for FY2017. The acceptance of Gold Bar for Ar Rahnu services in FY2017 has also contributed to the significant growth of overall Ar Rahnu Marhun and Income. Available to locals and foreigners, Muslims and Non-Muslims alike the loan tenures could range from 6-18 months. Borrowers have a choice to either repay of safekeeping fee via lump sum or by monthly installments. Currently, the margin of loan is up to 80% of the value of the gold. AR RAHNU MARHUN OUSTANDING (IN RM MILLION) AR RAHNU INCOME (IN RM MILLION) 131.0 10.6 8.07 82.2 80.2 50.1 6.1 57.1 4.06 + 63% 0 2012 2013 6.7 2014 2015 2016 + 59% 0 2012 2013 2014 2015 2016 Moving forward, Bank Muamalat plans to enhance the business model of the existing Ar Rahnu business by exploring into a one-stop gold centre, which would enable customer to buy and sell gold bars and to do Ar Rahnu transactions online. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 57
    60. BUSINESS BANKING DIVISION Business Banking Division (“BBD”) revamped its strategy in FY2017 to reprioritise and focus on short term facilities, with Trade Finance and Forex facilities in particular as well as to reposition Bank Muamalat as the preferred choice within the local community. The shift in strategy included concentrating on shorter term facilities with better asset quality and higher yields and non-fund based income in line with the Bank’s funding strategy. This resulted in improvements in overall fee income and improved overall profitability. This was a commendable achievement given the continuing challenges arising from weak economy in FY2017, which caused Bank Muamalat to remain selective in its new financing and concentration on customers and industries. FOCUS SHIFT FY2017 represented a major shift in BBD’s focus towards expanding its Trade Finance and Forex business. The strategies implemented to achieve this included balanced marketing of funded and non-funded products, staff training to improve proficiency in trade products and to develop trade specialists, synergising marketing with regional offices to improve reach and effectiveness as well as marketing to Bank Muamalat’s wider holding group customers. The improvement arising from the strategy was reflected by a rise in Trade Finance Income by 26% to RM7.3 million in FY2017 compared to RM5.8 million in FY2016 and a highly commendable 57.7% increase in Fee Income to RM15.3 million in FY2017, rising from RM9.7 million in FY2016. BBD plans to continue the focus on Trade Finance and Forex alongside its traditionally profitable financing business in FY2018 and beyond. FINANCING ASSETS AND INCOME YIELD In consideration of economic conditions and Bank Muamalat’s less aggressive stance on financing in FY2017, BBD achieved praiseworthy performance with an 8% increase in revenue to RM289 million, up from RM268 million in FY2016. From the revenue, financing income rose 6% from RM257.9 million to RM274 million in FY2017 while total fee income was RM15.3 million, up 57.7% as aforementioned. The revenue was made from total performing assets which finished at RM5.23 billion as at FY2017, up 6.3% from RM4.92 billion as at FY2016. This showed that despite the lower increase in financing assets compared to FY2016, yield based on gross average monthly financing assets continued to improve to 5.57% in FY2017, reflecting improvements in the profitability of the financing assets as a result of the BBD’s strategies. Previously in FY2016, there was a 10% increase in financing assets; however, the yield was lower at 5.45%. Financing assets have been improving since 2013, with a compounded annual growth rate of 10.1% p.a. In FY2017, the increment was mainly due to new disbursements from bilateral relationships and some big ticket syndicated financing disbursements. Financing income has also been rising with improvements in yield since FY2016. Notwithstanding, BBD’s focus on trade financing and nonfund base revenue has complemented the growth and not resulted in hampered growth in financing assets. BBD continues to actively look for financing opportunities in infrastructure, project and contract financing in order to book quality long term assets with minimal risk of noncompletion, while also having a keen eye for customers in the manufacturing, education, healthcare and consumer (food and beverage) sectors. FINANCING ASSETS AND FINANCING INCOME (IN RM MILLION) 6,000 5,229 5,000 4,483 4,342 4,000 3,830 3,557 FINANCING ASSET FINANCING INCOME 3,000 2,000 1,000 214 0 58 2013 185 2014 201 2015 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 258 2016 274 2017
    61. DEPOSIT BASE BBD ’s total deposit base experienced a contraction in FY2017, shrinking 17% from RM3.04 billion to RM2.52 billion in FY2017. The main factors for this were reduction by 31% in Corporate Current Account and Savings Account (“CASA”) deposits in FY2017 and contraction of 50% in General Investment Account (“GIA”) deposits and unforeseen decrease in Commercial Fixed Term Accounts (“FTA”), which dipped from RM424 million to RM183 million. Nonetheless, Bank Muamalat continued to support BBD by promoting the Bank’s Corporate Internet Banking, cultivating relationships with customers and assisting them with their cash management. also mostly focused on Finance, Insurance, Real Estate and Business Services (54.3%), followed by Transport, Storage and Communication (15.5%) and Construction (11.0%). As with Corporate and Commercial Financing, SME Retail concentration was also in Finance, Insurance, Real Estate and Business Services (30.1%), with Construction (23.0%) and Wholesale and Retail Trade (20.4%) coming thereafter. For Corporate Banking, the real estate exposure increased to 35.7% of total financing assets in FY2017, up from 27.0% in FY2016. Although there is some concentration in the Finance, Insurance, Real Estate and Business Services sector, BBD’s policy is to be selective in its real estate exposure, concentrating mainly on the lower risk affordable residential and township properties in high growth regions such as the Central Region and Penang. Increase in real estate exposure in FY2017 included progressive disbursements under existing exposures booked in previous financial years. FINANCING SECTORS As with FY2016, the main sectors in BBD’s Corporate Financing were Finance, Insurance, Real Estate and Business Services (40.4%), Education, Healthcare and Others (16.3%) and Manufacturing (13.5%). Commercial Financing was DEPOSITS (IN RM MILLION) DEPOSIT (CA) DEPOSIT (FTA) DEPOSIT 3,500 3,044 3,000 2,536 2,500 2,524 1,842 2,000 1,738 1,789 1,728 1,637 1,500 1,315 1,025 1,000 500 0 703 1,202 887 798 474 2013 2014 2015 2016 2017 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 59
    62. BUSINESS BANKING DIVISION Business Banking Division Business FinancingBanking SectorsDivision Financing Sectors FINANCING BY SECTORS Construction Manufacturing Transport , Storage and Communication Finance, Insurance, Real Estate and Business Services Primary Agriculture Education, Health and Others Mining and Quarrying Wholesale and Retail Trade and Restaurants and Hotels Electricity, Gas and Water Supply Sector NEC UTILISATION RATE AND ASSET QUALITY Despite the utilisation rate of BBD deteriorating to 74% in FY2017 compared to 85% in FY2016, Bank Muamalat managed to improve the quality of utilisation as shown by the higher yield of 5.57%. Non Performing Financing (“NPF”) ratio has been on a reducing trend since FY2014 as BBD has been giving high importance to asset quality over the past few financial years. NPF was 1.97% in FY2017, Rate and Asset Utilisation Quality Rate and Asset Quality down from 2.72% in FY2016 while the delinquent ratio has been improving since FY2013 to 0.14%. and yield from existing and new accounts. The focus sectors include construction and infrastructure, manufacturing, education, healthcare and consumer (food and beverage) sectors, with a keen interest in exporters as Bank Muamalat looks to increase its holding in foreign currencies, in line with the current economic conditions. This strategy is expected to boost profitability, protect BBD’s current portfolio against delinquencies and maintain low NPF ratios. e utilisation rateDespite of BBDthe deteriorated utilisation rate to 74% of BBD in FY2017 deteriorated compared to 74% to 85% in FY2017 in FY2016, compared Bank to 85% in FY2016, Bank managed to improve Muamalat the managed quality of to utilisation improveas theshown quality byofthe utilisation higher yield as shown of 5.57%. by the Nonhigher yield of 5.57%. Non MOVING FORWARD g Financing (“NPF”) ratio BBD hasFinancing been on(“NPF”) a reducing ratiotrend has been since on FY2014 a reducing as BBDtrend has been since giving FY2014 as BBD has been giving ForPerforming FY2018, will continue to concentrate on Trade Forexthe andpast non-fund based products alongside tance to assetFinancing, quality high importance over to asset few financial quality over years. theNPF past was few1.97% financial in FY2017, years. NPF down was from 1.97% in FY2017, down from cautious and selective expansion while balancing risks Y2016 while the 2.72% delinquent in FY2016 ratio while has been the improving delinquentsince ratioFY2013 has been to improving 0.14%. since FY2013 to 0.14%. versus returns. Although this may lead to minimal financing assets growth, BBD will continue its focus on asset quality and efficient use of capital and look to improve revenue 60 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
    63. BUSINESS BANKING DIVISION NON PERFORMING FINANCING (IN %) 4.50% 4.40% 4.00% 3.50% 3.00% 3.20% 2.90% 2.50% 2.72% 2.00% 1.97% 1.50% 1.00% 0.50% 0% 2013 2014 2015 2016 2017 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 61
    64. TREASURY CAPITAL MARKET Treasury & Capital Markets performed reasonably well in a year that was fraught with challenges. Global financial markets continued to be volatile amid uncertainty over the policy direction of the U.S. Federal Reserve. Despite falling revenue from a weaker commodities market and concerns over political uncertainty, Malaysia’s economy maintained a steady growth rate in 2016. US political uncertainty following President-elect Donald Trump’s win and fears over the impact of an expected US rate hike pressured the ringgit late in the year, with the currency coming close to a 19-year low in late November, when its value fell by 6.5% to RM4.46:USD1. Bank Muamalat’s wholesale funding costs moderated from the previous year after a cut in the overnight policy rate (OPR) by 25 basis points in July 2016. The Bank’s liquidity position saw significant improvements in the year under review with liquidity coverage ratio (“LCR”) well above regulatory levels and net stable funding ratio (“NSFR”) poised to meet requirements by end of 2017. The local yield curve gapped up significantly after the unexpected results in the US election but has since subsided into the 1st quarter of 2017 although the belly of the curve is still at higher levels compound to 1st half 2016. Despite this backdrop of volatility, capital gains from sale of securities managed to increase 73% year on year. 62 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 Liquidity and capital management was a major focus for the Asset Liability Management (“ALM”) function within Treasury particularly towards compliance of NSFR and MFRS 9 by 2018. Key initiatives completed were as follows:• Enhanced/revamped incremental product pricing methodology. • Issuance of Subordinated Sukuk and Senior Sukuk amounting to RM250.0 million and RM505.0 million. • Cagamas funding. OUTLOOK FOR 2017/2018 After a lackluster outturn in 2016, global economic activity is projected to pick up pace in 2017 and 2018, especially in emerging markets and developing economies. However, there is a wide dispersion of forecasted outcomes around the projections, given uncertainty surrounding the policy stance of the U.S. administration and its global ramifications. Improving commodity prices and a weakened Ringgit should be supportive of the Malaysia economy this year with GDP expected to expand around 4.8%. We expect Bank Negara Malaysia (“BNM”) to maintain an accommodative stance in its monetary policy but with firmer bias into 2nd half 2017 in tandem with expected tightening by the Federal Reserve. Our strategy of ‘short duration’ and emphasis on funding and asset liquidity will be maintained while trading activities will continue to focus on customer flows.
    65. DEPOSITS FY2017 saw a mixed performance of Bank Muamalat ’s core deposits during the 1st and 2nd halves of the period under review. For the first 6 months, Current Account (“CA”) and Fixed Term Account-i (“FTA-I”) registered a drop of 19.06% and 0.67% respectively. Savings Account (“SA”), on the other hand, increased by 4.08%. The deposit performances improved in the 2nd half period, albeit modestly with CA narrowing the decreasing gap to 2.78% while SA continued to show increment of 1.67%. Overall, core deposits registered a decrease of 4.21% from the opening balance of FYE2016/2017, i.e. from RM15.911 billion to RM15.242 billion. Several factors can be attributed to the above performances. On the macro level, rate wars among competitors continued to dominate the deposit landscape of both the private and government sectors. Replacement of Wadiah-based products to Mudharabah was completed in September 2016, has rendered CASA to be vulnerable to attritions for the first 6 months of period under review CORE DEPOSITS (IN RM BILLION) CASA DEPOSITS (IN RM BILLION) FYE FYE 16/17 15.24 15/16 15.91 14/15 13/14 14.92 14.53 12/13 11/12 10/11 14.53 13.52 12.89 16/17 4.23 15/16 4.78 14/15 4.77 13/14 4.26 12/13 3.77 11/12 3.73 10/11 3.43 2 4 6 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 63
    66. DEPOSITS CORE DEPOSITS COMPOSITION 20 % 72% TOTAL CORE DEPOSITS RM15.24 BILLION Execution of several initiatives was focused on both private and government segments during the period under review to mitigate the anticipated decline of CASA balances. On the government market, we continued to provide value added services to selected agencies in order to strengthen our presence there and to alleviate stiff competitions from other financial institutions aiming a bigger piece of the pie. A total of 6 marketing initiatives were introduced during the period under review, encompassing campaigns and promotions for all product suite. For FTA-i, the Wang Besar! 3 and 4 series were launched in May 2016 and September 2016 respectively and managed to acquire a total placement of RM814.55 million from the combined target of RM450 million. CASA, on the other hand, offered a different scenario. In relation to the hurdles faced by these products, initiatives performed under the Wadiah contract ambit were limited to those not in contradictions with Islamic Financial Services Act (“IFSA”) guidelines, such as Staff Deposit Acquistions, Project Hijrah and Muamalat Mesra Masjid. Save n Win, a Savings Account campaign was successfully introduced in January 2017, upon the stabilisation of the new CASA Tawarruq product launch. 64 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 FTA 8% Current Account Savings Account We anticipate that additional account openings will follow suit in the following financial years with our consistent service and rapport maintenance. Among them are the contributions from the government sector that will be on the opening of new operating accounts by Jabatan Akauntan Negara Malaysia for some of their top ministries. Our deposit strategies will remain intact for the next financial years, i.e. to create outstanding deposit value propositions that meet our targeted market requirements while minimizing deposit attrition through continuous programs of innovative deposit campaigns, creative marketing productions, improvised and new fin-tech development as well as new market penetration. Retail deposit will continue be the main focus of growth, to reach a composition level from 27% to 43% in 5 years time, and thus being the catalyst for driving Bank Muamalat’s overall deposit growth of RM5.9b or 36.6% within the period.
    67. WEALTH MANAGEMENT Wealth Management Department continued its impressive performance from the previous year and on 16 March 2017 took home the highly prestigious and sought after global recognition award for Best Bancassurance Product awarded by Timetric at the 8th Annual Retail Banker International Asia Trailblazer Summit & Awards 2016. Bank Muamalat (triumphed over) excelled above 19 other nominees including the likes of DBS Bank, Standard Chartered and Maybank Group Malaysia to win the award. This recognition is a proof of Bank Muamalat’s capability in providing the best product in fulfilling the needs of its customers and the market at large. Keeping our ears to the ground and understanding customer’s needs is the secret to achieving great heights and competing with larger financial institutions. This award recognises the initiative by the Wealth Management Department in developing the revolutionary M-Tiara Golden Age bancatakaful product which addresses the Takaful needs of senior citizens aged 50 and above. This Takaful plan is also the first in the industry which incorporates a Waqaf feature that provides the option for Muslim clients to assign a portion of their sum covered for Waqaf purposes, thereby allowing for continuous charitable endowment even after one’s demise. This product is exclusively distributed by the Bank and was jointly developed by Bank Muamalat Malaysia Berhad and Great Eastern Takaful Berhad. On 24 March 2017, En Mohd Iqbal Bin Ahmad of Sungai Petani Branch and En Muhammad Hakimi Bin Mat Johor of Seri Manjung Branch brought further pride and honour to Bank Muamalat by being named as the country’s CHAMPION and 1st RUNNER UP respectively for the prestigious Top Bancatakaful Producer (Bank Sales Staff Category) Award at the Malaysian Takaful Association (MTA) Star Nite Awards ceremony. The MTA Awards night is an annual event organised to recognise Top Performing individuals and organisations What counts is what you do with your money - Merton Miller Life is a daring adventure or nothing - Helen Keller that have weathered numerous challenges and emerged victorious in the Takaful Industry. It is an accolade desired by many in the industry and winning this prestigious award is an attestation that Bank Muamalat is committed to drive and grow the Islamic Wealth Management sector and have succeeded in grooming up our people to the national level. Overall, the Wealth Management business delivered RM6.03 million fee income as at March 2017. On another impressive note, Bank Muamalat’s closed the year by successfully realising sales of 263/kg of Muamalat Gold-I with a corresponding income of RM2.4 million. Total gold sold since inception in January 2016 stands at 335kg, corresponding to an approximate value of RM61.0 million and an income of RM3.0 million. Moving forward, we foresee Wealth Management Department as an important contributor to the bottom line of the bank through its increasing fee based income. To this end, the department will continue to reinforce and develop its range of products to meet the changing demands of our clients. In the pipeline and expected to come on board in the next financial year, is the setting up of Bank Muamalat’s first Affluent Banking Center to cater to the affluent, high net worth market. We are extremely excited at this prospect as this will be the establishment of the industry’s first Islamic Affluent Banking Center and anticipate a substantial contribution to Bank Muamalat’s deposit based and fee based income. The department is also working closely with major players in the market to strengthen our estate planning product offerings to ensure comprehensive advisory platform for all walk of life. The aim of the present Wealth Management and Affluent Banking Department is to set a milestone of Islamic Financial Advisory era at all. Bank Muamalat branches that hopefully will be the key factor to put forth Bank Muamalat in the mind of the present and future customers who are concerned on managing their assets till eternity. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 65
    68. INVESTMENT BANKING DEPARTMENT The investment banking arena remained extremely competitive throughout the financial year with a subdued economic and business environment resulting in limited opportunities , mostly emanating from the public sector, Government-linked Companies (“GLC”) and large-cap corporate sectors. Given the traditional dominance of the larger local and foreign players in this space, Investment Banking Department (“IBD”) faced considerable challenges in establishing deal flows to further our aspiration to become one of the leading Islamic investment banking houses in the country. Notwithstanding, IBD managed to turn in commendable performance from an Islamic syndicated financing mandate for a telecommunications infrastructure services provider, the conclusion of the maiden issuances of senior and subordinated sukuk programmes jointly arranged by Bank Muamalat, underwriting the initial public offering of Perak Transit Berhad (“PTB”), an integrated transportation terminal and public transportation services provider based in Ipoh, Perak on the ACE Market of Bursa Malaysia as well as income from additional investments in Ar-Rahnu joint venture business. Our subsidiary, Muamalat Venture Sdn Bhd, a registered venture capital management corporation with the Securities Commission Malaysia, is one of the substantial shareholders and promoters of PTB. As at 31 March 2017, the value of our investment in PTB has appreciated approximately by 73% since the inception of our investment. 66 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 During the financial year, IBD had also embarked and played a meaningful role in fostering the Bank Muamalat’s initiatives on Investment Account Platform (“IAP”). IAP, which was officially launched by Bank Negara Malaysia on 17 February 2016, is a centralized multibank platform initiated by six Malaysian Islamic banking institutions. IAP allows companies to raise fund for their ventures, while providing opportunities to the investing public and institutions to participate in the growth of the ventures. Bank Muamalat is pleased to be a part of this important strategic initiative and was the first sponsoring bank having launched the fund-raising of Perak Transit Berhad on IAP’s web-based investment platform. The venture debuted in April 2016 (prior to PTB’s listing) and successfully raised RM10.0 million for its working capital requirements. Rated by RAM Solutions Sdn Bhd, the 3-year tenured investment via Wakalah Restricted Investment Account (WRIA) currently generates return averaging more than 6.0% with prompt payments of principal and profits. Moving forward, given the challenging market environment, IBD will continue to focus on our key corporate relationships for deal flows in project and syndicated financing transactions which will increase our portfolio of financing assets and bring in attractive fee-based income, while remaining on the lookout for good investment potential and opportunities. IBD will also continue to focus on steering and supporting the IAP initiative while diversifying its revenue base with new income streams.
    69. MUAMALAT INVEST SDN BHD Muamalat Invest Sdn Bhd (“MISB”), a wholly owned subsidiary of Bank Muamalat Malaysia Berhad (“Bank Muamalat”), was incorporated on 22 April 1996 with a paid up capital of RM10 million. MISB was accorded an Islamic Fund Management license in September 2010. As at March 2017, MISB through its series of Islamic wholesale funds has captured around 9% of the total Islamic wholesale fund Net Asset Value (NAV) based on Summary of Statistic-Wholesale Funds in Malaysia issued by Securities Commission Malaysia. MISB provides Shariah compliant management services which include: MISB continues to embark on efforts to diversify asset classes for products offered to cater to the Islamic wholesale institutional and corporate investors. investment • Management of discretionary and non-discretionary mandates for asset classes covering equity and sukuk; and • Provision of wholesale fund products for investments in various asset classes i.e. Islamic money market instruments, equities and sukuk. For FY2017, MISB continued to grow its Assets under Management (AUM) to approximately RM3.19 billion from RM3.12 billion in FY2016. This translates to an increase of approximately 2% year-on-year. Investments also continued to be made into building infrastructure and resources in order to position itself as a key player in the wholesale Islamic capital market space. NOR AHMADI SULONG CHIEF EXECUTIVE OFFICER BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 67
    70. SHARIAH SHARIAH DEPARTMENT ACTIVITIES FOR FY 2017 68 1 . SHARIAH ADVISORY & SECRETARIAT SECTION: The role of Shariah Secretariat in performing secretariat function to the Shariah Committee (“SC”) comprises of providing input and support to the SC which includes coordinating meetings, compiling proposal papers, disseminating Shariah decisions to relevant stakeholders, engaging with relevant parties who seek further deliberations on issues from the SC and ensuring the welfare of SC members is accordingly served. 2. RESEARCH & DEVELOPMENT SECTION: The role of Shariah Research is to perform in-depth research and studies on Shariah matters, including providing day-to-day Shariah advise and consultancy to relevant parties, especially those involved in the product development process. For FY2017, a total of 16 research papers have been completed comprising Shariah issues, product development and special request by Shariah Committee and other parties. In terms of Shariah advisory and consultancy roles, the functions are to assist and provide advice to the relevant parties based on the decision of the SC, includes preproduct approval, operation process, documentations, activities of Business Unit, Support Unit, the Bank’s subsidiaries and external clients (upon request). Additionally, as to comply with Shariah requirement on Bank Muamalat’s new products, our section have reviewed and prepared the Summary of Gap Analysis on the Policy Documents which were issued by BNM. Among others were on wakalah, kafalah, hibah’, qard, wadi’ah ijarah and wa’d. During FY2017, several initiative have been made. We have developed and enhaced several digital resources for quick access of SC’s decisions which are Shariah Decision Database (SDD), Product Brief Info (PBI) and Shariah Non-Compliant List (SNCL). We have also formulated a new initiative on Online Signing for relevant and urgent papers. Moreover, in collaboration with Human Capital Division and Customer Service Department we have also conducted more than 30 series of Shariah training and awareness to the staff for branches, headquarters, Takaful Specialists and other related institutions. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
    71. Collaboration : Funds collected are channelled towards the education and health sectors. www.wakafselangor.muamalat.com.my BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 69
    72. CALENDAR OF EVENTS 2017 70 DATE DETAILS EVENTS & CSR 16 Apr 16 Golf Muhibbah with ATM 29 Apr 16 Reflex & Donate 03 May 16 Integrity Day 06 May 16 Mother's Day Programme 08 May 16 Branch Launch @ Tanah Merah 10-12 May 16 GIFF 2016 27 May 16 Reflex & Donate 29 May 16 Branch Launch @ Gua Musang 01 Jun 16 Lambaian Kaabah 2016 07 Jun 16 Program Ramadhan - Insan Super 12 Jun 16 Iftar with Underprivileged Children, Special Children and Mahaad Tahfiz @ SDCC 14 Jun 16 Program Ramadhan - Komunikasi 16 Jun 16 Iftar with Mahaad Tahfiz and homeless @ Masjid Jamek 20 Jun 16 Father’s Day 24 Jun 16 Reflex & Donate 28 Jun 16 Bubur Lambuk Distribution 20 Jul 16 Corporate Raya & Debit Card Launch 25 Jul 16 Bank Muamalat Raya (Staff ) 28 Jul 16 Signing Ceremony between Bank Muamalat Malaysia Berhad and Koperasi Perumahan ATM 29 Jul 16 Reflex & Donate 03 Aug 16 Nostalgia Bank Bumiputra 25 Aug 16 Branch Launch @ Gemas 26 Aug 16 Reflex & Donate 28 Aug 16 Signing Ceremony : UNIMAP 21-22 Sep 16 OSH Day 23 Sep 16 Reflex & Donate 10 -11 Oct 16 Proton Test Drive 13 Oct 16 Bank Muamalat ISO CERT Award 18 Oct 16 Donation by Wakaf Selangor Muamalat to PERKIM Banting 19-20 Oct 16 “Mari Mengaji” Briefing 01 Nov 16 “Mari Mengaji “with Al Baghdadi 06 Nov 16 Cooler Box contribution presentation to Glenmarie Golf & Country Club 08 Nov 16 Motorcycle donation Yayasan Amal Malaysia and Van Donation to mosque at Tanah Merah & Kedah 15 Nov 16 Muamalat Mentorship Programme with UITM 21-23 Nov 16 Kuala Lumpur Islamic Finance Forum 2016 30 Nov 16 Back 2 School Staff 07 Dec 16 Back 2 School Orphanage BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
    73. 14-16 Dec 16 Waqf Workshop 11 Jan 17 Ceramah Perdana Maulidur Rasul 13-15 Jan 17 Karnival Kewangan 2017 14-15 Jan 17 DRB-HICOM Autofest 15 Jan 17 MUAMALAT JOM KAYUH “#fitmuamalat” 17 Jan 17 Scale up Talk : Selling Your Product 24 Jan 17 Chinese New Year Dinner 26 Jan 17 CSR Workplace : Distribution of Karrimor Bag 19 Feb 17 Muamalat Jom Kayuh bersama Amy Search 25 Feb 17 Dinner with Akif student @ SDCC 10 Mar 17 Ziarah Mahabbah, Donation by Wakaf Selangor Muamalat to Ranau 13 Mar 17 Signing Ceremony with RISDA 14 Mar 17 Visit: University of Arizona 25 Mar 17 Launch of Muamalat Sports Recreational Club-Southern BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 71
    74. Placing 1st Prize Mohd Fazli Khalid SRC BMMB 5 2nd Prize Mohd Nizam Mahat SRC BMMB 3 SRC BMMB 3 SRC BMMB 3 3rd Prize by number Mohdof Fariq CORPORATE Category fish Ismail caught RESPONSIBILITY 4th Prize 5th Prize Mohd Jamal Arif Ahmad Fadzil Mohd Saidi Group KESAN Name Weight2 Placing 1st Prize Mohd Fazli Khalid SRC BMMB 5 2nd Prize Mohd Nizam Mahat SRC BMMB 3 SRC BMMB 3 SRC BMMB 3 KESAN 2 Corporate Social goes Fariq hand in hand with 3rdResponsibility Prize Mohd Ismail Islamic banking or ethical banking and it is defined as corporate 4thand Prize Mohd Jamal initiative to assess take responsibility for theArif company ’s effects on the environment on Fadzil social welfare. 5th Prize and impact Ahmad Mohd The Saidi term generally applies to the company’s effort that goes beyond what may be required by regulators or environmental protection groups. Corporate social responsibility may also be referred to as “corporate citizenship” and can involve incurring short-term costs that do not provide an immediate financial benefit to the company, but instead promote positive social and environmental change. At Bank Muamalat Malaysia Berhad, our focus for year 2016 is“Prihatin Muamalat” and this is reflected in our Corporate Social Responsibility for the year 2016. CR @ THE WORKPLACE FISHING CONTEST ORGANISED BY KESAN Bank Muamalat Sports Club (SRC BMMB) participated in a fishing contest organised by Kelab Sukan Jabatan Akauntan Negara Malaysia (KESAN) and Bank Muamalat managed to secure 7 prizes out of 10 prizes. The event was held at Kolam Memancing Taman U, Seri Kembangan on 28 February 2016 with 60 participants. En. Mohd Ilham bin Yusak from KESAN is the winner who managed to catch 3.65kg fish. The result of the contest is as follows:CATEGORY WEIGHT PLACING BY NAME GROUP WEIGHT KESAN 3.650 Placing Name Group 1st Prize Mohd Ilham bin Yusak 2nd Prize Anuar Ridzaudin Hassan SRC BMMB 3.410 1st Prize Mohd Fazli Khalid SRC BMMB 3rd Prize Mohd Nizam Mahat SRC BMMB 2.850 2nd Prize Mohd Nizam Mahat SRC BMMB 4th Prize Raub Osman KESAN 2.545 3rd Prize Mohd Fariq Ismail SRC BMMB 5th Prize Mohd Azuan Ahmad SRC BMMB 2.440 4th Prize Mohd Jamal Arif SRC BMMB 5th Prize Ahmad Fadzil Mohd Saidi KESAN CATEGORY BY NUMBER OF FISH CAUGHT PLACING NAME 72 Category by number of fish caught GROUP WEIGHT 1st Prize Mohd Fazli Khalid SRC BMMB 5 2nd Prize Mohd Nizam Mahat SRC BMMB 3 3rd Prize Mohd Fariq Ismail SRC BMMB 3 4th Prize Mohd Jamal Arif SRC BMMB 3 5th Prize Ahmad Fadzil Mohd Saidi KESAN 2 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
    75. Day MALAYSIA RAYA 2016 - JOM BALIK KAMPUNG BANKMother ’s MUAMALAT 6 May 2016, HQ Bank Muamalat, Bank Muamalat organized a CR programme to MOTHER’S DAY BANKhave MUAMALAT MALAYSIAday RAYA 2016 - JOM BALIK the Menara Bumiputra, 25 Day. July 300 2016 - Every year, we a special to celebrate celebrate Mother’s rosesBumiputra, were distributed to all mothers in Bank Muamalat as 6 May 2016, Bank Muamalat Menara KAMPUNG joyous Hari aRaya occasion with Bank Muamalat HQ work staff, members CR appreciation programme to celebrate Mother’s Day. Menara 25 and JulyBoard 2016 - Every year, the and aorganised symbol of towards their sacrifice and Bumiputra, hard another 100 roses 300 roses were distributed to all mothers in the Bank bank have a special day to celebrate the joyous Hari Management. The to theme of thispublic year’s event, which was celebrated on 25 July 2016, were distributed thetowards general Melaka. as a symbol of appreciation their sacrificenear and Jalan Raya occasion with the HQ staff, Board members and was Jom Balik Kampung. was up in to hard work and another 100 rosesEverybody were distributed to the dressed Management. Thebeautiful theme of this traditional year’s event, wasoutfits “Jom public near Jalan Melaka. Balik Kampung”. Everybody was dressed up in beautiful matchgeneral the theme. traditional outfits to match the theme. Food stalls were creatively decorated by the staff based Food stalls were creatively decorated by the staff based on the culture and prominent on the culture and prominent features of each state within Malaysia. Tasty and western foods of each state within Tasty traditional andtraditional western foods were at, features Bank Muamalat organized a CR Malaysia. programme to MUAMALAT BANK MALAYSIA RAYA 2016 - JOMinBALI were in abundance. Everyone looked radiant with happy at,were Bankdistributed Muamalat ain CR programme to abundance. Everyone looked radiant with happy and faces smiling faces everywhere. es to organized all mothers Bank Muamalat as and smiling everywhere. es distributed to hard all mothers in Bank Muamalat as ds were their sacrifice and work and another 100Menara roses Bumiputra, 25 July 2016 - Every year, we h ds their sacrifice and hard work and another 100 roses ublic near Jalan Melaka. joyous Hari Raya occasion with Bank Muamala ublic near Jalan Melaka. Management. The theme of this year’s event, whi was Jom Balik Kampung. Everybody was dressed match the theme. Food stalls were creatively decorated by the staff b features of each state within Malaysia. Tasty tra abundance. Everyone looked radiant with happy a Father Day 2016 20 June 2016, Menara Bumiputra: Bank Muamalat organised a Corporate Responsibility programme to celebrate Father’s Day. There were 400 pre-packed kuih, drink and dates distributed to all fathers in HQ. Bank Muamalat also distributed 100 pre-packed food to the general public. The objective of the programme is to instill appreciation towards all fathers for their sacrifice and love. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 Father Day 2016 73
    76. CORPORATE CR @ COMMUNITY RESPONSIBILITY CR @ COMMUNITY CR @ COMMUNITY Programme with Bank Muamalat : Pertubuhan Kebajikan dan Pendidikan Permata Rohani Programme with Bank Muamalat : Pertubuhan Kebajikan dan Pendidikan Permata Programme with Bank Muamalat : Pertubuhan Ke Rohani Rohani Malaysia Berhad (Bank Muamalat) Kuala Lumpur , 27 February 2016, Bank Muamalat CR @ COMMUNITY FATHERS DAY 2016 20 June 2016, Menara , Bumiputra: Bank 2016, Muamalat Kuala Lumpur 27 February Bank Malaysia Berhad (Bank Muamalat) have organized a CR programme with Muamalat children from Rumah Pertubuhan Kebajikan organised a Corporate Responsibility programme to PROGRAMME WITH, BANK MUAMALAT : PERTUBUHAN Kuala Lumpur 27 February 2016, Bank have organized CR400programme children from Rumah Pertubuhan Kebajikan dan Pendidikan Permata Rohanikuih, atwith Fifty4Ferns, Janda Baik, Pahang. There wereMuamalat 40 celebrate Father’s Day. There a were pre-packed KEBAJIKAN DAN PENDIDIKAN PERMATA ROHANI have organized a CR programme with children f drinkschildren and dates distributed from to all fathers HQ. 15 Bank Kuala Lumpur, 27 February Bank Muamalat dan Pendidikan Permata atyears Fifty4Ferns, Janda Baik, 2016, Pahang. There Malaysia were 40 involved age Rohani 7inuntil old. Muamalat also distributed 100 pre-packed food to the BerhadPendidikan (Bank Muamalat) organisedRohani a CR programme dan Permata at Fifty4Ferns, Ja children involved 7 until 15 general public. The objectivefrom of theage programme is toyears old. with children from Rumah Pertubuhan Kebajikan dan main idea programme is to createinvolved awareness empathy towards children fromand age 7 until Janda 15 years instill The appreciation towardsbehind all fathersthe for their sacrifice Pendidikan Permata Rohani at Fifty4Ferns, Baik, old. and love. Pahang. There were 40 children involved from ages 7 The main idea behind the programme is to create awareness and empathy towards underprivileged children. until 15 yearsidea old. behind the programme is to create The main underprivileged children. Some of the activities are motivation talk programme and telematch. underprivileged children. The main idea behind the programme is to create awareness and empathy towards underprivileged Some of the activities are motivation talk programme and telematch. children.ofSome the activities were motivational Some the of activities areheld motivation talk programme talks and telematch. 74 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
    77. ook the initiative to treat the special children and ch "Boboi Boy The Movie". There were 288 children all MOVIE TREAT “BOBOI BOY THE MOVIE” WITH SPECIAL CHILDREN AND UNDERPRIVILEGED CHILDREN Tanjung Golden Village (TGV), Sunway Putra, Kuala an Maluri Lumpur, 17 March 2016 - Bank Muamalat once again took the initiative to treat the special children and Caves (Pelajar Lelaki) children to watch “Boboi Boy The underprivileged a Perdana Movie”. There were 288 children all together from: • Yayasan Chow Kit ramme was• Puan PPDK 4Jamilah Abdul Sallam from Human • • • • • DK Wahyu P Keluarga Besar Norlina Baitul Ehsan Al-Khairi, Taman Maluri Baitul Ehsan Al-Khairi, Batu Caves (Pelajar Lelaki) Anak Yatim Attaqwa Putra Perdana REFLEXOLOGY PROGRAMME (MALAYSIA ASSOCIATION OF THE BLIND) WITH OLD FOLKS HOME AT KUALA KUBU BHARU Kuala Kubu Bharu- 23 April 2016, Bank Muamalat once again organised a programme at Kuala Kubu Old Folks Home. This programme is a collaboration between Old Folks Home and Malaysian Association for the blinds. The programme was where the blinds perform reflexology to the old folks. The purpose of the programme is to create a close knit relationship between the old folk’s homes and blind community. Bank Muamalat also contributed goodies in the form of biscuits, hand towels and box drinks. Association of the Blind ) with Old Fo lk Homes a t k Muamalat once again organised a programme programme is a collabo ra tion betwee the blinds. Th n Old Folk e programm e was where e purpose o the blinds f the progra mme is to cre s homes an a te d blind com a close munity. scu BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 75
    78. CORPORATE RESPONSIBILITY IFTAR with Underprivileged Children BANK MUAMALAT CONTRIBUTED A WHEEL CHAIR IN IFTAR WITH UNDERPRIVILEGED CHILDREN LANGKAWI On Sunday , 12 June 2016, was a meaningful day for Friday,On 4 June 2016: In 12 conjunction with thewas Ramadan Bank Muamalat 250 children from 8 orphanages Sunday, June 2016, a meaningful day foras our Bank Muamalat. As 250 month Bank Muamalat donated a wheel chair which was were invited to a “Break Fast & Furious 3”. The Iftar children from 8 orphanages were invited to a "Break Fast & Furious 3", Iftar with presented by Y.Bhg Dato’ Hj Mohd Redza Shah Abdul with underprivileged children was held at Sime Darby children, held at Sime Darby Convention Centre, This is Wahid,underprivileged CEO Bank Muamalat Malaysia Berhad to a disable Convention Centre, Mont Kiara. ThisMont is BankKiara. Muamalat’s IF TA individual. The disable individual is an orphan and living annual Corporate Social Responsibility (CSR) initiative to to R w Bank Muamalat's annual Corporate Social Responsibilityith (CSR) back Undinitiative erpriv to gholy egive dC hi ld with his grandmother and siblings. give back to the community duringile the month of ren the community during the holy month of Ramadhan. Ramadan. On Sunday, 12 Ju nechildren 20 16Seri , wa The eight selected were from PPR The eight selected beneficiaries were children from PPR beneficiaries Pantai Dalam, PPR Alam, s a mean c hi ld re n fro Pantai Dalam, PPR SerimAlam, Rumah At-Taqwa Putra 8 o rp ha nages w Rumah At-Taqwa Putra Perdana, Rumah Kebajikan Anak Yatim and Golongan Asnaf ere invite undRumah Perdana, Anak Yatim and Golongan erprivKebajikan ilegedRawang, c hi ld re Baitul Nurrawdhah Puchong, Pusat Jagaan Budaya Harapan KRT Dahlia n, he Asnaf Baitul Nurrawdhah Puchong, Pusat Jagaan Budaya ld atTun Sime Da Bank M ua m a la Harapan Rawang, KRT Dahlia Tun Teja Rawang. Rumah t's Teja Rawang. Rumah Anak Yatim Ummi Kajang and Anak Yatim Asnaf SMK Kajang annfrom ual C o rp from rate Social Anakth Yatim Ummi Anak Yatim Asnaf o e co mmKajang unity and Utama. d ur in g th e ho ly month of Ra SMK Kajang Utama. Owners (LOC), Spyderto Cam-Am & Rokeb were for e eigClub Lotus Owners Club (LOC), Spyder Cam-AmLotus &Th Rokeb were invited provide joyride ht se lec tethe dchildren beneand fic ia invited to provide joyride for to give rie were child the children and to give the children an unforgettable The childrensthe were Ru anaunforgettable h At-experience. Taqw childrenm experience. children were a PutraThePe rd a na , Rumah K taken for joyrides around the vicinity of SDCC. Bafor taken itujoyrides l Nuraround the vicinity of SDCC. rawdhah Puchong , Pusat Jagaan Te ja Ra wjoyride, a ng . Ru Apart from the Bank Muamalat also provided m a h nakthe Apart from the joyride, Bank Muamalat also provided a photoboothAfor children. Ya tim Ummi Kaja Utama. for the children. There was also a photobooth a special There was also a special appearance by Queen Pirate Other appearance by Elsa Queenand Elsa and PiratePrincess. Princess. Other activities conducted quiz, colouring contestThe activities conducted were pop quiz, colouring contest were andpop tilawah Al-quran. Lotilawah and Al-quran. also a received lucky tus O wners The children also received lucky draw hampers. The evening ended sweet note C luchildren (Lwith Owith C), aSp draw hampers. The eveningbended sweet note yd e r Cam-Am th e c when each child was handed the "duit raya". ldre n handed and to when eachhi child was the “duit raya”. taken for joyrides give the children an un around the vicinity of SDCC Apart from the jo yride, Bank Muam alat also There was also a special appea rance by activities conduc ted were pop q uiz, colou children also rec eived lucky draw hampers when each child was handed the "duit raya". 76 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
    79. Iftar with Maahad Tahfiz Al-Bayan School of Qu Masjid Jamek , Kuala Lumpur, Thursday, 16 Berhad (Bank Muamalat) organised an iftar f m ho d an dh di Ha & an ur Q of ol ho Sc n ya Ba Raya” and survival kit to the homeless while ‘D Tahfiz IFTAR WITH MAAHAD TAHFIZ AL-BAYAN SCHOOL OF QURAN & HADITH & THE HOMELESS Masjid Jamek, Kuala Lumpur, Thursday, 16 June 2016 The Bank Muamalat organised an iftar for 400 guests including Mahaad Tahfiz Al-Bayan School of Quran & Hadidh and the homeless. Bank Muamalat presented “Duit Raya” and survival kit to the homeless while ‘Duit Raya’ and backpack to the Mahaad Tahfiz children. Melaka -Sa'adah, held at Masjid As as w B KE RO n, event ah missio ged families. The ile riv rp de un to d was donate s. The donation tion to the familie na do of n tio ta presen r and etc. e, cooking oil, suga needs such as ric BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 77
    80. CORPORATE RESPONSIBILITY JAUHLAH MAHABBAH TO UJONG PASIR , MELAKA 26 Nov 2016, the Jaulah Mahabbah mission by ROKEB was held at Masjid As-Sa’adah, Ujong Pasir, Melaka. The donation was donated to underprivileged families. The event began with a doa recitation and presentation of donation to the families. The donation is in a form of monetary and basic needs such as rice, cooking oil, sugar and etc. 78 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 CR @ MARKETPLACE MEDIA NIGHT 2016 Kuala Lumpur, 16 December 2016 – For the first time Bank Muamalat organised a media night to celebrate the media and to acknowledge their importance in circulating information and news about Bank Muamalat as well as its products. As an appreciation to the members of the media, Bank Muamalat has awarded them with trophies in three (3) categories which are TV, Radio and Online media. There were also lucky draws and performance by Caliph Buskers.
    81. SUSTAINABILITY REPORT Being ethical comes hand in hand in the banking industry . Furthermore as an Islamic financial institution, we take pride in upholding these values. We know that sustainability efforts are important in delivering our values as we are largely responsible to the COMMUNITY, WORKPLACE, MARKETPLACE as well as the ENVIRONMENT. We may not have all the answers, all the access or all the know-how but we believe our responsibilities towards our community, workplace, marketplace and environment deserves our best interest. With that in mind, we’re constantly striving to find and remain committed about making positive as well as lasting social and environmental impact across the nation. And this is all reflected in our SUSTAINABILITY REPORT for the financial year.
    82. RESPONSIBLE TO THE COMMUNITY D elivering essential values for the community is an ongoing commitment that has been a part of Bank Muamalat ’s fabric since our early days. We hold strongly to our belief in making a positive and sustainable impact to the communities we operate in. Our business helps support economic growth through the expansion of products and services, employment and the creation of knowledgeable workers. We believe that we can contribute significantly in enhancing the living standards of the community through initiatives such as sponsorships, charitable contributions, and disaster relief efforts. Wakaf Selangor Muamalat Wakaf Selangor Muamalat (“WSM”) has been in operation for 5 years since its inception on 27 September 2012. Since then, WSM received overwhelming response from the public. As at FY 2017, total wakaf fund collected was RM17,743,164.44 while total collection for FY2017 alone was RM2,719,025.19. To date, WSM through its Joint Management Committee (“JMC”) between Bank Muamalat and Perbadanan Wakaf Selangor (“PWS”), has approved RM14,244,212.29 and RM7,576,897.29 was disbursed on wakaf projects. 80 80 BANKMUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) (6175-W) • annual report 2016 REPORT 2017 BANK MALAYSIA BERHAD | ANNUAL Chart 1: Monthly collection of WSM Fund from April 2016 to March 2017 MONTH RM Apr ‘16 206,734.85 May ‘16 241,920.69 Jun ‘16 285,086.61 Jul ‘16 241,632.85 Aug ‘16 210,254.23 Sept ‘16 215,178.28 Oct ‘16 210,180.32 Nov ‘16 230,787.45 Dec ‘16 232,386.71 Jan’17 199,740.16 Feb’17 208,714.95 Mar’17 236,408.09 TOTAL 2,719,025.19
    83. SUSTAINABILITY REPORT During the FY2017 , WSM contributed a total of RM3,009,974.94 (to various institutions under health and education sectors). The details are described below: Table 1: List of WSM beneficiaries No Beneficiaries Contribution Amount (RM) 1 Yayasan Amal Malaysia Building 994,500.00 2 Beacon Hospital Mobile Clinic 260,710.48 3 Maahad Muhammadi Gua Musang KHB workshop equipment 4 SMUA Darul Ulum Building 5 PERTIWI School Van 6 KAFA Integrasi Al Mubarak Building 7 Hospital Tengku Ampuan Rahimah Klang Ultrasound Machine 97,997.00 8 Kolej Integrasi Tahfiz Tunas Ilmuwan Sains Laboratory equipment 26,506.09 9 SAR Al - Falah Building 41,870.75 10 Hospital Raja Permaisuri Bainun Ipoh Kidney machine 151,580.00 11 UNIMAPCARE Dialysis machine 250,000.00 12 Pusat Dialisis Tunku Syed Kangar Dialysis machine 167,480.00 13 SK Pandamaran Jaya Klang Canteen tables & chairs 16,000.00 14 St John Ambulan Propaq monitor machine 27,984.00 15 Persatuan Darul Fitrah Terengganu Building 16 My Care Prosthetic Leg 17 PERKIM Banting Van 28,618.50 468,587.00 28,000 157,500.00 124,794.00 50,000.00 117,847.12 Total contribution 3,009,974.94 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 81
    84. 3 4 6 7 8 9 5 10 Picture : WSM Handover Events Pic 1: Pic 2: Pic 3: Pic 4: Pic 5: 82 KAFA Integrasi Al Mubarak Kolej Integrasi Tahfiz Tunas Sains Ilmuwan SRA Bandar Seri Putra Pusat Dialisis Tuanku Syed Kangar UNIMAPCARE 82 BANKMUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) (6175-W) • annual report 2016 REPORT 2017 BANK MALAYSIA BERHAD | ANNUAL Pic 6: SK Pandamaran Jaya Klang Pic 7: Hospital Raja Permaisuri Bainun Ipoh Pic 8: SAR Al - Falah Pic 9: Yayasan Amal Malaysia Pic 10: PERKIM Banting
    85. SUSTAINABILITY REPORT 1 . Tabung Mawaddah Tabung Mawaddah (TM) Committee has been actively operating since 2002, dedicated to aid and implement charitable activities to 8 Asnaf recipients (Fakir, Miskin, Amil, Muallaf, Riqab, Gharimin, Fisabillah and Musafir) and non-asnaf recipients. TM is funded by zakat and alms (sadaqah) sources contributed by Bank Muamalat and the staff. The objectives of TM Committee’s establishment are: • to provide assistance and financial aid to the needy; • to ensure that each donation, charity and alms reach the targeted groups; • to carry out Bank Muamalat’s corporate social responsibilities; • to the society on the basis of Maslahah Ammah; • to instill the spirit and caring nature of Malaysian society creation of a harmonious society; and • to practice the teachings of Islam in helping the needy. Besides a one off contribution, TM also provides monthly allocation for: • Food for homeless programme; • Micro credit scheme to aid small entrepreneur; • Masih Ada Yang Sayang (MAYs) community programmes; • Programme with NGO’s; and • Monthly aid to the Asnaf recipients The size of TM fund distributed and the trend of TM aids applications for FY2017 are described as below. Fakir RM157,800.00 Miskin RM343,582.20 Fi-Sabilillah Gharimin Mualaf Sadaqah RM1,987,245.41 RM4,919.00 RM500.00 RM89,502.21 2. Bank Muamalat Mentorship Programme For UiTM Students In April 2016, Bank Muamalat and UiTM have signed an MOU to collaborate on areas that bring mutual benefit to both organisations. Arising from this MOU, Bank Muamalat in collaboration with the Faculty Business and Management Puncak Alam Campus has developed a Mentorship Program for the graduating students of the faculty. This programme involves knowledge sharing by practitioners from Bank Muamalat to UiTM students.  It involves a series of lectures and case studies to 240 participating students from the Faculty of Business and Management. The topics covered under this Mentorship Programme are as follows: 1. 2. 3. 4. 5. A guide for fresh graduate to attend a job interview Career Planning Decision Making Problem Solving Grooming to be an effective manager The first lecture started on 27 September 2016 and the programme completed on 15 December 2016.   Participants received a certificate of attendance upon completion of this Mentorship Programme. The programme also included a half day walk through selected departments at Bank Muamalat Head Office to give an exposure to participants and lecturers on actual environment at the work place.  On 15 November 2016, 86 participants of the program were given a guided tour to CSD, CCC, MCRC, CFSRD, COD, DMD and Jalan Melaka Branch.  BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 83
    86. RESPONSIBLE TO THE COMMUNITY The students were also given a briefing by Shariah Department on “Difference Between Shariah-compliant and Conventional Banking” while Puan Azihan briefed them on the “Bank’s Initiative Toward Paperless Environment”.  Bank Muamalat also hosted a lunch for the students and lecturers. In view of the overwhelming response to this program by the participants, Bank Muamalat may extend the program to all local universities as part of Bank Muamalat’s Corporate Social Responsibility.   84 84 BANKMUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) (6175-W) • annual report 2016 REPORT 2017 BANK MALAYSIA BERHAD | ANNUAL
    87. SUSTAINABILITY REPORT 3 . Back to School Free Market for the Orphanage Menara Bumiputra,Kuala Lumpur – Bank Muamalat Malaysia Berhad once again organised a Back to School Free Market programme for the orphanage. The donation donated is in the form of school uniform, school equipment, socks, shoes and other school items. Around 193 orphans as well as children from staff earning less than RM3,000 participated in this programme. The orphanage homes involved with the programme are Rumah Permata Rohani, Rumah Baitul Kasih and Rumah Baitul Barokah. 4 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 85
    88. RESPONSIBLE TO THE WORKPLACE B ank Muamalat employees represent a rich and diverse human capital base with skills , competencies, capabilities and experience in delivering growth and sustainability of the Bank in providing the Islamic financial services and solutions to the community. Since the formalization of the 5-year strategic business plan in October 2016, Bank Muamalat has moved swiftly into implementing, building frameworks for a robust people management practices and embedding the right values and beliefs towards a strong performance oriented corporate culture. Pursuant to the above, the management of the human capital is guided by the Bank’s strategic 5-year business plan. Working in partnership and engaging all stakeholders across the Bank is the key in creating an environment where employees can thrive in delivering sustainable organisational performance. A longer-term strategic priority has been identified for Human Capital in the execution of the strategic business plan: 1. Applying its human capital expertise assertively in supporting the business divisions and support functions in delivering results; 2. Building the leadership pipelines across Bank Muamalat by enhancing capabilities of the leaders, management and staff; in line with the changing business landscape; and 3. Strengthening the human capital analytical ability and the management of the human capital risks in order to maintain sustainable business performance. Building Agility During the year, Bank Muamalat has made several changes to the organisational structure, aimed at building a Bank that is nimble and agile. The changes are necessary to align with the business strategies, to establish a focus and dynamic workforce leveraging on the bench strength and competencies of leaders. Additionally, agility is the key in meeting the emergence of competition, by swiftly embracing changes in technology, innovation of products, diversifying into new channels and optimising capacity with clear focus coupled with the right resources. Talent Acquisition, Internal Mobility and Retention During the year, Bank Muamalat has decided to in-source its talent acquisition requirements as part of the human capital strategic initiatives in enabling its employees to develop new and necessary skills in assuming new roles. Bank Muamalat actively supports internal cross divisional career mobility by identifying redeployment opportunities, followed by learning and development interventions. 255 employees representing 15% of the total employee population has benefitted from the new expanded roles. This initiative will enable Bank Muamalat in managing its cost against income ratio on human capital whilst improving on the employee retention. Not only such 86 86 BANKMUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) (6175-W) • annual report 2016 REPORT 2017 BANK MALAYSIA BERHAD | ANNUAL move would enhance the knowledge of its employees but also to potentially encourage career growth within Bank Muamalat by allowing them to build a more diverse and fulfilling career. Community Talent Pipeline Bank Muamalat’s hiring strategy includes ensuring a steady pipeline of young talents, including interns. As a socially responsible organisation, Bank Muamalat offers a platform for internship programme to undergraduates and trainees under the “Skim Latihan 1 Malaysia” (SL1M) with opportunity to gain a real life work experience in various functions across Bank Muamalat, thereby enhancing their employability. Mutual Separation Programme Aimed at enhancing efficiency on operating cost structures, Bank Muamalat offers an on–going programme on Mutual Separation Scheme which is on voluntary basis. During the year under review, employees with serious medical conditions and nearing retirement age may opt for this programme which allows them to retire early with the opportunity to manage the circumstances around their health with peace of mind.
    89. SUSTAINABILITY REPORT Managing Human Capital Risk Managing human capital risk is a new initiative that allows a comprehensive and effective management of the people , supported by statistical figures which shall influence and improve current management practices. The framework for the human capital risk, ready to be rolled out this year, will also include focus on talent and succession planning, retention of key personnel, leadership and management capabilities. The human capital risk management will also address the incentives and rewards structure, ensuring that employees are rewarded for commendable performance within a sound risk management and governance framework. Subsequent to the above, in accelerating employee capabilities, professional and personal development programmes, continue to be essential components of the Bank Muamalat’s people agenda. Several high performing talents are identified for the Top Talent, Management Development Programme and Executive Development Programme organised by DRBHICOM. Bank Muamalat is also developing its tailored inhouse development programme for Senior Leadership, Management & Executives. Talent Management and Succession Planning Sustainability of Bank Muamalat hinges on the right future leaders who can drive the business plans forward. Our approach to talent management aligns with the 5-year strategic business plan and ends with a refined people and leadership plan. Bank Muamalat has enrolled high potential employees into the talent development programmes in partnership with DRB-HICOM to ensure a ready pool of talent pipeline. Identification of successors as well as competency accreditations has been implemented across Bank Muamalat. Building Capabilities In creating a high performance culture, Bank Muamalat places emphasis on strengthening the Performance Management System. Amongst other things, this would include ensuring that the Key Performance Indicators of the business and support divisions are aligned with the 5-year strategic business plan. In House MBA programes MBA 11 To further enhance the competencies and capabilities of employees, Bank Muamalat partnered with DRB-HICOM University to become the pioneer organisation within the DRB-HICOM Group to initiate the in-house Masters in Business Administration programme commencing in February 2017. All 62 Branch Managers - accredited Associate Cetification in Islamic Finance (AQIF) Top Talent MDP DRB HICOM MTP 1 5 3 MDP - Management Development Programme MTP - Management Trainee Programme Recognising the importance of certification in enhancing the capabilities of our branches in serving and attending to the needs and demands of our customers, Bank Muamalat embarked on a project to certify all Branch Managers and Assistant Branch Managers with the Associate Qualification in Islamic Finance (AQIF), accredited by the Islamic Banking & Finance Institute Malaysia (IBFIM). BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 87
    90. RESPONSIBLE TO THE WORKPLACE Benchmarking all 62 Branch Managers against competency standards Bank Muamalat had also initiated a programme with Finance Accreditation Agency to benchmark all Branch Managers to measure their level of competencies against global standards . This will enhance the trust and belief of our customers towards the services and products offered by Bank Muamalat. Moving forward, Bank Muamalat is collaborating with Federation of Investment Managers Malaysia and Malaysian Takaful Association to certify all our Branch Managers and Assistant Branch Managers in both the Unit Trust and Takaful Basic Examination aiming for the branch to deliver higher quality services in a wider range of products. Bank Muamalat remains committed to people development with an average of 3 training days recorded per staff. In 2016 the Bank invested a total of RM3.4 million on training programmes in the following category:Course Category Regulatory (eg: Anti Money Laundering Counter Finance Terrorism, Islamic Financial Services Act, Foreign Exchange Administration, Shariah regulations) Leadership Skills Functional Mastery Product Knowledge Personal Mastery Business Mastery Health & Wellness Bank Muamalat initiated various activities aimed to create awareness on the importance of health and fitness. This “Keep Fit Culture”, would contribute towards enhancing productivity, resulting in improved work performance. 88 88 BANKMUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) (6175-W) • annual report 2016 REPORT 2017 BANK MALAYSIA BERHAD | ANNUAL The Corporate Wellness Programme initiated in early 2017 began with the “Fit Muamalat Campaign”. The first activity was “Jom Kayuh” bicycle ride which took place in January 2017 which attracted 250 participants. Subsequently, the “Jom Kayuh” event held in February 2017, attracted an even bigger crowd of 400 participants. Gauging from the overwhelming response, the Management announced the formation of six (6) sports houses under the wing of the bank’s Sports and Recreation Club (SRC). Health Check and Blood Donation Drive A Health Check and Blood Donation Drive was held at Menara Bumiputra, Kuala Lumpur. The purpose of the programme is to educate Bank Muamalat Staff to practice a healthy lifestyle. Furthermore, it also gives the opportunity for the staff to perform health check and educate them on the importance of staying healthy. The programme is a collaboration between Beacon Hospital, Petaling Jaya and the National Blood Bank. The programme began at 10.00 am until 5.00 pm. There was 400 staff who took part in this programme.
    91. SUSTAINABILITY REPORT Israk & Mikraj 2016 In celebration of Israk & Mikraj, Bank Muamalat organised a talk for the staff. It was presented by Al-Fadhil Ustaz Zulhazwan, a freelance Islamic speaker. The talk was attended by more than 200 staff. Lambaian Kaabah 2016 Bank Muamalat, in its effort to appreciate its people, has long introduced Lambaian Kaabah. This programme is a programme that provides an opportunity for the staff to perform their Umrah. This year Bank Muamalat sent a total of 12 participants (including spouses) for the said purpose. No. Name Staff ID Department Position 1 Ahmad Faizin Bin Mohammad 101303 Bintulu Branch Executive 2 Wan Noor Suraya Binti Wan Semail 100800 Kota Bharu Branch Executive 3 Mohd Hafiz Bin Hamzah 101003 Melaka Branch Non-Executive 4 Wan Rosli Wan Mansor 100756 Ipoh Branch Non-Executive 5 Nur Farazella Bte Hussin 102443 Regional Office East Coast Assistant Manager 6 Noor Akmal Duki 100749 Head Quarters Executive BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 89
    92. RESPONSIBLE TO THE WORKPLACE Uptown HOD Muamalat Sports Club & Recreational Bank Muamalat with Corporate Communications Department have introduced Uptown Muamalat which is open for business every Friday from 12.30 pm – 2.30 pm. The initiative was to promote business opportunity for the staff. There were 21 stalls that sold London lamb stew (CEO Office), Tauhu Sumedang Adik Manis (Nasi Mak Dara & Pak Teruna Stall), Pulut Lepa Terengganu (Kampung Central Stall), Churros Chaiwala (Imam Mr Banker), Laksa Sarawak (Pak Mos Stall), Keropok Lekor Terengganu (MISB Stall), Chia Seeds & Munafie (Wonder Le’Gurl Stall), Bantal Tidur (Uke’Lele Stall), Keratan Mulberry (Lady Gaga Stall) and Computer and IT product (ICT Stall).  Other Stalls were ‘The Juice Service’, TPS/Cyber Stall, Mesti Singgah Stall, Nasi Tomato Stall, BBD Stall, Compliance Stall, Cracker Crunch Stall, Beauty Sweetness Café Stall, Bonjour Stall, MISB Stall, SSD Stall, ICT Stall and CBD Stall. Part of the earnings was donated to Tabung Mawaddah Bank Muamalat Malaysia Berhad for the needy.  Sports and Recreation Club (SRC) Sports and Recreation Club (SRC), established since 2015, serves as a platform for the employees to participate in sports and recreational activities in Bank Muamalat. Among the main objectives of SRC establishment is to encourage teamwork, to build and cultivate the spirit of togetherness among the employees in Bank Muamalat through SRC activities. The employees not only would be able to show their potential or talent through the sports of their interests but they would also be able to lead a healthy life through sports and recreational activities. In stimulating the spirit of teamwork and cooperation to help escalate the team’s name, every employee has been predetermined of their respective sports houses based on the names of the famous Muslim commanders as below: 90 90 BANKMUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) (6175-W) • annual report 2016 REPORT 2017 BANK MALAYSIA BERHAD | ANNUAL 1. Red House (Abu Ubaidah Al-Jarrah) 2. Blue House (Saad Abi Waqqas) 3. Green House (Khalid Al-Walid) 4. Yellow House (Sallehuddin Ayyubi) 5. Orange House (Muhammad Al-Fateh) 6. Purple House (Tariq Bin Ziyad) SRC activities were not only held at the headquarters level but have also been expanded to other areas throughout the country. In bridging the relationship between the employees in DRB HICOM group, SRC is also involved in the sports activities held by DRB HICOM group.
    93. SUSTAINABILITY REPORT Among the sports and recreational activities held throughout FY2017 were as below :Durian Feast Durian as the ‘King of Fruits’ received many attention and interests. In conjunction with ‘Durian Season’ in the month of August 2016, SRC organised Durian Feast on a large scale in the compound of the headquarters and had received a very encouraging response. Not only the staff were able to enjoy the different types of durian, they could also buy them at a very reasonable price. Jom Kayuh Mesra Alam In promoting cycling activity whilst raising awareness in the community on being fit and healthy, Bank Muamalat has collaborated with Proton Holdings Bhd to organise a “Jom Kayuh Mesra Alam” programme. The programme was held at Proton City, Tanjung Malim, Perak and was also attended by famous celebrities namely Siti Nurhaliza and Amy Search. The event was open for 3 categories which were 30km, 15km and 800m for kids. More than 1,500 avid cyclists and nature lovers were involved in this first ever collaboration programme. Futsal, Ping Pong, Netball and Badminton Teams A tournament between the houses was held for futsal, ping pong and netball games to further encourage teamwork spirit among the staff. In addition to that, the winner will be able to increase the points for respective sports teams as the members would compete to ensure their respective house team succeeds. Each team conducted early training to ensure a quality delivery and skills before they compete. Purple House is the champion for futsal tournament while Blue house is the champion for ping pong, netball and badminton. The result from their championship allowed them to contribute points which led those teams to hold the 1st and 2nd position. Expansion of SRC to other region The initiative to expand the sports and recreational activities to other region has been initialised with the launch of SRC in the Southern Region in Johor Bharu followed by Middle, North and East Malaysia (Sabah & Sarawak). Every region has their own respective SRC committee to make it easier for planning and execution of SRC sports and recreational activities. Sports Carnival As for the highlight of the celebration of sports and recreational activities, SRC is planning to hold a ‘Sports Carnival Program’ which will be held this November 2017. This highlighted programme will gather all house teams from the headquarters and other regions where selected sports will be competed again. List of SRC Committees 1. 2. 3. 4. 5. 6. Vice President/Acting President - Hj Zaharuddin Alias Secretary - Izanor Ismail Vice Secretary - Mohd Imran Imam Shafie Treasurer - Mohd Najib Ismail Vice Treasurer - Mazrina Mohammad Zainol Committee - Ebi Suffian Ab Wahab - Harlina Shamsudin BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 91
    94. RESPONSIBLE TO THE MARKET PLACE Bank Muamalat is committed to being a responsible corporate citizen not only with the community but as well as our business partners . Hence, we strive at building long term relationships based on clarity of purpose, integrity, respect, honesty and fairness. 1. Inaugural listing on Investment Account Platform of Perak Transit • In supporting the government’s strategic initiative to continue providing a conducive and comprehensive ecosystem in boosting real economic activity, Bank Muamalat has launched the listing in the Investment Account Platform (IAP) of Perak Transit Berhad on 26th April 2016. • Perak Transit Berhad is an integrated transportation terminal and public transportation services provider based in Ipoh, Perak. • Investment in Perak Transit was in the form of a RM10 million financing facility for 3 years with an adjusted return at 6.5% per annum. • The IAP enables different spectrum of businesses like SMEs, new growth industries and entrepreneurs with profitable projects to gain alternative access to funding and on the other hand enables investors to directly finance ventures of their choice according to the risk-return preferences. • IAP will broaden the traditional role of Islamic banking from that of a credit provider to one that will now include being an instant intermediary. 2. The first Shariah Compliant Debit Card • The Bank has launched its Debit Card “Aisya” that comes with a unique feature of waqf in July 2016 • The debit card was named after the Prophet Muhammad’s wife, Saidatina Aisya, whose intelligence provided the inspiration for Bank Muamalat to develop the card which comes with a waqf feature. • If customers use the debit card at any of the merchants, it enables Bank Muamalat to contribute to the waqf by putting aside 20% of the interchange fee income without deducting or imposing any fee for the waqf to the customers. • The first of its kind in Malaysia and perhaps the world as it incorporates spending with the element of social responsibility. 92 92 BANKMUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) (6175-W) • annual report 2016 REPORT 2017 BANK MALAYSIA BERHAD | ANNUAL
    95. SUSTAINABILITY REPORT 3 . i-Muamalat Mobile Application • As part of its bid to provide convenience and easy access to many of its customers, Bank Muamalat has introduced its i-Muamalat mobile application. • The application will allow users to check their account balance, transfer funds, make bill payments and top-up their mobile data credit. • Bank Muamalat’s account holders may also use the application to check prayer’s time and even to locate the nearest Bank Muamalat branches. • The application is equipped with a high security system which meets the security standard set by the Malaysian banking authority. • The i-Muamalat application was launched by the Prime Minister, Datuk Seri Mohammad Najib bin Tun Abdul Razak. • The application is available from both Google Play Store and Apple Store • “Art meets technology” defines our design for the application, reflecting our purpose that the application is all about our customers and not about the Bank as well as our intention to create an application that is both easy on the eye and incredibly easy to use 4. ISO 9001 Accreditation • Bank Muamalat as we have been awarded with the ISO 9001:2015 certification in June 2017, an internationally recognised standard that ensures the products and services offered meet the needs of the customers through an effective quality management system. • Our decision to work towards ISO 9001 accreditation demonstrates our commitment to provide a highquality and consistent service to our customers. • Bank Muamalat is also proud to be formally presented with the certificate by SIRIM QAS International, the well known certification body for ISO 9001 Quality Management System. • The certification is a testament to the positive engagement of staff at all levels, and demonstrates a clear desire to embrace the standard as a fundamental element of its growth and customer focus strategies as stated in Bank Muamalat’s Business Plan. • The benefits of ISO 9001 go far beyond meeting customer requirements. The management systems help to enhance the businesses’ operations and provide a culture that aims for performance exceeding expectations. • The doodle art design which currently depicts a Sports and Games theme (in line with SEA Games KL 2017), will be updated every few months to feature other artwork including cultural festivals and Malaysian flowers as well as famous buildings in Malaysia BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 93
    96. 94 94 BANKMUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) (6175-W) • annual report 2016 REPORT 2017 BANK MALAYSIA BERHAD | ANNUAL
    97. SUSTAINABILITY REPORT BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 95
    98. RESPONSIBLE TO THE MARKET PLACE 5 . Mystery Shopper • The Mystery Shopper Programme continued to be an important measurement of branches level of service for the last six years. • The average score of service index for FY2017 was 85.43%, a slight increase from last financial year service index of 84.11%. • Out of 63 branches, 53 branches (84%) were categorised as excellent and good (index of 80% and above). Overall Section Score for FY 15/16 vs FY16/17 100% 98.20% 92.13% 90% 85.08% 92.05% 86.35% 80% 77.22% 81.00% 70% 74.75% 60% Ambience & Banking Hall Teller Zone Sales & Consultation Zone Overall Experience 6. Moving Forward: Customer Service Excellence Blueprint • The blueprint approved in March 2017, detailed service excellence plan and strategies at Bank Muamalat various critical touch points to make our service an enriching experience for customers. • We believe great service will lead to delightful customers’ experiences that will improve Bank Muamalat’s ability to create greater customer loyalty. • One of the main initiatives in the blueprint is #mesramuamalat programme. The programme is aimed to create friendly (“Mesra”) atmosphere at branches while maintaining our professionalism as an Islamic bank. • As part of Bank Muamalat’s effort to understand and serve its customers better, Bank Muamalat will also implement a single bank-wide Customer Relationship Management System (CRMS). • As a major customer retention strategy, the interactive system will manage and analyse customer interactions and data throughout customer’s lifecycle. • The system will allow personalised attention to customers so as to build loyalty via emphasizing on relationshipbased business instead of transaction-based. 96 96 BANKMUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) (6175-W) • annual report 2016 REPORT 2017 BANK MALAYSIA BERHAD | ANNUAL
    99. RESPONSIBLE TO THE SUSTAINABILITY REPORT ENVIRONMENT We believe that sustaining our current environment is about protecting the future by making the right decision today . Knowing the importance of environmental degeneration, Bank Muamalat is committed to take measures to conserve, maintain and preserve the state of the environment for a better place for future generations ahead. 1. Managing our environmental impact • In line with part of our business plan to harness digital technology and realising the importance of green environment, Bank Muamalat has been encouraging staff to manage their paper usage in printing and photocopying. • Paperless: For a start, Bank Muamalat has decided to go paperless for all management meetings. This initiative was gradually implemented since 2011, proving Bank Muamalat’s intention to become a more socially responsible financial institution. • All meeting papers are uploaded to an online system that is readily accessible for the board of directors and the management committee members to browse via any device on internet. • The implementation of reducing usage of papers went to the extent to have digital books (e-books) for selected books especially the Arabic references and economic e-books as an alternative to physical books • Bank Muamalat believes that the digitalization strategy placed in our recent business plan will take us towards a paperless environment. •Energy Efficiency: Bank Muamalat has also commenced the replacement of energy efficient bulbs at all offices and branches. The new light bulbs installed has an improved lifespan of 20,000 hours compared to the previous type of light bulbs which only has 5,000 hours of lifespan. • Apart from the replacement of energy efficient bulbs, Bank Muamalat also rescheduled the centralised airconditioner at Menara Bumiputra to operate within operation hours which reduces the electricity costs up to RM312,000 annually. • Bank Muamalat continues its energy efficiency campaign by encouraging staff to switch off the lights and other electrical items when not in use. •Chemical Waste: With Ar-Rahnu being a crucial part of Bank Muamalat’s business, gold testing is among the procedure that is essential in ArRahnu processes. Choosing to be a more socially responsible institution, Bank Muamalat’s opted to use an improved technology device for gold testing to replace the old method which used acid test to determine the purity of gold. • The new gold testing device does not only prove to be more accurate and efficient, it is also more environmentally friendly due to no chemical waste disposal involved . •All the green initiatives above has allowed Bank Muamalat to save up to RM1.38 million annually which is believed to be a small amount compared to the environmental impact that can be accomplished through them. 2. Sea Coral Reefs Conservation Activities, Selakan Island, Sabah •Bank Muamalat has initiated the first corporate programme to involve concurrent activities of scuba diving and charity with the main objective to focus on a remote community that is away from major towns and for our pioneer place, Selakan Island was chosen. • Selakan Island is situated in the area of Tun Sakaran Marine Park, about 30-minute speed boat ride from Semporna town, Sabah. The only island in the Marine Park that has a Muslim settlement, majority of the households in Selakan Island live on floating houses comprising of 39 houses with approximately 350 occupants. Among economic activity of the community include growing sea weeds, fishing and collecting sea bounty. • Basic facilities are very limited on the island with fresh water supply is only obtainable by collecting rainwater and the electricity is from a solar panel provided by the state government a few years BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 97
    100. back . This island has a small mosque for the local community and a primary school for pre-school until Year 3 students. • With the decline of coral reef habitats around the world, the importance of coral farming is becoming clear. Aiming to conserve sea coral reefs and with the support from Tun Sakaran Marine Park, Bank Muamalat decided to be directly involved in the propagation of sea coral reefs. • Avid divers of Bank Muamalat and selective staff were trained on the process of taking, cutting and how to tie the sea corals to the steel frame which will be placed at the bottom of the sea as per advised by the Tun Sakaran Marine Park personnel. •Through this programme, a plot of seabed was established as a site for any future sea coral reef conservation activities by Bank Muamalat and will be named as Bank Muamalat Sea Coral Park. • Bank Muamalat is the first bank to embark in the sea coral propagation with Tun Sakaran Marine Park. The Bank hopes that this activity will become an inspiration for other corporate bodies to engage in coral conservation activities. 3. Seeding and Planting of Mangrove Trees and River Cruise Programme, Bagan Lalang • Bank Muamalat Malaysia Berhad organised a “Seeding and Planting of Mangrove Trees” on the coast of Bagan Lalang, Sepang, Selangor which stemmed from the objective of fostering passion for nature and creating awareness among the employees of the importance in protecting and preserving mangrove forest ecosystem that has been increasingly threatened with destruction. • It also exposed the participants to the ways of planting mangrove trees while fostering the spirit of camaraderie among staff and the management as well as instilling good values among the participants. • A total of 60 staff and family members participated in the programme. • The programme is important in order to maintain coastal greenery in every state in Malaysia and to prevent erosion by the waves especially during a monsoon season. 98 98 BANKMUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) (6175-W) • annual report 2016 REPORT 2017 BANK MALAYSIA BERHAD | ANNUAL • Bank Muamalat contributed RM5,000 to the MNS at the event in order to participate in the campaign for the conservation of mangrove trees and for the love of the environment. • In addition to the event, Bank Muamalat also officiated the opening of a hut (pondok wakaf ) located at Bagan Lalang beach for leisure and recreational use by visitors. • A total of 80 mangrove trees were planted by the participants who had gained knowledge on how such trees live and their importance to the environmental eco-system and coastal areas.
    101. ACCOUNTABILITY
    102. STATEMENT ON CORPORATE GOVERNANCE T he Board of Bank Muamalat (The Board) acknowledges that good corporate governance is the cornerstone of an effective and responsible organisation. The Board is fully committed to achieving the highest standards of corporate governance in its management of the affairs of Bank Muamalat and its accountability to shareholders and other stakeholders in line with the Malaysian Code of Corporate Governance 2017 (MCCG 2017) as well as the Guidelines on Corporate Governance for Licensed Islamic Bank issued by Bank Negara Malaysia (BNM Guidelines on CG). Therefore, the Board continuously strives to ensure that best practices are adopted in establishing accountability and integrity of the Board and Management. The Board will continue to ensure that the right leadership, policy, strategy and internal controls, are upheld in order to continuously deliver and sustain Bank Muamalat’s value propositions for the benefit of its stakeholders generally whilst at the same time ensure continuous momentum towards reaching Bank Muamalat’s aspirations to become the preferred Islamic financial services provider. BOARD OF DIRECTORS Board Structure & Composition The present size and composition of the Board is well balanced. As presently constituted, the Board has the stability, continuity and commitment as well as the capacity to discharge its responsibilities effectively. The Board currently comprises nine members. Six are Independent Non-Executive Directors, two are NonIndependent Non-Excutive Directors (nominees of DRBHICOM Berhad and Khazanah Nasional Berhad ) and one is Executive Director (the CEO). The current composition of the Board is in compliance with the BNM Guidelines on CG as majority of the Board members are Independent Directors. The Non-Executive Directors do not participate in the day-to-day management of Bank Muamalat and do not engage in any business dealing or other relationship with Bank Muamalat in order to ensure that they remain capable of exercising independent judgment and act in the best interests of Bank Muamalat and its shareholders. The presence of a majority of Independent Non-Executive Directors provides effective check and balance in the functioning of the Board. Further, the Board is satisfied and assured that no individual or group of Directors has unfettered powers of decision that could create a potential conflict of interest. A brief profile of each member of the Board is presented on pages 18 to 26 of this Annual Report. 100 100 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL Roles & Responsibilities of the Board The Board has the responsibility of ensuring the strategic guidance of Bank Muamalat, the effective monitoring of management, and accountability to Bank Muamalat and shareholders. In discharging their duties, the Board acts on well-informed basis, in good faith, with due diligence and care, and in the best interest of Bank Muamalat and stakeholders. The Directors in discharging their duties and responsibilities are constantly mindful of the public interest and concern of the business community, particularly those of customers, shareholders and all other stakeholders. The key duties of the Board include the following:• Review and approve strategies, business plans and significant policies and monitor management’s performance in implementing them; • Set corporate values and clear lines of responsibility and accountability that are communicated throughout the organisation; • Ensure competent management; • Ensure that the operations of Bank Muamalat are conducted prudently, and within the framework of relevant laws and policies; • Ensures that Bank Muamalat establishes comprehensive risk management policies, processes and infrastructure, to manage the various types of risks; • Institute comprehensive policies, processes and infrastructure to ensure Shariah compliance in all aspects of Bank Muamalat’s operations, products and activities; • Set up an effective internal audit department, staffed with qualified internal audit personnel to perform
    103. ACCOUNTABILITY • • • • • • • • • internal audit functions, covering the financial, management and Shariah Audit; Establish procedure to avoid self-serving practices and conflicts of interest including dealings of any form with related entities; Ensure protection of the interests of the depositors, particularly investment account holders; Establish and ensure the effective functioning of various board committees; Ensure Bank Muamalat has a beneficial influence on the economic well-being of its community; Ensure development and implementation, and maintain an effective oversight over Bank Muamalat’s Data Management and MIS Framework and ensure that the MIS Framework is aligned with business and risk strategies; Ensure establishment and adherence to the internal policies governing risk concentrations through annual review. The independent review is to be conducted regularly to verify compliance to the prudential limit and standards set by Bank Muamalat as well as the established internal policies; Ensure approval and oversight of Bank Muamalat’s capital management framework and its related policies, processes and strategies; Ensure approval of capital allocation on risk-adjusted basis appropriate level of capital is maintained in line with the approved risk appetite and risk profile; and Ensure approval of proposed issuance, call or redemption of any capital instruments and ordinary shares and for proposed dividend payments and reinvestment. The Non-Executive Chairman ensures the smooth functioning of the Board and that the procedures and processes are in place to facilitate effective conduct of business of the Board. The Chairman also ensures that decisions are taken on a sound and well-informed basis, including by ensuring that all strategic and critical issues are considered by the Board, and that Directors receive the relevant information on a timely basis. The Chief Executive Officer is primarily responsible for the day-to-day management of Bank Muamalat. He is responsible for developing the business direction and strategies of Bank Muamalat and also to ensure that Bank Muamalat’s business strategies and policies are effectively implemented. Directors may also seek independent professional advice, at Bank Muamalat’s expense, when deemed necessary for the proper discharge of their duties. Board Charter The Board Charter (Charter) formalizes the various roles and responsibilities of the Board, Board Committees and individual director of Bank Muamalat with the aim of streamlining and enhancing corporate governance practices towards transparency, accountability and integrity in boardroom activities. The Charter incorporates the Principles and Recommendations of the MCCG 2017, certain aspects of the Bank’s Constitutions and relevant sections of the Islamic Financial Services Act 2013 (IFSA 2013) and Companies Act 2016 as the duties and responsibilities of Directors are concerned. The Board Charter covers the following areas: • • • • • Board’s Roles and Responsibilities Board Procedures Board Appointment/Removal and Composition Board Structure Culture Board Meetings and Access to Information Bank Muamalat’s Board Meetings are scheduled in advance before the end of the financial year, specifically before the end of the calendar year, so as to allow members of the Board to plan ahead and fit the coming years’ Board and Board Committees meetings into their respective schedules. The Board meets every month with additional meetings convened as and when urgent issues and/or important decisions are required to be addressed between the scheduled meetings. Scheduled Board meetings are structured with a pre-set agenda. Ahead of each meeting, the Directors are provided with an agenda and appropriate meeting papers containing information relevant to the matters to be deliberated for their perusal. At each meeting, the Board receives updates BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 101
    104. STATEMENT ON CORPORATE GOVERNANCE from the respective Chairmen /representatives of the Board Committees on matters that have been deliberated at the Board Committees, as well as on matters that require attention. the maximum number of directorships/ positions in nonpublic listed companies and non-profit organisations that a Director can hold in Malaysia and offshore/ overseas, as follows: In order to effectively discharge its duties, the Board has full and unrestricted access to the information of Bank Muamalat through the Senior Management as well as the services of the Company Secretary. The Company Secretary also ensures that a quorum is present at the commencement of each Board and Committees meeting in order to constitute a valid meeting. • Maximum ten directorships in public listed companies • Maximum fifteen directorships in non-listed public companies. To ensure that Directors do not have competing commitments that impair their ability to discharge their duties effectively, the Board has established a policy on A director is allowed to hold directorships in institutions/ organisations to represent the interest of financial industry, non-profit organisations and statutory bodies/ government-owned companies and the number of such directorships will not be taken into account in computing the maximum limit. The Board convened twelve meetings during the financial year ended 31 March 2017 and the attendance of each director in office during the financial year is set out below:Directors 102 Number of meetings Held Attended % Tan Sri Dato’ Dr Mohd Munir Abdul Majid (Chairman/Independent Non-Executive Director) 12 12 100 Dato’ Sri Che Khalib Mohamad Noh (Non-Independent Non-Executive Director) 12 10 83 Dato’ Ahmad Fuaad Mohd Kenali (Non-Independent Non-Executive Director) *resigned w.e.f. 28 July 2016 5 4 80 Dato’ Haji Mohd Redza Shah Abdul Wahid (Executive Director/Chief Executive Officer) 12 12 100 Dato’ Haji Mohd Izani Ghani (Non-Independent Non-Executive Director) 12 11 92 102 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    105. ACCOUNTABILITY Directors Number of meetings Held Attended % 7 7 100 Tengku Dato’ Seri Hasmuddin Tengku Othman (Independent Non-Executive Director) 12 11 92 Dato’ Azmi Abdullah (Independent Non-Executive Director) 12 12 100 Dato’ Haji Kamil Khalid Ariff (Independent Non-Executive Director) 12 11 92 Dr. Azura Othman (Independent Non-Executive Director) 12 12 100 3 3 100 Haji Abdul Jabbar Abdul Majid (Non-Independent Non-Executive Director) *resigned w.e.f. 12 October 2016 Ghazali Darman (Independent Non-Executive Director) *appointed w.e.f. 4 January 2017 All Directors have thus well complied with the requirement that Directors must attend at least 75% of the Board meetings held in each financial year in accordance with the BNM Guidelines on CG. Company Secretary The Company Secretary attends all Board meetings and ensures that accurate and proper records of the proceedings and resolutions passed are maintained in the statutory records at the registered office of the Company. The Company Secretary also facilitates timely communication of decisions made and policies set by the Board at Board meetings, to the Senior Management for action. The Company Secretary works closely with the Management to ensure that there are timely and appropriate information flows within and to the Board and Board Committees, and between the Non-Executive Directors and Management. The appointment and removal of the Company Secretary must be approved by the Board. Training Programme for Directors The Board assumes the responsibility to further enhance the skills and knowledge of the members on the relevant new laws and regulations and changing commercial risks, as well as to keep abreast with developments in the financial services industry. Each director attends at least one training programme, which is to be specifically identified by Bank Muamalat for its directors during the financial year. Board Appointment Process Bank Muamalat is governed by the BNM Guidelines on CG in respect of the appointment of new directors and the re-appointment of its existing directors upon the expiry of their respective tenures of office as approved by BNM. All appointment of directors is subject to the approval by BNM. The primary responsibility of the directors’ appointment/ reappointment has been delegated to the Board Nomination & Remuneration Committee (NRC). The NRC comprises exclusively non-executive directors, with the Chairman and the majority of whom are independent. In line with the BNM Guidelines on CG, the NRC recommends to the Board suitable candidates for directorships and appointment of key senior personnel of the Bank and relevant subsidiaries. The NRC also ensures that candidates satisfy the relevant requirements on the skills and core competencies of a director and are deemed fit and proper to be appointed as director in accordance with the Fit and Proper criteria. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 103
    106. STATEMENT ON CORPORATE GOVERNANCE The NRC has , during the year under review evaluated and recommended the appointment of the following director: i. Ghazali Darman as an independent non executive director The Board considers that the recent appointment of the above director who brings his own unique skills, experiences and knowledge in the commercial sector with exposure in the financial related industry will ensure that the critical competencies gaps identified by the Board are appropriately addressed and provide fresh insights that would help Bank Muamalat overcome challenges ahead. Re-election of Directors In accordance with Bank Muamalat’s Constitutions, all directors are subject to retirement by rotation at due intervals of rotation. Being eligible they may offer themselves for re-election, a process that enables the shareholders to vote them back into office. Directors who are appointed as additional directors or to fill casual vacancies during the year are subject to reelection by the shareholders at the next Annual General Meeting following their appointment. Tenure of Independent Directors The tenure of an independent director is capped at nine (9) years and the nine (9) years can either be a consecutive service of nine (9) years or a cumulative service of nine (9) years with intervals or upon expiry of the prevailing term as approved by BNM, whichever is the later date. 104 104 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL A director who has served the Board as an independent director for a cumulative period of nine (9) years is required to submit his resignation letter as an independent director to the Board at least three (3) months from the date of his ninth anniversary as independent director. In the event that the director is reappointed, he should be considered as a non-independent director. Notwithstanding the above, the Shareholders may in exceptional cases and subject to the assessment of the NRC decide that an independent director can remain as an independent director after serving the cumulative term of nine (9) years, subject to BNM’s approval. A director may also continue to serve as a member of the Board beyond the age of seventy (70) years, if the NRC has concluded and the Board has concurred and subject to his/her re-appointment as director being approved by shareholders. Evaluation of Board Performance One of the broad responsibilities of the NRC is to provide a formal and transparent procedure for the assessment of effectiveness of individual directors and the Board as a whole. In line with the BNM Guidelines on CG and for this purpose, the NRC had conducted and established clear selection criteria, processes and procedures to assess each director’s ability to contribute to the effective decision making of the Board. In addition, assessment would also be undertaken to gauge the effectiveness of the relevant Board Committees. The annual board assessment exercise was primarily based upon the answers to a customised questionnaire which was prepared internally.
    107. ACCOUNTABILITY BOARD COMMITTEES The Board has established several Board Committees whose compositions and terms of reference are in accordance with the BNM Guidelines on CG as well as best practices prescribed by the MCCG 2017 . The Board Committees in the Bank are as follows:1. Board Audit Committee The Board Audit Committee (BAC) comprises exclusively Non-Executive Directors of the Board, responsible to fulfill the oversight function in relation to the adequacy and integrity of system of internal controls and financial reporting, risk management and compliance with internal policies, procedures and external applicable rules and regulations. The Board Audit Committee is authorised by the Board to investigate any matter within its Terms of Reference and has full access to and co-operation by management and full discretion to invite any director or executive officer to attend its meetings, and reasonable resources to enable it to discharge its functions properly. The BAC has full and unrestricted access to information and be able to obtain independent professional advice. The composition of the BAC and the attendance of the meetings held in the year under review are as follows:Members of Audit Committee Number of meetings Held Attended % Tengku Dato’ Seri Hasmuddin Tengku Othman (Chairman/Independent Non-Executive Director) *resigned as Chairman w.e.f. 30 August 2016 16 15 94 Dr. Azura Othman (Independent Non-Executive Director) *appointed as Chairman w.e.f. 1 September 2016 16 16 100 Haji Abdul Jabbar Abdul Majid (Non-Independent Non-Executive Director) *resigned w.e.f. 12 October 2016 8 8 100 Dato’ Azmi Abdullah (Independent Non-Executive Director) 16 16 100 Dato’ Haji Kamil Khalid Ariff (Independent Non-Executive Director) 16 15 94 Ghazali Darman *appointed w.e.f. 10 January 2017 4 4 100 The objectives and activities carried out by the BAC during the year under review are summarised in the Statement of Internal Control as stated in pages 110 to 111 of this Annual Report. 2. Board Nomination & Remuneration Committee The Board Nomination Committee and Remuneration Committee were combined in September 2016 to become the NRC which provides a formal and transparent procedure for the appointment of directors, CEO and members of Shariah Committee as well as assessment of effectiveness of board as a whole, Shariah Committee members and performance of CEO and key senior management officers. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 105
    108. STATEMENT ON CORPORATE GOVERNANCE The NRC also provides a formal and transparent procedure for developing a remuneration policy for Directors , CEO and key senior management officers and ensuring that Bank Muamalat’s compensation package is competitive and consistent with its culture, objectives and strategies. In addition, the NRC is also responsible for developing remuneration policy for the Shariah Committee members that commensurate with their roles and responsibilities. The NRC will then recommend the proposed remuneration package to the Board for its approval. The NRC comprises Non-Executive Directors and the Chairman who is independent. Meetings are held as and when required for the NRC to deliberate on related matters. The members of the NRC and the attendance for the year under review are as follows:Members of Board Nomination Committee Held Attended % Tengku Dato’ Seri Hasmuddin Tengku Othman (Chairman/Independent NonExecutive Director) 6 6 100 Dato’ Sri Che Khalib Mohamad Noh (Non-Independent Non-Executive Director) 6 4 67 Dato’ Haji Mohd Izani Ghani (Non-Independent Non-Executive Director) 6 5 83 Haji Abdul Jabbar Abdul Majid (Non-Independent Non-Executive Director) *resigned w.e.f. 12 October 2016 6 6 100 Dato’ Azmi Abdullah (Independent Non-Executive Director) 6 6 100 Members of Board Remuneration Committee 106 Number of meetings Number of meetings Held Attended % Dato’ Azmi Abdullah (Chairman/Independent Non-Executive Director) 5 5 100 Dato’ Sri Che Khalib Mohamad Noh (Non-Independent Non-Executive Director) 5 3 60 Dato’ Haji Mohd Izani Ghani (Non-Independent Non-Executive Director) 5 5 100 Haji Abdul Jabbar Abdul Majid (Non-Independent Non-Executive Director) *resigned w.e.f. 12 October 2016 5 5 100 Tengku Dato’ Seri Hasmuddin Tengku Othman (Independent Non-Executive Director) 5 5 100 106 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    109. ACCOUNTABILITY Members of Board Nomination & Remuneration Committee Number of meetings Held Attended % Tengku Dato’ Seri Hasmuddin Tengku Othman (Chairman/Independent NonExecutive Director) 5 5 100 Dato’ Sri Che Khalib Mohamad Noh (Non-Independent Non-Executive Director) 5 3 60 Dato’ Haji Mohd Izani Ghani (Non-Independent Non-Executive Director) 5 4 80 Haji Abdul Jabbar Abdul Majid (Non-Independent Non-Executive Director) *resigned w.e.f. 12 October 2016 1 1 100 Dato’ Azmi Abdullah (Independent Non-Executive Director) 5 5 100 The primary duties and responsibilities of the NRC are as follows:• Establishing minimum requirements for the Board that is, required mix of skills, experience, qualification and other core competencies required of a director. The NRC is also responsible for establishing minimum requirements for the CEO. The requirements and criteria should be approved by the full board; • Recommending and assessing the nominees for directorship, board committee members, and Shariah Committee members as well as the CEO; • Overseeing the overall composition of the Board, in terms of the appropriate size and skills, and balance between executive directors, non-executive directors and independent directors through annual review; • Recommending to the Board the removal of a director/CEO/Shariah Committee member from the Board/management/ committee if the director/CEO/Shariah Committee member is ineffective, errant and negligent in discharging his responsibilities; • Establishing a mechanism for the annual formal assessment on the effectiveness of the board as a whole, assessment of the performance of individual directors, the performance of the CEO and other key senior management officers (Executive Vice President (EVP) and above); • Ensuring that all directors and Shariah Committee members receive an appropriate continuous training program in order to keep abreast with the latest developments in the industry; • Overseeing the appointment, management succession planning and performance evaluation of key senior management officers; • Recommending to the board the removal of key senior management officers if they are ineffective, errant and negligent in discharging their responsibilities; • Assessing , on annual basis, to ensure that the directors and key senior management officers are not disqualified under the Guidelines on the Governance of Shariah Committee for the Islamic Financial Institutions (BNM/GPS1); • Providing a formal and transparent procedure for developing the remuneration for directors, board committee members, CEO, Shariah committee and key senior management officers and to ensure that their compensation is competitive and consistent with Bank Muamalat’s culture, objectives and strategy; • Recommending to the Board on the policies, strategies and framework for the Bank in relation to the remuneration, rewards and benefits; and • Recommending the remuneration of the Shariah Committee members for the full board’s approval. The remuneration shall commensurate and reflect the roles and responsibilities of the Shariah Committee. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 107
    110. STATEMENT ON CORPORATE GOVERNANCE 3 . Board Risk Management Committee The Board Risk Management Committee (BRMC) is authorised to oversee Management’s activities in managing credit, market, liquidity, operational, legal and other risk and to ensure that the risk management process is in place and functioning. In addition, the BRMC is also responsible for ensuring that a comprehensive risk management infrastructure is in place for managing the risk associated with Mudharabah and Musharakah financing or investments. The composition and the attendance for the year under review of the Board Risk Management Committee are as follows:Members of Board Risk Management Committee Number of meetings Held Attended % Dato’ Azmi Abdullah (Chairman/Independent Non-Executive Director) 13 13 100 Dato’ Haji Mohd Izani Ghani (Non-Independent Non-Executive Director) 13 9 69 Haji Abdul Jabbar Abdul Majid (Non-Independent Non-Executive Director) *resigned w.e.f. 12 October 2016 7 7 100 Tengku Dato’ Seri Hasmuddin Tengku Othman (Independent Non-Executive Director) 13 13 100 Dato’ Haji Kamil Khalid Ariff (Independent Non-Executive Director) 13 12 92 The objectives and activities carried out by the Board Risk Management Committee during the year under review are summarised in the Statement on Risk Management as stated in pages 112 to 119 of this Annual Report. 4. Shariah Committee 108 The Shariah Committee was established in accordance with the requirements of the Islamic Financial Services Act 2013 as well as Bank Muamalat’s Constitutions, which prescribe the setting up a Shariah body to ensure that Bank Muamalat’s conduct its affairs in accordance with the Shariah principles. Members of the Shariah Committee are scholars renowned for their knowledge and experience in Fiqh Muamalat. Further details of the Shariah Committee are set out on Pages 28 to 35 of this Annual Report. 108 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    111. ACCOUNTABILITY 5 . Internal Audit and Control Activities The Board has the overall responsibility in maintaining a system of internal controls that provides reasonable assurance of effective and efficient operations and compliance with laws and regulations, as well as internal procedures and guidelines. The Statement on Internal Control and activities of Bank Muamalat are summarized on page 110 of this Annual Report 6. Related Party Transactions The details of related party transactions of Bank Muamalat are disclosed on pages 243 to 244 under the Audited Financial Statement for the financial year ended 31 March 2017 of this Annual Report. 7. Management Reports At every Board meeting, management reports on the progress of projects undertaken by Bank Muamalat pertaining to products and services, information technology, recruitment, human resource, policies and procedures, regulatory requirement as well as income and expenses are submitted to the Board for review. 8. Corporate Responsibility As part of its shared values, Bank Muamalat is continuously developing and strengthening its relationship with the community. Through its Corporate Responsibility initiatives, Bank Muamalat willingly gives back to the community not just in monetary terms but also through the provision of products, services as well as educating the public on the importance of Islamic financial services through a series of ‘ceramahs’. Further details of the Corporate Responsibility Initiatives are set out on Pages 72 to 78 of this Annual Report. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 109
    112. STATEMENT ON INTERNAL CONTROLS THE STATEMENT ON INTERNAL CONTROLS IS MADE PURSUANT TO BEST PRACTICES AS DEFINED BY MALAYSIAN CODE ON CORPORATE GOVERNANCE 2012 BY SECURITIES COMMISSION TO INCLUDE IN ITS ANNUAL REPORT A STATEMENT ABOUT THE STATE OF ITS INTERNAL CONTROL . THE STATEMENT IS CRUCIAL AS IT OUTLINES THE PROCESSES TO BE ADOPTED BY THE BOARD IN REVIEWING THE ADEQUACY AND EFFECTIVENESS OF INTERNAL CONTROL SYSTEM OF BANK MUAMALAT. RESPONSIBILITY The Board recognises the importance of maintaining a sound system of internal controls and risk management practices as well as reviewing their adequacy and effectiveness to safeguard shareholders value. Robust and dynamic risk management and internal controls are vital in ensuring stability of the business in facing rapid changes of business operations today. The Board reviews and is ultimately responsible for the adequacy and integrity of the internal control systems in Bank Muamalat in addressing business and operational risks. The Board diligently exercises overall responsibility in ensuring that Bank Muamalat’s system of internal controls is adequate and effective to manage the risk profiles within Bank Muamalat’s risk appetite. It is pertinent to note that, such a system is designed to manage Bank Muamalat’s key areas of risks within an acceptable risk appetite, rather than to guarantee total elimination of risk of failure to achieve Bank Muamalat’s objectives and goals. As such, the system of internal controls can only provide reasonable rather than absolute assurance of effectiveness against material misstatements of financial information or against fraud or financial losses. The concept of reasonable assurance also acknowledges that the control procedures cost should not exceed the expected benefits. The Board is of the opinion that, for the period under review up to the issuance date of the annual report and financial statements, the system of internal controls in place at Bank 110 110 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL Muamalat is appropriate and adequate to safeguard the stakeholders’ interest and its assets. The control structure and process which have been instituted throughout Bank Muamalat are reviewed and enhanced from time to time as to suit the changes in Bank Muamalat’s business environment and risk appetite. As at the date of approval of this statement, the improvement of the internal controls system remained in place. The role of Management includes: • Identifying and evaluating the risk faced, and the achievement of business objectives and strategies; • Formulating relevant policies and procedures to manage these risks; • Designing, implementing, and monitoring a sound system of internal control; • Implementing the policies approved by the Board; and • Reporting in a timely manner to the Board any changes to the risks and corrective actions taken. Internal Audit Function • Internal Audit Department (“IAD”) conducts independent audits and provide reasonable assurance and value-added recommendations on the adequacy and effectiveness of the system of internal controls and financial reporting, and compliance with internal policies and procedures, and external applicable rules and regulations. They evaluate and contribute to the improvement of governance, risk management, and control processes using a systematic and disciplined approach. Audit reviews are carried out using risk-
    113. ACCOUNTABILITY • • based approach on units, branches, and key business processes based on annual audit plan approved by the Board Audit Committee (‘BAC”) taking into consideration Bank Muamalat’s objectives, business and regulatory environment, and input of the Senior Management, Shariah Committee, and the Board. The Management Audit Committee (“MAC”) is a management committee chaired by the Executive Vice President, Finance Division comprising senior level representatives of Bank Muamalat from a broad range of business and support units. The MAC meets regularly to deliberate on the findings of all audit reports and decide on the appropriate action required to resolve the audit issues. The BAC meets on a scheduled basis to review the findings, recommendations, and action plans reported by IAD, Management, External Auditors, and Regulatory Authorities. It has the authority and is empowered by the Board to review the adequacy and effectiveness of the Bank Muamalat’s internal control system. It also reviews the internal audit function and the scope of the annual audit plan and frequency of the internal audit activities. Minutes of the BAC meeting are then tabled to the Board. OTHER KEY ELEMENTS OF INTERNAL CONTROLS The other key elements incorporated by the Board, which contributes to an effective internal controls system includes: Business Plan and Budget Annual business plan and budget are prepared and submitted to the Board for approval, where performance achievements are reviewed against the targeted results on monthly basis to allow corrective actions to be taken to mitigate risks. The Board reviews regular reports from the Management on the key financial and operating statistics, as well as legal and regulatory matters. Policies and Procedures The Board approves any changes or updates to Bank Muamalat’s policies. Bank Muamalat’s policies and procedures are established and formalised to ensure compliance with internal controls and the relevant laws and regulations, which are set out in the respective manuals, guidelines, and directives issued by Bank Muamalat and the regulatory authorities that updated from time to time. Defined authority limits have been established for each level within Bank Muamalat to approve acquisition and disposals of assets, approval of credit items, writing off operational and credit items, as well as approving expenses. In regards to Bank Muamalat’s commitment towards its Whistle Blowing Policy, the Board has established Muamalat Ethics Line to enable employees to raise concerns in a responsible manner regarding any unprofessional or unethical conduct, and to have such concerns properly investigated. All disclosures under this Policy will be managed by a third party appointed by Bank Muamalat and will be treated as strictly confidential. Organisation Structure Establishment of a formalised organisation structure that provides clear demarcation of reporting and responsibility for ensuring proper assignment of authorities, segregation of duties, and accountability towards Bank Muamalat. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 111
    114. STATEMENT ON RISK MANAGEMENT Overview Risk Governance Risk is inherent in every aspect of the Bank ’s business activities. Key among these are credit, market, liquidity, operational, strategic, reputational, and compliance risks. As a full-fledged Islamic financial institution (IFI), the Bank also faces the additional risk of Shariah non-compliance. Failure to manage these risks effectively could result in financial loss, regulatory sanctions and penalties as well as reputational damage, which in turn may adversely impact the Bank’s ability to execute its business strategies. The risk management framework incorporates risk governance and oversight structure where roles, responsibilities and accountability for the management of risk are clearly outlined. It also provides a blueprint for how the Board, through delegation of authority to committees and executive officers, establishes and executes risk appetite and associated limits for business activities. Bank Muamalat undertakes an integrated approach towards risk management to ensure that these risks and their unique interactions are properly identified, addressed and managed in a comprehensive and holistic manner. The Bank’s risk framework and structure are built on formal governance processes that set out the roles and responsibilities for risk management activities as well as their overall governance and oversight. The defined risk management framework and clearly articulated risk appetite statements work together to ensure a comprehensive approach to risk management. Risk management strategies are formed with due consideration of the Bank’s risk appetite, business strategies and objectives, identified and quantified risks, and the required monitoring and control environment. Apart from ensuring sound management and control of these principal risks, the integrated risk framework also enables the Bank to optimise use of resources as well as to identify and secure its strategic and competitive advantage. 112 112 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL The Board of Directors is responsible for the overall risk governance and oversight which include determination of risk strategies, defining Bank Muamalat’s risk appetite, and ensuring effective of control and monitoring of risks. The Board oversees risk management function through a clearly defined and effective risk management structure, which includes board and management level committees with distinct roles and responsibilities and discretionary authority. Management is responsible for tracking and reporting performance measurements as well as any exceptions to guidelines or limits. The Board and its committees oversee financial performance, execution of the strategic and business plans, adherence to risk appetite limits and the adequacy of internal controls.
    115. ACCOUNTABILITY Risk Management Organisation Structure Bank Muamalat ’s risk governance structure consists of board and management level committees as well as risk control units who are guided and managed by a reporting hierarchy to enforce the overall governance and oversight of risks. Each committee and control unit has its own delegated roles, responsibilities and authorities. The Board maintains the ultimate responsibility for overall risk governance and management. It is responsible for ensuring that the risk management structure is clearly defined and performs effectively. This includes determination of risk strategies and risk appetite and ensuring effective of control and monitoring of risks. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 113
    116. STATEMENT ON RISK MANAGEMENT The Board is supported by two board-level committees , namely the Board Risk Management Committee (BRMC) and the Shariah Committee (SC), each with distinct roles and responsibilities. The committees, through the authorities delegated by the Board, execute and implement the Bank’s strategies, policies and methodologies and ensure that these are kept in line with the Board’s vision. BRMC is a board-level forum that focuses and deliberates on all risk management issues. The committee oversees and ensures effective management of risks and enforcement of approved risk tolerances and limits. It is also responsible for reviewing and assessing the existing risk management framework for its continued efficacy and for ensuring that robust infrastructure and systems as well as resources are in place to effectively monitor risk and capital positions. Shariah compliance management is enforced by the Board through the SC. SC functions independently from the Board and is tasked with the responsibility of understanding Shariah issues in all activities assumed by the Bank. SC also serves as advisory to the Board and management team on all Shariah matters. Shariah management and compliance are closely aligned to ensure that Bank Muamalat has a full view of all risks and is able to put forth an integrated and end-to-end Shariah compliance management. Management formulates and reviews strategic and business plans, as well as capital plan and risk appetite statement, annually and recommends them to the Board for approval. The strategic plan takes into consideration the Bank’s financial objectives and resources, which must align with its risk capacity and risk appetite. Financial objectives for each business line are established by setting growth and return targets and allocating capital for each business. Management would then assess the overall performance and risk-adjusted returns of each business line against the set targets and indicators. Capital allocations and operating limits are regularly evaluated as part of the overall governance processes as businesses and economic environment would continue to evolve. Management-level risk committees are set up to oversee specific risk areas and perform risk control functions. These include asset-liability management, credit evaluation and management, investment management, and operational risk management A dedicated Risk Management 114 114 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL Department supports the above committees by performing the day-to-day risk management functions independent from the business lines and targets. Bank Muamalat’s risk governance structure is based on a distributed function approach, where risk governance and management is undertaken under the Three Lines of Defence model. All units have a specific responsibility for risk management under the above model. The first line of defence in managing risks lies within the business units where risks are directly undertaken and assumed in the day-to-day business activities and operations. As front-liners, the business units are responsible for carrying out the established processes for identifying, mitigating and managing risks within their respective environment in aligment with Bank Muamalat’s strategic targets. The second line, which comprises risk management control functions and compliance, ensures independent oversight and management of all material risks undertaken by the Bank. The risk management function provides specialised resources for developing risk frameworks, policies, methodologies and tools for risk identification, measurement and control. It also provides the control function, which monitors the risks by using various key indicators and reports, guided by established risk appetite and tolerance limits. Internal Audit, as the third line of defence, provides independent review and assurance on adequacy of risk management processes and effectiveness of the first two lines of defence in fulfilling their mandates. Risk Appetite Bank Muamalat’s risk appetite framework comprises a governance structure, processes and risk appetite statements (RAS). It is intended to ensure that Bank Muamalat maintains an acceptable risk profile by providing a common framework and a comparable set of measures for senior management and the Board to clearly indicate the level of risk the Bank is willing to accept. It also serves as a foundation and reference for Bank Muamalat’s risk culture and provides guidance for business and risk-taking activities as well as decision making.
    117. ACCOUNTABILITY RAS is set annually in conjunction with the strategic , capital and business plans to align risk appetite with Bank Muamalat’s strategies and financial resources. It incorporates key performance indicators such as earnings volatility, liquidity and capital ratios, where strategic tolerance levels are stated to facilitate ongoing monitoring and oversight. The risk appetite defines risk capacity in terms of capital levels required to support business activities as well as capital buffers deemed adequate to meet regulatory and strategic requirements. As overall risk capacity is limited, the Bank needs to prioritise the risks it takes on in order to maintain a strong and flexible financial position to weather through challenging economic conditions and take advantage of organic growth opportunities. Thus, objectives and targets for capital and liquidity are set with the intention to allow Bank Muamalat to operate in a safe and sound manner at all times, including during periods of stress. Business units operate within stated risk limits which are based on the amount of capital, earnings or liquidity that Bank Muamalat is willing to put at risk to achieve its strategic objectives and business plans. Risk management strategies are formed in line with the RAS as it provides the basis for risk-taking boundaries, tolerance limits and measures. Capital Management Bank Muamalat’s capital management framework outlines the governance and approach for managing capital. The framework was developed according to the capital standards outlined in the BNM’s CAFIB guidelines and adopts forward-looking and risk-based approaches and principles derived from industry’s best practices. The objective of capital management is to ensure capital resources are effectively and efficiently used in pursuing the Bank’s business and strategic targets. Capital requirements are assessed in conjunction with strategic and business plans and the annual capital plan is developed to ensure sufficient capital is maintained to meet business needs and support the risks associated with these activities. Bank Muamalat applies Standardised Approach for credit and market risks and the Basic Indicator Approach for operational risk to determine its risk-weighted assets and capital requirement. As prescribed under the ICAAP, other possible major risks that are not covered under these measurement approaches are also assessed to determine further capital requirement, if any. The capital position is closely monitored against capital plan and internal targets to ensure that it remains within set targets or if necessary, to trigger preemptive or remedial actions. Stress tests are periodically performed to evaluate the impact of macro-economic and risk factors on capital levels and to formulate appropriate capital management strategies. Stress testing is also used to identify early warning signs and potential risk events that may adversely impact Bank Muamalat’s risk profile and business direction. It is also used to determine the appropriate capital buffers needed to ensure that the minimum regulatory ratios are not breached under actual and stressed scenarios. The capital planning and management framework is also used to ensure that adequate capital buffer is held under normal and projected adverse conditions. Hence, the annual capital plan addresses any capital issuance requirements, capital instrument composition and maturity profile, and capital crisis contingency planning. Managing Risks Bank Muamalat’s risk management framework stipulates the oversight structure and policies that outline the applicable principles, processes, control mechanisms and methodologies used to manage risks. The framework also specifies clear responsibilities for risk management activities as well as the reporting requirement and ongoing monitoring of these activities. Risk management strategies are formulated and implemented to ensure that risks are effectively addressed and managed. Risk strategies are also developed with the aim of balancing risks with business objectives and ensuring growth plans are supported by a well-defined and effective risk infrastructure. The risk infrastructure is continuously updated and upgraded for the latest risk management approaches and processes to enable timely identification, measurement and response to existing and emerging risks in tandem with the Bank’s risk profile and operating environment. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 115
    118. STATEMENT ON RISK MANAGEMENT Credit Risk Management Credit risk is defined as the risk of financial loss if a customer or counterparty fails to meet its obligations as they fall due . It is a primary source of risk as Bank Muamalat’s financial assets comprise mainly retail and wholesale financing portfolios and investment securities. Bank Muamalat’s has established a comprehensive credit risk management framework which comprises policies, processes, measurement methodologies, and a reporting and oversight structure. Credit underwriting and management is governed by a set of credit-related policies, namely the Credit Risk Policy (CRP) and Guidelines to Credit Risk Policies (GCRP). They outline Bank Muamalat’s policies on credit risk such as financing underwriting standards, pricing policy, risk rating, approving authority limits, prudential limits, risk mitigation, review process, rehabilitation and restructuring, and provisioning for impaired financing. The policies are reviewed and updated regularly to ensure its continued relevance and effectiveness. Credit risk management involves measurement, mitigation and management of credit risk exposures at every stage of the credit process. At origination and onboarding, business units are guided by credit underwriting standards, rating models and pricing policy. Credit proposals are subjected to independent evaluation and risk assessment prior to approval. Credit limits are sanctioned under a welldefined approving authority structure to ensure credit decision making are undertaken under prudent and proper governance. These authority limits are approved by the Board and are subject to periodic review to ensure its effectiveness and compliance. Bank Muamalat monitors and manages credit exposures based on concentration and portfolio segments to ensure ongoing compliance to risk appetite and tolerance level. Reports on trend analysis, limit exposures and risk profiling and analytics are produced and deliberated at risk management committees on a regular basis. Exposures to delinquent and problematic financing assets are monitored and managed by an independent support unit that focuses and specialises on restructuring and 116 116 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL recovery activities. Early warning triggers are used to identify potentially distressed accounts to initiate timely remedial actions. Such exposures are actively monitored to ensure delinquency is kept within tolerable limits. Market Risk & Asset-Liability Management Market risk is defined as risk of losses in on and off-balance sheet positions resulting from movements in market rates, foreign exchange rates, equity and commodity prices, which may adversely impact earnings and capital positions. The risk is inherent in the financial instruments held in Bank Muamalat’s asset and liability portfolios. In the event of market stress, these risks could have a material impact on Bank Muamalat’s financial performance due to changes in economic value based on varying market conditions, with one of the primary risks being changes in the levels of interest rates. The risk of such adverse changes arising from fluctuations in interest rates is managed through our Asset-Liability Management (ALM) activities. ALM refers to the coordinated management of Bank Muamalat’s balance sheet and its composition. The main focus of ALM is on the overall performance that can be measured in terms of net income. In turn, the primary determinant of net income will be the overall risk-return position of the Bank. Bank Muamalat’s risk management framework addresses both market risk and asset-liability management, where market risk exposures are managed and controlled in order to optimise return on risk and maintain a market profile that is consistent with the approved strategic and business plan. The framework covers key risk management practices such as risk identification, measurement, mitigation, monitoring and control, which are performed under a formal governance and oversight structure. An independent market risk control function is responsible for measuring risk exposures according to established policies and guidelines and reports to the Asset Liability Working Committee (ALCO) on a monthly basis. Balance sheet and
    119. ACCOUNTABILITY capital management issues and strategies are discussed at the ALCO and later escalated with recommended action plans to the ERMC , BRMC and Board respectively. The above market risk and ALM management process is governed by the Market Risk & ALM Policies and Guidelines (MRAPG) and Trading Book Policy Statement (TBPS). Rate of Return Risk Rate of return risk refers to the variability of assets and liabilities resulting from volatility of market benchmark rates, impacting portfolios both in the trading and banking books. Such changes may adversely affect both earnings and economic value. Bank Muamalat’s uses various measurement tools and analysis to study the impact of market rate changes on earnings and balance sheet profile to manage the said exposure. These include earnings at risk (‘EaR’), economic value of equity (’EVE’) and re-pricing gap analysis. In addition, the value at risk (VaR) approach is used to estimate the maximum potential loss of an investment portfolio over a specified time. Risk tolerance limit are built along these sensitivity measurement to manage and mitigate the related risk exposures. The following rate of return risks are actively managed by the Bank: Risk Definition Repricing Risk Timing differences in maturity and repricing of Bank’s assets and liabilities Yield Curve Risk Unanticipated yield curve shifts that has adverse impact on Bank’s income and economic values Basis Risk Arises from imperfect correlation in the adjustment of rates earned and paid on different instruments with otherwise similar re-pricing characteristics Optionality/ Embedded Option Risk The risk arising from options embedded in Bank’s assets, liabilities and offbalance sheet portfolio Liquidity Risk Liquidity risk is best described as the inability to fund any obligation on time as they fall due, whether due to increase in asset or demand for funds from the depositors. Bank Muamalat will incur liquidity risk if it is unable to create liquidity and this has serious implications on its reputation and continued existence. Bank Muamalat’s priority is to therefore manage and maintain a stable source of financial resources toward fulfilling the above expectation. Through active balance sheet management, Bank Muamalat ensures sufficient cash and liquid assets are made available to meet both short and long term obligations. The primary focus of liquidity management is to assess all cash inflows against outflows to identify the potential for any net shortfall going forward. This includes funding requirements for off-balance sheet commitments. Bank Muamalat pays particular attention to its ability to cover any shortfall in liquidity for up to one month time period followed by a medium-term assessment of liquidity of up to one year. The measurement and limits used to monitor and manage liquidity risk are as prescribed under the BNM’s liquidity framework, namely the New Liquidity Framework (NLF), Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR). To mitigate the risk, Bank Muamalat employs a funding diversification strategy and establishes a liquidity contingency plan. For ongoing management and monitoring of liquidity and funding positions, Bank Muamalat establishes risk tolerance and limits within the applicable risk appetite metrics and provides monthly reporting of its asset, liability and liquidity positioning. Bank Muamalat has also established a comprehensive liquidity crisis contingency framework with set triggers and management action plan. To ensure its readiness in dealing with liquidity crisis, Bank Muamalat has set up a pre-crisis management framework with a built-in and structured crisis response mechanism, which allows quick identification of potential liquidity crisis before it occurs. The process involves continuous monitoring of various indicators which act as earlywarning signals of impending crisis situation in different severity levels. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 117
    120. STATEMENT ON RISK MANAGEMENT Operational Risk Management Operational risk is defined as the risk of loss resulting from inadequate or failed internal processes , people and system or from various external events. It may occur anywhere within the organisation, including in third-party business processes, and is not limited to operation functions. The effects of operational risk may extend beyond financial losses and may result in legal and reputational risk impacts. Operational Risk Management (ORM) therefore focuses on effective management of risks to minimise possible financial and non-financial losses arising from operational lapses. The key risk organs under the operational risk framework are the Operational Risk Management unit, Operational Risk Management Committee (ORMC), Internal Audit, Compliance and the business lines. The management of operational risks is targeted at preventing risk events and damages (by in-process and managerial controls), handling critical situations (via contingency plans and business continuity management (BCM)) and mitigating potential losses (collaterals). By establishing and operating a system of control procedures that commensurate with its risks, Bank Muamalat aims to limit its exposures to an acceptable level in accordance with the risk appetite. In addition, Bank Muamalat has established a web-based application, known as Muamalat Operational Risk Solution (MORiS), which is used as a tool in risk identification and assessment, a tracking mechanism of risk exposures against established key risk indicators (KRI), and a centralised database for loss incidents and near-misses. 118 118 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL Bank Muamalat adopts the BNM’s Guidelines on Business Continuity Management, which entails enterprisewide planning and arrangement of key resources and procedures that would enable Bank Muamalat to respond and continue to operate critical business functions across a broad spectrum of interruptions to business arising from internal or external events. Under the BCM, the Business Continuity Plan (BCP) is prepared based on risk assessment and business impact analysis performed on identified potential threats to business functions. The business impact analysis also aims to identify critical business functions’ recovery time objective and maximum tolerable downtime given Bank Muamalat’s resources and infrastructure. Shariah Risk Management Shariah non-compliance risk is defined as the risk that arises from failure to comply with the Shariah rules and principles as determined by the Shariah Committee (SC) of The Bank’s and relevant Shariah regulatory councils or committees. To manage Shariah risk, the Bank has established the Shariah Risk Management Unit (SRMU) as part of its integrated risk management framework, which is in accordance with BNM’s guidelines on Shariah Governance Framework (SGF). SRMU’s main responsibilities include formulation of policies and guidelines on Shariah risk management and the required governance and oversight processes. These include the approaches for identification and assessment of Shariah non-compliance risks in business activities, products and services, and assessment of the effectiveness of existing controls and mitigation plan. SRMU also performs assessment of new and existing products, services and operating procedures from Shariah risk perspective and conducts training and awareness programme on Shariah risk to promote a Shariah compliance risk culture.
    121. ACCOUNTABILITY Strategic Risk Management Strategic risk is defined as the risk of unexpected negative developments in Bank Muamalat ’s performance stemming from fundamental strategic and business decisions and their execution. The risk may result from incorrect assumptions about external or internal factors, inappropriate business plans, ineffective business strategy execution, or failure to respond in a timely manner to changes in the regulatory, macroeconomic or competitive environments. In assessing and managing strategic risk, the Bank’s looks at risks associated with its current and future business plans and strategies and identify situations which can be of potential threat to achieving the strategic objectives. These may include plans for entering into new businesses, expansion of existing products and services, and enhancement or replacement of infrastructure, such as those involving information technology, networking and outsourcing. Reputational Risk Management Reputational risk is the risk of loss arising from negative perception of Bank Muamalat’s image by its conduct or business practices, which could adversely impact profitability, operations or shareholder value. Bank Muamalat manages reputational risk through established policies and controls in its businesses and risk management processes to mitigate reputational risks in a timely manner and through proactive monitoring and identification of potential reputational risk events. The integrated risk governance structure provides oversight of all risks including those which could potentially lead to reputational risks. To ensure its readiness to respond to a potential risk event, Bank Muamalat assesses its internal capability to manage reputation risk and understand the external impact of the risk event materialising. The processes and procedures to respond to events that give rise to reputational risk include educating individuals and organisations that influence public opinion, external communication strategies to mitigate the risk, and informing key stakeholders of potential reputational risks. Managing reputational risk is the responsibility of all individuals within the organisation, particularly those who are directly involved in making commercial decisions in their respective functions or business lines. Reputational risk generally arises from failure to effectively manage all other types of risks. Bank Muamalat therefore places high importance on overall risk governance and in particular, on ensuring compliance to the Shariah tenets. As a full-fledged Islamic financial institution, negative perception on the part of its customers and other stakeholders could lead to significant and sustained brand damage and other adverse consequences. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 119
    122. STATEMENT ON COMPLIANCE Bank Muamalat recognises that compliance risk and obligations have to be managed proactively and effectively , with the culture of compliance embedded across all business activities of Bank Muamalat. Regulatory compliance risk is defined as risk or failure to comply with applicable legal and regulatory requirements impacting Bank Muamalat’s operations. The Board, Chief Executive Officer and Senior Management have adopted the Compliance Policy and Charter built on the following principles: • Commitment to comply with relevant regulatory requirements and ensuring that Bank Muamalat’s operations, internal policies and procedures, code of conduct and standards applicable to its banking activities are conducted in line with regulatory requirements. • Shared responsibility for regulatory compliance, premised on the concept of 3 lines of defence: 1st Line of Defence [Management, Business and support units] 2 nd Line of Defence [Compliance Department] 3 rd Line of Defence [Internal Audit Department] 120 120 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL • The 1st line of defence is formed by Management, the business and support units. These are the primary parties responsible for managing compliance risk and obligations, and the delivery of compliant outcomes; • The 2nd line of defence is formed by the Compliance Department, to ensure Bank Muamalat manages risk holistically, including compliance risks; and • The 3rd line of defence is formed by the Internal Audit Department, who will provide an independent assurance to the Board that the overall Compliance Policy operates as intended. • Formations of dedicated Compliance function, which will coordinate the management of Bank Muamalat’s compliance risk, implement a compliance programme across Bank Muamalat to ensure effective operationalisation of the Compliance Policy. The Chief Compliance Officer, who is administratively reported to the Chief Executive Officer, will have unrestricted access to the Board Risk Management Committee, and if necessary, the Board. • Embedding the Compliance Policy within the operations of Bank Muamalat, thus making regulatory compliance risk management an integral part of Bank Muamalat’s business activities.
    123. ACCOUNTABILITY The Board and Management of Bank Muamalat further pledge to ensure the implementation of the following drivers of effective compliance culture : Compliance Reporting & Resolution Leadership Engagement Compliance Monitoring Compliance Management & Mitigation Training and Communication Training and Communication Compliance Culture Compliance Culture • Leadership commitment, engagement and sponsorship of the compliance programme • Education and communication to improve compliance knowledge and awareness • Implementation of policies, procedures and internal controls to effectively manage compliance risk • Appropriate mechanisms to identify, capture, escalate, analyse and respond to issues or breaches associated to compliance obligations • Promotion of an environment that encourages employees to seek guidance, raise concerns and report potential noncompliance incidences • Demonstration of active enforcement of penalties for non-compliance Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Bank Muamalat also explicitly recognises the importance of maintaining continuous efforts and initiatives in assisting the Government of Malaysia and Bank Negara Malaysia in combating illicit and money laundering activities, as well as, financing of terrorism activities through the use of the banking system. With infrastructure and processes in place, Bank Muamalat has demonstrated its full commitment and support in ensuring compliance with the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA) as one of the responsible Reporting Institution. Foreign Account Tax Compliance Act Bank Muamalat is committed to comply with the reporting requirements and timeline imposed by the US Treasury for reporting of Foreign Account Tax Compliance Act (FATCA). Bank Muamalat has registered itself as a Registered Deemed Compliant Foreign Financial Institution and has communicated our Global Intermediary Identification Number to all correspondent banks. Common Reporting Standard Common Reporting Standards (CRS) is an initiative that involves governments obtaining information from their financial institutions and exchanging data automatically with other nations. As Malaysia has signed up to the Organisation for Economic Co-operation and Development’s CRS, Bank Muamalat is committed to comply with the requirements. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 121
    124. CODE OF CONDUCT & ETHICAL PRINCIPLES Bank Muamalat is committed to maintaining the highest standards of conduct at the workplace and in business engagements. Our business must be conducted fairly, professionally, impartially and in full compliance of Shariah principles. The Code and Ethic/Conduct reflects and reinforces Bank Muamalat’s values as an Islamic Bank and it is designed to assist the stakeholders in understanding the ethical principles: • Uphold good reputation and public confidence by providing 100% Shariah Compliant products and services as a preferred Islamic financial service provider; • Treat all stakeholders which include the employees, business partners, customers and communities with full respect and dignity and appreciate the diversity of our workforce; • Adhere to all rules and regulation including Statutory Regulatory Requirements, Shariah Principles as well as Bank Muamalat’s internal policy and guidelines; 122 122 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL • Protect all customers’ information from improper disclosure, abuse or loss. However, customers’ information may be made available to third parties with written consent of the respective customer or when disclosure is authorised by Governmental, judicial bodies, agencies or regulators; • Work in a professional manner for the benefit of customer during the relationship, whereby Bank Muamalat is responsible for the protection of any financial interests of the customer; and • Do the right thing at all times without compromise. As a preferred Islamic Financial provider, Bank Muamalat is clear and sincere in what we say and do. As a custodian of public fund, Bank Muamalat is committed to protect and monitor consumer’s deposit and other financial assets through the development of an efficient system to help eliminate fraud or misconduct and improve productivity in operations.
    126. 2 2BANK BANKMUAMALAT MUAMALAT MALAYSIA BERHADBERHAD (6175-W) (6175-W) • annual report 2016 REPORT 2017 MALAYSIA | ANNUAL
    127. FINANCIAL STATEMENTS CONTENTS Financial Statements 124 132 132 133 134 138 140 142 143 144 145 146 150 Directors ’ report Statement by directors Statutory declaration Report of the Shariah committee Independent auditors’ report Consolidated statement of financial position Statement of financial position Statements of profit or loss Statements of other comprehensive income Consolidated statement of changes in equity Statement of changes in equity Statements of cash flows Notes to the financial statements BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 123
    128. 124 124 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    129. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 125
    130. 126 126 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    131. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 127
    132. 128 128 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    133. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 129
    134. 130 130 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    135. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 131
    136. 132 132 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    137. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 133
    138. 134 134 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    139. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 135
    140. 136 136 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    141. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 137
    142. 138 138 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    143. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 139
    144. 140 140 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    145. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 141
    146. 142 142 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    147. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 143
    148. 144 144 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    149. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 145
    150. 146 146 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    151. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 147
    152. 148 148 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    153. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 149
    154. 150 150 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    155. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 151
    156. 152 152 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    157. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 153
    158. 154 154 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    159. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 155
    160. 156 156 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    161. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 157
    162. 158 158 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    163. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 159
    164. 160 160 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    165. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 161
    166. 162 162 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    167. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 163
    168. 164 164 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    169. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 165
    170. 166 166 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    171. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 167
    172. 168 168 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    173. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 169
    174. 170 170 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    175. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 171
    176. 172 172 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    177. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 173
    178. 174 174 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    179. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 175
    180. 176 176 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    181. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 177
    182. 178 178 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    183. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 179
    184. 180 180 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    185. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 181
    186. 182 182 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    187. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 183
    188. 184 184 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    189. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 185
    190. 186 186 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    191. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 187
    192. 188 188 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    193. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 189
    194. 190 190 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    195. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 191
    196. 192 192 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    197. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 193
    198. 194 194 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    199. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 195
    200. 196 196 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    201. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 197
    202. 198 198 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    203. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 199
    204. 200 200 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    205. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 201
    206. 202 202 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    207. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 203
    208. 204 204 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    209. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 205
    210. 206 206 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    211. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 207
    212. 208 208 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    213. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 209
    214. 210 210 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    215. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 211
    216. 212 212 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    217. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 213
    218. 214 214 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    219. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 215
    220. 216 216 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    221. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 217
    222. 218 218 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    223. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 219
    224. 220 220 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    225. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 221
    226. 222 222 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    227. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 223
    228. 224 224 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    229. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 225
    230. 226 226 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    231. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 227
    232. 228 228 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    233. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 229
    234. 230 230 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    235. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 231
    236. 232 232 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    237. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 233
    238. 234 234 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    239. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 235
    240. 236 236 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    241. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 237
    242. 238 238 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    243. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 239
    244. 240 240 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    245. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 241
    246. 242 242 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    247. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 243
    248. 244 244 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    249. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 245
    250. 246 246 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    251. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 247
    252. 248 248 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    253. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 249
    254. 250 250 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    255. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 251
    256. 252 252 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    257. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 253
    258. 254 254 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    259. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 255
    260. 256 256 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    261. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 257
    262. 258 258 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    263. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 259
    264. 260 260 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    265. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 261
    266. 262 262 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    267. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 263
    268. 264 264 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    269. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 265
    270. 266 266 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    271. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 267
    272. 268 268 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    273. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 269
    274. 270 270 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    275. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 271
    276. 272 272 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    277. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 273
    278. 274 274 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    279. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 275
    280. 276 276 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    281. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 277
    282. 278 278 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    283. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 279
    284. 280 280 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    285. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 281
    286. 282 282 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    287. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 283
    288. 284 284 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    289. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 285
    290. 286 286 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    291. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 287
    292. 288 288 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    293. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 289
    294. 290 290 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    295. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 291
    296. 292 292 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    297. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 293
    298. 294 294 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    299. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 295
    300. 296 296 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    301. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 297
    302. 298 298 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    303. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 299
    304. 300 300 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    305. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 301
    306. 302 302 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    307. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 303
    308. 304 304 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    309. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 305
    310. 306 306 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    311. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 307
    312. 308 308 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    313. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 309
    314. 310 310 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    315. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 311
    316. 312 312 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    317. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 313
    318. 314 314 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    319. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 315
    320. 316 316 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    322. 318 318 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    323. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 319
    324. 320 320 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    325. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 321
    326. 322 322 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    327. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 323
    328. 324 324 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    329. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 325
    330. 326 326 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    331. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 327
    332. 328 328 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    333. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 329
    334. 330 330 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    335. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 331
    336. 332 332 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    337. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 333
    338. 334 334 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    339. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 335
    340. 336 336 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    341. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 337
    342. 338 338 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    343. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 339
    344. 340 340 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    345. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 341
    346. 342 342 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    347. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 343
    348. 344 344 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    349. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 345
    350. 346 346 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    351. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 347
    352. 348 348 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    353. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 349
    354. 350 350 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    355. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 351
    356. 352 352 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    357. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 353
    358. 354 354 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    359. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 355
    360. 356 356 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    361. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 357
    362. 358 358 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    363. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 359
    364. 360 360 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    365. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 361
    366. 362 362 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    367. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 363
    368. 364 364 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    369. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 365
    370. 366 366 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    371. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 367
    372. 368 368 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    373. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 369
    374. 370 370 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    375. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 371
    376. 372 372 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    377. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 373
    378. 374 374 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    379. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 375
    380. 376 376 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    381. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 377
    382. 378 378 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    383. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 379
    384. 380 380 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    385. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 381
    386. 382 382 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    387. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 383
    388. 384 384 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    389. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 385
    390. 386 386 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    391. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 387
    392. 388 388 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    393. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 389
    394. 390 390 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    395. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 391
    396. 392 392 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    397. BASEL II - PILLAR 3 DISCLOSURE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 393
    398. 394 394 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
    399. a n n u a l r e p o r t 2 0 1 5 Branch Network (To contact Branches; please call 1300 88 8787) REGIONAL OFFICE FEDERAL TERRITORY Sungai Besi Bank Muamalat Malaysia Berhad Regional Office Federal Territory 1st Floor, No.32 & 33, Jalan Medan Pusat Bandar 4, Seksyen 9, 43650 Bandar Baru Bangi, Selangor D.E No.Fax : 03-8925 5894 No 2&2A, Jalan Tasik Utama 7, Medan Niaga Tasik Damai, Sg Besi, 57000, Kuala Lumpur Faks : 03-9058 1476 BRANCHES Putrajaya WILAYAH PERSEKUTUAN No.2 & 4, Ground & 1st Floor, Jalan Diplomatik 2, Pusat Komersial Diplomatik, Precinct 15, 62050 Putrajaya. Faks : 03-8889 2053 Jalan Melaka 1st Floor, Blok Podium Menara Bumiputra 21, Jalan Melaka 50100 Kuala Lumpur. Faks : 03-2032 5997 BUREAU DE CHANGE Alam Damai Kuala Lumpur International Airport (KLIA1) No. 52A-1, and 56, Wisma Alam Damai, Jalan Alam Damai 1, Cheras, 56100 Kuala Lumpur Faks : 03-9101 8023 Lot No. MTBD 12a, Level 5, International Departure Level, Main Terminal Building (MTBD), Kuala Lumpur International Airport, 64000 KLIA, Sepang, Selangor. Faks : 03-8787 1346 Jalan Ipoh Ground Floor, Wisma TCT No. 516-1, Batu 3, Jalan Ipoh 51200 Kuala Lumpur. Faks : 03-4043 1467 Jalan Tar No 399, Ground Floor, Bangunan UMNO Lama Jln Tuanku Abdul Rahman, 50100 Kuala Lumpur. Faks : 03-2697 8020 Kuala Lumpur International Airport (KLIA2) Level 2, Lot No. S6-2-A24, International Departure Level (Airside), KLIA2, 64000 Sepang, Selangor. Faks : 03-8787 1687 Senai International Airport Lot KA15, Aeromall, Senai International Airport, 81250 Johor Bahru, Johor. Faks : 07-597 0612 Taman Melawati 268, 269 & 270, Jalan Bandar 12 Taman Melawati, 53100 Kuala Lumpur. Faks : 03-4107 4625 BANK MUAMALAT MALAYSIA BERHAD (6175-W) BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 395 395
    400. a n n u a l r e p o r t 2 0 1 5 Branch Network REGIONAL OFFICE SELANGOR & N.SEMBILAN Rawang Bank Muamalat Malaysia Berhad Regional Office Selangor & N.Sembilan Mezzanine Floor, Kompleks PKNS, 40000 Shah Alam. No.Fax : 03-5510 6611 No. 9 & 11, Jalan Bandar Rawang 1, Bandar Baru Rawang, 48000 Rawang. Faks: 03-6092 1677 SELANGOR Shah Alam, Pkns Batu Caves No. 3A & 3A-1 & No.5 Prima Samudera, Jln Samudera Utara, 11, Taman Samudera 68100, Batu Caves, Selangor Darul Ehsan Faks: 03-6186 2387 Kajang Subang Jaya Ground, 1st & 2nd Floor, No. 2-1-G/1/2, Jalan Prima Saujana 2/1, Prima Saujana,43000 Kajang, Selangor Darul Ehasan. Faks : 03-8733 8014 Ground & First Floor, No. 1, Jalan USJ Sentral 2, USJ Sentral, 47500 Subang Jaya, Selangor Darul Ehsan Fax : 03-8022 1729/ 8022 1730 Kelang Bandar Baru Bangi No.46 & 48, Jalan Kelicap, 42A/Ku1, Klang Bandar Diraja,Off Jalan Meru, 41050 Klang, Selangor Faks : 03-3344 4146 Ground, 1st & 2nd Floor, D32 & D33, Jalan Medan Pusat Bandar 4, Seksyen 9, 43650 Bandar Baru Bangi, Selangor Darul Ehsan. Faks : 03-8925 5884 Petaling Jaya No. B-29-1 & 2, Blok B, Jaya One 72A, Jalan Universiti,46200, P.J Selangor Darul Ehsan Fax : 03-7954 1196 Laman Seri Ground & 1st Floor, No.G03A & 103A, Laman Seri Business Park, No. 7, Jalan Sukan, Seksyen 13, 40100 Shah Alam, Selangor. Faks : 03-5510 0239 396 G-1, 2 & 3, Ground Floor, Kompleks PKNS, 40000 Shah Alam. Tel : 03-5510 6511 Faks : 03-5510 6611 396 BANK MUAMALAT MALAYSIA BERHAD (6175-W) 396BANK BANKMUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) • annual report 2016 MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 Universiti Islam Antarabangsa Ground & First Floor, Azman Hashim Complex, PT 5063, Mukim Setapak, Universiti Islam Antarabangsa Malaysia, Jalan Gombak, 53300 Kuala Lumpur. Faks : 03-6187 8579 Glenmarie, Shah Alam No.2, Jalan Presiden F U1/F, Accentra Glenmarie, Seksyen U1, 40150, Shah Alam. Faks : 03-5569 1435 Ampang Point No.23 & 23-A, Jalan Memanda 7/1, Off Jalan Ampang, 68000 Ampang, Selangor. Faks : 03-4270 0215
    401. a n n u a l NEGERI SEMBILAN Seri Manjung Seremban Ground & 1st Floor, No. 392, Taman Samudera, 32040 Seri Manjung Perak Faks : 05-688 4931 Wisma Great Eastern, Mo. 105, 107 & 109, Jalan Yam Tuan, 70000 Seremban, Negeri Sembilan. Faks : 06-762 7218 Port Dickson No. 3 & 3A, Jalan Remis 2, Medan Remis, Telok Kemang, 71050 Port Dickson, Negeri Sembilan. Faks : 06-646 2331 Gemas No. 16, Jalan DS1/1, Dataran Satria 1, 73400 Gemas, Negeri Sembilan. Faks : 07-948 2106 REGIONAL OFFICE NORTHERN Bank Muamalat Malaysia Berhad Regional Office Northern, 3rd Floor, No. 64, Lebuh Pantai, Georgetown, 10300 Pulau Pinang. No.Fax : 04-261 1503 PERAK Ipoh Ground & Mezzanine Floor, Wisma Maju UMNO, Jalan Sultan Idris Shah, 30000 Ipoh. Faks : 05-243 4997 r e p o r t 2 0 1 5 Taiping 98-100, Ground & 1st Floor, Jalan Kota, 34000 Taiping. Faks : 05-807 8375 KEDAH Alor Setar Tingkat Bawah & Mezzanine, Lot No. 2242 & 1009, Menara Dewan Perhimpunan Melayu Kedah (DPMK), Lebuhraya Darul Aman, 05100 Alor Setar. Faks : 04-734 0248 Souq Al-Bukhary Ground Floor, Bazaar Souq Al-Bukhary, No. 1, Jln Tun Abdul Razak, 05200 Alor Setar. Faks : 04-731 5546 Kulim No. 6, Bangunan Al-Ikhwan, Pusat Perniagaan Putra, Jalan Kilang Lama, 09000 Kulim. Faks : 04-490 7714 Sungai Petani No. 21, Lot 88, Jalan Perdana Heights 2/2, Perdana Heights, 08000 Sungai Petani, Kedah Faks : 04-421 5007 Parit Buntar No. 40 & 42, Jalan Wawasan 4, Taman Wawasan Jaya, Pusat Bandar Baru, 34200 Parit Buntar, Perak Faks : 05-716 7102 BANK MUAMALAT MALAYSIA BERHAD (6175-W) BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 397 397
    402. a n n u a l r e p o r t 2 0 1 5 Branch Network PULAU PINANG TERENGGANU Bayan Baru Kuala Terengganu 2A-G-26 & 2A-G-28, Quartermile, Solok Mayang Pasir, Bayan Baru, 11950 Pulau Pinang. Faks : 04-641 1058 1, Jalan Air Jerneh, 20300 Kuala Terengganu. Faks : 09-622 3543 Kg. Raja Seberang Jaya Ground, 1st & 2nd Floor, No. 27 & 28, Jalan Todak 2, Bandar Sunway Seberang Jaya, 13700 Perai, Butterworth, Pulau Pinang. Faks : 04-399 3797 Lot 5678 & 5679, Taman D’Lahar, Gong Kepas, Kampung Raja, 22200, Besut, Terengganu Darul Iman Faks : 09-697 5566 Lebuh Pantai KELANTAN Ground Floor, No. 64, Lebuh Pantai, 10300, Georgetown Pulau Pinang. Faks : 04-261 1700 Kota Bharu PERLIS Kangar No. 11 & 13, Jalan Bukit Lagi, 01000 Kangar. Faks : 04-976 4799 REGIONAL OFFICE EAST COAST Bank Muamalat Malaysia Berhad Regional Office East Coast, Tingkat 2, Bangunan Perbadanan Menteri Besar Kelantan, Jalan Kuala Krai, 15150 Kota Bharu, Kelantan Darul Naim No.Fax : 09-743 3993 Ground & 1st Floor, Lot2 & Lot 275, Bangunan Perbadanan Menteri Besar Kelantan (PMBK), Jalan Kuala Krai, 15150 Kota Bharu. Faks : 09-744 4622 Kok Lanas Ground & 1st Floor, Lot PT 5080 Kompleks Perniagaan Saidina Ali, Jalan Kuala Krai, Kok Lanas 16450 Kota Bharu. Faks : 09-788 6828 Jalan Sultan Yahya Petra Ground Floor, Lot PT 265 & PT, 266, Wisma Nik Kob, Jalan Sultan Yahya Petra, 15200 Kota Bharu. Faks : 09-747 3230 Jeli Ground & First Floor, No. PT4646, Lot 2003, PN 3523,17600 Bandar Jeli, Kelantan Faks : 09-944 8228 Tanah Merah No. 692, 693 & 694, Kompleks Perniagaan Humaira, Pusat Bandar Tanah Merah, 17500 Tanah Merah Fax: 09-9544550 398 398 BANK MUAMALAT MALAYSIA BERHAD (6175-W) 398BANK BANKMUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) • annual report 2016 MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
    403. a n n u a l Gua Musang Taman Cheng Baru Ground Floor , PT 13772, 13773 & 13774, Bandar Baru Gua Musang, 18300 Gua Musang, Fax: 09-9122069 Ground & 1st Floor, No 92, Jln Cheng Baru, Taman Cheng Baru, 75250 Melaka. Faks : 06-312 5091 PAHANG Kuantan B-114 & B-116, Sri Dagangan Centre, Jalan Tun Ismail, 25000 Kuantan. Faks : 09-516 2853 Mentakab 6 & 7, Jalan Tun Abd Razak, 28400 Mentakab. Faks : 09-277 3306/2306 Pekan G-02, Ground Floor, Bangunan UMNO (Bahagian Pekan) Jalan Teng Que, 26600, Pekan, Pahang Darul Makmur Faks : 09-422 3751 Temerloh Ground & First Floor, C-8, Jalan Tengku Ismail, Temerloh, 28000 Pahang Darul Makmur Faks : 09-2962 364 r e p o r t JOHOR Johor Bahru Ground & 1st Floor, Lot 1 & 2, Kebun Teh Commercial City, Jalan Kebun Teh, 80250 Johor Bahru, Johor Faks : 07-224 0811 Batu Pahat 24-25, Ground & 1st Floor, Jalan Kundang, Taman Bukit Pasir, 83000 Batu Pahat. Faks : 07-432 4945 Universiti Tun Hussein Onn Malaysia (UTHM) Ground Floor, Bangunan Pusat Khidmat Pelajar, Universiti Tun Hussein Onn Malaysia, 86400 Parit Raja, Batu Pahat. Faks : 07-453 6125 Johor Jaya Ground & 1st Floor, No. 17, Jalan Ros Merah 2/20, Taman Johor Jaya, 81100 Johor Bahru. Faks : 07-355 8106 REGIONAL OFFICE SOUTHERN Kluang Bank Muamalat Malaysia Berhad Regional Office Southern, 1st Floor, Lot 1 & 2, Kebun Teh Commercial City, Jalan Kebun Teh, 80250 Johor Bahru, Johor No.Fax : 07-228 1550 No. 1, Jalan Persiaran Dato’ Haji Ismail Hassan, 86000 Kluang. Faks : 07-774 4419 MELAKA Melaka 395, Taman Sinn, Jalan Semabuk, 75050 Melaka. Faks : 06-286 7518 2 0 1 5 Kulai Ground & 1st Floor, No. 32, Jalan Sri Putra 1, Bandar Putra, 81000 Kulai, Johor Faks : 07-662 1570 Segamat No. 37 & 38, Jalan Genuang Perdana, Taman Genuang Perdana, 85000 Segamat, Johor Faks : 07-943 3042 BANK MUAMALAT MALAYSIA BERHAD (6175-W) BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 399 399
    404. a n n u a l r e p o r t 2 0 1 5 Branch Network Taman Universiti Miri Ground & 1st Floor, No 28, Jalan Kebudayaan 5, Taman Universiti, 81300 Skudai. Faks : 07-520 5503 433-434 Ground & First Floor Jalan Bendahara 98000 Miri Sarawak Faks : 085-418 111 Kota Tinggi SABAH No. 23,25 & 27, Jalan Sri Warisan 1, Kota Tinggi Heritage Mall, 81920, Kota Tinggi, Johor. Faks : 07- 882 5229 Kota Kinabalu KIOSK Ground & Mezzanine Floor, Wisma Gek Poh, No.18, Jalan Haji Saman, 88000 Kota Kinabalu. Sabah Faks : 088-239 128 Sg. Udang Labuan No. 11, Jalan Kerambit 1, Bandar Baru Sungai Udang, 76300 Sungai Udang, Melaka. Tel : 06-3515 700 Faks : 06-3515 700 Ground Floor & 1st Floor, Block A, Lot 25, Lazenda Centre, Jalan OKK Abdullah, 87007, Wilayah Persekutuan Labuan. Faks : 087-424 204 REGIONAL OFFICE EAST MALAYSIA Tawau Bank Muamalat Malaysia Berhad Regional Office East Malaysia Mezzanine Floor, Wisma Gek Poh, No.18, Jalan Haji Saman, 88000 Kota Kinabalu. Sabah Tel : 088-233 024 / 025 / 026 Faks : 088-233 530 Lot 69 & 70, Ground & First Floor, Kubota Square, Jalan Kubota, 91000 Tawau, Sabah. Faks : 089-771 493 SARAWAK Kuching Lot 456, 457 & 458, Al Idrus Commercial Centre, Jalan Satok, 93400 Kuching, Sarawak. Faks : 085-418 111 Bintulu Ground 1st & 2nd Floor, No. 252, Lot 73 Park City Commercial Centre,Jalan Tanjung Batu, 97012 Bintulu Faks : 086-337 461 400 400 BANK MUAMALAT MALAYSIA BERHAD (6175-W) 400BANK BANKMUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) • annual report 2016 MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
      2. Delivering Values Community . Marketplace. Workplace. Environment At Bank Muamalat, we enhance our value based on criteria beyond business results and MARKETPLACE. Our WORKPLACE sets the pace for us to deliver and share our values with the COMMUNITY and ENVIRONMENT. The COMMUNITY is the place we seek for co-prosperity and epitomize our business ingenuity. Our customer service and product offerings result in social and human benefits. The MARKETPLACE is the platform for us to manifest our true grit and sheer determination to succeed as one of the fair and socially-engaged market players. The WORKPLACE is closely guarded for our employees, being our biggest asset, to be nurtured, well-engaged and conducive for work-life balance. We cherish our ENVIRONMENT and vow to care, safeguard and cherish it for our future generations to inherit and restore the beauty of the nature.
      3. CONTENT HIGHLIGHTS AND OVERVIEW 06 07 08 11 12 10 Years Financial Highlights Corporate Information Asset Performance Connected Party Media Highlights LEADERSHIP 16 18 28 29 32 34 36 38 Board of Directors Board of Directors Profile Shariah Committee Shariah Committee Profile Terms of Reference Statement from the Chairman of Shariah Committee Senior Management Senior Management Profile INSIGHTS 48 50 54 58 62 63 65 66 67 68 70 72 Chairman ’s Statement From The CEO’s Blog Consumer Banking Business Banking Division Treasury Capital Market Deposits Wealth Management Investment Banking Muamalat Invest Sdn. Bhd. (MISB) Shariah Calendar of Events 2017 Corporate Responsibility SUSTAINABILITY REPORT 80 86 92 97 Responsible to the Community Responsible to the Workplace Responsible to the Marketplace Responsible to the Environment ACCOUNTABILITY 100 110 112 120 122 Statement on Corporate Governance Statement on Internal Controls Statement on Risk Management Statement on Compliance Code of Conduct & Ethical Principles THE FINANCIAL 123 Financial Statements 318 Basel II – Pillar 3 Disclosures OTHERS 395 Branch Network
      4. VISION & MISSION • To Become the Preferred Islamic Financial Service Provider • To Deliver Best Value to the Stakeholders VALUE • Care • Respect • Integrity • Innovative • Service Oriented 2 2 BANK BANK MUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) • annual| ANNUAL report 2016REPORT 2017 MALAYSIA BERHAD (6175-W)
      5. B ank Muamalat ’s logo and identity are essentially formed by a dynamic line in a continuous motion. The principal objective of efficiency and dynamism are reflected by this single line. The single line signifies an efficient, clear and focused vision. This reflects the strong relationship between Bank Muamalat and its customers. The dome is a basic design element of Islamic architecture. It is used to signify the place for prayers and shelter. This represents the products and services that Bank Muamalat can offer to its customers. The five domes are representative of the five tenets of Islam and the five times Muslims are called to pray. The five points are also used in relation to the five principles of the Rukun Negara, giving a truly Malaysian objective to its existence. The linkage of the five domes with a single line signifies networking of Bank Muamalat and the relationship between Bank Muamalat, customers and its external environment. This networking and togetherness translate the very meaning of Muamalat itself, which is “relationship between mankind”. An hour glass embedded in the centre within the logo design stands for the time which is the essence of a bank. Investments grow over time. Two colours are used within the logo. Sultan blue, a royal colour is used to provide a feeling of strength and confidence. Orange is a warm and exciting colour. It gives light and signifies growth. The orange is used to signify the warmth of Bank Muamalat which is in continuous growth, never static but always dynamic. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 3
      6. HIGHLIGHTS AND OVERVIEW 4 4 BANK BANK MUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) • annual| ANNUAL report 2016REPORT 2017 MALAYSIA BERHAD (6175-W)
      7. MARKET PLACE BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 5
      8. 10 YEARS Jan 2009 - Mar 2010 2011 Restated 2012 Restated 2013 2014 702 ,236 1,319,131 1,348,286 1,401,004 1,598,476 1,745,576 1,854,694 1,995,937 2,138,571 Profit/(Loss) Before Tax (RM’000) 64,238 44,068 142,061 186,785 103,006 235,963 208,284 121,966 167,233 170,536 Profit/(Loss) After Tax (RM’000) 48,138 31,951 98,834 120,433 69,244 167,936 151,564 89,280 131, 909 149,907 Total Assets (RM’000) 13,808,090 14,398,645 16,733,420 18,659,940 20,504,037 21,071,590 20,061,690 22,438,036 22,636,889 23,526,342 Total Deposits (RM’000) 12,172,868 12,447,970 14,920,856 16,216,173 18,151,087 18,744,179 17,629,228 19,544,549 19,643,428 19,917,482 Total Financing (RM’000) 5,870,585 6,427,747 7,037,126 7,495,007 9,064,271 10,352,626 11,899,691 13,414,670 14,512,877 14,918,272 48 3 1 1,454 48 5 1 1,419 49 6 1 1,584 51 4 1 1,763 58 2 1 1,929 59 7 1 2,099 59 7 1 2,135 59 7 1 1,987 61 1 1 1,703 62 1 1 1,733 0.47 8.86 0.31 6.12 0.73 11.24 1.06 15.24 0.53 7.49 1.14 15.73 1.01 12.46 0.57 6.78 0.74 8.69 0.74 8.25 2016 2017 2008 737,331 2015 2007 FINANCIAL HIGHLIGHTS _____________________________________________________________________________________________________________________________________________ Total Shareholders Fund (RM’000) _____________________________________________________________________________________________________________________________________________ _____________________________________________________________________________________________________________________________________________ _____________________________________________________________________________________________________________________________________________ _____________________________________________________________________________________________________________________________________________ _____________________________________________________________________________________________________________________________________________ _____________________________________________________________________________________________________________________________________________ No of Branches No of Service Centres/Kiosk No of Offshore Branches/Labuan No of Staff _____________________________________________________________________________________________________________________________________________ Return on Asset (%) - Pretax Return on Equity (%) - Pretax _____________________________________________________________________________________________________________________________________________ Total Shareholders Fund (RM ‘000) Total Asset (RM ‘000) 2,138,571 1,995,937 1,854,694 1,598,476 2013 1,745,576 2014 21,071,590 2015 2016 2017 Total Deposits (RM ‘000) 2013 22,438,036 22,636,889 2015 2016 23,526,342 20,061,690 2014 2017 Profit Before Tax (RM ‘000) 235,963 19,917,482 19,544,549 18,744,179 19,643,428 208,294 17,629,228 167,233 170,536 121,966 2013 6 2014 2015 2016 2017 6 BANK BANK MUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) • annual| ANNUAL report 2016REPORT 2017 MALAYSIA BERHAD (6175-W) 2013 2014 2015 2016 2017
      9. CORPORATE INFORMATION BOARD OF DIRECTORS COMPANY SECRETARY CHAIRMAN Tan Sri Dato ’ Dr. Mohd Munir Abdul Majid Julaida Jufri (LS 9358) MEMBERS Dato’ Sri’ Che Khalib Mohamad Noh Dato’ Haji Mohd Redza Shah Abdul Wahid Dato’ Haji Mohd Izani Ghani Tengku Dato’ Seri Hasmuddin Tengku Othman Dato’ Azmi Abdullah Dato’ Haji Kamil Khalid Ariff Dr Azura Othman Ghazali Darman (appointed w.e.f. 4 January 2017) 20th Floor, Menara Bumiputra Jalan Melaka 50100 Kuala Lumpur Tel: 603-2615 7069 Fax: 603-2693 3367 REGISTERED OFFICE AUDITORS Ernst & Young Level 23A, Menara Milenium Jalan Damanlela, Pusat Bandar Damansara 50490 Kuala Lumpur BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 7
      10. ASSET PERFORMANCE ASSET PORTFOLIO (RM ‘000) 2016 15000000 2017 10000000 14,802,394 15,231,296 5000000 0 GROSS FINANCING 2016 2017 6,027,128 6,470,792 FINANCIAL INVESTMENTS 2016 2017 1,069,101 1,049,925 CASH & SHORT-TERM FUNDS FINANCING BY BUSINESS SEGMENT 2016 SME TREASURY & INVESTMENT 2017 SME CORPORATE CORPORATE CONSUMER CONSUMER COMMERCIAL 8 TREASURY & INVESTMENT 8 BANK BANK MUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) • annual| ANNUAL report 2016REPORT 2017 MALAYSIA BERHAD (6175-W) COMMERCIAL
      11. FINANCING BY ISLAMIC CONTRACT 2016 ISTISNA ’ MURABAHAH 2017 SHIRKAH MUTANAQISAH SHIRKAH AL MILK QARD RAHNU BAI’ BITHAMAN AJIL BAI’ AL-DAYN MURABAHAH ISTISNA’ QARD SHIRKAH MUTANAQISAH SHIRKAH AL MILK RAHNU BAI’ BITHAMAN AJIL IJARAH BAI’ AL-DAYN IJARAH IJARAH THUMMA AL-BAI IJARAH THUMMA AL-BAI INAH TAWARRUQ TAWARRUQ INAH ASSET QUALITY 2016 (RM MIL) 2017 (RM MIL) Gross impaired financing (RM Million) 326.5 351.9 Gross impaired financing ratio (%) 2.2% 2.3% Financing loss reserve ratio (%) 88.7% 89.1% Collective assessment ratio (%) 1.4% 1.6% COMPONENTS 2016 2017 IMPAIRED FINANCING NON-IMPAIRED FINANCING IMPAIRED FINANCING NON-IMPAIRED FINANCING BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 9
      12. ASSET PERFORMANCE IMPAIRED FINANCING BY SECTOR 2017 2016 PURCHASE OF PURCHASE OF TRANSPORT , FINANCE, TAKAFUL TRANSPORT COMMUNITY, TRANSPORT, FINANCE, TAKAFUL TRANSPORT COMMUNITY, SOCIAL AND SOCIAL AND AND BUSINESS STORAGE AND AND BUSINESS VEHICLES STORAGE AND VEHICLES PERSONAL SERVICE PERSONAL SERVICE SERVICES COMMUNICATION SERVICES COMMUNICATION AGRICULTURE AGRICULTURE MANUFACTURING WHOLESALE WHOLESALE MANUFACTURING AND RETAIL AND AND RETAIL AND RESTAURANT RESTAURANT CONSTRUCTION CONSTRUCTION HOUSEHOLD HOUSEHOLD IMPAIRED FINANCING BY BUSINESS SEGMENT 2017 2016 SME TREASURY & INVESTMENT SME TREASURY & INVESTMENT CORPORATE CORPORATE COMMERCIAL CONSUMER COMMERCIAL 10 10 BANK BANKMUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) • annual report 2016REPORT 2017 MALAYSIA BERHAD (6175-W) | ANNUAL CONSUMER
      13. CONNECTED PARTY As at end of FY 2017 , connected parties exposures accounted for 6.5% of total outstanding credit exposures of RM25 billion. The amount stood at 68% against Bank Muamalat’s capital base of RM2.37 billion. Both measurements were well below the threshold limit set by Bank Negara Malaysia. Connected Parties Exposure by Financial Instrument as at March 2017 (RM’Mil) MILLIONS 18,000 16,000 6,245 14,000 13,505 12,000 SECURITIES FINANCING 10,000 8,000 6,000 4,000 2,000 0 171 1,433 CONNECTED PARTIES NON-CONNECTED PARTIES Connected Parties VS Non Connected Parties Exposure as at March 2017 100% 90% 80% 70% 11% 89% 32% 68% 60% SECURITIES FINANCING 50% 40% 30% 20% 10% 0% CONNECTED PARTIES NON-CONNECTED PARTIES Connected Parties Exposure by Sector as at March 2017 TRANSPORT, ELECTRICITY, STORAGE AND GAS AND EDUCATION, HEALTH OTHERS COMMUNICATION WATER CONSTRUCTION AND OTHERS GOVERNMENT, SPV FINANCE, INSURANCE, REAL AGRICULTURE, HUNTING, ESTATE AND BUSINESS SERVICES FORESTRY AND FISHING MANUFACTURING WHOLESALE AND RETAIL TRADE AND RESTAURANTS AND HOTELS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 11
      16. LEADERSHIP 14 14 BANK BANKMUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) • annual report 2016REPORT 2017 MALAYSIA BERHAD (6175-W) | ANNUAL
      17. CORPORATE HIGHLIGHTS COMMUNITY BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 15
      18. BOARD OF DIRECTORS 16 16 BANK BANKMUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) • annual report 2016REPORT 2017 MALAYSIA BERHAD (6175-W) | ANNUAL
      19. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 17
      20. BOARD OF DIRECTORS PROFILE T an Sri Dato ’ Dr. Mohd Munir Abdul Majid is the Chairman of Bank Muamalat and was appointed to the Board of Bank Muamalat on 3 June 2008. He obtained a B.Sc (Econ) from the London School of Economics and Political Science (LSE) in 1971 where he also obtained his Ph.D in International Relations in 1978. He taught at the Department of International Relations in LSE from 1972-1975. He was a research analyst for Daiwa Europe NV in London from 1975-1978. TAN SRI DATO’ DR. MOHD MUNIR ABDUL MAJID CHAIRMAN Dr. Munir joined the New Straits Times (NST) at the end of 1978 as leader writer and progressed to become the Group Editor. During his time at NST, he published numerous articles on national and international politics, and economics. He left NST in 1986 to become the CEO of a small merchant bank, Pertanian Baring Sanwa (PBS), whose name he changed to Commerce International Merchant Bankers (CIMB) which was then transformed into one of Malaysia’s leading merchant banks. He was invited by the Government of Malaysia to establish and become the first and founding Executive Chairman of the Securities Commission in 1993, where he served for two terms until 1999. As the founding Executive Chairman he was instrumental in shaping the legal and regulatory framework of the capital markets, as well as introducing the country’s first code of corporate governance. During this time, he was the chairman of the emerging markets committee of the International Organisation of Securities Commissions (IOSCO). In 1997, he received the Cranfield Management Excellence award. After leaving the Securities Commission, he served as a Senior Independent NonExecutive Director of Telekom Malaysia Berhad for 4 years until June 2004, and was the chairman of its mobile subsidiary 18 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 Celcom (M) Berhad from 2002-2004. In June 2004, Dr. Munir joined Malaysia Airlines Board of Directors and in August he was appointed its Non-Executive Chairman until July 2011. In February 2014 Dr. Munir was appointed Chairman of CIMB Asean Research Institute and also joined the board of the Institute of Strategic and International Studies (ISIS) Malaysia. He is Chairman of the Asean Business Advisory Council – Malaysia Chapter and was 2015 chair of the Council region-wide. He is the President of the Asean Business Club. Dr Munir is also Chairman of the Financial Services Professional Board since 2016. He is a member of the Board of Silverlake Axis Limited. Dr. Munir was the founder President of the Kuala Lumpur Business Club (2003-2008). In May 2004, he was appointed a member of the Court of Fellows of the Malaysian Institute of Management. In December 2005, he was made an Honorary Fellow of the LSE and in 2008 he was appointed Visiting Senior Fellow at LSE IDEAS (Centre for International Affairs, Diplomacy and Strategy) where he started the Southeast Asia International Affairs Programme and headed it until 2012. He has written for IDEAS publications and published in International Politics, a British academic journal. A collection of his articles was published in a book, 9/11 and the Attack on Muslims. Dr. Munir received his early education at St Mark’s Primary School in Butterworth and the Bukit Mertajam High School in the state of Penang. He received his upper secondary education at the Royal Military College in Sungei Besi near Kuala Lumpur where he was awarded the Commandant’s Prize for being the best all-round student in 1967. He left for London the next year.
      21. DATO ’ HAJI MOHD REDZA SHAH ABDUL WAHID CHIEF EXECUTIVE OFFICER/EXECUTIVE DIRECTOR D ato’ Haji Mohd Redza Shah Abdul Wahid was appointed to the Board of the Bank on 1 November 2008. He holds a Bachelor of Science in Economics (Industry and Trade) from London School of Economics, University of London and a Master of Science in Economics (International Banking and Finance) from University of Wales, Cardiff. He is also a qualified Chartered Banker. 1994 as a Senior Finance Manager and later moved to Silterra Malaysia Sdn Bhd, as Chief Financial Officer. He left Silterra Malaysia Sdn Bhd to spearhead Tradewinds Corporation Berhad as the Group CEO from September 2002 to November 2005. Prior to joining Bank Muamalat, he was the Executive Director and Group Chief Operating Officer of DRB-HICOM from 1 March 2006 till October 2008. Dato’ Haji Mohd Redza Shah started his career with Touche Ross & Co. London (now known as Deloitte & Touche) in 1988 as Trainee Accountant and qualified as Associate Chartered Accountant (ACA). In 1992 he joined Arab Malaysian Corporation Berhad, in Internal Audit and progressed to become the Corporate Finance Manager. He then joined Khazanah Nasional Berhad when it commenced operations in July Dato’ Haji Mohd Redza Shah is currently the President of the Association of Islamic Banking Institutions Malaysia (AIBIM), and sits on the Board of Islamic Banking & Finance Institute Malaysia (IBFIM) and Raeed Holding Sdn Bhd. He also sits on the Board of General Council for Islamic Banks and Financial Institutions (CIBAFI). BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 19
      22. BOARD OF DIRECTORS PROFILE DATO ’ SRI CHE KHALIB MOHAMAD NOH NON-INDEPENDENT NON-EXECUTIVE DIRECTOR D ato’ Sri Che Khalib Mohamad Noh was appointed as Non-Independent NonExecutive Director of Bank Muamalat nominated by DRB-HICOM Berhad on 27 August 2012. He is a member of Nomination and Remuneration, and Veto Committees. Dato’ Sri Che Khalib is currently the Group Managing Director of MMC Corporation Berhad. He was the former President and Chief Executive Officer of Tenaga Nasional Bhd (TNB), prior to his position as the Chief Operating Officer - Finance, Strategy & Planning of DRB-HICOM Berhad. A qualified accountant, Dato’ Sri Che Khalib is a member of the Malaysian Institute of Accountants (CA, M) and also a Fellow of the Association of Chartered Certified Accountants (FCCA, UK) United Kingdom. 20 Dato’ Sri Che Khalib began his career with Messrs Ernst & Young in 1989 and later joined Bumiputra Merchant Bankers Berhad. He was previously a member of the Board and the Executive Committee of Khazanah Nasional Berhad from year 2000 to 2004. He also served as a Board member within the United Engineers Malaysia (UEM) Group of companies and Bank Industri & Teknologi Malaysia Berhad. He currently sits on the Board of Gas Malaysia Berhad, Zelan Berhad, Malakoff Corporation Berhad, Johor Port Berhad, MMC Engineering Group Berhad, NCB Holdings Bhd, Aliran Ihsan Resources Berhad, Kontena Nasional Berhad, Northport (Malaysia) Berhad and several private limited companies. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
      23. DATO ’ HAJI MOHD IZANI GHANI NON-INDEPENDENT NON-EXECUTIVE DIRECTOR D ato’ Haji Mohd Izani Ghani was appointed as Non-Independent NonExecutive Director of Bank Muamalat nominated by Khazanah Nasional Berhad (Khazanah), on 1 March 2009. He is a member of Nomination and Remuneration, and Board Risk Management Committees of the Bank. He graduated from the London School of Economics and Political Science in 1991 with BSc (Economics) specialising in Accounting and Finance. After graduating from LSE, he pursued his professional accounting qualification from the Association of Chartered Certified Accountants and admitted to fellowship in 2000. He is also a member of Malaysian Institute of Accountants. He was previously the Chief Financial Officer of Khazanah for seven years before assuming a new role as Executive Director of Investments in June 2017. He also oversees Khazanah’s regional office in Istanbul. Apart from Bank Muamalat, he sits on the Board of Malaysia Airports Holdings Berhad and Fajr Capital Limited and chairs Istanbul Sabiha Gokcen Airport. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 21
      24. BOARD OF DIRECTORS PROFILE TENGKU DATO ’ SERI HASMUDDIN TENGKU OTHMAN INDEPENDENT NON-EXECUTIVE DIRECTOR T engku Dato’ Seri Hasmuddin Tengku Othman was appointed as a NonIndependent Non-Executive Director of Bank Muamalat since 18 April, 2006 and was subsequently redesignated to Independent Non-Executive Director by Bank Negara Malaysia on 16 February, 2009. He is the Chairman of Nomination and Remuneration Committee, a member of Board Audit and Risk Management Committees. He graduated from the University of Malaya with a Bachelor of Law (Honours) degree in 1986. He is a practising advocate and solicitor having been admitted to the Malaysian Bar on 14 July 1987. His main areas of practice are corporate and commercial law and Islamic banking and finance. Tengku Dato’ Seri Hasmuddin is among the legal counsel involved in framing the structural framework for Islamic banking documentation in the early stages of that sector’s development in Malaysia. He is a member of the Association of Chartered Islamic Finance Professionals (ACIFP) since 2009. He continues to play an active role in the development of this 22 area of law through his involvement in the organisation of Kuala Lumpur Islamic Finance Forum (KLIFF), an annual forum that gathers prominent personalities, practitioners and industry players of Islamic Finance as well as by presenting papers on the subject both locally and internationally. Currently Tengku Dato’ Seri Hasmuddin sits on the boards of Institut Jantung Negara Sdn Bhd, IJN Holdings Sdn. Bhd., Aliran Ihsan Resources Berhad, Serba Dinamik Holdings Berhad, HSK Corporate Advisory & Consultancy and Rangkaian Hotel Seri Malaysia Sdn Bhd. He is also a member of Jawatankuasa Pemantauan dan Pengawasan Syarikat Jaminan Pembiayaan Perniagaan Berhad. Tengku Dato’ Seri Hasmuddin is also involved in charitable organisations in his capacity as trustee to Tuanku Najihah Foundation, Yayasan Institut Al Quran Kuala Lumpur, Tabung Amanah Pesakit Malaysia, Institut Quran Tuanku Jaafar, Yayasan Kolej Islam Sultan Alam Shah and Yayasan Munarah. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
      25. DATO ’ AZMI ABDULLAH INDEPENDENT NON-EXECUTIVE DIRECTOR D ato’ Azmi Abdullah was appointed as Independent Non-Executive Director of Bank Muamalat since 16 September 2009. He is the Chairman of Board Risk Management Committees and member of Nomination and Remuneration, Board Audit and Veto Committees. Prior to joining the Bank, he was the First Managing Director/Chief Executive Officer of SME Bank for over 4 years and the Managing Director/Chief Executive Officer of Bumiputera-Commerce Bank Berhad, where he served for more than 26 years in various departments. Dato’ Azmi graduated with a B.A. (Hons) Degree in Economics from Universiti Kebangsaan Malaysia (UKM) in 1974. He was conferred Honorary Doctorate in Business Administration from Universiti Kebangsaan Malaysia in 2006. He also sits as a Director in Kumpulan Wang Persaraan (Diperbadankan), ECS Solution Sdn Bhd, Trans National Insurance Broker Sdn Bhd, Ireka Corporation Berhad and a member of the Board and Investment Committee of Amanah Raya Berhad. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 23
      26. BOARD OF DIRECTORS PROFILE DATO ’ HAJI KAMIL KHALID ARIFF INDEPENDENT NON-EXECUTIVE DIRECTOR D ato’ Haji Kamil Khalid Ariff was appointed as Independent NonExecutive Director of Bank Muamalat on 29 September 2011. He is the Chairman of Veto Committee and member of Board Risk Management, Digital Banking Board and Board Audit Committees. He graduated with MBA in International Business from Michigan, USA in 1979. Prior to this, he obtained Bsc in Management from Syracuse University, New York and the Diploma in Public Administration from ITM. His last position was as Managing Director/Chief Executive Officer of Mahkota Technologies Sdn. Bhd. (formerly known as General Electric Company of the UK) – dealing mainly in the electrical engineering/ supply Industry. Upon his recent retirement, he has been retained as Advisor to the Mahkota Group. He is also a 24 Chairman/Director of several other private companies. In the last 30 years, he served in numerous Management and Board positions in several large corporate entities viz, The New Straits Times, Kumpulan Perangsang Selangor Bhd, Kumpulan Guthrie Bhd. and Idris Hydraulic Bhd. During this time, he was exposed to various multi facet industries viz Advertising & Publishing, Trading, Manufacturing and Engineering. He was also a founder Director of the Kuala Lumpur Tin Market, which he, as part of a Government Steering Committee, help set up in the mid 1980s. Dato’ Haji Kamil Khalid is also Chairman of Liberty Insurance Berhad, Gibraltar BSN Life Insurance Berhad, Director of Pramerica BSN Holdings Sdn. Bhd. Awan Inspirasi Sdn Bhd and several other private companies. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
      27. DR . AZURA OTHMAN INDEPENDENT NON-EXECUTIVE DIRECTOR D r. Azura was appointed as Independent Non-Executive Director of Bank Muamalat on 24 April 2015. She is the chairman of Board Audit and a member of Board Risk Management Committees. Dr Azura graduated with a degree in Accounting and Finance from the London School of Economics and Political Science. She is also a Fellow of ACCA (UK), a member of Malaysian Institute of Accountant and a chartered member of the Institute of Chartered Islamic Finance Professionals (CIIF). She received her PhD in Islamic Finance from the International Centre of Education in Islamic Finance (INCEIF). Currently, she is the Chief Executive Officer of the Chartered Institute of Islamic Finance Professionals (CIIF), a professional standard setting body for Islamic finance practitioners. She was a former Executive Director of Pricewaterhouse Coopers Taxation Services, Malaysia. She has over 19 years of experience as a tax consultant and in engagements relating to Islamic Finance, working together with the Malaysian Ministry of Finance, Inland Revenue Board and BNM. Her major assignments include formulating the tax incentives for Malaysia as the International Islamic Financial Centre (MIFC). BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 25
      28. BOARD OF DIRECTORS PROFILE GHAZALI HAJI DARMAN INDEPENDENT NON-EXECUTIVE DIRECTOR G hazali Haji Darman was appointed as an Independent Non-Executive Director of Bank Muamalat Malaysia Berhad on 4 January 2017 . He is the Chairman of Digital Banking Board Committee and a member of Nomination and Remuneration and Board Audit Committees of the Bank. He graduated with a Bachelor of Arts in Accounting from University of Canberra, Australia. At present, he is an Independent Non Executive Director of Bursa Malaysia Berhad and a member of the Audit Committee, Risk Management Committee, Market Participation Committee (regulatory committee) and IT Project Steering Committee. 26 Previously, he was the Global Head of Domain for Transportation and System Integration and member of Senior Management Team for DHL IT Services, based in Cyberjaya. His responsibilities covered all four shared IT service centers for DHL Global Operations (located in Cyberjaya, Bonn, Prague and Scottsdale, USA). He was a world-wide partner and director in Accenture, specializing in financial industry and later leads the government market practice. He was the Commissioner for PT Praisindo Teknologi, Jakarta which specialises in Wealth Management and IT Security. He was also an advisor to Outsourcing Malaysia, an initiative of the outsourcing industry and a chapter of PIKOM – the country’s national ICT industry association, is envisioned to promote and develop Malaysia’s outsourcing services industry as a global hub for high-value outsourcing. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
      29. TION A C U ED H E A LT H NT E M I N VEST BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 27
      30. SHARIAH COMMITTEE Ustaz Haji Azizi Che Seman Dr . Wan Marhaini Wan Ahmad Ustaz Engku Ahmad Fadzil Engku Ali SS Datuk Dr. Zulkifli Mohamad Al-Bakri Prof. Madya Dr. Mohamad Sabri Haron 28 Dr. Ab Halim Muhammad BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
      31. SHARIAH COMMITTEE PROFILE USTAZ HAJI AZIZI CHE SEMAN CHAIRMAN Ustaz Haji Azizi Che Seman is currently a lecturer at the Islamic Studies Academy , University of Malaya, a position he has held since 2002. He has been with Bank Muamalat since 1 April 2005. Until now, he is entrusted to be the Chairman for Bank Muamalat’s Shariah Committee. He has also been appointed as Shariah Advisor of AIBIM. In terms of qualification, he is now pursuing his studies in the field of Islamic capital market. He holds a Masters Degree in Economics from International Islamic University of Malaysia in 2001 and a Bachelor of Islamic Studies from University Malaya in 1996. His specialisation areas are in Islamic Capital Market, Islamic Economics, Fiqh Muamalat and Islamic Research Methodology. Besides his function in Shariah advisory, he also contributes his ideas and experiences in the development of Bank Muamalat’s IT system. USTAZ ENGKU AHMAD FADZIL ENGKU ALI Ustaz Engku Ahmad Fadzil Engku Ali has obtained his early education at The Malay College Kuala Kangsar from 1982 until 1986. He later furthered his study in Law and successfully obtained his Bachelor’s Degree in Laws (Second Class Honors Upper) from The International Islamic University of Malaysia in 1993. In the subsequent year, he graduated from the same university with a Bachelor’s Degree in Shariah Law (First Class Honors). He was called to the bar, admitted and enrolled as an Advocate and Solicitor of The High Court of Malaya in 1995. He then pursued his studies at Jordan University and in the year 2000, he successfully obtained a Masters Degree in Islamic Judiciary. Since then until October 2014, he served as a lecturer at the International Islamic University of Malaysia. Some of the subjects that he taught at the university were Probate and the Law of Successions (both Islamic and Civil), Islamic Jurisprudence, Islamic Criminal Law and Malaysian Legal System. He is, since August 2015, a Senior Fellow at Institut Kajian Strategik Islam Malaysia (IKSIM). He has been a member of Bank Muamalat’s Shariah Committee since 2005. PROF. MADYA DR. MOHAMAD SABRI HARON Prof. Madya Dr. Mohamad Sabri bin Haron is a lecturer at Pusat Citra Universiti, National University of Malaysia. He is also a Senior Fellow at The Institute of Malaysian and International Studies (IKMAS) as well as a Senior Fellow of The Institute of Islam Hadhari. He obtained a Diploma in Islamic Studies from Kolej Sultan Zainal Abidin in 1985 and Bachelor of Islamic Studies (al-Quran and al-Sunnah) from National University of Malaysia in 1988. He has completed his Master of Comparative Law at International Islamic University of Malaysia in 1993. He succeeded in obtaining his PhD. in Islamic Law (Fiqh and Usul Fiqh) in 1998 from University of Jordan. He has been with Bank Muamalat since December 2003. His specialization areas are in Islamic Economics and Islamic Civilization. He has also been seconded to the Securities Commission as the Senior Manager in Islamic Capital market starting from 1 June 2009 until 31 May 2010. Currently he is also appointed as a Chairman of Shariah Committee for Apex Investment Services Berhad (Islamic Fund) and also as a Member of Shariah Committee for Koperasi ANGKASA. In addition to that, he serves as a Member of Shariah Committee for Koperasi Pos (KOPONAS) and a Member of Shariah Committee for Koperasi Universiti Kebangsaan Malaysia (Koperasi UNIKEB). He is also active in social and charitable activities and has been appointed as Chairman of Rukun Tetangga Al-Ehsan, Bandar Baru Bangi as well as a committee member to construct Masjid Al-Umm at Bandar Baru Bangi, Bangi selangor. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 29
      32. SHARIAH COMMITTEE PROFILE DR . AB. HALIM MUHAMMAD Dr. Ab. Halim Muhammad graduated in 1972 with a Bachelor’s Degree of Shari’ah from AlAzhar University, Cairo Egypt and completed his studies in PhD. of Shari’ah at St. Andrews University Scotland in 1977. He served as a lecturer and became the Head of Department of Quran & Sunnah, Faculty of Islamic Studies Universiti Kebangsaan Malaysia. Some of the subjects that he taught were Islamic Jurisprudence (Muamalat, Islamic Banking & Islamic Finance and Takaful), Principles of Islamic Jurisprudence and Islamic Criminal Laws. He was the first Chairman of Shariah Committee of Bank Muamalat prior to joining National Shariah Advisory Council of Bank Negara Malaysia in 2004. He has been re-appointed as a member of Bank Muamalat’s Shariah Committee since 30 November 2009. He was also a member of Shariah Committee of Securities Commission and a currently he is Shariah Committee of ASDI Unit Trust Terengganu, Apex Unit Trust and Reit Johor. Recently, he has been appointed as Ahli Jamaah Ulama’ Majlis Agama Islam Negeri Kelantan. YBHG. SS DATUK DR. ZULKIFLI B. MOHAMAD AL-BAKRI YBhg. SS Datuk Dr. Zulkifli B. Mohamad Al-Bakri is a scholar in Malaysia. He obtained his early education at Sek. Men. Agama (Atas) Sultan Zainal Abidin, Terengganu and furthered his study in a Bachelor’s Degree at Universiti Islam Madinah, Arab Saudi prior to entering Universiti Ilmu-Ilmu Islam Dan Arab, Syria to finish his Masters. He succeeded in obtaining his PhD at USM, Pulau Pinang in 2004. He served as a lecturer in Universiti Sains Islam Malaysia from 2006-2009. He is now focusing more on writing and has written many books in Fatwa, Islamic Law and Islamic Jurisprudence. He has a vast experience in Islamic Banking as he was formerly the Chairman of Shariah Committee of Bank Pertanian Malaysia prior to joining Bank on 1 April 2011. He is also an expert and capable in providing fatwa, as he served as a member of Fatwa’s Committee for state of Negeri Sembilan and the Chairman for Shariah Committee in World Fatwa Management and Research Institute (INFAD) at USIM. YBhg. Datuk Dr. Zulkifli B. Mohamad Al-Bakri was proclaimed as Mufti Wilayah Persekutuan on 20 June 2014. However he has resigned from Shariah Committee of BMMB with effect from 31 October 2016 due to being called by Bank Negara Malaysia to serve as Shariah Advisory Council of BNM. DR. WAN MARHAINI WAN AHMAD Dr. Wan Marhaini Wan Ahmad is currently a senior lecturer at the Finance and Banking Department, University of Malaya, a position she has held since 2002. She completed her doctorate in Zakat Investment at the University of Edinburgh, United Kingdom in 2012. She received a Master Degree in Economics from International Islamic University of Malaysia in 2002 and has a degree in Shariah from the Academy of Islamic Studies University of Malaya in 1996. Her research interests lie in the area of Fiqh Muamalat, Islamic Economics, Islamic Finance and Banking. In the University of Malaya, she has experiences teaching both Islamic and conventional economics and finance for both undergraduate and Masters programmes (MBA and MM). Currently, she teaches principles of Islamic economics and Islamic finance as well as the applications of modern Islamic banking, takaful and Islamic capital market. Prior to joining Bank Muamalat Malaysia Berhad, she has served as a Shariah Committee member for EONCAP Islamic Bank Berhad for tenure of April until November 2011. 30 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
      33. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 31
      34. SHARIAH COMMITTEE TERMS OF REFERENCE OBJECTIVE /PURPOSE These terms of references were prepared to inform and notify the appointed Shariah Committee on all relevant matters pertaining to their duties, processes and procedures. AUTHORITY These terms of references are governed by the IFSA 2013 (including any amendment that will be made from time to time)(“Laws and Regulations”). DUTIES, RESPONSIBILITIES & ACCOUNTABILITY OF THE SHARIAH COMMITTEE  (4) The main duties and responsibilities of the Shariah Committee are as follows: (1) (2) (3) 32 Responsibility and accountability The Shariah Committee is expected to understand that in the course of discharging the duties and responsibilities as a Shariah Committee member must be in accordance with Laws and Regulations in respect of duties and obligations of the Shariah Committee member, and responsible and accountable for all Shariah decisions, opinions and views provided by them. Advise to the Board and Bank Muamalat including Bank Muamalat’s subsidiaries The Shariah Committee is expected to advise the Board, Management including Bank Muamalat’s subsidiaries and provide input to Bank Muamalat on Shariah matters in order for Bank Muamalat to comply with Shariah principles at all times. Endorse Shariah policies and procedures The Shariah Committee is expected to endorse Shariah policies and procedures prepared by Bank Muamalat and to ensure that the contents do not contain any element which is not in line with Shariah. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 Endorse and validate relevant documentations To ensure that the products of Bank Muamalat comply with Shariah principles, the Shariah Committee must approve: i. the terms and conditions contained in the forms, contracts, agreements or other legal documentations used in executing the transactions; and ii. the product manual, marketing advertisements, sales illustrations and brochures used to describe the product. (5) Assess work carried out by Shariah review and Shariah audit To assess the work carried out by Shariah review and Shariah audit in order to ensure compliance with Shariah matters which forms part of their duties in providing their assessment of Shariah compliance and assurance information in the annual report. (6) Assist related parties on Shariah matters The related parties of Bank Muamalat such as its legal counsel, auditor or consultant may seek advice on Shariah matters from the Shariah Committee and the Shariah Committee is expected to provide the necessary assistance to the requesting party. (7) Shariah Advisory Council, Bank Negara Malaysia The Shariah Committee may advise Bank Muamalat to consult the Shariah Advisory Council of Bank Negara Malaysia (SAC) on Shariah matters that could not be resolved.
      35. In cases where there are uncertainties and differences of opinions , Bank Muamalat may seek advice and refer for a ruling from the SAC. The request for advice shall be communicated through the Secretariat of the SAC. Members of the Shariah Committee must not act in a manner that would undermine the rulings and decisions made by the SAC or the committee they represent. They are required to respect and observe the published Shariah rulings issued by the SAC and shall not go against the decisions of the committee that they represent in public. In cases of disputes and court proceedings related to Islamic financial business or any Shariah issues arising from Bank Muamalat’s business operations, both the court and the arbitrator shall take into consideration the published rulings of the SAC or refer such issues to the SAC for its ruling. Any ruling made by the SAC arising from a reference made shall be binding on Bank Muamalat and the court or the arbitrator. In the event where the decision given by Bank Muamalat’s Shariah Committee is different from the ruling given by the SAC, the rulings of the SAC shall prevail. However, the Shariah Committee is allowed to adopt a more stringent Shariah decision. (8) Provide Written Shariah Opinions The Shariah Committee is required to provide written Shariah opinions in circumstances where Bank Muamalat makes reference to the SAC for further deliberation, or where Bank Muamalat submits applications to SAC for new product approval. (9) Provide Bank Muamalat with guidelines and advice on religious matters to ensure that Bank Muamalat’s overall activities are in line with Shariah. (10) Make decisions on matters arising from existing and future activities of Bank Muamalat which have religious repercussions. (11) Report to the shareholders and the depositors that all Bank Muamalat’s activities are in accordance with Shariah. (12) Provide Shariah advisory and consultancy services in all matters relating to Bank Muamalat’s products, transactions and activities as well as other businesses involving Bank Muamalat. (13) Scrutinise and endorse the annual financial report of Bank Muamalat. (14) Provide training to the staff as well as notes or relevant materials for their reference. (15) Represent Bank Muamalat or to attend any meetings with the SAC or other relevant bodies concerning any Shariah issues relating to Bank Muamalat. (16) The Shariah Committee shall maintain the confidentiality of Bank Muamalat’s internal information and shall be responsible for the safe guarding of confidential information. He or she should maintain all information in strict confidence, except when disclosure is authorised by Bank Muamalat or required by law. 17) The Shariah Committee shall ensure the quality and consistency of the Shariah decisions. Most of the issues submitted to the Shariah Committee for deliberation are resolved via meeting. For FYE March 2017, 13 meetings were held. The details of their attendance are as follows: Shariah Committee Member Attendance Tn. Hj. Azizi Che Seman 13/13 YM Engku Ahmad Fadzil Engku Ali 12/13 Prof. Madya Dr Mohamad Sabri Haron 13/13 Dr Ab Halim Muhammad 12/13 Datuk Dr. Zulkifli B. Mohamad Al-Bakri Dr Marhaini Wan Ahmad 1/6 12/13 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 33
      36. “We would like to extend our warmest congratulations to the Board of Directors and the Management for their genuine concern and strong passion to ensure not only the productivity and profitability of Bank Muamalat... ” USTAZ HAJI AZIZI CHE SEMAN CHAIRMAN, SHARIAH COMMITTEE Statement from the Chairman of Shariah Committee In the Name of Allah, the Most Gracious, the Most Merciful Assalamualaikum Warahmatullahi Wabarakatuh A lhamdulillah, all praise to Allah SWT, the salutations and greetings to our Prophet Muhammad SAW and his entire family, companions, tabi’in and tabi’i al-tabi’in, and devout Islamic scholars of allegiance to assemble a great contribution in uplifting the religion of Islam to the last blood droplet. With this Annual Report 2017, we can share our activities and the transparency of the Bank in line to keep up the Islamic da’wah via promoting Islamic banking system, In-sha-Allah. Bank Muamalat Malaysia Berhad (Bank Muamalat) is a full-fledged Islamic Financial Institution operating under the Islamic Financial Services Act 2013 (IFSA), offering Shariah-based financial services and products. As a commercial bank that offers Shariah-based products and services, Bank Muamalat provides a wide range of deposits, financing and various banking products and services to cater the demands of Malaysian market, irrespective of race or religion. 34 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
      37. The fact that Shariah compliance is the core and essence of Islamic banking proves that it is essential for the banking and commercial activities to be in line with Shariah principles and guidelines . Among challenges faced are to review current Bank Muamalat’s product offerings to assure its compliance as issued in Policy Documents for Shariah contracts by Bank Negara Malaysia throughout the year. With the assistance of Shariah Governance Framework organs within Bank Muamalat, we believe that we have played our role to oversee Shariah matters related to Bank Muamalat’s business operations and activities. Prophet Muhammad SAW said, meaning: “A Muslim is a brother of another Muslim, so he should not oppress him, nor should he hand him over to an oppressor. Whoever fulfilled the needs of his brother, Allah will fulfill his needs; whoever brought his (Muslim) brother out of a discomfort, Allah will bring him out of the discomforts of the Day of Resurrection, and whoever screened a Muslim, Allah will screen him on the Day of Resurrection.” (Narrated by Al-Bukhari, No.622) As Shariah Committee of Bank Muamalat, we have given our highest dedication to assure the quality and demonstrated our commitment to ensure Shariah compliance in the products, process, documentations, marketing, IT systems and other related matters. During Financial Year 2016/2017, the Shariah Committee has endorsed new products and services offered by Bank Muamalat, among others; new collaboration under IAP, CASA Tawarruq, Debit Card, and Structured Financing Bai Dayn Bi Sila’. The Muamalat Gold-i has received encouraging response from the public and moving forward Bank Muamalat has planned to expand gold product further through -Muamalat Gold-i Account which allows customers the flexibility to purchase without handling physical gold. In the context of the economic development, Islam presents integrated and proactive approaches for developing and promoting wakaf institutions particularly in collaboration with the financial institutions as the new initiative. Being an ethical bank, Bank Muamalat has been cooperating with Perbadanan Wakaf Selangor (PWS) in managing Wakaf Selangor Muamalat (WSM) to implement cash waqf. Moving forward, Bank Muamalat has also planned to initiate new collaborations with other states in the next financial year, In-sha-Allah. We would like to extend our warmest congratulations to the Board of Directors and the Management for their genuine concern and strong passion to ensure not only the productivity and profitability of Bank Muamalat, but also to assure the dictates and requirements of Shariah are properly observed and adhered to. We are also very thankful to the staff for the cooperation in providing us adequate information in ensuring our deliberations on each and every issue would be resolved accordingly. In-sha-Allah, with a good and excellent banking system, we are able to channel da’wah and call out and attract the people in using Islamic banking and then towards the implementation of the entire Islamic system. Hopefully, good attitude and services to customers will make Bank Muamalat a leader in quality Islamic banking without undermining the never-ending quest for the ultimate goal of gaining Allah’s blessing and pleasure. Thank you Regards Chairman Shariah Committee BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 35
      38. SENIOR MANAGEMENT Syed Alwi Mohamed Sultan Tuan Haji PeerMohamed Ibramsha Chief Operating Officer , Retail Business & Operations Executive Vice President, Corporate Services Division Haji Ismail Ibrahim Executive Vice President, Credit Management Division Adinor Mohamed Yunus Chief Risk Officer 36 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
      39. Hafni Mohd Said Executive Vice President , Finance Division Nor Hamidah Abu Bakar Abdul Razak Mohamed Ismail Senior Vice President, (Business Banking Division) Chief Technology Officer, ICT Division Azliza Abdul Rahman Executive Vice President, Human Capital Division BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 37
      40. SENIOR MANAGEMENT PROFILE TUAN HAJI PEERMOHAMED IBRAMSHA CHIEF OPERATING OFFICER , RETAIL BUSINESS & OPERATIONS P eerMohamed Ibramsha was appointed as the Chief Operating Officer for Retail Business & Operations since December 2016 and his current portfolio covers Operations Division, Consumer Banking Division, Affluent Banking Services, Card Business, Deposit and Wealth Management. He holds a Bachelor’s Degree in Accountancy and is also a member of Malaysian Institute of Accountant and a Fellow Certified Practicing Accountant (FCPA) with CPA 38 Australia. He has been with Bank Muamalat since November 2008 and before his current position, he was the Chief Financial Officer (CFO) of Bank Muamalat until October 2014 and Chief Operating Officer – Operations until November 2016. Prior to this, he was the CFO of Alam Flora Sdn Bhd for approximately 2 years and CFO of Glenmarie Properties Sdn Bhd and its group of companies for approximately 10 years. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
      41. HAJI ISMAIL IBRAHIM EXECUTIVE VICE PRESIDENT , CREDIT MANAGEMENT H aji Ismail Ibrahim joined Bank Muamalat as an Executive Vice President, CEO’s Office in April 2012 and was subsequently redesignated to Executive Vice President, Operations on 1 February 2013 with direct oversight of Business Process & Transformation, Credit Operation, Document Management, Compliance, Treasury Processing & Settlement and Trade Finance Departments. He was redesignated to Executive Vice President, Credit Management Division since 9 September 2014. With this designation he oversees Credit Operations, Collection & Recovery, Document Management, Customer Service, Call Centre and IT Project Management. Prior to joining Bank Muamalat, Haji Ismail was on the Board of Kuwait Finance House (Malaysia) Berhad as an Independent Non-Executive Director. He started his career in Agro Bank Malaysia Berhad (formerly known as Bank Pertanian Malaysia Berhad), and later moved to United Overseas Bank (Malaysia) Berhad and Affin Bank Berhad. In 1992, he joined Public Bank Berhad as the Director, Credit Operations overseeing credit evaluation, credit administration and loan recovery. He was also the pioneer staff in the development of Islamic banking in Public Bank Berhad and played a key role in the establishment of Public Islamic Bank Berhad. He was appointed as the Chief Executive Officer of Public Islamic Bank and remained on the post until his retirement in January 2011. Haji Ismail brings with him a wealth of 44 years of banking experience in areas of credit evaluation, loan recovery, credit administration, branch management and Islamic banking operation. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 39
      42. SENIOR MANAGEMENT PROFILE ADINOR MOHAMED YUNUS CHIEF RISK OFFICER A dinor Mohamed Yunus is currently the Chief Risk Officer with direct oversight of Risk Management , Credit Assessment and Retail Approving Center. He is the Chairman for Operational Risk Management Committee, Business Continuity Management Committee and attends the Board Audit Committee and Board Risk Management Committee. He also serves as a member of the Management Committee, Executive Risk Management Committee, IT Steering Committee, Asset Liability Management Committee and Management Audit Committee. As a permanent invitee of the Credit Committee and Investment 40 Committee, he provides the necessary risk oversight and assurance over the decisionmaking process. He has spent more than 20 years in the Treasury and Capital Markets at various banks in Kuala Lumpur and Jakarta. His last appointment was the Head of Group Treasury at Bank Pembangunan Malaysia Berhad, prior to joining Bank Muamalat in 2011. He holds a Bachelor’ of Business Administration (Accounting and Finance) and a Master of Business Administration from Loyola University, USA BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
      43. SYED ALWI MOHAMED SULTAN EXECUTIVE VICE PRESIDENT , STRATEGIC PLANNING AND SERVICES DIVISION S yed Alwi is the Executive Vice President, Strategic Planning and Services Division at Bank Muamalat. The Strategic Planning and Services Division’s scope covers strategic planning and support services covering all business aspects of the bank including consumer banking, business banking, treasury and investment banking with the responsibility to design, structure, innovate, implement, monitor and supervise all products, services, transactions and business offerings of the bank, including managing Shariah advisory services. The division has direct oversight of Strategy, Product Development and Innovation Department and Shariah Department. Syed Alwi also serves as a member of the Management Committee, Executive Risk Management Committee, Investment Committee, Management Audit Committee and Asset-Liability Committee (ALCO). He is the management representative in the Shariah Committee and has direct oversight on all Shariah governance matters. He also sits as a Board member of Muamalat Ventures Sdn Bhd, a wholly owned subsidiary of Bank Muamalat involved in private equity and investments. Prior to joining Bank Muamalat, Syed Alwi served as Managing Director and Head of Islamic Banking, Asia Pacific at BNP Paribas, Director of Islamic Origination at Standard Chartered Saadiq Malaysia Berhad and Vice President, Corporate Banking-Asia at The Islamic Bank of Asia Limited, Singapore. Syed Alwi has more than eighteen (18) years of working experience in the Islamic financial services industry, both as a consultant and a banker. He is an Accounting graduate and also holds a MBA-Islamic Finance (First Class) from the International Islamic University Malaysia (IIUM). BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 41
      44. SENIOR MANAGEMENT PROFILE HAFNI MOHD SAID EXECUTIVE VICE PRESIDENT , FINANCE DIVISION H afni Mohd Said is currently the Executive Vice President (EVP) of Finance Division, Bank Muamalat. He holds a Bachelor of Commerce (Accounting) from Dalhousie University, Halifax, Canada, and in 2008 he completed his Master in Business Administration (Finance) from Universiti Putra Malaysia. Prior to joining Bank Muamalat, Hafni started his working career with RHB Bank Berhad as a Management Trainee upon completing his bachelor degree in 1992, and his last position at RHB Bank Berhad was as the Vice President, Head of Islamic Banking & Subsidiaries Audit Department. 42 Hafni joined Bank Muamalat Malaysia Berhad in July 2010 as the Chief Internal Auditor and has been given a new role in Finance Division of the Bank since October 2014. The operational functions involving tax management, regulatory and financial reporting, management of General Ledgers and management accounts, BASEL and liquidity reporting, financial planning and analysis, and reporting and monitoring of the Bank’s strategies are currently under the purview of EVP, Finance. In December 2016, the functions of Treasury Processing and Settlement as well as Data Quality have also been assigned to report under the purview of EVP, Finance. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
      45. ABDUL RAZAK BIN MOHAMED ISMAIL CHIEF TECHNOLOGY OFFICER , INFORMATION COMMUNICATION TECHNOLOGY DIVISION A bdul Razak joined Bank Muamalat in May 2016 as the Chief Technology Officer, Information Communication Technology Division. Abdul Razak also serves as a member of Management Committee (MANCO) and Information Technology Steering Committee (ITSC). Abdul Razak started his career in Bank of America Singapore from 1982 till 1996. In 1996 he joined RHB Bank Malaysia (DCB Bank then) until 2015. During this period, he served as Head of Information Technology Division for about 8 years. His last position at RHB Bank Malaysia was Executive Vice President of Project Monitoring Office. He brings with him thirty four (34) years of working experience in the area of Information Technology (IT). BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 43
      46. SENIOR MANAGEMENT PROFILE AZLIZA ABDUL RAHMAN EXECUTIVE VICE PRESIDENT , HUMAN CAPITAL DIVISION P uan Azliza Abdul Rahman joined Bank Muamalat on 1st June 2016. She holds a Master of Arts in Human Resource Management from the University of Hull, United Kingdom in 1996 and obtained an Advanced Diploma in Business Administration (Transport) from Universiti Teknologi MARA (UiTM) in 1985. Azliza garnered 27 years of solid experience in Human Resources Management, covering HR Strategy and Communications, Total Remuneration Management, Succession Planning and Leadership Development. Prior to joining Bank Muamalat, Puan Azliza was the Group Head-Human Capital KLAS Group (now known as Pos Aviation Sdn Bhd), a subsidiary of DRB HICOM, from 2014 to 2016. She held the position of General Manager of Human Capital of DRB HICOM Group from 2012 to 2014 and was responsible in supervising Human Capital of subsidiaries in the sectors of 44 Manufacturing, Automotive, Properties, Services, Education and Aviation & Defence, spanning more than 60 companies and 60,000 employees. She was a member of the Group Risk Management Committee, OSH Council and Steering Committee for International College of Automotive Malaysia (ICAM) (now known as DRBHICOM University of Automotive Malaysia). From 1997 to 2011, Puan Azliza was the Head of Human Resources & Administration with Uni Asia Life Assurance Berhad (now known as Gibraltar BSN Life Berhad). Puan Azliza started her career in the automotive industry as a Management Trainee with Federal Auto Holdings Berhad in 1985 and was the Head Human Resources and Administration before she left the company in 1995. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
      47. NOR HAMIDAH BINTI ABU BAKAR SENIOR VICE PRESIDENT , BUSINESS BANKING DIVISION N or Hamidah graduated from International Islamic University, Malaysia with a Bachelor’s Degree in Economics. She has over 20 years experience in banking, with a career starting in RHB Bank Berhad Corporate Banking Division. She joined Bank Muamalat as Head, Syndication, a section that was set-up on her arrival where she successfully structured and arranged syndicated and club deals in excess of RM2.1 billion. She progressed to become the Acting Head of Business Banking Division in 2015 and was subsequently promoted to Head, Business Banking Division in 2016 and now oversees 5 departments, namely Corporate Banking, Regional & Commercial Banking, Trade Finance, Investment Banking and Business Development, Strategic Liaison and Cooperative. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 45
      48. INSIGHTS 46 46 BANK BANKMUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) • annual report 2016REPORT 2017 MALAYSIA BERHAD (6175-W) | ANNUAL
      49. CORPORATE HIGHLIGHTS COMMUNITY BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 47
      50. CHAIRMAN ’S STATEMENT The global economy in 2016 continued to experience uncertainty and volatility caused by fundamental shifts in political and social dynamics as seen in the US Presidential Election, referendum for UK to exit EU (Brexit) and China’s economic rebalancing initiatives. These events have added to the existing risks prevailing in the domestic financial sector which has been experiencing thinning margins, rising costs, heightened requirements on compliance, all of which have had a dragging effect on yields and returns. Malaysia’s economic growth in 2016 edged lower to 4.2% (2015: 5.0%), dragged down by slower growth prolonged low oil prices, lackluster global demand, volatile international financial markets and weakened ringgit exchange rate. Inflation rate remained at 2.1% in 2016, an impact from lower global energy and commodity prices, offsetting the effects from the government’s Goods & Services Tax (GST). Whilst the banking sector remained intact with strong capital and liquidity buffers, consumer sentiment was pessimistic and the business sector continued to be cautious in expanding their business capacity, reflecting weak economic factors and the depreciating value of the Malaysian Ringgit (MYR). Growth in the banking system’s loans and financing for 2016 had moderated to 5.3% (2015: 7.9%). To support liquidity in the domestic financial markets, the Statutory Reserve Rates (SRR) was reduced from 4.00% to 3.50% in February 2016 which helped to ease conditions in the interbank markets. Furthermore, monetary policy rate was adjusted to 3.00% in July 2016 from 3.25% to support the Malaysian economy while maintaining price stability. TAN SRI DATO’ DR. MOHD MUNIR ABDUL MAJID CHAIRMAN Dear Stakeholders, I am heartened to share with you the performance of Bank Muamalat Malaysia Berhad for the Financial Year ended March 31, 2017. Bank Muamalat has demonstrated its resilience during these trying times and delivered a respectable financial result despite the challenging domestic and global economic environment. 48 The Islamic financing sector continued to be resilient with total Islamic banking sector assets (including DFIs) growing by 11.4% to account for 26.8% of total banking system assets in 2016. Total financing also grew strongly by 15.7% to RM495 billion, accounting for 31.3% of total banking system. FINANCIAL PERFORMANCE While facing a dynamic and challenging operating environment in 2016, I am pleased to report that Bank Muamalat Malaysia Berhad nevertheless recorded a respectable performance with Profit Before Tax (PBT) edging up slightly by 2% from the year before at RM170.5million (FY2016: RM 167.2 million), on the back of total revenue of RM1.2 billion. Total assets remained above RM20billion with the financing base growing to RM14.9 billion during the financial year. In terms of capital adequacy measures, Bank Muamalat’s key capital ratio remained at a healthy level, with core capital ratio at 14.44% and total capital ratio at 16.68%, both of which remained above the industry average of 13.0% and 16.6% respectively. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
      51. I would also like to extend my gratitude to our customers for their continued support and loyalty . May Allah bless our efforts and provide us with His continued sustenance.” PROSPECTS Since October 2016, Bank Muamalat embarked on its 5-Year Strategic Business Plan 2017-2021 based on five main pillars – harnessing digital technologies, becoming the preferred investment solutions provider, positioning Bank Muamalat as the banker of choice for localised communities, being recognised as a socially responsible bank and winning at customer service excellence. We have outlined several action plans and initiatives that will be geared towards improving cost efficiencies, enhancing yield through asset quality improvements, identifying newer sources of fee-based income and diversification of sources of funding and liquidity. KEY DEVELOPMENTS For the year 2016, in promoting a cashless society, Bank Muamalat had successfully launched a unique Shariah compliant Waqf Debit Card named “Aisya”, after the Prophet Muhammad (SAW)’s wife, Saidatina Aisya. The card comes with the unique feature of Waqf where a portion of the fee income which the bank earns from the card utilisation will be channeled to the Wakaf Selangor Muamalat fund. It is thefirst-of-its-kind Waqf debit card to be launched, incorporating elements of social responsibility in financial transactions. This reflects Bank Muamalat’s innate belief system in championing socio-economic distributive justice and a sustainable environment. With the Malaysian economy expected to grow its 4%-5% for 2017 (GDP growth was 5.8% in Q2 2017), the domestic banking sector is expected to remain resilient though the operating environment remains intense and tough. As recognition of our initiatives, Bank Muamalat was awarded two prestigious awards during the year. In June 2016, Bank Muamalat was awarded with the “Best Private Bank (Malaysia) - Editor’s Award” held in Singapore by ClearView Financial Media, a leading news provider of business intelligence. This was recognition of our ground-breaking initiatives in growing our wealth management business and investment solutions. In October 2016, Bank Muamalat was awarded the “Pioneer of Islamic Banking Award 2016” by Global Islamic Finance Awards (GIFA) held in Jakarta, an event which was attended by His Excellency President Joko Widodo. The objective of GIFA is to highlight best practices in Islamic banking and celebrate the success of institutions in promoting social responsibility and commitment to Islamic banking. Bank Muamalat’s pioneering initiatives in launching the first ever Investment Account Platform (IAP) deal, the innovative CASA Tawarruq product, first ever Waqf-based Debit Card and efforts in promoting Muamalat Gold-i, were credited for this prestigious recognition. Bank Muamalat continued to expand its operations in ArRahnu business by enabling all branches within the bank’s branch network to offer Ar-Rahnu financial services to our customers. Additionally during the year, Bank Muamalat opened three new branches; one each in Tanah Merah and Gua Musang in Kelantan and one in Gemas, Negeri Sembilan. This reflects Bank Muamalat’s mission to be the banker of choice for the communities that we serve by enhancing accessibility to our target markets. ACKNOWLEDGEMENT In July 2016, Dato’ Ahmad Fuaad Mohd Kenali resigned from the board following his appointment as the Chief Executive Officer (CEO) of Proton Holdings Berhad which demanded more of his time and attention. We wish him the best in his new endeavour. In October 2016, Tn Hj Abdul Jabbar bin Abdul Majid retired as a member of the Board upon the end of his term. We have benefited from his vast experience and expertise in the fields of finance, accounting and audit. Our deep appreciation goes to him for his immense contributions. We have fortified the Board with one new director, En. Ghazali Hj Darman, whose tenure as Independent Non-Executive Director was effective beginning January 2017. We are fortunate to benefit from his experience of more than 20 years in the fields of technology and digital business consultancy. On behalf of the Board, I like to sincerely express thanks to the management team and all members of staff for their leadership, commitment and dedication in the mission to make Bank Muamalat the preferred Islamic financial institution and a premier financial services provider. I am counting on them for their continued contribution in the years ahead. I would also like to record my appreciation to my fellow Board members for their counsel, insights and support. I wish to thank the relevant authorities, in particular Bank Negara Malaysia, the Securities Commission and the Ministry of Finance for their guidance and assistance. I would also like to extend my gratitude to our customers for their continued support and loyalty. May Allah bless our efforts and provide us with His continued sustenance. Yours Sincerely, Tan Sri Dato’ Dr. Mohd Munir Abdul Majid BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 49
      52. FROM THE CEO ’S BLOG DATO’ HAJI MOHD REDZA SHAH ABDUL WAHID CHIEF EXECUTIVE OFFICER APR-16 TOUGH TIMES DON’T LAST, TOUGH PEOPLE DO There is an old Chinese saying that goes: “If you live with a problem long enough, it could eventually become a blessing.” Within every adversity in life, there is always a seed of an equivalent or greater benefit. Here is an extract from the book “Tough times don’t last, tough people do”. Another fabulous read I can recommend. “People are like potatoes. After they have been harvested they have to be spread out and sorted in order to get the maximum market dollar. They are divided according to size. It is only after potatoes have been sorted and bagged that they are loaded onto trucks. This is the method that all Idaho potato farmers use, all but one. One farmer never bothered to sort the potatoes. Yet he seemed to be making the most money. When asked what is his secret he said. “It’s simple. I just load up the wagon with potatoes and take the roughest road to town. During the eight mile trip, the little potatoes always fall to the bottom. The medium ones land in the middle while the big potatoes rise to the top.” That is not only true of potatoes. It is a law of life. Big potatoes rise to the top on rough roads, and tough people rise to the top in rough times. Tough times never last, but tough people do. 50 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 JUNE-16 AKU BENCI ABANG - A SHORT STORY DEDICATED TO BROTHER REDZUAN When Holy months of Ramadhan and Syawal come, often it is a time for us to not only step up our prayers but remember the unfortunate. The orphans, the handicapped, the single mothers and our parents are often the remembered ones but not usually the siblings, your own brother or sisters. The story of Abang Redzuan is a reminder for all of us to do this... We, at the Bank, were inspired to do this video after our trip to Langkawi 2 months ago to give a specially made wheelchair for him. Redzuan lost his mother in 2012, then the following year his dad passed away. Subsequently, he met with a motorcycle accident and is now paralysed from shoulder below. He and his siblings are taken care of by his grandmother and uncle, whose job is selling kueh. Despite his disability, Redzuan, 20, is a cheerful character, thanks to the motivation by people around him especially The Pink Squad Charity Team. When I asked him of his ambition, he said it is to complete his higher education. The wheelchair gift by Tabung Mawaddah is meant to help him be more independent and meet his goal. The story of Redzuan is one of determination and willpower in facing adversity. Not many of us, including myself could
      53. possibly face the challenges that Allah has given to him . Indeed he is an inspiration to all of us. The official video is released today on our Facebook - Bank Muamalat Malaysia Berhad. Please take time to not only LIKE it but SHARE this with friends and relatives during this holy month. We would like to see this video trending and go viral in the cyberspace. Many thanks to the Corporate Communications staff and The Tabung Mawaddah team who has eased the burden of Redzuan. Also a special mention to Saudara Saiful Nang and his team to make this first Social Media Project of us a reality. #AkuBenciAbang AUGUST-16 CASA TAWARRUQ | A GAME CHANGER The most basic service a bank can provide to members of the public is to act as a depository for their moneys. This is the essence of commercial banking. The public generally holds its deposits with banks in the form of accounts. The most basic account is the savings account and the current account. In Malaysia, under the previous Islamic Banking Act (IBA 1983), Islamic banks used to offer demand deposit accounts through two Shariah contracts, the Mudarabah and Wadiah Yad Dhamanah. However, with the coming into effect of the Islamic Financial Services Act (IFSA) in 2013, Mudarabah has been phased out from being offered as a deposit product whilst Wadiah Yad Dhamanah will be phased out by July 2018 (refer to the Shariah Policy Document on Qard dated August 3, 2016). Pursuant to that, I am pleased to note that the Product Development and Innovation Department together with the Deposit Department supported by all internal stakeholders especially the IT Department and Branch Operations have worked laboriously over the past 6 months to develop and launch an innovative current account and savings account product which is based on the contract of Tawarruq. These products are going to be simply called Savings Account-i Tawarruq and Current Account-i Tawarruq, however the simplicity elements end there. The Tawarruq-based CASA product is actually groundbreaking and quite remarkable for its diligent structuring and design that allows us to scale up our CASA strategy and strike a balance between commercial viability and Shariah and regulatory compliance. We can expect the Deposit Department to roll-out innovative deposit campaigns and promotions following the launch of this product and I encourage all of you to subscribe to and become ambassadors in promoting this product through friends and relatives and social media. Of course, please make sure that you consult with the respective product specialists or download the product disclosure sheet to understand the product design and features better. This is part of our on-going strategy to roll-out new, innovative and relevant products to the market to enable us to cater for and capture newer markets and customer segments while retaining existing customer base. The Tawarruq-based CASA will possibly be a game changer in the Islamic banking industry. I can confidently say that Malaysia has pioneered the Tawarruq-based CASA and Bank Muamalat is among the very few banks that has launched this product. Well done to the working committee involved in making this happen, now let’s make the best out of this new product launch! NOV-16 DIGITALIZATION - WHAT’S IN IT FOR ME? Did you know that our WHOLE lives are already digital? We used to use calculators, alarm clocks, compasses, radios, Walkmans, cameras, notebooks, diaries, torchlight, photo albums and prayer time calendars to make our lives easier. Now we carry ALL that in just ONE device! What are left are our wallets and purses! In order for us to be better as employees and thus more importantly, better care-givers to our families, we must try our very best to embrace technology in every way so that we can do better for our lives and our family. We are currently going through a transformation; to a digital era by changing processes that we use here in the Bank from manual to automation and digital solution of the future. Don’t worry, as we move forward on our digital journey, adequate training will be provided. We understand the importance of providing education and we assure that no staff will be left behind. With that in mind; Do you like shopping? I hear; in fact I know that many of us do! I do too. I am sure that at some point, some of you have looked at popular shopping websites and applications like MUDAH, Lazada and Zalora, just to name a few. Some of us buy and some of us just tengok-tengok sahaja. How would YOU feel if you had the chance to easily do your own tiny internet-based business, without disrupting your day-job? BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 51
      54. FROM THE CEO ’S BLOG Exciting, kan? answer the reasons as to why we are here for. Let’s make our lives better by participating in our new digital initiative. As for Arwah Intan Maizura, she always remarked that she is so lucky as she has the best husband she could ask for. She is buried now in a grave with her most loved one side by side, could you get anything closer than this...? Allahu Akbar, May the two of them be at peace in Barzagh. Intan Maizura ...Terima Kasih for your contributions to the Bank ....from all of us Goodbye God Bless...! Details coming soon! DEC-16 GOODBYE GOD BLESS..! The last weeks of December is always a busy period as we clear our desks to hastily take the final days of the year off and think of our New Year resolutions. A busy year indeed as we had a Business Plan to prepare and new regulations to meet. At the same time managing the year end turbulance where corporates try to scramble the best rates and some Banks attempt to window dress their Balance Sheet. Added to that is the unexpected water woes in the Klang valley that needed to be managed in each household. The whatsapp messages keeps pounding in till the noise becomes irritating. Finally, I decided to read them. Surprisingly, one of the many was from Rohaida in the HOD group that informed us a major accident had occurred in Slim River and it involved fatalities to our staff. Reading through the message it then hit to me that we had lost Intan Maizura, our Assistant Manager, Compliance. The heart sank and and the eyes drooled. The planned goodbye to 2016 had turned to an unplanned goodbye to a young and hardworking staff. To know that her husband who was from POS Malaysia also passed away made it even more sad as two staff from our DRB-HICOM family departed at the same time. Her family said they were on the way back from her dad’s Thalil arwah when a lorry crossed from the opposite side and hit their car head on at the NKVE. Such is Allah’s fate, one minute you are praying for the dead, and next you suddenly join them. It brings to reality the objective of life. What are we here for and where are we heading....? Whilst we spend our daily lives over work and family, how much time is spent towards pleasing the Almighty. If our lives were taken, how ready are we to face the hereafter and leave our loved ones to care for their own...? The departure of Intan Maizura would certainly put a pause in our lives as we really have not planned for an unexpected but certain event. As we say Goodbye to 2016 perhaps we should plan for the unexpected and be better citizens of the world and leave a mark by contributing to Islamic Banking industry, for this is the place where our expertise is and the arena where the good deeds would be counted in the Hereafter. This is our Jihad to make this world a better place, perhaps that could 52 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 We are currently going through a transformation; to a digital era by changing processes that we use here in the Bank from manual to automation and digital solution of the future.”
      56. CONSUMER BANKING CONSUMER BANKING IN FY2017 The past few years have proven challenging for the banking sector . The year 2016 was no exception. During this time of global economic uncertainty and domestic challenges, the sector experienced very modest growth. The introduction of new regulations together with funding pressures has compelled banks especially Consumer Banking to implement competitive pricing on deposits. At the same time, banks have had to intensify competitive pricing on financings due to the need to grow in a market that is constrained. REVENUE (IN RM MILLION) 655.4 611.6 555.8 476.3 434.8 Consumer Banking’s revenue increased by RM43.7 million or 7% driven by an 8% growth in funded income. The growth in funded income was primarily attributed to the 8% growth in financing income mainly from personal and mortgage products following the introduction of several initiatives in personal financing under 3PS in May 2016 and mortgage financing under SMART Mortgage in July 2016. A significant growth of 58.2% y-o-y in Ar-Rahnu income from RM6.7 to RM10.6 million in FY2017 has also contributed to the achievement of Non Funded Income. However, overall Non Funded Income for FY2017 decreased by RM1.4 million or 4% due to lower fee income from Wealth Management & Banking Transaction Services Commission. + 7% 0 FINANCING INCOME (IN RM MILLION) 575.1 2012 2013 2014 2015 2016 NON-FUNDED INCOME (IN RM MILLION) 655.2 511.1 399.7 444.9 36.7 33.98 36.6 35.2 31.42 + 8% 2012 54 2013 2014 2015 - 4% 2016 0 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 2012 2013 2014 2015 2016
      57. CONSUMER FINANCING MORTGAGE FINANCING Despite the challenging market conditions underpinned by intense competition and margin erosion , consumer banking experiences a slight financing growth of 1% YoY. With total assets of RM9.81 billion, consumer banking remain the biggest contributor to Bank Muamalat both in asset and as well as income portfolio. Mortgage financing continued to be the biggest portion of consumer banking financing asset with 53% share followed by personal financing of 37% share. In the property sector, the demand for properties experienced slower growth following various property cooling measures introduced by the Government, responsible financing guidelines issued by Bank Negara Malaysia (“BNM”) to promote sustainable household debts, and the subdued consumer sentiment as a result of the implementation of Goods and Services Tax (“GST”), higher cost of living and the weakened ringgit. Notwithstanding stiff competition, narrowing margins and stricter regulations, Bank Muamalat’s domestic lending to the residential property sector grew by 4% from RM5.01 billion to RM5.19 billion for FY2017, accounting for 53% of the consumer’s total financing asset portfolio. TOTAL FINANCING ASSET (IN RM MILLION) 9.71 7.02 9.81 8.97 8.16 Bank Muamalat remained focused on the lower risk mass market segment with the majority of the mortgage financings extended for financing of residential properties is costing between RM150,000 to RM500,000. Notwithstanding the market dynamics, we remained focused on our segment-led approach and continued to target the mass affluent segment through SMART 1Hutang product. This is a mortgage financing consolidation proposition that gives customers the control, convenience, and flexibility over their monthly financing obligations. By consolidating their various financings into this one mortgage account, customers now have the option of paying less each month, saving on total profit or financing costs, or having more cash in hand. + 1% 0 2012 2013 Personal 37% 2014 Auto 7% 2015 Ar Rahnu 2% 2016 MORTAGE FINANCING OUTSTANDING (IN RM MILLION) Others 1% 4.58 Mortgage 53% 3.08 5.00 5.19 3.85 TOTAL FINANCING RM9.81 BILLION + 4% 0 2012 2013 2014 2015 2016 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 55
      58. CONSUMER BANKING PERSONAL FINANCING AUTOMOBILE FINANCING Bank Muamalat ’s personal financing is mainly driven by Pembiayaan Pengurusan Kewangan (PPK) and Pembiayaan Pengurusan Persaraan (3P) products. Both products are tailored for staff of government agencies, statutory bodies, government linked corporations and large corporations. Bank Muamalat’s passenger vehicle hire purchase financing portfolio continued to shrink from last 3 years in line with Bank Muamalat’s strategy to balance the asset profile, improve financing yield with more selective financing acquisitions and maximising funding allocation. In FY2017, auto finance disbursements were only at RM84.3 million as compared to FY2016 at RM96.2 million. Total auto finance outstanding stood at RM694 million, 14% lower from RM803 million than recorded in FY2016. In recent years, new policies and guidelines introduced by BNM which are designed to reign in household debt have continued to shape the personal financing segment. For FY2017, total personal financing outstanding stood at RM3.63 billion, a 0.3% rise from FY2016 in line with Bank Muamalat’s adopting more stringent lending criteria which is consistent with BNM’s prudential measures. Bank Muamalat continued to drive volume and business through marketing initiatives and business collaborations with DRB Group Automotive business especially our national car, PROTON and several programmes with reputable and established big bike dealers to generate business referrals in order to achieve business growth. Bank Muamalat will continue to support personal financing products with marketing and awareness campaigns to ensure our competitive edge. Consumer banking will also work on developing personal financial education programmes to highlight the importance of managing personal finances. The automotive industry remained challenging with sluggish market sentiment affecting the business community as a result of global and domestic issues whilst consumer sentiment remain dampened, especially the middle and low-income groups, due to higher cost of living. Most car distributors have also announced imminent rise in vehicle prices in 2016 amid the weakening ringgit and higher cost environment. Despite the challenging operating environment, we believed that the execution of Bank Muamalat’s new business strategy will continue to drive domestic vehicle hire purchase financing growth. PERSONAL FINANCING OUSTANDING (IN RM MILLION) 3.18 2.71 3.62 3.63 2.97 AUTOMOBILE FINANCING OUTSTANDING (IN RM MILLION) 0.97 + 0.3% 1.05 0.94 0.80 0 0.69 2012 2013 2014 2015 2016 - 14% 0 56 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 2012 2013 2014 2015 2016
      59. AR RAHNU Ar Rahnu is a micro credit instrument for individual , small business operators and small traders with low credit standing particularly those in financial predicament who are in urgent need for cash and capital. Only gold and jewelry made of gold can be pawned. The Ar-Rahnu industry has been established since 25 years ago and is currently regulated by the Pawnbrokers Act which was enacted in 1972 and Malaysia government has regulated the Islamic Pawnbroking industry under Ar-Rahnu Act. In 2016, the total Islamic pawn broking transaction industry in Malaysia has grown almost RM5 billion a year. Bank Muamalat’s Ar Rahnu marhun outstanding grew by 63% to stand at RM131.0 million in FY2017 and contributed a significant growth to Ar Rahnu income which expanded 58.2% y-o-y or by RM10.6 million. Ar-Rahnu services were available at 47 branches out of 62 Bank Muamalat’s branches for FY2017. The acceptance of Gold Bar for Ar Rahnu services in FY2017 has also contributed to the significant growth of overall Ar Rahnu Marhun and Income. Available to locals and foreigners, Muslims and Non-Muslims alike the loan tenures could range from 6-18 months. Borrowers have a choice to either repay of safekeeping fee via lump sum or by monthly installments. Currently, the margin of loan is up to 80% of the value of the gold. AR RAHNU MARHUN OUSTANDING (IN RM MILLION) AR RAHNU INCOME (IN RM MILLION) 131.0 10.6 8.07 82.2 80.2 50.1 6.1 57.1 4.06 + 63% 0 2012 2013 6.7 2014 2015 2016 + 59% 0 2012 2013 2014 2015 2016 Moving forward, Bank Muamalat plans to enhance the business model of the existing Ar Rahnu business by exploring into a one-stop gold centre, which would enable customer to buy and sell gold bars and to do Ar Rahnu transactions online. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 57
      60. BUSINESS BANKING DIVISION Business Banking Division (“BBD”) revamped its strategy in FY2017 to reprioritise and focus on short term facilities, with Trade Finance and Forex facilities in particular as well as to reposition Bank Muamalat as the preferred choice within the local community. The shift in strategy included concentrating on shorter term facilities with better asset quality and higher yields and non-fund based income in line with the Bank’s funding strategy. This resulted in improvements in overall fee income and improved overall profitability. This was a commendable achievement given the continuing challenges arising from weak economy in FY2017, which caused Bank Muamalat to remain selective in its new financing and concentration on customers and industries. FOCUS SHIFT FY2017 represented a major shift in BBD’s focus towards expanding its Trade Finance and Forex business. The strategies implemented to achieve this included balanced marketing of funded and non-funded products, staff training to improve proficiency in trade products and to develop trade specialists, synergising marketing with regional offices to improve reach and effectiveness as well as marketing to Bank Muamalat’s wider holding group customers. The improvement arising from the strategy was reflected by a rise in Trade Finance Income by 26% to RM7.3 million in FY2017 compared to RM5.8 million in FY2016 and a highly commendable 57.7% increase in Fee Income to RM15.3 million in FY2017, rising from RM9.7 million in FY2016. BBD plans to continue the focus on Trade Finance and Forex alongside its traditionally profitable financing business in FY2018 and beyond. FINANCING ASSETS AND INCOME YIELD In consideration of economic conditions and Bank Muamalat’s less aggressive stance on financing in FY2017, BBD achieved praiseworthy performance with an 8% increase in revenue to RM289 million, up from RM268 million in FY2016. From the revenue, financing income rose 6% from RM257.9 million to RM274 million in FY2017 while total fee income was RM15.3 million, up 57.7% as aforementioned. The revenue was made from total performing assets which finished at RM5.23 billion as at FY2017, up 6.3% from RM4.92 billion as at FY2016. This showed that despite the lower increase in financing assets compared to FY2016, yield based on gross average monthly financing assets continued to improve to 5.57% in FY2017, reflecting improvements in the profitability of the financing assets as a result of the BBD’s strategies. Previously in FY2016, there was a 10% increase in financing assets; however, the yield was lower at 5.45%. Financing assets have been improving since 2013, with a compounded annual growth rate of 10.1% p.a. In FY2017, the increment was mainly due to new disbursements from bilateral relationships and some big ticket syndicated financing disbursements. Financing income has also been rising with improvements in yield since FY2016. Notwithstanding, BBD’s focus on trade financing and nonfund base revenue has complemented the growth and not resulted in hampered growth in financing assets. BBD continues to actively look for financing opportunities in infrastructure, project and contract financing in order to book quality long term assets with minimal risk of noncompletion, while also having a keen eye for customers in the manufacturing, education, healthcare and consumer (food and beverage) sectors. FINANCING ASSETS AND FINANCING INCOME (IN RM MILLION) 6,000 5,229 5,000 4,483 4,342 4,000 3,830 3,557 FINANCING ASSET FINANCING INCOME 3,000 2,000 1,000 214 0 58 2013 185 2014 201 2015 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 258 2016 274 2017
      61. DEPOSIT BASE BBD ’s total deposit base experienced a contraction in FY2017, shrinking 17% from RM3.04 billion to RM2.52 billion in FY2017. The main factors for this were reduction by 31% in Corporate Current Account and Savings Account (“CASA”) deposits in FY2017 and contraction of 50% in General Investment Account (“GIA”) deposits and unforeseen decrease in Commercial Fixed Term Accounts (“FTA”), which dipped from RM424 million to RM183 million. Nonetheless, Bank Muamalat continued to support BBD by promoting the Bank’s Corporate Internet Banking, cultivating relationships with customers and assisting them with their cash management. also mostly focused on Finance, Insurance, Real Estate and Business Services (54.3%), followed by Transport, Storage and Communication (15.5%) and Construction (11.0%). As with Corporate and Commercial Financing, SME Retail concentration was also in Finance, Insurance, Real Estate and Business Services (30.1%), with Construction (23.0%) and Wholesale and Retail Trade (20.4%) coming thereafter. For Corporate Banking, the real estate exposure increased to 35.7% of total financing assets in FY2017, up from 27.0% in FY2016. Although there is some concentration in the Finance, Insurance, Real Estate and Business Services sector, BBD’s policy is to be selective in its real estate exposure, concentrating mainly on the lower risk affordable residential and township properties in high growth regions such as the Central Region and Penang. Increase in real estate exposure in FY2017 included progressive disbursements under existing exposures booked in previous financial years. FINANCING SECTORS As with FY2016, the main sectors in BBD’s Corporate Financing were Finance, Insurance, Real Estate and Business Services (40.4%), Education, Healthcare and Others (16.3%) and Manufacturing (13.5%). Commercial Financing was DEPOSITS (IN RM MILLION) DEPOSIT (CA) DEPOSIT (FTA) DEPOSIT 3,500 3,044 3,000 2,536 2,500 2,524 1,842 2,000 1,738 1,789 1,728 1,637 1,500 1,315 1,025 1,000 500 0 703 1,202 887 798 474 2013 2014 2015 2016 2017 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 59
      62. BUSINESS BANKING DIVISION Business Banking Division Business FinancingBanking SectorsDivision Financing Sectors FINANCING BY SECTORS Construction Manufacturing Transport , Storage and Communication Finance, Insurance, Real Estate and Business Services Primary Agriculture Education, Health and Others Mining and Quarrying Wholesale and Retail Trade and Restaurants and Hotels Electricity, Gas and Water Supply Sector NEC UTILISATION RATE AND ASSET QUALITY Despite the utilisation rate of BBD deteriorating to 74% in FY2017 compared to 85% in FY2016, Bank Muamalat managed to improve the quality of utilisation as shown by the higher yield of 5.57%. Non Performing Financing (“NPF”) ratio has been on a reducing trend since FY2014 as BBD has been giving high importance to asset quality over the past few financial years. NPF was 1.97% in FY2017, Rate and Asset Utilisation Quality Rate and Asset Quality down from 2.72% in FY2016 while the delinquent ratio has been improving since FY2013 to 0.14%. and yield from existing and new accounts. The focus sectors include construction and infrastructure, manufacturing, education, healthcare and consumer (food and beverage) sectors, with a keen interest in exporters as Bank Muamalat looks to increase its holding in foreign currencies, in line with the current economic conditions. This strategy is expected to boost profitability, protect BBD’s current portfolio against delinquencies and maintain low NPF ratios. e utilisation rateDespite of BBDthe deteriorated utilisation rate to 74% of BBD in FY2017 deteriorated compared to 74% to 85% in FY2017 in FY2016, compared Bank to 85% in FY2016, Bank managed to improve Muamalat the managed quality of to utilisation improveas theshown quality byofthe utilisation higher yield as shown of 5.57%. by the Nonhigher yield of 5.57%. Non MOVING FORWARD g Financing (“NPF”) ratio BBD hasFinancing been on(“NPF”) a reducing ratiotrend has been since on FY2014 a reducing as BBDtrend has been since giving FY2014 as BBD has been giving ForPerforming FY2018, will continue to concentrate on Trade Forexthe andpast non-fund based products alongside tance to assetFinancing, quality high importance over to asset few financial quality over years. theNPF past was few1.97% financial in FY2017, years. NPF down was from 1.97% in FY2017, down from cautious and selective expansion while balancing risks Y2016 while the 2.72% delinquent in FY2016 ratio while has been the improving delinquentsince ratioFY2013 has been to improving 0.14%. since FY2013 to 0.14%. versus returns. Although this may lead to minimal financing assets growth, BBD will continue its focus on asset quality and efficient use of capital and look to improve revenue 60 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
      63. BUSINESS BANKING DIVISION NON PERFORMING FINANCING (IN %) 4.50% 4.40% 4.00% 3.50% 3.00% 3.20% 2.90% 2.50% 2.72% 2.00% 1.97% 1.50% 1.00% 0.50% 0% 2013 2014 2015 2016 2017 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 61
      64. TREASURY CAPITAL MARKET Treasury & Capital Markets performed reasonably well in a year that was fraught with challenges. Global financial markets continued to be volatile amid uncertainty over the policy direction of the U.S. Federal Reserve. Despite falling revenue from a weaker commodities market and concerns over political uncertainty, Malaysia’s economy maintained a steady growth rate in 2016. US political uncertainty following President-elect Donald Trump’s win and fears over the impact of an expected US rate hike pressured the ringgit late in the year, with the currency coming close to a 19-year low in late November, when its value fell by 6.5% to RM4.46:USD1. Bank Muamalat’s wholesale funding costs moderated from the previous year after a cut in the overnight policy rate (OPR) by 25 basis points in July 2016. The Bank’s liquidity position saw significant improvements in the year under review with liquidity coverage ratio (“LCR”) well above regulatory levels and net stable funding ratio (“NSFR”) poised to meet requirements by end of 2017. The local yield curve gapped up significantly after the unexpected results in the US election but has since subsided into the 1st quarter of 2017 although the belly of the curve is still at higher levels compound to 1st half 2016. Despite this backdrop of volatility, capital gains from sale of securities managed to increase 73% year on year. 62 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 Liquidity and capital management was a major focus for the Asset Liability Management (“ALM”) function within Treasury particularly towards compliance of NSFR and MFRS 9 by 2018. Key initiatives completed were as follows:• Enhanced/revamped incremental product pricing methodology. • Issuance of Subordinated Sukuk and Senior Sukuk amounting to RM250.0 million and RM505.0 million. • Cagamas funding. OUTLOOK FOR 2017/2018 After a lackluster outturn in 2016, global economic activity is projected to pick up pace in 2017 and 2018, especially in emerging markets and developing economies. However, there is a wide dispersion of forecasted outcomes around the projections, given uncertainty surrounding the policy stance of the U.S. administration and its global ramifications. Improving commodity prices and a weakened Ringgit should be supportive of the Malaysia economy this year with GDP expected to expand around 4.8%. We expect Bank Negara Malaysia (“BNM”) to maintain an accommodative stance in its monetary policy but with firmer bias into 2nd half 2017 in tandem with expected tightening by the Federal Reserve. Our strategy of ‘short duration’ and emphasis on funding and asset liquidity will be maintained while trading activities will continue to focus on customer flows.
      65. DEPOSITS FY2017 saw a mixed performance of Bank Muamalat ’s core deposits during the 1st and 2nd halves of the period under review. For the first 6 months, Current Account (“CA”) and Fixed Term Account-i (“FTA-I”) registered a drop of 19.06% and 0.67% respectively. Savings Account (“SA”), on the other hand, increased by 4.08%. The deposit performances improved in the 2nd half period, albeit modestly with CA narrowing the decreasing gap to 2.78% while SA continued to show increment of 1.67%. Overall, core deposits registered a decrease of 4.21% from the opening balance of FYE2016/2017, i.e. from RM15.911 billion to RM15.242 billion. Several factors can be attributed to the above performances. On the macro level, rate wars among competitors continued to dominate the deposit landscape of both the private and government sectors. Replacement of Wadiah-based products to Mudharabah was completed in September 2016, has rendered CASA to be vulnerable to attritions for the first 6 months of period under review CORE DEPOSITS (IN RM BILLION) CASA DEPOSITS (IN RM BILLION) FYE FYE 16/17 15.24 15/16 15.91 14/15 13/14 14.92 14.53 12/13 11/12 10/11 14.53 13.52 12.89 16/17 4.23 15/16 4.78 14/15 4.77 13/14 4.26 12/13 3.77 11/12 3.73 10/11 3.43 2 4 6 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 63
      66. DEPOSITS CORE DEPOSITS COMPOSITION 20 % 72% TOTAL CORE DEPOSITS RM15.24 BILLION Execution of several initiatives was focused on both private and government segments during the period under review to mitigate the anticipated decline of CASA balances. On the government market, we continued to provide value added services to selected agencies in order to strengthen our presence there and to alleviate stiff competitions from other financial institutions aiming a bigger piece of the pie. A total of 6 marketing initiatives were introduced during the period under review, encompassing campaigns and promotions for all product suite. For FTA-i, the Wang Besar! 3 and 4 series were launched in May 2016 and September 2016 respectively and managed to acquire a total placement of RM814.55 million from the combined target of RM450 million. CASA, on the other hand, offered a different scenario. In relation to the hurdles faced by these products, initiatives performed under the Wadiah contract ambit were limited to those not in contradictions with Islamic Financial Services Act (“IFSA”) guidelines, such as Staff Deposit Acquistions, Project Hijrah and Muamalat Mesra Masjid. Save n Win, a Savings Account campaign was successfully introduced in January 2017, upon the stabilisation of the new CASA Tawarruq product launch. 64 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 FTA 8% Current Account Savings Account We anticipate that additional account openings will follow suit in the following financial years with our consistent service and rapport maintenance. Among them are the contributions from the government sector that will be on the opening of new operating accounts by Jabatan Akauntan Negara Malaysia for some of their top ministries. Our deposit strategies will remain intact for the next financial years, i.e. to create outstanding deposit value propositions that meet our targeted market requirements while minimizing deposit attrition through continuous programs of innovative deposit campaigns, creative marketing productions, improvised and new fin-tech development as well as new market penetration. Retail deposit will continue be the main focus of growth, to reach a composition level from 27% to 43% in 5 years time, and thus being the catalyst for driving Bank Muamalat’s overall deposit growth of RM5.9b or 36.6% within the period.
      67. WEALTH MANAGEMENT Wealth Management Department continued its impressive performance from the previous year and on 16 March 2017 took home the highly prestigious and sought after global recognition award for Best Bancassurance Product awarded by Timetric at the 8th Annual Retail Banker International Asia Trailblazer Summit & Awards 2016. Bank Muamalat (triumphed over) excelled above 19 other nominees including the likes of DBS Bank, Standard Chartered and Maybank Group Malaysia to win the award. This recognition is a proof of Bank Muamalat’s capability in providing the best product in fulfilling the needs of its customers and the market at large. Keeping our ears to the ground and understanding customer’s needs is the secret to achieving great heights and competing with larger financial institutions. This award recognises the initiative by the Wealth Management Department in developing the revolutionary M-Tiara Golden Age bancatakaful product which addresses the Takaful needs of senior citizens aged 50 and above. This Takaful plan is also the first in the industry which incorporates a Waqaf feature that provides the option for Muslim clients to assign a portion of their sum covered for Waqaf purposes, thereby allowing for continuous charitable endowment even after one’s demise. This product is exclusively distributed by the Bank and was jointly developed by Bank Muamalat Malaysia Berhad and Great Eastern Takaful Berhad. On 24 March 2017, En Mohd Iqbal Bin Ahmad of Sungai Petani Branch and En Muhammad Hakimi Bin Mat Johor of Seri Manjung Branch brought further pride and honour to Bank Muamalat by being named as the country’s CHAMPION and 1st RUNNER UP respectively for the prestigious Top Bancatakaful Producer (Bank Sales Staff Category) Award at the Malaysian Takaful Association (MTA) Star Nite Awards ceremony. The MTA Awards night is an annual event organised to recognise Top Performing individuals and organisations What counts is what you do with your money - Merton Miller Life is a daring adventure or nothing - Helen Keller that have weathered numerous challenges and emerged victorious in the Takaful Industry. It is an accolade desired by many in the industry and winning this prestigious award is an attestation that Bank Muamalat is committed to drive and grow the Islamic Wealth Management sector and have succeeded in grooming up our people to the national level. Overall, the Wealth Management business delivered RM6.03 million fee income as at March 2017. On another impressive note, Bank Muamalat’s closed the year by successfully realising sales of 263/kg of Muamalat Gold-I with a corresponding income of RM2.4 million. Total gold sold since inception in January 2016 stands at 335kg, corresponding to an approximate value of RM61.0 million and an income of RM3.0 million. Moving forward, we foresee Wealth Management Department as an important contributor to the bottom line of the bank through its increasing fee based income. To this end, the department will continue to reinforce and develop its range of products to meet the changing demands of our clients. In the pipeline and expected to come on board in the next financial year, is the setting up of Bank Muamalat’s first Affluent Banking Center to cater to the affluent, high net worth market. We are extremely excited at this prospect as this will be the establishment of the industry’s first Islamic Affluent Banking Center and anticipate a substantial contribution to Bank Muamalat’s deposit based and fee based income. The department is also working closely with major players in the market to strengthen our estate planning product offerings to ensure comprehensive advisory platform for all walk of life. The aim of the present Wealth Management and Affluent Banking Department is to set a milestone of Islamic Financial Advisory era at all. Bank Muamalat branches that hopefully will be the key factor to put forth Bank Muamalat in the mind of the present and future customers who are concerned on managing their assets till eternity. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 65
      68. INVESTMENT BANKING DEPARTMENT The investment banking arena remained extremely competitive throughout the financial year with a subdued economic and business environment resulting in limited opportunities , mostly emanating from the public sector, Government-linked Companies (“GLC”) and large-cap corporate sectors. Given the traditional dominance of the larger local and foreign players in this space, Investment Banking Department (“IBD”) faced considerable challenges in establishing deal flows to further our aspiration to become one of the leading Islamic investment banking houses in the country. Notwithstanding, IBD managed to turn in commendable performance from an Islamic syndicated financing mandate for a telecommunications infrastructure services provider, the conclusion of the maiden issuances of senior and subordinated sukuk programmes jointly arranged by Bank Muamalat, underwriting the initial public offering of Perak Transit Berhad (“PTB”), an integrated transportation terminal and public transportation services provider based in Ipoh, Perak on the ACE Market of Bursa Malaysia as well as income from additional investments in Ar-Rahnu joint venture business. Our subsidiary, Muamalat Venture Sdn Bhd, a registered venture capital management corporation with the Securities Commission Malaysia, is one of the substantial shareholders and promoters of PTB. As at 31 March 2017, the value of our investment in PTB has appreciated approximately by 73% since the inception of our investment. 66 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 During the financial year, IBD had also embarked and played a meaningful role in fostering the Bank Muamalat’s initiatives on Investment Account Platform (“IAP”). IAP, which was officially launched by Bank Negara Malaysia on 17 February 2016, is a centralized multibank platform initiated by six Malaysian Islamic banking institutions. IAP allows companies to raise fund for their ventures, while providing opportunities to the investing public and institutions to participate in the growth of the ventures. Bank Muamalat is pleased to be a part of this important strategic initiative and was the first sponsoring bank having launched the fund-raising of Perak Transit Berhad on IAP’s web-based investment platform. The venture debuted in April 2016 (prior to PTB’s listing) and successfully raised RM10.0 million for its working capital requirements. Rated by RAM Solutions Sdn Bhd, the 3-year tenured investment via Wakalah Restricted Investment Account (WRIA) currently generates return averaging more than 6.0% with prompt payments of principal and profits. Moving forward, given the challenging market environment, IBD will continue to focus on our key corporate relationships for deal flows in project and syndicated financing transactions which will increase our portfolio of financing assets and bring in attractive fee-based income, while remaining on the lookout for good investment potential and opportunities. IBD will also continue to focus on steering and supporting the IAP initiative while diversifying its revenue base with new income streams.
      69. MUAMALAT INVEST SDN BHD Muamalat Invest Sdn Bhd (“MISB”), a wholly owned subsidiary of Bank Muamalat Malaysia Berhad (“Bank Muamalat”), was incorporated on 22 April 1996 with a paid up capital of RM10 million. MISB was accorded an Islamic Fund Management license in September 2010. As at March 2017, MISB through its series of Islamic wholesale funds has captured around 9% of the total Islamic wholesale fund Net Asset Value (NAV) based on Summary of Statistic-Wholesale Funds in Malaysia issued by Securities Commission Malaysia. MISB provides Shariah compliant management services which include: MISB continues to embark on efforts to diversify asset classes for products offered to cater to the Islamic wholesale institutional and corporate investors. investment • Management of discretionary and non-discretionary mandates for asset classes covering equity and sukuk; and • Provision of wholesale fund products for investments in various asset classes i.e. Islamic money market instruments, equities and sukuk. For FY2017, MISB continued to grow its Assets under Management (AUM) to approximately RM3.19 billion from RM3.12 billion in FY2016. This translates to an increase of approximately 2% year-on-year. Investments also continued to be made into building infrastructure and resources in order to position itself as a key player in the wholesale Islamic capital market space. NOR AHMADI SULONG CHIEF EXECUTIVE OFFICER BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 67
      70. SHARIAH SHARIAH DEPARTMENT ACTIVITIES FOR FY 2017 68 1 . SHARIAH ADVISORY & SECRETARIAT SECTION: The role of Shariah Secretariat in performing secretariat function to the Shariah Committee (“SC”) comprises of providing input and support to the SC which includes coordinating meetings, compiling proposal papers, disseminating Shariah decisions to relevant stakeholders, engaging with relevant parties who seek further deliberations on issues from the SC and ensuring the welfare of SC members is accordingly served. 2. RESEARCH & DEVELOPMENT SECTION: The role of Shariah Research is to perform in-depth research and studies on Shariah matters, including providing day-to-day Shariah advise and consultancy to relevant parties, especially those involved in the product development process. For FY2017, a total of 16 research papers have been completed comprising Shariah issues, product development and special request by Shariah Committee and other parties. In terms of Shariah advisory and consultancy roles, the functions are to assist and provide advice to the relevant parties based on the decision of the SC, includes preproduct approval, operation process, documentations, activities of Business Unit, Support Unit, the Bank’s subsidiaries and external clients (upon request). Additionally, as to comply with Shariah requirement on Bank Muamalat’s new products, our section have reviewed and prepared the Summary of Gap Analysis on the Policy Documents which were issued by BNM. Among others were on wakalah, kafalah, hibah’, qard, wadi’ah ijarah and wa’d. During FY2017, several initiative have been made. We have developed and enhaced several digital resources for quick access of SC’s decisions which are Shariah Decision Database (SDD), Product Brief Info (PBI) and Shariah Non-Compliant List (SNCL). We have also formulated a new initiative on Online Signing for relevant and urgent papers. Moreover, in collaboration with Human Capital Division and Customer Service Department we have also conducted more than 30 series of Shariah training and awareness to the staff for branches, headquarters, Takaful Specialists and other related institutions. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
      71. Collaboration : Funds collected are channelled towards the education and health sectors. www.wakafselangor.muamalat.com.my BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 69
      72. CALENDAR OF EVENTS 2017 70 DATE DETAILS EVENTS & CSR 16 Apr 16 Golf Muhibbah with ATM 29 Apr 16 Reflex & Donate 03 May 16 Integrity Day 06 May 16 Mother's Day Programme 08 May 16 Branch Launch @ Tanah Merah 10-12 May 16 GIFF 2016 27 May 16 Reflex & Donate 29 May 16 Branch Launch @ Gua Musang 01 Jun 16 Lambaian Kaabah 2016 07 Jun 16 Program Ramadhan - Insan Super 12 Jun 16 Iftar with Underprivileged Children, Special Children and Mahaad Tahfiz @ SDCC 14 Jun 16 Program Ramadhan - Komunikasi 16 Jun 16 Iftar with Mahaad Tahfiz and homeless @ Masjid Jamek 20 Jun 16 Father’s Day 24 Jun 16 Reflex & Donate 28 Jun 16 Bubur Lambuk Distribution 20 Jul 16 Corporate Raya & Debit Card Launch 25 Jul 16 Bank Muamalat Raya (Staff ) 28 Jul 16 Signing Ceremony between Bank Muamalat Malaysia Berhad and Koperasi Perumahan ATM 29 Jul 16 Reflex & Donate 03 Aug 16 Nostalgia Bank Bumiputra 25 Aug 16 Branch Launch @ Gemas 26 Aug 16 Reflex & Donate 28 Aug 16 Signing Ceremony : UNIMAP 21-22 Sep 16 OSH Day 23 Sep 16 Reflex & Donate 10 -11 Oct 16 Proton Test Drive 13 Oct 16 Bank Muamalat ISO CERT Award 18 Oct 16 Donation by Wakaf Selangor Muamalat to PERKIM Banting 19-20 Oct 16 “Mari Mengaji” Briefing 01 Nov 16 “Mari Mengaji “with Al Baghdadi 06 Nov 16 Cooler Box contribution presentation to Glenmarie Golf & Country Club 08 Nov 16 Motorcycle donation Yayasan Amal Malaysia and Van Donation to mosque at Tanah Merah & Kedah 15 Nov 16 Muamalat Mentorship Programme with UITM 21-23 Nov 16 Kuala Lumpur Islamic Finance Forum 2016 30 Nov 16 Back 2 School Staff 07 Dec 16 Back 2 School Orphanage BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
      73. 14-16 Dec 16 Waqf Workshop 11 Jan 17 Ceramah Perdana Maulidur Rasul 13-15 Jan 17 Karnival Kewangan 2017 14-15 Jan 17 DRB-HICOM Autofest 15 Jan 17 MUAMALAT JOM KAYUH “#fitmuamalat” 17 Jan 17 Scale up Talk : Selling Your Product 24 Jan 17 Chinese New Year Dinner 26 Jan 17 CSR Workplace : Distribution of Karrimor Bag 19 Feb 17 Muamalat Jom Kayuh bersama Amy Search 25 Feb 17 Dinner with Akif student @ SDCC 10 Mar 17 Ziarah Mahabbah, Donation by Wakaf Selangor Muamalat to Ranau 13 Mar 17 Signing Ceremony with RISDA 14 Mar 17 Visit: University of Arizona 25 Mar 17 Launch of Muamalat Sports Recreational Club-Southern BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 71
      74. Placing 1st Prize Mohd Fazli Khalid SRC BMMB 5 2nd Prize Mohd Nizam Mahat SRC BMMB 3 SRC BMMB 3 SRC BMMB 3 3rd Prize by number Mohdof Fariq CORPORATE Category fish Ismail caught RESPONSIBILITY 4th Prize 5th Prize Mohd Jamal Arif Ahmad Fadzil Mohd Saidi Group KESAN Name Weight2 Placing 1st Prize Mohd Fazli Khalid SRC BMMB 5 2nd Prize Mohd Nizam Mahat SRC BMMB 3 SRC BMMB 3 SRC BMMB 3 KESAN 2 Corporate Social goes Fariq hand in hand with 3rdResponsibility Prize Mohd Ismail Islamic banking or ethical banking and it is defined as corporate 4thand Prize Mohd Jamal initiative to assess take responsibility for theArif company ’s effects on the environment on Fadzil social welfare. 5th Prize and impact Ahmad Mohd The Saidi term generally applies to the company’s effort that goes beyond what may be required by regulators or environmental protection groups. Corporate social responsibility may also be referred to as “corporate citizenship” and can involve incurring short-term costs that do not provide an immediate financial benefit to the company, but instead promote positive social and environmental change. At Bank Muamalat Malaysia Berhad, our focus for year 2016 is“Prihatin Muamalat” and this is reflected in our Corporate Social Responsibility for the year 2016. CR @ THE WORKPLACE FISHING CONTEST ORGANISED BY KESAN Bank Muamalat Sports Club (SRC BMMB) participated in a fishing contest organised by Kelab Sukan Jabatan Akauntan Negara Malaysia (KESAN) and Bank Muamalat managed to secure 7 prizes out of 10 prizes. The event was held at Kolam Memancing Taman U, Seri Kembangan on 28 February 2016 with 60 participants. En. Mohd Ilham bin Yusak from KESAN is the winner who managed to catch 3.65kg fish. The result of the contest is as follows:CATEGORY WEIGHT PLACING BY NAME GROUP WEIGHT KESAN 3.650 Placing Name Group 1st Prize Mohd Ilham bin Yusak 2nd Prize Anuar Ridzaudin Hassan SRC BMMB 3.410 1st Prize Mohd Fazli Khalid SRC BMMB 3rd Prize Mohd Nizam Mahat SRC BMMB 2.850 2nd Prize Mohd Nizam Mahat SRC BMMB 4th Prize Raub Osman KESAN 2.545 3rd Prize Mohd Fariq Ismail SRC BMMB 5th Prize Mohd Azuan Ahmad SRC BMMB 2.440 4th Prize Mohd Jamal Arif SRC BMMB 5th Prize Ahmad Fadzil Mohd Saidi KESAN CATEGORY BY NUMBER OF FISH CAUGHT PLACING NAME 72 Category by number of fish caught GROUP WEIGHT 1st Prize Mohd Fazli Khalid SRC BMMB 5 2nd Prize Mohd Nizam Mahat SRC BMMB 3 3rd Prize Mohd Fariq Ismail SRC BMMB 3 4th Prize Mohd Jamal Arif SRC BMMB 3 5th Prize Ahmad Fadzil Mohd Saidi KESAN 2 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
      75. Day MALAYSIA RAYA 2016 - JOM BALIK KAMPUNG BANKMother ’s MUAMALAT 6 May 2016, HQ Bank Muamalat, Bank Muamalat organized a CR programme to MOTHER’S DAY BANKhave MUAMALAT MALAYSIAday RAYA 2016 - JOM BALIK the Menara Bumiputra, 25 Day. July 300 2016 - Every year, we a special to celebrate celebrate Mother’s rosesBumiputra, were distributed to all mothers in Bank Muamalat as 6 May 2016, Bank Muamalat Menara KAMPUNG joyous Hari aRaya occasion with Bank Muamalat HQ work staff, members CR appreciation programme to celebrate Mother’s Day. Menara 25 and JulyBoard 2016 - Every year, the and aorganised symbol of towards their sacrifice and Bumiputra, hard another 100 roses 300 roses were distributed to all mothers in the Bank bank have a special day to celebrate the joyous Hari Management. The to theme of thispublic year’s event, which was celebrated on 25 July 2016, were distributed thetowards general Melaka. as a symbol of appreciation their sacrificenear and Jalan Raya occasion with the HQ staff, Board members and was Jom Balik Kampung. was up in to hard work and another 100 rosesEverybody were distributed to the dressed Management. Thebeautiful theme of this traditional year’s event, wasoutfits “Jom public near Jalan Melaka. Balik Kampung”. Everybody was dressed up in beautiful matchgeneral the theme. traditional outfits to match the theme. Food stalls were creatively decorated by the staff based Food stalls were creatively decorated by the staff based on the culture and prominent on the culture and prominent features of each state within Malaysia. Tasty and western foods of each state within Tasty traditional andtraditional western foods were at, features Bank Muamalat organized a CR Malaysia. programme to MUAMALAT BANK MALAYSIA RAYA 2016 - JOMinBALI were in abundance. Everyone looked radiant with happy at,were Bankdistributed Muamalat ain CR programme to abundance. Everyone looked radiant with happy and faces smiling faces everywhere. es to organized all mothers Bank Muamalat as and smiling everywhere. es distributed to hard all mothers in Bank Muamalat as ds were their sacrifice and work and another 100Menara roses Bumiputra, 25 July 2016 - Every year, we h ds their sacrifice and hard work and another 100 roses ublic near Jalan Melaka. joyous Hari Raya occasion with Bank Muamala ublic near Jalan Melaka. Management. The theme of this year’s event, whi was Jom Balik Kampung. Everybody was dressed match the theme. Food stalls were creatively decorated by the staff b features of each state within Malaysia. Tasty tra abundance. Everyone looked radiant with happy a Father Day 2016 20 June 2016, Menara Bumiputra: Bank Muamalat organised a Corporate Responsibility programme to celebrate Father’s Day. There were 400 pre-packed kuih, drink and dates distributed to all fathers in HQ. Bank Muamalat also distributed 100 pre-packed food to the general public. The objective of the programme is to instill appreciation towards all fathers for their sacrifice and love. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 Father Day 2016 73
      76. CORPORATE CR @ COMMUNITY RESPONSIBILITY CR @ COMMUNITY CR @ COMMUNITY Programme with Bank Muamalat : Pertubuhan Kebajikan dan Pendidikan Permata Rohani Programme with Bank Muamalat : Pertubuhan Kebajikan dan Pendidikan Permata Programme with Bank Muamalat : Pertubuhan Ke Rohani Rohani Malaysia Berhad (Bank Muamalat) Kuala Lumpur , 27 February 2016, Bank Muamalat CR @ COMMUNITY FATHERS DAY 2016 20 June 2016, Menara , Bumiputra: Bank 2016, Muamalat Kuala Lumpur 27 February Bank Malaysia Berhad (Bank Muamalat) have organized a CR programme with Muamalat children from Rumah Pertubuhan Kebajikan organised a Corporate Responsibility programme to PROGRAMME WITH, BANK MUAMALAT : PERTUBUHAN Kuala Lumpur 27 February 2016, Bank have organized CR400programme children from Rumah Pertubuhan Kebajikan dan Pendidikan Permata Rohanikuih, atwith Fifty4Ferns, Janda Baik, Pahang. There wereMuamalat 40 celebrate Father’s Day. There a were pre-packed KEBAJIKAN DAN PENDIDIKAN PERMATA ROHANI have organized a CR programme with children f drinkschildren and dates distributed from to all fathers HQ. 15 Bank Kuala Lumpur, 27 February Bank Muamalat dan Pendidikan Permata atyears Fifty4Ferns, Janda Baik, 2016, Pahang. There Malaysia were 40 involved age Rohani 7inuntil old. Muamalat also distributed 100 pre-packed food to the BerhadPendidikan (Bank Muamalat) organisedRohani a CR programme dan Permata at Fifty4Ferns, Ja children involved 7 until 15 general public. The objectivefrom of theage programme is toyears old. with children from Rumah Pertubuhan Kebajikan dan main idea programme is to createinvolved awareness empathy towards children fromand age 7 until Janda 15 years instill The appreciation towardsbehind all fathersthe for their sacrifice Pendidikan Permata Rohani at Fifty4Ferns, Baik, old. and love. Pahang. There were 40 children involved from ages 7 The main idea behind the programme is to create awareness and empathy towards underprivileged children. until 15 yearsidea old. behind the programme is to create The main underprivileged children. Some of the activities are motivation talk programme and telematch. underprivileged children. The main idea behind the programme is to create awareness and empathy towards underprivileged Some of the activities are motivation talk programme and telematch. children.ofSome the activities were motivational Some the of activities areheld motivation talk programme talks and telematch. 74 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
      77. ook the initiative to treat the special children and ch "Boboi Boy The Movie". There were 288 children all MOVIE TREAT “BOBOI BOY THE MOVIE” WITH SPECIAL CHILDREN AND UNDERPRIVILEGED CHILDREN Tanjung Golden Village (TGV), Sunway Putra, Kuala an Maluri Lumpur, 17 March 2016 - Bank Muamalat once again took the initiative to treat the special children and Caves (Pelajar Lelaki) children to watch “Boboi Boy The underprivileged a Perdana Movie”. There were 288 children all together from: • Yayasan Chow Kit ramme was• Puan PPDK 4Jamilah Abdul Sallam from Human • • • • • DK Wahyu P Keluarga Besar Norlina Baitul Ehsan Al-Khairi, Taman Maluri Baitul Ehsan Al-Khairi, Batu Caves (Pelajar Lelaki) Anak Yatim Attaqwa Putra Perdana REFLEXOLOGY PROGRAMME (MALAYSIA ASSOCIATION OF THE BLIND) WITH OLD FOLKS HOME AT KUALA KUBU BHARU Kuala Kubu Bharu- 23 April 2016, Bank Muamalat once again organised a programme at Kuala Kubu Old Folks Home. This programme is a collaboration between Old Folks Home and Malaysian Association for the blinds. The programme was where the blinds perform reflexology to the old folks. The purpose of the programme is to create a close knit relationship between the old folk’s homes and blind community. Bank Muamalat also contributed goodies in the form of biscuits, hand towels and box drinks. Association of the Blind ) with Old Fo lk Homes a t k Muamalat once again organised a programme programme is a collabo ra tion betwee the blinds. Th n Old Folk e programm e was where e purpose o the blinds f the progra mme is to cre s homes an a te d blind com a close munity. scu BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 75
      78. CORPORATE RESPONSIBILITY IFTAR with Underprivileged Children BANK MUAMALAT CONTRIBUTED A WHEEL CHAIR IN IFTAR WITH UNDERPRIVILEGED CHILDREN LANGKAWI On Sunday , 12 June 2016, was a meaningful day for Friday,On 4 June 2016: In 12 conjunction with thewas Ramadan Bank Muamalat 250 children from 8 orphanages Sunday, June 2016, a meaningful day foras our Bank Muamalat. As 250 month Bank Muamalat donated a wheel chair which was were invited to a “Break Fast & Furious 3”. The Iftar children from 8 orphanages were invited to a "Break Fast & Furious 3", Iftar with presented by Y.Bhg Dato’ Hj Mohd Redza Shah Abdul with underprivileged children was held at Sime Darby children, held at Sime Darby Convention Centre, This is Wahid,underprivileged CEO Bank Muamalat Malaysia Berhad to a disable Convention Centre, Mont Kiara. ThisMont is BankKiara. Muamalat’s IF TA individual. The disable individual is an orphan and living annual Corporate Social Responsibility (CSR) initiative to to R w Bank Muamalat's annual Corporate Social Responsibilityith (CSR) back Undinitiative erpriv to gholy egive dC hi ld with his grandmother and siblings. give back to the community duringile the month of ren the community during the holy month of Ramadhan. Ramadan. On Sunday, 12 Ju nechildren 20 16Seri , wa The eight selected were from PPR The eight selected beneficiaries were children from PPR beneficiaries Pantai Dalam, PPR Alam, s a mean c hi ld re n fro Pantai Dalam, PPR SerimAlam, Rumah At-Taqwa Putra 8 o rp ha nages w Rumah At-Taqwa Putra Perdana, Rumah Kebajikan Anak Yatim and Golongan Asnaf ere invite undRumah Perdana, Anak Yatim and Golongan erprivKebajikan ilegedRawang, c hi ld re Baitul Nurrawdhah Puchong, Pusat Jagaan Budaya Harapan KRT Dahlia n, he Asnaf Baitul Nurrawdhah Puchong, Pusat Jagaan Budaya ld atTun Sime Da Bank M ua m a la Harapan Rawang, KRT Dahlia Tun Teja Rawang. Rumah t's Teja Rawang. Rumah Anak Yatim Ummi Kajang and Anak Yatim Asnaf SMK Kajang annfrom ual C o rp from rate Social Anakth Yatim Ummi Anak Yatim Asnaf o e co mmKajang unity and Utama. d ur in g th e ho ly month of Ra SMK Kajang Utama. Owners (LOC), Spyderto Cam-Am & Rokeb were for e eigClub Lotus Owners Club (LOC), Spyder Cam-AmLotus &Th Rokeb were invited provide joyride ht se lec tethe dchildren beneand fic ia invited to provide joyride for to give rie were child the children and to give the children an unforgettable The childrensthe were Ru anaunforgettable h At-experience. Taqw childrenm experience. children were a PutraThePe rd a na , Rumah K taken for joyrides around the vicinity of SDCC. Bafor taken itujoyrides l Nuraround the vicinity of SDCC. rawdhah Puchong , Pusat Jagaan Te ja Ra wjoyride, a ng . Ru Apart from the Bank Muamalat also provided m a h nakthe Apart from the joyride, Bank Muamalat also provided a photoboothAfor children. Ya tim Ummi Kaja Utama. for the children. There was also a photobooth a special There was also a special appearance by Queen Pirate Other appearance by Elsa Queenand Elsa and PiratePrincess. Princess. Other activities conducted quiz, colouring contestThe activities conducted were pop quiz, colouring contest were andpop tilawah Al-quran. Lotilawah and Al-quran. also a received lucky tus O wners The children also received lucky draw hampers. The evening ended sweet note C luchildren (Lwith Owith C), aSp draw hampers. The eveningbended sweet note yd e r Cam-Am th e c when each child was handed the "duit raya". ldre n handed and to when eachhi child was the “duit raya”. taken for joyrides give the children an un around the vicinity of SDCC Apart from the jo yride, Bank Muam alat also There was also a special appea rance by activities conduc ted were pop q uiz, colou children also rec eived lucky draw hampers when each child was handed the "duit raya". 76 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017
      79. Iftar with Maahad Tahfiz Al-Bayan School of Qu Masjid Jamek , Kuala Lumpur, Thursday, 16 Berhad (Bank Muamalat) organised an iftar f m ho d an dh di Ha & an ur Q of ol ho Sc n ya Ba Raya” and survival kit to the homeless while ‘D Tahfiz IFTAR WITH MAAHAD TAHFIZ AL-BAYAN SCHOOL OF QURAN & HADITH & THE HOMELESS Masjid Jamek, Kuala Lumpur, Thursday, 16 June 2016 The Bank Muamalat organised an iftar for 400 guests including Mahaad Tahfiz Al-Bayan School of Quran & Hadidh and the homeless. Bank Muamalat presented “Duit Raya” and survival kit to the homeless while ‘Duit Raya’ and backpack to the Mahaad Tahfiz children. Melaka -Sa'adah, held at Masjid As as w B KE RO n, event ah missio ged families. The ile riv rp de un to d was donate s. The donation tion to the familie na do of n tio ta presen r and etc. e, cooking oil, suga needs such as ric BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 77
      80. CORPORATE RESPONSIBILITY JAUHLAH MAHABBAH TO UJONG PASIR , MELAKA 26 Nov 2016, the Jaulah Mahabbah mission by ROKEB was held at Masjid As-Sa’adah, Ujong Pasir, Melaka. The donation was donated to underprivileged families. The event began with a doa recitation and presentation of donation to the families. The donation is in a form of monetary and basic needs such as rice, cooking oil, sugar and etc. 78 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 CR @ MARKETPLACE MEDIA NIGHT 2016 Kuala Lumpur, 16 December 2016 – For the first time Bank Muamalat organised a media night to celebrate the media and to acknowledge their importance in circulating information and news about Bank Muamalat as well as its products. As an appreciation to the members of the media, Bank Muamalat has awarded them with trophies in three (3) categories which are TV, Radio and Online media. There were also lucky draws and performance by Caliph Buskers.
      81. SUSTAINABILITY REPORT Being ethical comes hand in hand in the banking industry . Furthermore as an Islamic financial institution, we take pride in upholding these values. We know that sustainability efforts are important in delivering our values as we are largely responsible to the COMMUNITY, WORKPLACE, MARKETPLACE as well as the ENVIRONMENT. We may not have all the answers, all the access or all the know-how but we believe our responsibilities towards our community, workplace, marketplace and environment deserves our best interest. With that in mind, we’re constantly striving to find and remain committed about making positive as well as lasting social and environmental impact across the nation. And this is all reflected in our SUSTAINABILITY REPORT for the financial year.
      82. RESPONSIBLE TO THE COMMUNITY D elivering essential values for the community is an ongoing commitment that has been a part of Bank Muamalat ’s fabric since our early days. We hold strongly to our belief in making a positive and sustainable impact to the communities we operate in. Our business helps support economic growth through the expansion of products and services, employment and the creation of knowledgeable workers. We believe that we can contribute significantly in enhancing the living standards of the community through initiatives such as sponsorships, charitable contributions, and disaster relief efforts. Wakaf Selangor Muamalat Wakaf Selangor Muamalat (“WSM”) has been in operation for 5 years since its inception on 27 September 2012. Since then, WSM received overwhelming response from the public. As at FY 2017, total wakaf fund collected was RM17,743,164.44 while total collection for FY2017 alone was RM2,719,025.19. To date, WSM through its Joint Management Committee (“JMC”) between Bank Muamalat and Perbadanan Wakaf Selangor (“PWS”), has approved RM14,244,212.29 and RM7,576,897.29 was disbursed on wakaf projects. 80 80 BANKMUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) (6175-W) • annual report 2016 REPORT 2017 BANK MALAYSIA BERHAD | ANNUAL Chart 1: Monthly collection of WSM Fund from April 2016 to March 2017 MONTH RM Apr ‘16 206,734.85 May ‘16 241,920.69 Jun ‘16 285,086.61 Jul ‘16 241,632.85 Aug ‘16 210,254.23 Sept ‘16 215,178.28 Oct ‘16 210,180.32 Nov ‘16 230,787.45 Dec ‘16 232,386.71 Jan’17 199,740.16 Feb’17 208,714.95 Mar’17 236,408.09 TOTAL 2,719,025.19
      83. SUSTAINABILITY REPORT During the FY2017 , WSM contributed a total of RM3,009,974.94 (to various institutions under health and education sectors). The details are described below: Table 1: List of WSM beneficiaries No Beneficiaries Contribution Amount (RM) 1 Yayasan Amal Malaysia Building 994,500.00 2 Beacon Hospital Mobile Clinic 260,710.48 3 Maahad Muhammadi Gua Musang KHB workshop equipment 4 SMUA Darul Ulum Building 5 PERTIWI School Van 6 KAFA Integrasi Al Mubarak Building 7 Hospital Tengku Ampuan Rahimah Klang Ultrasound Machine 97,997.00 8 Kolej Integrasi Tahfiz Tunas Ilmuwan Sains Laboratory equipment 26,506.09 9 SAR Al - Falah Building 41,870.75 10 Hospital Raja Permaisuri Bainun Ipoh Kidney machine 151,580.00 11 UNIMAPCARE Dialysis machine 250,000.00 12 Pusat Dialisis Tunku Syed Kangar Dialysis machine 167,480.00 13 SK Pandamaran Jaya Klang Canteen tables & chairs 16,000.00 14 St John Ambulan Propaq monitor machine 27,984.00 15 Persatuan Darul Fitrah Terengganu Building 16 My Care Prosthetic Leg 17 PERKIM Banting Van 28,618.50 468,587.00 28,000 157,500.00 124,794.00 50,000.00 117,847.12 Total contribution 3,009,974.94 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 81
      84. 3 4 6 7 8 9 5 10 Picture : WSM Handover Events Pic 1: Pic 2: Pic 3: Pic 4: Pic 5: 82 KAFA Integrasi Al Mubarak Kolej Integrasi Tahfiz Tunas Sains Ilmuwan SRA Bandar Seri Putra Pusat Dialisis Tuanku Syed Kangar UNIMAPCARE 82 BANKMUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) (6175-W) • annual report 2016 REPORT 2017 BANK MALAYSIA BERHAD | ANNUAL Pic 6: SK Pandamaran Jaya Klang Pic 7: Hospital Raja Permaisuri Bainun Ipoh Pic 8: SAR Al - Falah Pic 9: Yayasan Amal Malaysia Pic 10: PERKIM Banting
      85. SUSTAINABILITY REPORT 1 . Tabung Mawaddah Tabung Mawaddah (TM) Committee has been actively operating since 2002, dedicated to aid and implement charitable activities to 8 Asnaf recipients (Fakir, Miskin, Amil, Muallaf, Riqab, Gharimin, Fisabillah and Musafir) and non-asnaf recipients. TM is funded by zakat and alms (sadaqah) sources contributed by Bank Muamalat and the staff. The objectives of TM Committee’s establishment are: • to provide assistance and financial aid to the needy; • to ensure that each donation, charity and alms reach the targeted groups; • to carry out Bank Muamalat’s corporate social responsibilities; • to the society on the basis of Maslahah Ammah; • to instill the spirit and caring nature of Malaysian society creation of a harmonious society; and • to practice the teachings of Islam in helping the needy. Besides a one off contribution, TM also provides monthly allocation for: • Food for homeless programme; • Micro credit scheme to aid small entrepreneur; • Masih Ada Yang Sayang (MAYs) community programmes; • Programme with NGO’s; and • Monthly aid to the Asnaf recipients The size of TM fund distributed and the trend of TM aids applications for FY2017 are described as below. Fakir RM157,800.00 Miskin RM343,582.20 Fi-Sabilillah Gharimin Mualaf Sadaqah RM1,987,245.41 RM4,919.00 RM500.00 RM89,502.21 2. Bank Muamalat Mentorship Programme For UiTM Students In April 2016, Bank Muamalat and UiTM have signed an MOU to collaborate on areas that bring mutual benefit to both organisations. Arising from this MOU, Bank Muamalat in collaboration with the Faculty Business and Management Puncak Alam Campus has developed a Mentorship Program for the graduating students of the faculty. This programme involves knowledge sharing by practitioners from Bank Muamalat to UiTM students.  It involves a series of lectures and case studies to 240 participating students from the Faculty of Business and Management. The topics covered under this Mentorship Programme are as follows: 1. 2. 3. 4. 5. A guide for fresh graduate to attend a job interview Career Planning Decision Making Problem Solving Grooming to be an effective manager The first lecture started on 27 September 2016 and the programme completed on 15 December 2016.   Participants received a certificate of attendance upon completion of this Mentorship Programme. The programme also included a half day walk through selected departments at Bank Muamalat Head Office to give an exposure to participants and lecturers on actual environment at the work place.  On 15 November 2016, 86 participants of the program were given a guided tour to CSD, CCC, MCRC, CFSRD, COD, DMD and Jalan Melaka Branch.  BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 83
      86. RESPONSIBLE TO THE COMMUNITY The students were also given a briefing by Shariah Department on “Difference Between Shariah-compliant and Conventional Banking” while Puan Azihan briefed them on the “Bank’s Initiative Toward Paperless Environment”.  Bank Muamalat also hosted a lunch for the students and lecturers. In view of the overwhelming response to this program by the participants, Bank Muamalat may extend the program to all local universities as part of Bank Muamalat’s Corporate Social Responsibility.   84 84 BANKMUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) (6175-W) • annual report 2016 REPORT 2017 BANK MALAYSIA BERHAD | ANNUAL
      87. SUSTAINABILITY REPORT 3 . Back to School Free Market for the Orphanage Menara Bumiputra,Kuala Lumpur – Bank Muamalat Malaysia Berhad once again organised a Back to School Free Market programme for the orphanage. The donation donated is in the form of school uniform, school equipment, socks, shoes and other school items. Around 193 orphans as well as children from staff earning less than RM3,000 participated in this programme. The orphanage homes involved with the programme are Rumah Permata Rohani, Rumah Baitul Kasih and Rumah Baitul Barokah. 4 BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 85
      88. RESPONSIBLE TO THE WORKPLACE B ank Muamalat employees represent a rich and diverse human capital base with skills , competencies, capabilities and experience in delivering growth and sustainability of the Bank in providing the Islamic financial services and solutions to the community. Since the formalization of the 5-year strategic business plan in October 2016, Bank Muamalat has moved swiftly into implementing, building frameworks for a robust people management practices and embedding the right values and beliefs towards a strong performance oriented corporate culture. Pursuant to the above, the management of the human capital is guided by the Bank’s strategic 5-year business plan. Working in partnership and engaging all stakeholders across the Bank is the key in creating an environment where employees can thrive in delivering sustainable organisational performance. A longer-term strategic priority has been identified for Human Capital in the execution of the strategic business plan: 1. Applying its human capital expertise assertively in supporting the business divisions and support functions in delivering results; 2. Building the leadership pipelines across Bank Muamalat by enhancing capabilities of the leaders, management and staff; in line with the changing business landscape; and 3. Strengthening the human capital analytical ability and the management of the human capital risks in order to maintain sustainable business performance. Building Agility During the year, Bank Muamalat has made several changes to the organisational structure, aimed at building a Bank that is nimble and agile. The changes are necessary to align with the business strategies, to establish a focus and dynamic workforce leveraging on the bench strength and competencies of leaders. Additionally, agility is the key in meeting the emergence of competition, by swiftly embracing changes in technology, innovation of products, diversifying into new channels and optimising capacity with clear focus coupled with the right resources. Talent Acquisition, Internal Mobility and Retention During the year, Bank Muamalat has decided to in-source its talent acquisition requirements as part of the human capital strategic initiatives in enabling its employees to develop new and necessary skills in assuming new roles. Bank Muamalat actively supports internal cross divisional career mobility by identifying redeployment opportunities, followed by learning and development interventions. 255 employees representing 15% of the total employee population has benefitted from the new expanded roles. This initiative will enable Bank Muamalat in managing its cost against income ratio on human capital whilst improving on the employee retention. Not only such 86 86 BANKMUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) (6175-W) • annual report 2016 REPORT 2017 BANK MALAYSIA BERHAD | ANNUAL move would enhance the knowledge of its employees but also to potentially encourage career growth within Bank Muamalat by allowing them to build a more diverse and fulfilling career. Community Talent Pipeline Bank Muamalat’s hiring strategy includes ensuring a steady pipeline of young talents, including interns. As a socially responsible organisation, Bank Muamalat offers a platform for internship programme to undergraduates and trainees under the “Skim Latihan 1 Malaysia” (SL1M) with opportunity to gain a real life work experience in various functions across Bank Muamalat, thereby enhancing their employability. Mutual Separation Programme Aimed at enhancing efficiency on operating cost structures, Bank Muamalat offers an on–going programme on Mutual Separation Scheme which is on voluntary basis. During the year under review, employees with serious medical conditions and nearing retirement age may opt for this programme which allows them to retire early with the opportunity to manage the circumstances around their health with peace of mind.
      89. SUSTAINABILITY REPORT Managing Human Capital Risk Managing human capital risk is a new initiative that allows a comprehensive and effective management of the people , supported by statistical figures which shall influence and improve current management practices. The framework for the human capital risk, ready to be rolled out this year, will also include focus on talent and succession planning, retention of key personnel, leadership and management capabilities. The human capital risk management will also address the incentives and rewards structure, ensuring that employees are rewarded for commendable performance within a sound risk management and governance framework. Subsequent to the above, in accelerating employee capabilities, professional and personal development programmes, continue to be essential components of the Bank Muamalat’s people agenda. Several high performing talents are identified for the Top Talent, Management Development Programme and Executive Development Programme organised by DRBHICOM. Bank Muamalat is also developing its tailored inhouse development programme for Senior Leadership, Management & Executives. Talent Management and Succession Planning Sustainability of Bank Muamalat hinges on the right future leaders who can drive the business plans forward. Our approach to talent management aligns with the 5-year strategic business plan and ends with a refined people and leadership plan. Bank Muamalat has enrolled high potential employees into the talent development programmes in partnership with DRB-HICOM to ensure a ready pool of talent pipeline. Identification of successors as well as competency accreditations has been implemented across Bank Muamalat. Building Capabilities In creating a high performance culture, Bank Muamalat places emphasis on strengthening the Performance Management System. Amongst other things, this would include ensuring that the Key Performance Indicators of the business and support divisions are aligned with the 5-year strategic business plan. In House MBA programes MBA 11 To further enhance the competencies and capabilities of employees, Bank Muamalat partnered with DRB-HICOM University to become the pioneer organisation within the DRB-HICOM Group to initiate the in-house Masters in Business Administration programme commencing in February 2017. All 62 Branch Managers - accredited Associate Cetification in Islamic Finance (AQIF) Top Talent MDP DRB HICOM MTP 1 5 3 MDP - Management Development Programme MTP - Management Trainee Programme Recognising the importance of certification in enhancing the capabilities of our branches in serving and attending to the needs and demands of our customers, Bank Muamalat embarked on a project to certify all Branch Managers and Assistant Branch Managers with the Associate Qualification in Islamic Finance (AQIF), accredited by the Islamic Banking & Finance Institute Malaysia (IBFIM). BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 87
      90. RESPONSIBLE TO THE WORKPLACE Benchmarking all 62 Branch Managers against competency standards Bank Muamalat had also initiated a programme with Finance Accreditation Agency to benchmark all Branch Managers to measure their level of competencies against global standards . This will enhance the trust and belief of our customers towards the services and products offered by Bank Muamalat. Moving forward, Bank Muamalat is collaborating with Federation of Investment Managers Malaysia and Malaysian Takaful Association to certify all our Branch Managers and Assistant Branch Managers in both the Unit Trust and Takaful Basic Examination aiming for the branch to deliver higher quality services in a wider range of products. Bank Muamalat remains committed to people development with an average of 3 training days recorded per staff. In 2016 the Bank invested a total of RM3.4 million on training programmes in the following category:Course Category Regulatory (eg: Anti Money Laundering Counter Finance Terrorism, Islamic Financial Services Act, Foreign Exchange Administration, Shariah regulations) Leadership Skills Functional Mastery Product Knowledge Personal Mastery Business Mastery Health & Wellness Bank Muamalat initiated various activities aimed to create awareness on the importance of health and fitness. This “Keep Fit Culture”, would contribute towards enhancing productivity, resulting in improved work performance. 88 88 BANKMUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) (6175-W) • annual report 2016 REPORT 2017 BANK MALAYSIA BERHAD | ANNUAL The Corporate Wellness Programme initiated in early 2017 began with the “Fit Muamalat Campaign”. The first activity was “Jom Kayuh” bicycle ride which took place in January 2017 which attracted 250 participants. Subsequently, the “Jom Kayuh” event held in February 2017, attracted an even bigger crowd of 400 participants. Gauging from the overwhelming response, the Management announced the formation of six (6) sports houses under the wing of the bank’s Sports and Recreation Club (SRC). Health Check and Blood Donation Drive A Health Check and Blood Donation Drive was held at Menara Bumiputra, Kuala Lumpur. The purpose of the programme is to educate Bank Muamalat Staff to practice a healthy lifestyle. Furthermore, it also gives the opportunity for the staff to perform health check and educate them on the importance of staying healthy. The programme is a collaboration between Beacon Hospital, Petaling Jaya and the National Blood Bank. The programme began at 10.00 am until 5.00 pm. There was 400 staff who took part in this programme.
      91. SUSTAINABILITY REPORT Israk & Mikraj 2016 In celebration of Israk & Mikraj, Bank Muamalat organised a talk for the staff. It was presented by Al-Fadhil Ustaz Zulhazwan, a freelance Islamic speaker. The talk was attended by more than 200 staff. Lambaian Kaabah 2016 Bank Muamalat, in its effort to appreciate its people, has long introduced Lambaian Kaabah. This programme is a programme that provides an opportunity for the staff to perform their Umrah. This year Bank Muamalat sent a total of 12 participants (including spouses) for the said purpose. No. Name Staff ID Department Position 1 Ahmad Faizin Bin Mohammad 101303 Bintulu Branch Executive 2 Wan Noor Suraya Binti Wan Semail 100800 Kota Bharu Branch Executive 3 Mohd Hafiz Bin Hamzah 101003 Melaka Branch Non-Executive 4 Wan Rosli Wan Mansor 100756 Ipoh Branch Non-Executive 5 Nur Farazella Bte Hussin 102443 Regional Office East Coast Assistant Manager 6 Noor Akmal Duki 100749 Head Quarters Executive BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 89
      92. RESPONSIBLE TO THE WORKPLACE Uptown HOD Muamalat Sports Club & Recreational Bank Muamalat with Corporate Communications Department have introduced Uptown Muamalat which is open for business every Friday from 12.30 pm – 2.30 pm. The initiative was to promote business opportunity for the staff. There were 21 stalls that sold London lamb stew (CEO Office), Tauhu Sumedang Adik Manis (Nasi Mak Dara & Pak Teruna Stall), Pulut Lepa Terengganu (Kampung Central Stall), Churros Chaiwala (Imam Mr Banker), Laksa Sarawak (Pak Mos Stall), Keropok Lekor Terengganu (MISB Stall), Chia Seeds & Munafie (Wonder Le’Gurl Stall), Bantal Tidur (Uke’Lele Stall), Keratan Mulberry (Lady Gaga Stall) and Computer and IT product (ICT Stall).  Other Stalls were ‘The Juice Service’, TPS/Cyber Stall, Mesti Singgah Stall, Nasi Tomato Stall, BBD Stall, Compliance Stall, Cracker Crunch Stall, Beauty Sweetness Café Stall, Bonjour Stall, MISB Stall, SSD Stall, ICT Stall and CBD Stall. Part of the earnings was donated to Tabung Mawaddah Bank Muamalat Malaysia Berhad for the needy.  Sports and Recreation Club (SRC) Sports and Recreation Club (SRC), established since 2015, serves as a platform for the employees to participate in sports and recreational activities in Bank Muamalat. Among the main objectives of SRC establishment is to encourage teamwork, to build and cultivate the spirit of togetherness among the employees in Bank Muamalat through SRC activities. The employees not only would be able to show their potential or talent through the sports of their interests but they would also be able to lead a healthy life through sports and recreational activities. In stimulating the spirit of teamwork and cooperation to help escalate the team’s name, every employee has been predetermined of their respective sports houses based on the names of the famous Muslim commanders as below: 90 90 BANKMUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) (6175-W) • annual report 2016 REPORT 2017 BANK MALAYSIA BERHAD | ANNUAL 1. Red House (Abu Ubaidah Al-Jarrah) 2. Blue House (Saad Abi Waqqas) 3. Green House (Khalid Al-Walid) 4. Yellow House (Sallehuddin Ayyubi) 5. Orange House (Muhammad Al-Fateh) 6. Purple House (Tariq Bin Ziyad) SRC activities were not only held at the headquarters level but have also been expanded to other areas throughout the country. In bridging the relationship between the employees in DRB HICOM group, SRC is also involved in the sports activities held by DRB HICOM group.
      93. SUSTAINABILITY REPORT Among the sports and recreational activities held throughout FY2017 were as below :Durian Feast Durian as the ‘King of Fruits’ received many attention and interests. In conjunction with ‘Durian Season’ in the month of August 2016, SRC organised Durian Feast on a large scale in the compound of the headquarters and had received a very encouraging response. Not only the staff were able to enjoy the different types of durian, they could also buy them at a very reasonable price. Jom Kayuh Mesra Alam In promoting cycling activity whilst raising awareness in the community on being fit and healthy, Bank Muamalat has collaborated with Proton Holdings Bhd to organise a “Jom Kayuh Mesra Alam” programme. The programme was held at Proton City, Tanjung Malim, Perak and was also attended by famous celebrities namely Siti Nurhaliza and Amy Search. The event was open for 3 categories which were 30km, 15km and 800m for kids. More than 1,500 avid cyclists and nature lovers were involved in this first ever collaboration programme. Futsal, Ping Pong, Netball and Badminton Teams A tournament between the houses was held for futsal, ping pong and netball games to further encourage teamwork spirit among the staff. In addition to that, the winner will be able to increase the points for respective sports teams as the members would compete to ensure their respective house team succeeds. Each team conducted early training to ensure a quality delivery and skills before they compete. Purple House is the champion for futsal tournament while Blue house is the champion for ping pong, netball and badminton. The result from their championship allowed them to contribute points which led those teams to hold the 1st and 2nd position. Expansion of SRC to other region The initiative to expand the sports and recreational activities to other region has been initialised with the launch of SRC in the Southern Region in Johor Bharu followed by Middle, North and East Malaysia (Sabah & Sarawak). Every region has their own respective SRC committee to make it easier for planning and execution of SRC sports and recreational activities. Sports Carnival As for the highlight of the celebration of sports and recreational activities, SRC is planning to hold a ‘Sports Carnival Program’ which will be held this November 2017. This highlighted programme will gather all house teams from the headquarters and other regions where selected sports will be competed again. List of SRC Committees 1. 2. 3. 4. 5. 6. Vice President/Acting President - Hj Zaharuddin Alias Secretary - Izanor Ismail Vice Secretary - Mohd Imran Imam Shafie Treasurer - Mohd Najib Ismail Vice Treasurer - Mazrina Mohammad Zainol Committee - Ebi Suffian Ab Wahab - Harlina Shamsudin BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 91
      94. RESPONSIBLE TO THE MARKET PLACE Bank Muamalat is committed to being a responsible corporate citizen not only with the community but as well as our business partners . Hence, we strive at building long term relationships based on clarity of purpose, integrity, respect, honesty and fairness. 1. Inaugural listing on Investment Account Platform of Perak Transit • In supporting the government’s strategic initiative to continue providing a conducive and comprehensive ecosystem in boosting real economic activity, Bank Muamalat has launched the listing in the Investment Account Platform (IAP) of Perak Transit Berhad on 26th April 2016. • Perak Transit Berhad is an integrated transportation terminal and public transportation services provider based in Ipoh, Perak. • Investment in Perak Transit was in the form of a RM10 million financing facility for 3 years with an adjusted return at 6.5% per annum. • The IAP enables different spectrum of businesses like SMEs, new growth industries and entrepreneurs with profitable projects to gain alternative access to funding and on the other hand enables investors to directly finance ventures of their choice according to the risk-return preferences. • IAP will broaden the traditional role of Islamic banking from that of a credit provider to one that will now include being an instant intermediary. 2. The first Shariah Compliant Debit Card • The Bank has launched its Debit Card “Aisya” that comes with a unique feature of waqf in July 2016 • The debit card was named after the Prophet Muhammad’s wife, Saidatina Aisya, whose intelligence provided the inspiration for Bank Muamalat to develop the card which comes with a waqf feature. • If customers use the debit card at any of the merchants, it enables Bank Muamalat to contribute to the waqf by putting aside 20% of the interchange fee income without deducting or imposing any fee for the waqf to the customers. • The first of its kind in Malaysia and perhaps the world as it incorporates spending with the element of social responsibility. 92 92 BANKMUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) (6175-W) • annual report 2016 REPORT 2017 BANK MALAYSIA BERHAD | ANNUAL
      95. SUSTAINABILITY REPORT 3 . i-Muamalat Mobile Application • As part of its bid to provide convenience and easy access to many of its customers, Bank Muamalat has introduced its i-Muamalat mobile application. • The application will allow users to check their account balance, transfer funds, make bill payments and top-up their mobile data credit. • Bank Muamalat’s account holders may also use the application to check prayer’s time and even to locate the nearest Bank Muamalat branches. • The application is equipped with a high security system which meets the security standard set by the Malaysian banking authority. • The i-Muamalat application was launched by the Prime Minister, Datuk Seri Mohammad Najib bin Tun Abdul Razak. • The application is available from both Google Play Store and Apple Store • “Art meets technology” defines our design for the application, reflecting our purpose that the application is all about our customers and not about the Bank as well as our intention to create an application that is both easy on the eye and incredibly easy to use 4. ISO 9001 Accreditation • Bank Muamalat as we have been awarded with the ISO 9001:2015 certification in June 2017, an internationally recognised standard that ensures the products and services offered meet the needs of the customers through an effective quality management system. • Our decision to work towards ISO 9001 accreditation demonstrates our commitment to provide a highquality and consistent service to our customers. • Bank Muamalat is also proud to be formally presented with the certificate by SIRIM QAS International, the well known certification body for ISO 9001 Quality Management System. • The certification is a testament to the positive engagement of staff at all levels, and demonstrates a clear desire to embrace the standard as a fundamental element of its growth and customer focus strategies as stated in Bank Muamalat’s Business Plan. • The benefits of ISO 9001 go far beyond meeting customer requirements. The management systems help to enhance the businesses’ operations and provide a culture that aims for performance exceeding expectations. • The doodle art design which currently depicts a Sports and Games theme (in line with SEA Games KL 2017), will be updated every few months to feature other artwork including cultural festivals and Malaysian flowers as well as famous buildings in Malaysia BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 93
      96. 94 94 BANKMUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) (6175-W) • annual report 2016 REPORT 2017 BANK MALAYSIA BERHAD | ANNUAL
      97. SUSTAINABILITY REPORT BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 95
      98. RESPONSIBLE TO THE MARKET PLACE 5 . Mystery Shopper • The Mystery Shopper Programme continued to be an important measurement of branches level of service for the last six years. • The average score of service index for FY2017 was 85.43%, a slight increase from last financial year service index of 84.11%. • Out of 63 branches, 53 branches (84%) were categorised as excellent and good (index of 80% and above). Overall Section Score for FY 15/16 vs FY16/17 100% 98.20% 92.13% 90% 85.08% 92.05% 86.35% 80% 77.22% 81.00% 70% 74.75% 60% Ambience & Banking Hall Teller Zone Sales & Consultation Zone Overall Experience 6. Moving Forward: Customer Service Excellence Blueprint • The blueprint approved in March 2017, detailed service excellence plan and strategies at Bank Muamalat various critical touch points to make our service an enriching experience for customers. • We believe great service will lead to delightful customers’ experiences that will improve Bank Muamalat’s ability to create greater customer loyalty. • One of the main initiatives in the blueprint is #mesramuamalat programme. The programme is aimed to create friendly (“Mesra”) atmosphere at branches while maintaining our professionalism as an Islamic bank. • As part of Bank Muamalat’s effort to understand and serve its customers better, Bank Muamalat will also implement a single bank-wide Customer Relationship Management System (CRMS). • As a major customer retention strategy, the interactive system will manage and analyse customer interactions and data throughout customer’s lifecycle. • The system will allow personalised attention to customers so as to build loyalty via emphasizing on relationshipbased business instead of transaction-based. 96 96 BANKMUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) (6175-W) • annual report 2016 REPORT 2017 BANK MALAYSIA BERHAD | ANNUAL
      99. RESPONSIBLE TO THE SUSTAINABILITY REPORT ENVIRONMENT We believe that sustaining our current environment is about protecting the future by making the right decision today . Knowing the importance of environmental degeneration, Bank Muamalat is committed to take measures to conserve, maintain and preserve the state of the environment for a better place for future generations ahead. 1. Managing our environmental impact • In line with part of our business plan to harness digital technology and realising the importance of green environment, Bank Muamalat has been encouraging staff to manage their paper usage in printing and photocopying. • Paperless: For a start, Bank Muamalat has decided to go paperless for all management meetings. This initiative was gradually implemented since 2011, proving Bank Muamalat’s intention to become a more socially responsible financial institution. • All meeting papers are uploaded to an online system that is readily accessible for the board of directors and the management committee members to browse via any device on internet. • The implementation of reducing usage of papers went to the extent to have digital books (e-books) for selected books especially the Arabic references and economic e-books as an alternative to physical books • Bank Muamalat believes that the digitalization strategy placed in our recent business plan will take us towards a paperless environment. •Energy Efficiency: Bank Muamalat has also commenced the replacement of energy efficient bulbs at all offices and branches. The new light bulbs installed has an improved lifespan of 20,000 hours compared to the previous type of light bulbs which only has 5,000 hours of lifespan. • Apart from the replacement of energy efficient bulbs, Bank Muamalat also rescheduled the centralised airconditioner at Menara Bumiputra to operate within operation hours which reduces the electricity costs up to RM312,000 annually. • Bank Muamalat continues its energy efficiency campaign by encouraging staff to switch off the lights and other electrical items when not in use. •Chemical Waste: With Ar-Rahnu being a crucial part of Bank Muamalat’s business, gold testing is among the procedure that is essential in ArRahnu processes. Choosing to be a more socially responsible institution, Bank Muamalat’s opted to use an improved technology device for gold testing to replace the old method which used acid test to determine the purity of gold. • The new gold testing device does not only prove to be more accurate and efficient, it is also more environmentally friendly due to no chemical waste disposal involved . •All the green initiatives above has allowed Bank Muamalat to save up to RM1.38 million annually which is believed to be a small amount compared to the environmental impact that can be accomplished through them. 2. Sea Coral Reefs Conservation Activities, Selakan Island, Sabah •Bank Muamalat has initiated the first corporate programme to involve concurrent activities of scuba diving and charity with the main objective to focus on a remote community that is away from major towns and for our pioneer place, Selakan Island was chosen. • Selakan Island is situated in the area of Tun Sakaran Marine Park, about 30-minute speed boat ride from Semporna town, Sabah. The only island in the Marine Park that has a Muslim settlement, majority of the households in Selakan Island live on floating houses comprising of 39 houses with approximately 350 occupants. Among economic activity of the community include growing sea weeds, fishing and collecting sea bounty. • Basic facilities are very limited on the island with fresh water supply is only obtainable by collecting rainwater and the electricity is from a solar panel provided by the state government a few years BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 97
      100. back . This island has a small mosque for the local community and a primary school for pre-school until Year 3 students. • With the decline of coral reef habitats around the world, the importance of coral farming is becoming clear. Aiming to conserve sea coral reefs and with the support from Tun Sakaran Marine Park, Bank Muamalat decided to be directly involved in the propagation of sea coral reefs. • Avid divers of Bank Muamalat and selective staff were trained on the process of taking, cutting and how to tie the sea corals to the steel frame which will be placed at the bottom of the sea as per advised by the Tun Sakaran Marine Park personnel. •Through this programme, a plot of seabed was established as a site for any future sea coral reef conservation activities by Bank Muamalat and will be named as Bank Muamalat Sea Coral Park. • Bank Muamalat is the first bank to embark in the sea coral propagation with Tun Sakaran Marine Park. The Bank hopes that this activity will become an inspiration for other corporate bodies to engage in coral conservation activities. 3. Seeding and Planting of Mangrove Trees and River Cruise Programme, Bagan Lalang • Bank Muamalat Malaysia Berhad organised a “Seeding and Planting of Mangrove Trees” on the coast of Bagan Lalang, Sepang, Selangor which stemmed from the objective of fostering passion for nature and creating awareness among the employees of the importance in protecting and preserving mangrove forest ecosystem that has been increasingly threatened with destruction. • It also exposed the participants to the ways of planting mangrove trees while fostering the spirit of camaraderie among staff and the management as well as instilling good values among the participants. • A total of 60 staff and family members participated in the programme. • The programme is important in order to maintain coastal greenery in every state in Malaysia and to prevent erosion by the waves especially during a monsoon season. 98 98 BANKMUAMALAT MUAMALAT MALAYSIA BERHAD (6175-W) (6175-W) • annual report 2016 REPORT 2017 BANK MALAYSIA BERHAD | ANNUAL • Bank Muamalat contributed RM5,000 to the MNS at the event in order to participate in the campaign for the conservation of mangrove trees and for the love of the environment. • In addition to the event, Bank Muamalat also officiated the opening of a hut (pondok wakaf ) located at Bagan Lalang beach for leisure and recreational use by visitors. • A total of 80 mangrove trees were planted by the participants who had gained knowledge on how such trees live and their importance to the environmental eco-system and coastal areas.
      101. ACCOUNTABILITY
      102. STATEMENT ON CORPORATE GOVERNANCE T he Board of Bank Muamalat (The Board) acknowledges that good corporate governance is the cornerstone of an effective and responsible organisation. The Board is fully committed to achieving the highest standards of corporate governance in its management of the affairs of Bank Muamalat and its accountability to shareholders and other stakeholders in line with the Malaysian Code of Corporate Governance 2017 (MCCG 2017) as well as the Guidelines on Corporate Governance for Licensed Islamic Bank issued by Bank Negara Malaysia (BNM Guidelines on CG). Therefore, the Board continuously strives to ensure that best practices are adopted in establishing accountability and integrity of the Board and Management. The Board will continue to ensure that the right leadership, policy, strategy and internal controls, are upheld in order to continuously deliver and sustain Bank Muamalat’s value propositions for the benefit of its stakeholders generally whilst at the same time ensure continuous momentum towards reaching Bank Muamalat’s aspirations to become the preferred Islamic financial services provider. BOARD OF DIRECTORS Board Structure & Composition The present size and composition of the Board is well balanced. As presently constituted, the Board has the stability, continuity and commitment as well as the capacity to discharge its responsibilities effectively. The Board currently comprises nine members. Six are Independent Non-Executive Directors, two are NonIndependent Non-Excutive Directors (nominees of DRBHICOM Berhad and Khazanah Nasional Berhad ) and one is Executive Director (the CEO). The current composition of the Board is in compliance with the BNM Guidelines on CG as majority of the Board members are Independent Directors. The Non-Executive Directors do not participate in the day-to-day management of Bank Muamalat and do not engage in any business dealing or other relationship with Bank Muamalat in order to ensure that they remain capable of exercising independent judgment and act in the best interests of Bank Muamalat and its shareholders. The presence of a majority of Independent Non-Executive Directors provides effective check and balance in the functioning of the Board. Further, the Board is satisfied and assured that no individual or group of Directors has unfettered powers of decision that could create a potential conflict of interest. A brief profile of each member of the Board is presented on pages 18 to 26 of this Annual Report. 100 100 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL Roles & Responsibilities of the Board The Board has the responsibility of ensuring the strategic guidance of Bank Muamalat, the effective monitoring of management, and accountability to Bank Muamalat and shareholders. In discharging their duties, the Board acts on well-informed basis, in good faith, with due diligence and care, and in the best interest of Bank Muamalat and stakeholders. The Directors in discharging their duties and responsibilities are constantly mindful of the public interest and concern of the business community, particularly those of customers, shareholders and all other stakeholders. The key duties of the Board include the following:• Review and approve strategies, business plans and significant policies and monitor management’s performance in implementing them; • Set corporate values and clear lines of responsibility and accountability that are communicated throughout the organisation; • Ensure competent management; • Ensure that the operations of Bank Muamalat are conducted prudently, and within the framework of relevant laws and policies; • Ensures that Bank Muamalat establishes comprehensive risk management policies, processes and infrastructure, to manage the various types of risks; • Institute comprehensive policies, processes and infrastructure to ensure Shariah compliance in all aspects of Bank Muamalat’s operations, products and activities; • Set up an effective internal audit department, staffed with qualified internal audit personnel to perform
      103. ACCOUNTABILITY • • • • • • • • • internal audit functions, covering the financial, management and Shariah Audit; Establish procedure to avoid self-serving practices and conflicts of interest including dealings of any form with related entities; Ensure protection of the interests of the depositors, particularly investment account holders; Establish and ensure the effective functioning of various board committees; Ensure Bank Muamalat has a beneficial influence on the economic well-being of its community; Ensure development and implementation, and maintain an effective oversight over Bank Muamalat’s Data Management and MIS Framework and ensure that the MIS Framework is aligned with business and risk strategies; Ensure establishment and adherence to the internal policies governing risk concentrations through annual review. The independent review is to be conducted regularly to verify compliance to the prudential limit and standards set by Bank Muamalat as well as the established internal policies; Ensure approval and oversight of Bank Muamalat’s capital management framework and its related policies, processes and strategies; Ensure approval of capital allocation on risk-adjusted basis appropriate level of capital is maintained in line with the approved risk appetite and risk profile; and Ensure approval of proposed issuance, call or redemption of any capital instruments and ordinary shares and for proposed dividend payments and reinvestment. The Non-Executive Chairman ensures the smooth functioning of the Board and that the procedures and processes are in place to facilitate effective conduct of business of the Board. The Chairman also ensures that decisions are taken on a sound and well-informed basis, including by ensuring that all strategic and critical issues are considered by the Board, and that Directors receive the relevant information on a timely basis. The Chief Executive Officer is primarily responsible for the day-to-day management of Bank Muamalat. He is responsible for developing the business direction and strategies of Bank Muamalat and also to ensure that Bank Muamalat’s business strategies and policies are effectively implemented. Directors may also seek independent professional advice, at Bank Muamalat’s expense, when deemed necessary for the proper discharge of their duties. Board Charter The Board Charter (Charter) formalizes the various roles and responsibilities of the Board, Board Committees and individual director of Bank Muamalat with the aim of streamlining and enhancing corporate governance practices towards transparency, accountability and integrity in boardroom activities. The Charter incorporates the Principles and Recommendations of the MCCG 2017, certain aspects of the Bank’s Constitutions and relevant sections of the Islamic Financial Services Act 2013 (IFSA 2013) and Companies Act 2016 as the duties and responsibilities of Directors are concerned. The Board Charter covers the following areas: • • • • • Board’s Roles and Responsibilities Board Procedures Board Appointment/Removal and Composition Board Structure Culture Board Meetings and Access to Information Bank Muamalat’s Board Meetings are scheduled in advance before the end of the financial year, specifically before the end of the calendar year, so as to allow members of the Board to plan ahead and fit the coming years’ Board and Board Committees meetings into their respective schedules. The Board meets every month with additional meetings convened as and when urgent issues and/or important decisions are required to be addressed between the scheduled meetings. Scheduled Board meetings are structured with a pre-set agenda. Ahead of each meeting, the Directors are provided with an agenda and appropriate meeting papers containing information relevant to the matters to be deliberated for their perusal. At each meeting, the Board receives updates BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 101
      104. STATEMENT ON CORPORATE GOVERNANCE from the respective Chairmen /representatives of the Board Committees on matters that have been deliberated at the Board Committees, as well as on matters that require attention. the maximum number of directorships/ positions in nonpublic listed companies and non-profit organisations that a Director can hold in Malaysia and offshore/ overseas, as follows: In order to effectively discharge its duties, the Board has full and unrestricted access to the information of Bank Muamalat through the Senior Management as well as the services of the Company Secretary. The Company Secretary also ensures that a quorum is present at the commencement of each Board and Committees meeting in order to constitute a valid meeting. • Maximum ten directorships in public listed companies • Maximum fifteen directorships in non-listed public companies. To ensure that Directors do not have competing commitments that impair their ability to discharge their duties effectively, the Board has established a policy on A director is allowed to hold directorships in institutions/ organisations to represent the interest of financial industry, non-profit organisations and statutory bodies/ government-owned companies and the number of such directorships will not be taken into account in computing the maximum limit. The Board convened twelve meetings during the financial year ended 31 March 2017 and the attendance of each director in office during the financial year is set out below:Directors 102 Number of meetings Held Attended % Tan Sri Dato’ Dr Mohd Munir Abdul Majid (Chairman/Independent Non-Executive Director) 12 12 100 Dato’ Sri Che Khalib Mohamad Noh (Non-Independent Non-Executive Director) 12 10 83 Dato’ Ahmad Fuaad Mohd Kenali (Non-Independent Non-Executive Director) *resigned w.e.f. 28 July 2016 5 4 80 Dato’ Haji Mohd Redza Shah Abdul Wahid (Executive Director/Chief Executive Officer) 12 12 100 Dato’ Haji Mohd Izani Ghani (Non-Independent Non-Executive Director) 12 11 92 102 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      105. ACCOUNTABILITY Directors Number of meetings Held Attended % 7 7 100 Tengku Dato’ Seri Hasmuddin Tengku Othman (Independent Non-Executive Director) 12 11 92 Dato’ Azmi Abdullah (Independent Non-Executive Director) 12 12 100 Dato’ Haji Kamil Khalid Ariff (Independent Non-Executive Director) 12 11 92 Dr. Azura Othman (Independent Non-Executive Director) 12 12 100 3 3 100 Haji Abdul Jabbar Abdul Majid (Non-Independent Non-Executive Director) *resigned w.e.f. 12 October 2016 Ghazali Darman (Independent Non-Executive Director) *appointed w.e.f. 4 January 2017 All Directors have thus well complied with the requirement that Directors must attend at least 75% of the Board meetings held in each financial year in accordance with the BNM Guidelines on CG. Company Secretary The Company Secretary attends all Board meetings and ensures that accurate and proper records of the proceedings and resolutions passed are maintained in the statutory records at the registered office of the Company. The Company Secretary also facilitates timely communication of decisions made and policies set by the Board at Board meetings, to the Senior Management for action. The Company Secretary works closely with the Management to ensure that there are timely and appropriate information flows within and to the Board and Board Committees, and between the Non-Executive Directors and Management. The appointment and removal of the Company Secretary must be approved by the Board. Training Programme for Directors The Board assumes the responsibility to further enhance the skills and knowledge of the members on the relevant new laws and regulations and changing commercial risks, as well as to keep abreast with developments in the financial services industry. Each director attends at least one training programme, which is to be specifically identified by Bank Muamalat for its directors during the financial year. Board Appointment Process Bank Muamalat is governed by the BNM Guidelines on CG in respect of the appointment of new directors and the re-appointment of its existing directors upon the expiry of their respective tenures of office as approved by BNM. All appointment of directors is subject to the approval by BNM. The primary responsibility of the directors’ appointment/ reappointment has been delegated to the Board Nomination & Remuneration Committee (NRC). The NRC comprises exclusively non-executive directors, with the Chairman and the majority of whom are independent. In line with the BNM Guidelines on CG, the NRC recommends to the Board suitable candidates for directorships and appointment of key senior personnel of the Bank and relevant subsidiaries. The NRC also ensures that candidates satisfy the relevant requirements on the skills and core competencies of a director and are deemed fit and proper to be appointed as director in accordance with the Fit and Proper criteria. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 103
      106. STATEMENT ON CORPORATE GOVERNANCE The NRC has , during the year under review evaluated and recommended the appointment of the following director: i. Ghazali Darman as an independent non executive director The Board considers that the recent appointment of the above director who brings his own unique skills, experiences and knowledge in the commercial sector with exposure in the financial related industry will ensure that the critical competencies gaps identified by the Board are appropriately addressed and provide fresh insights that would help Bank Muamalat overcome challenges ahead. Re-election of Directors In accordance with Bank Muamalat’s Constitutions, all directors are subject to retirement by rotation at due intervals of rotation. Being eligible they may offer themselves for re-election, a process that enables the shareholders to vote them back into office. Directors who are appointed as additional directors or to fill casual vacancies during the year are subject to reelection by the shareholders at the next Annual General Meeting following their appointment. Tenure of Independent Directors The tenure of an independent director is capped at nine (9) years and the nine (9) years can either be a consecutive service of nine (9) years or a cumulative service of nine (9) years with intervals or upon expiry of the prevailing term as approved by BNM, whichever is the later date. 104 104 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL A director who has served the Board as an independent director for a cumulative period of nine (9) years is required to submit his resignation letter as an independent director to the Board at least three (3) months from the date of his ninth anniversary as independent director. In the event that the director is reappointed, he should be considered as a non-independent director. Notwithstanding the above, the Shareholders may in exceptional cases and subject to the assessment of the NRC decide that an independent director can remain as an independent director after serving the cumulative term of nine (9) years, subject to BNM’s approval. A director may also continue to serve as a member of the Board beyond the age of seventy (70) years, if the NRC has concluded and the Board has concurred and subject to his/her re-appointment as director being approved by shareholders. Evaluation of Board Performance One of the broad responsibilities of the NRC is to provide a formal and transparent procedure for the assessment of effectiveness of individual directors and the Board as a whole. In line with the BNM Guidelines on CG and for this purpose, the NRC had conducted and established clear selection criteria, processes and procedures to assess each director’s ability to contribute to the effective decision making of the Board. In addition, assessment would also be undertaken to gauge the effectiveness of the relevant Board Committees. The annual board assessment exercise was primarily based upon the answers to a customised questionnaire which was prepared internally.
      107. ACCOUNTABILITY BOARD COMMITTEES The Board has established several Board Committees whose compositions and terms of reference are in accordance with the BNM Guidelines on CG as well as best practices prescribed by the MCCG 2017 . The Board Committees in the Bank are as follows:1. Board Audit Committee The Board Audit Committee (BAC) comprises exclusively Non-Executive Directors of the Board, responsible to fulfill the oversight function in relation to the adequacy and integrity of system of internal controls and financial reporting, risk management and compliance with internal policies, procedures and external applicable rules and regulations. The Board Audit Committee is authorised by the Board to investigate any matter within its Terms of Reference and has full access to and co-operation by management and full discretion to invite any director or executive officer to attend its meetings, and reasonable resources to enable it to discharge its functions properly. The BAC has full and unrestricted access to information and be able to obtain independent professional advice. The composition of the BAC and the attendance of the meetings held in the year under review are as follows:Members of Audit Committee Number of meetings Held Attended % Tengku Dato’ Seri Hasmuddin Tengku Othman (Chairman/Independent Non-Executive Director) *resigned as Chairman w.e.f. 30 August 2016 16 15 94 Dr. Azura Othman (Independent Non-Executive Director) *appointed as Chairman w.e.f. 1 September 2016 16 16 100 Haji Abdul Jabbar Abdul Majid (Non-Independent Non-Executive Director) *resigned w.e.f. 12 October 2016 8 8 100 Dato’ Azmi Abdullah (Independent Non-Executive Director) 16 16 100 Dato’ Haji Kamil Khalid Ariff (Independent Non-Executive Director) 16 15 94 Ghazali Darman *appointed w.e.f. 10 January 2017 4 4 100 The objectives and activities carried out by the BAC during the year under review are summarised in the Statement of Internal Control as stated in pages 110 to 111 of this Annual Report. 2. Board Nomination & Remuneration Committee The Board Nomination Committee and Remuneration Committee were combined in September 2016 to become the NRC which provides a formal and transparent procedure for the appointment of directors, CEO and members of Shariah Committee as well as assessment of effectiveness of board as a whole, Shariah Committee members and performance of CEO and key senior management officers. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 105
      108. STATEMENT ON CORPORATE GOVERNANCE The NRC also provides a formal and transparent procedure for developing a remuneration policy for Directors , CEO and key senior management officers and ensuring that Bank Muamalat’s compensation package is competitive and consistent with its culture, objectives and strategies. In addition, the NRC is also responsible for developing remuneration policy for the Shariah Committee members that commensurate with their roles and responsibilities. The NRC will then recommend the proposed remuneration package to the Board for its approval. The NRC comprises Non-Executive Directors and the Chairman who is independent. Meetings are held as and when required for the NRC to deliberate on related matters. The members of the NRC and the attendance for the year under review are as follows:Members of Board Nomination Committee Held Attended % Tengku Dato’ Seri Hasmuddin Tengku Othman (Chairman/Independent NonExecutive Director) 6 6 100 Dato’ Sri Che Khalib Mohamad Noh (Non-Independent Non-Executive Director) 6 4 67 Dato’ Haji Mohd Izani Ghani (Non-Independent Non-Executive Director) 6 5 83 Haji Abdul Jabbar Abdul Majid (Non-Independent Non-Executive Director) *resigned w.e.f. 12 October 2016 6 6 100 Dato’ Azmi Abdullah (Independent Non-Executive Director) 6 6 100 Members of Board Remuneration Committee 106 Number of meetings Number of meetings Held Attended % Dato’ Azmi Abdullah (Chairman/Independent Non-Executive Director) 5 5 100 Dato’ Sri Che Khalib Mohamad Noh (Non-Independent Non-Executive Director) 5 3 60 Dato’ Haji Mohd Izani Ghani (Non-Independent Non-Executive Director) 5 5 100 Haji Abdul Jabbar Abdul Majid (Non-Independent Non-Executive Director) *resigned w.e.f. 12 October 2016 5 5 100 Tengku Dato’ Seri Hasmuddin Tengku Othman (Independent Non-Executive Director) 5 5 100 106 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      109. ACCOUNTABILITY Members of Board Nomination & Remuneration Committee Number of meetings Held Attended % Tengku Dato’ Seri Hasmuddin Tengku Othman (Chairman/Independent NonExecutive Director) 5 5 100 Dato’ Sri Che Khalib Mohamad Noh (Non-Independent Non-Executive Director) 5 3 60 Dato’ Haji Mohd Izani Ghani (Non-Independent Non-Executive Director) 5 4 80 Haji Abdul Jabbar Abdul Majid (Non-Independent Non-Executive Director) *resigned w.e.f. 12 October 2016 1 1 100 Dato’ Azmi Abdullah (Independent Non-Executive Director) 5 5 100 The primary duties and responsibilities of the NRC are as follows:• Establishing minimum requirements for the Board that is, required mix of skills, experience, qualification and other core competencies required of a director. The NRC is also responsible for establishing minimum requirements for the CEO. The requirements and criteria should be approved by the full board; • Recommending and assessing the nominees for directorship, board committee members, and Shariah Committee members as well as the CEO; • Overseeing the overall composition of the Board, in terms of the appropriate size and skills, and balance between executive directors, non-executive directors and independent directors through annual review; • Recommending to the Board the removal of a director/CEO/Shariah Committee member from the Board/management/ committee if the director/CEO/Shariah Committee member is ineffective, errant and negligent in discharging his responsibilities; • Establishing a mechanism for the annual formal assessment on the effectiveness of the board as a whole, assessment of the performance of individual directors, the performance of the CEO and other key senior management officers (Executive Vice President (EVP) and above); • Ensuring that all directors and Shariah Committee members receive an appropriate continuous training program in order to keep abreast with the latest developments in the industry; • Overseeing the appointment, management succession planning and performance evaluation of key senior management officers; • Recommending to the board the removal of key senior management officers if they are ineffective, errant and negligent in discharging their responsibilities; • Assessing , on annual basis, to ensure that the directors and key senior management officers are not disqualified under the Guidelines on the Governance of Shariah Committee for the Islamic Financial Institutions (BNM/GPS1); • Providing a formal and transparent procedure for developing the remuneration for directors, board committee members, CEO, Shariah committee and key senior management officers and to ensure that their compensation is competitive and consistent with Bank Muamalat’s culture, objectives and strategy; • Recommending to the Board on the policies, strategies and framework for the Bank in relation to the remuneration, rewards and benefits; and • Recommending the remuneration of the Shariah Committee members for the full board’s approval. The remuneration shall commensurate and reflect the roles and responsibilities of the Shariah Committee. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 107
      110. STATEMENT ON CORPORATE GOVERNANCE 3 . Board Risk Management Committee The Board Risk Management Committee (BRMC) is authorised to oversee Management’s activities in managing credit, market, liquidity, operational, legal and other risk and to ensure that the risk management process is in place and functioning. In addition, the BRMC is also responsible for ensuring that a comprehensive risk management infrastructure is in place for managing the risk associated with Mudharabah and Musharakah financing or investments. The composition and the attendance for the year under review of the Board Risk Management Committee are as follows:Members of Board Risk Management Committee Number of meetings Held Attended % Dato’ Azmi Abdullah (Chairman/Independent Non-Executive Director) 13 13 100 Dato’ Haji Mohd Izani Ghani (Non-Independent Non-Executive Director) 13 9 69 Haji Abdul Jabbar Abdul Majid (Non-Independent Non-Executive Director) *resigned w.e.f. 12 October 2016 7 7 100 Tengku Dato’ Seri Hasmuddin Tengku Othman (Independent Non-Executive Director) 13 13 100 Dato’ Haji Kamil Khalid Ariff (Independent Non-Executive Director) 13 12 92 The objectives and activities carried out by the Board Risk Management Committee during the year under review are summarised in the Statement on Risk Management as stated in pages 112 to 119 of this Annual Report. 4. Shariah Committee 108 The Shariah Committee was established in accordance with the requirements of the Islamic Financial Services Act 2013 as well as Bank Muamalat’s Constitutions, which prescribe the setting up a Shariah body to ensure that Bank Muamalat’s conduct its affairs in accordance with the Shariah principles. Members of the Shariah Committee are scholars renowned for their knowledge and experience in Fiqh Muamalat. Further details of the Shariah Committee are set out on Pages 28 to 35 of this Annual Report. 108 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      111. ACCOUNTABILITY 5 . Internal Audit and Control Activities The Board has the overall responsibility in maintaining a system of internal controls that provides reasonable assurance of effective and efficient operations and compliance with laws and regulations, as well as internal procedures and guidelines. The Statement on Internal Control and activities of Bank Muamalat are summarized on page 110 of this Annual Report 6. Related Party Transactions The details of related party transactions of Bank Muamalat are disclosed on pages 243 to 244 under the Audited Financial Statement for the financial year ended 31 March 2017 of this Annual Report. 7. Management Reports At every Board meeting, management reports on the progress of projects undertaken by Bank Muamalat pertaining to products and services, information technology, recruitment, human resource, policies and procedures, regulatory requirement as well as income and expenses are submitted to the Board for review. 8. Corporate Responsibility As part of its shared values, Bank Muamalat is continuously developing and strengthening its relationship with the community. Through its Corporate Responsibility initiatives, Bank Muamalat willingly gives back to the community not just in monetary terms but also through the provision of products, services as well as educating the public on the importance of Islamic financial services through a series of ‘ceramahs’. Further details of the Corporate Responsibility Initiatives are set out on Pages 72 to 78 of this Annual Report. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 109
      112. STATEMENT ON INTERNAL CONTROLS THE STATEMENT ON INTERNAL CONTROLS IS MADE PURSUANT TO BEST PRACTICES AS DEFINED BY MALAYSIAN CODE ON CORPORATE GOVERNANCE 2012 BY SECURITIES COMMISSION TO INCLUDE IN ITS ANNUAL REPORT A STATEMENT ABOUT THE STATE OF ITS INTERNAL CONTROL . THE STATEMENT IS CRUCIAL AS IT OUTLINES THE PROCESSES TO BE ADOPTED BY THE BOARD IN REVIEWING THE ADEQUACY AND EFFECTIVENESS OF INTERNAL CONTROL SYSTEM OF BANK MUAMALAT. RESPONSIBILITY The Board recognises the importance of maintaining a sound system of internal controls and risk management practices as well as reviewing their adequacy and effectiveness to safeguard shareholders value. Robust and dynamic risk management and internal controls are vital in ensuring stability of the business in facing rapid changes of business operations today. The Board reviews and is ultimately responsible for the adequacy and integrity of the internal control systems in Bank Muamalat in addressing business and operational risks. The Board diligently exercises overall responsibility in ensuring that Bank Muamalat’s system of internal controls is adequate and effective to manage the risk profiles within Bank Muamalat’s risk appetite. It is pertinent to note that, such a system is designed to manage Bank Muamalat’s key areas of risks within an acceptable risk appetite, rather than to guarantee total elimination of risk of failure to achieve Bank Muamalat’s objectives and goals. As such, the system of internal controls can only provide reasonable rather than absolute assurance of effectiveness against material misstatements of financial information or against fraud or financial losses. The concept of reasonable assurance also acknowledges that the control procedures cost should not exceed the expected benefits. The Board is of the opinion that, for the period under review up to the issuance date of the annual report and financial statements, the system of internal controls in place at Bank 110 110 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL Muamalat is appropriate and adequate to safeguard the stakeholders’ interest and its assets. The control structure and process which have been instituted throughout Bank Muamalat are reviewed and enhanced from time to time as to suit the changes in Bank Muamalat’s business environment and risk appetite. As at the date of approval of this statement, the improvement of the internal controls system remained in place. The role of Management includes: • Identifying and evaluating the risk faced, and the achievement of business objectives and strategies; • Formulating relevant policies and procedures to manage these risks; • Designing, implementing, and monitoring a sound system of internal control; • Implementing the policies approved by the Board; and • Reporting in a timely manner to the Board any changes to the risks and corrective actions taken. Internal Audit Function • Internal Audit Department (“IAD”) conducts independent audits and provide reasonable assurance and value-added recommendations on the adequacy and effectiveness of the system of internal controls and financial reporting, and compliance with internal policies and procedures, and external applicable rules and regulations. They evaluate and contribute to the improvement of governance, risk management, and control processes using a systematic and disciplined approach. Audit reviews are carried out using risk-
      113. ACCOUNTABILITY • • based approach on units, branches, and key business processes based on annual audit plan approved by the Board Audit Committee (‘BAC”) taking into consideration Bank Muamalat’s objectives, business and regulatory environment, and input of the Senior Management, Shariah Committee, and the Board. The Management Audit Committee (“MAC”) is a management committee chaired by the Executive Vice President, Finance Division comprising senior level representatives of Bank Muamalat from a broad range of business and support units. The MAC meets regularly to deliberate on the findings of all audit reports and decide on the appropriate action required to resolve the audit issues. The BAC meets on a scheduled basis to review the findings, recommendations, and action plans reported by IAD, Management, External Auditors, and Regulatory Authorities. It has the authority and is empowered by the Board to review the adequacy and effectiveness of the Bank Muamalat’s internal control system. It also reviews the internal audit function and the scope of the annual audit plan and frequency of the internal audit activities. Minutes of the BAC meeting are then tabled to the Board. OTHER KEY ELEMENTS OF INTERNAL CONTROLS The other key elements incorporated by the Board, which contributes to an effective internal controls system includes: Business Plan and Budget Annual business plan and budget are prepared and submitted to the Board for approval, where performance achievements are reviewed against the targeted results on monthly basis to allow corrective actions to be taken to mitigate risks. The Board reviews regular reports from the Management on the key financial and operating statistics, as well as legal and regulatory matters. Policies and Procedures The Board approves any changes or updates to Bank Muamalat’s policies. Bank Muamalat’s policies and procedures are established and formalised to ensure compliance with internal controls and the relevant laws and regulations, which are set out in the respective manuals, guidelines, and directives issued by Bank Muamalat and the regulatory authorities that updated from time to time. Defined authority limits have been established for each level within Bank Muamalat to approve acquisition and disposals of assets, approval of credit items, writing off operational and credit items, as well as approving expenses. In regards to Bank Muamalat’s commitment towards its Whistle Blowing Policy, the Board has established Muamalat Ethics Line to enable employees to raise concerns in a responsible manner regarding any unprofessional or unethical conduct, and to have such concerns properly investigated. All disclosures under this Policy will be managed by a third party appointed by Bank Muamalat and will be treated as strictly confidential. Organisation Structure Establishment of a formalised organisation structure that provides clear demarcation of reporting and responsibility for ensuring proper assignment of authorities, segregation of duties, and accountability towards Bank Muamalat. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 111
      114. STATEMENT ON RISK MANAGEMENT Overview Risk Governance Risk is inherent in every aspect of the Bank ’s business activities. Key among these are credit, market, liquidity, operational, strategic, reputational, and compliance risks. As a full-fledged Islamic financial institution (IFI), the Bank also faces the additional risk of Shariah non-compliance. Failure to manage these risks effectively could result in financial loss, regulatory sanctions and penalties as well as reputational damage, which in turn may adversely impact the Bank’s ability to execute its business strategies. The risk management framework incorporates risk governance and oversight structure where roles, responsibilities and accountability for the management of risk are clearly outlined. It also provides a blueprint for how the Board, through delegation of authority to committees and executive officers, establishes and executes risk appetite and associated limits for business activities. Bank Muamalat undertakes an integrated approach towards risk management to ensure that these risks and their unique interactions are properly identified, addressed and managed in a comprehensive and holistic manner. The Bank’s risk framework and structure are built on formal governance processes that set out the roles and responsibilities for risk management activities as well as their overall governance and oversight. The defined risk management framework and clearly articulated risk appetite statements work together to ensure a comprehensive approach to risk management. Risk management strategies are formed with due consideration of the Bank’s risk appetite, business strategies and objectives, identified and quantified risks, and the required monitoring and control environment. Apart from ensuring sound management and control of these principal risks, the integrated risk framework also enables the Bank to optimise use of resources as well as to identify and secure its strategic and competitive advantage. 112 112 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL The Board of Directors is responsible for the overall risk governance and oversight which include determination of risk strategies, defining Bank Muamalat’s risk appetite, and ensuring effective of control and monitoring of risks. The Board oversees risk management function through a clearly defined and effective risk management structure, which includes board and management level committees with distinct roles and responsibilities and discretionary authority. Management is responsible for tracking and reporting performance measurements as well as any exceptions to guidelines or limits. The Board and its committees oversee financial performance, execution of the strategic and business plans, adherence to risk appetite limits and the adequacy of internal controls.
      115. ACCOUNTABILITY Risk Management Organisation Structure Bank Muamalat ’s risk governance structure consists of board and management level committees as well as risk control units who are guided and managed by a reporting hierarchy to enforce the overall governance and oversight of risks. Each committee and control unit has its own delegated roles, responsibilities and authorities. The Board maintains the ultimate responsibility for overall risk governance and management. It is responsible for ensuring that the risk management structure is clearly defined and performs effectively. This includes determination of risk strategies and risk appetite and ensuring effective of control and monitoring of risks. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 113
      116. STATEMENT ON RISK MANAGEMENT The Board is supported by two board-level committees , namely the Board Risk Management Committee (BRMC) and the Shariah Committee (SC), each with distinct roles and responsibilities. The committees, through the authorities delegated by the Board, execute and implement the Bank’s strategies, policies and methodologies and ensure that these are kept in line with the Board’s vision. BRMC is a board-level forum that focuses and deliberates on all risk management issues. The committee oversees and ensures effective management of risks and enforcement of approved risk tolerances and limits. It is also responsible for reviewing and assessing the existing risk management framework for its continued efficacy and for ensuring that robust infrastructure and systems as well as resources are in place to effectively monitor risk and capital positions. Shariah compliance management is enforced by the Board through the SC. SC functions independently from the Board and is tasked with the responsibility of understanding Shariah issues in all activities assumed by the Bank. SC also serves as advisory to the Board and management team on all Shariah matters. Shariah management and compliance are closely aligned to ensure that Bank Muamalat has a full view of all risks and is able to put forth an integrated and end-to-end Shariah compliance management. Management formulates and reviews strategic and business plans, as well as capital plan and risk appetite statement, annually and recommends them to the Board for approval. The strategic plan takes into consideration the Bank’s financial objectives and resources, which must align with its risk capacity and risk appetite. Financial objectives for each business line are established by setting growth and return targets and allocating capital for each business. Management would then assess the overall performance and risk-adjusted returns of each business line against the set targets and indicators. Capital allocations and operating limits are regularly evaluated as part of the overall governance processes as businesses and economic environment would continue to evolve. Management-level risk committees are set up to oversee specific risk areas and perform risk control functions. These include asset-liability management, credit evaluation and management, investment management, and operational risk management A dedicated Risk Management 114 114 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL Department supports the above committees by performing the day-to-day risk management functions independent from the business lines and targets. Bank Muamalat’s risk governance structure is based on a distributed function approach, where risk governance and management is undertaken under the Three Lines of Defence model. All units have a specific responsibility for risk management under the above model. The first line of defence in managing risks lies within the business units where risks are directly undertaken and assumed in the day-to-day business activities and operations. As front-liners, the business units are responsible for carrying out the established processes for identifying, mitigating and managing risks within their respective environment in aligment with Bank Muamalat’s strategic targets. The second line, which comprises risk management control functions and compliance, ensures independent oversight and management of all material risks undertaken by the Bank. The risk management function provides specialised resources for developing risk frameworks, policies, methodologies and tools for risk identification, measurement and control. It also provides the control function, which monitors the risks by using various key indicators and reports, guided by established risk appetite and tolerance limits. Internal Audit, as the third line of defence, provides independent review and assurance on adequacy of risk management processes and effectiveness of the first two lines of defence in fulfilling their mandates. Risk Appetite Bank Muamalat’s risk appetite framework comprises a governance structure, processes and risk appetite statements (RAS). It is intended to ensure that Bank Muamalat maintains an acceptable risk profile by providing a common framework and a comparable set of measures for senior management and the Board to clearly indicate the level of risk the Bank is willing to accept. It also serves as a foundation and reference for Bank Muamalat’s risk culture and provides guidance for business and risk-taking activities as well as decision making.
      117. ACCOUNTABILITY RAS is set annually in conjunction with the strategic , capital and business plans to align risk appetite with Bank Muamalat’s strategies and financial resources. It incorporates key performance indicators such as earnings volatility, liquidity and capital ratios, where strategic tolerance levels are stated to facilitate ongoing monitoring and oversight. The risk appetite defines risk capacity in terms of capital levels required to support business activities as well as capital buffers deemed adequate to meet regulatory and strategic requirements. As overall risk capacity is limited, the Bank needs to prioritise the risks it takes on in order to maintain a strong and flexible financial position to weather through challenging economic conditions and take advantage of organic growth opportunities. Thus, objectives and targets for capital and liquidity are set with the intention to allow Bank Muamalat to operate in a safe and sound manner at all times, including during periods of stress. Business units operate within stated risk limits which are based on the amount of capital, earnings or liquidity that Bank Muamalat is willing to put at risk to achieve its strategic objectives and business plans. Risk management strategies are formed in line with the RAS as it provides the basis for risk-taking boundaries, tolerance limits and measures. Capital Management Bank Muamalat’s capital management framework outlines the governance and approach for managing capital. The framework was developed according to the capital standards outlined in the BNM’s CAFIB guidelines and adopts forward-looking and risk-based approaches and principles derived from industry’s best practices. The objective of capital management is to ensure capital resources are effectively and efficiently used in pursuing the Bank’s business and strategic targets. Capital requirements are assessed in conjunction with strategic and business plans and the annual capital plan is developed to ensure sufficient capital is maintained to meet business needs and support the risks associated with these activities. Bank Muamalat applies Standardised Approach for credit and market risks and the Basic Indicator Approach for operational risk to determine its risk-weighted assets and capital requirement. As prescribed under the ICAAP, other possible major risks that are not covered under these measurement approaches are also assessed to determine further capital requirement, if any. The capital position is closely monitored against capital plan and internal targets to ensure that it remains within set targets or if necessary, to trigger preemptive or remedial actions. Stress tests are periodically performed to evaluate the impact of macro-economic and risk factors on capital levels and to formulate appropriate capital management strategies. Stress testing is also used to identify early warning signs and potential risk events that may adversely impact Bank Muamalat’s risk profile and business direction. It is also used to determine the appropriate capital buffers needed to ensure that the minimum regulatory ratios are not breached under actual and stressed scenarios. The capital planning and management framework is also used to ensure that adequate capital buffer is held under normal and projected adverse conditions. Hence, the annual capital plan addresses any capital issuance requirements, capital instrument composition and maturity profile, and capital crisis contingency planning. Managing Risks Bank Muamalat’s risk management framework stipulates the oversight structure and policies that outline the applicable principles, processes, control mechanisms and methodologies used to manage risks. The framework also specifies clear responsibilities for risk management activities as well as the reporting requirement and ongoing monitoring of these activities. Risk management strategies are formulated and implemented to ensure that risks are effectively addressed and managed. Risk strategies are also developed with the aim of balancing risks with business objectives and ensuring growth plans are supported by a well-defined and effective risk infrastructure. The risk infrastructure is continuously updated and upgraded for the latest risk management approaches and processes to enable timely identification, measurement and response to existing and emerging risks in tandem with the Bank’s risk profile and operating environment. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 115
      118. STATEMENT ON RISK MANAGEMENT Credit Risk Management Credit risk is defined as the risk of financial loss if a customer or counterparty fails to meet its obligations as they fall due . It is a primary source of risk as Bank Muamalat’s financial assets comprise mainly retail and wholesale financing portfolios and investment securities. Bank Muamalat’s has established a comprehensive credit risk management framework which comprises policies, processes, measurement methodologies, and a reporting and oversight structure. Credit underwriting and management is governed by a set of credit-related policies, namely the Credit Risk Policy (CRP) and Guidelines to Credit Risk Policies (GCRP). They outline Bank Muamalat’s policies on credit risk such as financing underwriting standards, pricing policy, risk rating, approving authority limits, prudential limits, risk mitigation, review process, rehabilitation and restructuring, and provisioning for impaired financing. The policies are reviewed and updated regularly to ensure its continued relevance and effectiveness. Credit risk management involves measurement, mitigation and management of credit risk exposures at every stage of the credit process. At origination and onboarding, business units are guided by credit underwriting standards, rating models and pricing policy. Credit proposals are subjected to independent evaluation and risk assessment prior to approval. Credit limits are sanctioned under a welldefined approving authority structure to ensure credit decision making are undertaken under prudent and proper governance. These authority limits are approved by the Board and are subject to periodic review to ensure its effectiveness and compliance. Bank Muamalat monitors and manages credit exposures based on concentration and portfolio segments to ensure ongoing compliance to risk appetite and tolerance level. Reports on trend analysis, limit exposures and risk profiling and analytics are produced and deliberated at risk management committees on a regular basis. Exposures to delinquent and problematic financing assets are monitored and managed by an independent support unit that focuses and specialises on restructuring and 116 116 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL recovery activities. Early warning triggers are used to identify potentially distressed accounts to initiate timely remedial actions. Such exposures are actively monitored to ensure delinquency is kept within tolerable limits. Market Risk & Asset-Liability Management Market risk is defined as risk of losses in on and off-balance sheet positions resulting from movements in market rates, foreign exchange rates, equity and commodity prices, which may adversely impact earnings and capital positions. The risk is inherent in the financial instruments held in Bank Muamalat’s asset and liability portfolios. In the event of market stress, these risks could have a material impact on Bank Muamalat’s financial performance due to changes in economic value based on varying market conditions, with one of the primary risks being changes in the levels of interest rates. The risk of such adverse changes arising from fluctuations in interest rates is managed through our Asset-Liability Management (ALM) activities. ALM refers to the coordinated management of Bank Muamalat’s balance sheet and its composition. The main focus of ALM is on the overall performance that can be measured in terms of net income. In turn, the primary determinant of net income will be the overall risk-return position of the Bank. Bank Muamalat’s risk management framework addresses both market risk and asset-liability management, where market risk exposures are managed and controlled in order to optimise return on risk and maintain a market profile that is consistent with the approved strategic and business plan. The framework covers key risk management practices such as risk identification, measurement, mitigation, monitoring and control, which are performed under a formal governance and oversight structure. An independent market risk control function is responsible for measuring risk exposures according to established policies and guidelines and reports to the Asset Liability Working Committee (ALCO) on a monthly basis. Balance sheet and
      119. ACCOUNTABILITY capital management issues and strategies are discussed at the ALCO and later escalated with recommended action plans to the ERMC , BRMC and Board respectively. The above market risk and ALM management process is governed by the Market Risk & ALM Policies and Guidelines (MRAPG) and Trading Book Policy Statement (TBPS). Rate of Return Risk Rate of return risk refers to the variability of assets and liabilities resulting from volatility of market benchmark rates, impacting portfolios both in the trading and banking books. Such changes may adversely affect both earnings and economic value. Bank Muamalat’s uses various measurement tools and analysis to study the impact of market rate changes on earnings and balance sheet profile to manage the said exposure. These include earnings at risk (‘EaR’), economic value of equity (’EVE’) and re-pricing gap analysis. In addition, the value at risk (VaR) approach is used to estimate the maximum potential loss of an investment portfolio over a specified time. Risk tolerance limit are built along these sensitivity measurement to manage and mitigate the related risk exposures. The following rate of return risks are actively managed by the Bank: Risk Definition Repricing Risk Timing differences in maturity and repricing of Bank’s assets and liabilities Yield Curve Risk Unanticipated yield curve shifts that has adverse impact on Bank’s income and economic values Basis Risk Arises from imperfect correlation in the adjustment of rates earned and paid on different instruments with otherwise similar re-pricing characteristics Optionality/ Embedded Option Risk The risk arising from options embedded in Bank’s assets, liabilities and offbalance sheet portfolio Liquidity Risk Liquidity risk is best described as the inability to fund any obligation on time as they fall due, whether due to increase in asset or demand for funds from the depositors. Bank Muamalat will incur liquidity risk if it is unable to create liquidity and this has serious implications on its reputation and continued existence. Bank Muamalat’s priority is to therefore manage and maintain a stable source of financial resources toward fulfilling the above expectation. Through active balance sheet management, Bank Muamalat ensures sufficient cash and liquid assets are made available to meet both short and long term obligations. The primary focus of liquidity management is to assess all cash inflows against outflows to identify the potential for any net shortfall going forward. This includes funding requirements for off-balance sheet commitments. Bank Muamalat pays particular attention to its ability to cover any shortfall in liquidity for up to one month time period followed by a medium-term assessment of liquidity of up to one year. The measurement and limits used to monitor and manage liquidity risk are as prescribed under the BNM’s liquidity framework, namely the New Liquidity Framework (NLF), Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR). To mitigate the risk, Bank Muamalat employs a funding diversification strategy and establishes a liquidity contingency plan. For ongoing management and monitoring of liquidity and funding positions, Bank Muamalat establishes risk tolerance and limits within the applicable risk appetite metrics and provides monthly reporting of its asset, liability and liquidity positioning. Bank Muamalat has also established a comprehensive liquidity crisis contingency framework with set triggers and management action plan. To ensure its readiness in dealing with liquidity crisis, Bank Muamalat has set up a pre-crisis management framework with a built-in and structured crisis response mechanism, which allows quick identification of potential liquidity crisis before it occurs. The process involves continuous monitoring of various indicators which act as earlywarning signals of impending crisis situation in different severity levels. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 117
      120. STATEMENT ON RISK MANAGEMENT Operational Risk Management Operational risk is defined as the risk of loss resulting from inadequate or failed internal processes , people and system or from various external events. It may occur anywhere within the organisation, including in third-party business processes, and is not limited to operation functions. The effects of operational risk may extend beyond financial losses and may result in legal and reputational risk impacts. Operational Risk Management (ORM) therefore focuses on effective management of risks to minimise possible financial and non-financial losses arising from operational lapses. The key risk organs under the operational risk framework are the Operational Risk Management unit, Operational Risk Management Committee (ORMC), Internal Audit, Compliance and the business lines. The management of operational risks is targeted at preventing risk events and damages (by in-process and managerial controls), handling critical situations (via contingency plans and business continuity management (BCM)) and mitigating potential losses (collaterals). By establishing and operating a system of control procedures that commensurate with its risks, Bank Muamalat aims to limit its exposures to an acceptable level in accordance with the risk appetite. In addition, Bank Muamalat has established a web-based application, known as Muamalat Operational Risk Solution (MORiS), which is used as a tool in risk identification and assessment, a tracking mechanism of risk exposures against established key risk indicators (KRI), and a centralised database for loss incidents and near-misses. 118 118 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL Bank Muamalat adopts the BNM’s Guidelines on Business Continuity Management, which entails enterprisewide planning and arrangement of key resources and procedures that would enable Bank Muamalat to respond and continue to operate critical business functions across a broad spectrum of interruptions to business arising from internal or external events. Under the BCM, the Business Continuity Plan (BCP) is prepared based on risk assessment and business impact analysis performed on identified potential threats to business functions. The business impact analysis also aims to identify critical business functions’ recovery time objective and maximum tolerable downtime given Bank Muamalat’s resources and infrastructure. Shariah Risk Management Shariah non-compliance risk is defined as the risk that arises from failure to comply with the Shariah rules and principles as determined by the Shariah Committee (SC) of The Bank’s and relevant Shariah regulatory councils or committees. To manage Shariah risk, the Bank has established the Shariah Risk Management Unit (SRMU) as part of its integrated risk management framework, which is in accordance with BNM’s guidelines on Shariah Governance Framework (SGF). SRMU’s main responsibilities include formulation of policies and guidelines on Shariah risk management and the required governance and oversight processes. These include the approaches for identification and assessment of Shariah non-compliance risks in business activities, products and services, and assessment of the effectiveness of existing controls and mitigation plan. SRMU also performs assessment of new and existing products, services and operating procedures from Shariah risk perspective and conducts training and awareness programme on Shariah risk to promote a Shariah compliance risk culture.
      121. ACCOUNTABILITY Strategic Risk Management Strategic risk is defined as the risk of unexpected negative developments in Bank Muamalat ’s performance stemming from fundamental strategic and business decisions and their execution. The risk may result from incorrect assumptions about external or internal factors, inappropriate business plans, ineffective business strategy execution, or failure to respond in a timely manner to changes in the regulatory, macroeconomic or competitive environments. In assessing and managing strategic risk, the Bank’s looks at risks associated with its current and future business plans and strategies and identify situations which can be of potential threat to achieving the strategic objectives. These may include plans for entering into new businesses, expansion of existing products and services, and enhancement or replacement of infrastructure, such as those involving information technology, networking and outsourcing. Reputational Risk Management Reputational risk is the risk of loss arising from negative perception of Bank Muamalat’s image by its conduct or business practices, which could adversely impact profitability, operations or shareholder value. Bank Muamalat manages reputational risk through established policies and controls in its businesses and risk management processes to mitigate reputational risks in a timely manner and through proactive monitoring and identification of potential reputational risk events. The integrated risk governance structure provides oversight of all risks including those which could potentially lead to reputational risks. To ensure its readiness to respond to a potential risk event, Bank Muamalat assesses its internal capability to manage reputation risk and understand the external impact of the risk event materialising. The processes and procedures to respond to events that give rise to reputational risk include educating individuals and organisations that influence public opinion, external communication strategies to mitigate the risk, and informing key stakeholders of potential reputational risks. Managing reputational risk is the responsibility of all individuals within the organisation, particularly those who are directly involved in making commercial decisions in their respective functions or business lines. Reputational risk generally arises from failure to effectively manage all other types of risks. Bank Muamalat therefore places high importance on overall risk governance and in particular, on ensuring compliance to the Shariah tenets. As a full-fledged Islamic financial institution, negative perception on the part of its customers and other stakeholders could lead to significant and sustained brand damage and other adverse consequences. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 119
      122. STATEMENT ON COMPLIANCE Bank Muamalat recognises that compliance risk and obligations have to be managed proactively and effectively , with the culture of compliance embedded across all business activities of Bank Muamalat. Regulatory compliance risk is defined as risk or failure to comply with applicable legal and regulatory requirements impacting Bank Muamalat’s operations. The Board, Chief Executive Officer and Senior Management have adopted the Compliance Policy and Charter built on the following principles: • Commitment to comply with relevant regulatory requirements and ensuring that Bank Muamalat’s operations, internal policies and procedures, code of conduct and standards applicable to its banking activities are conducted in line with regulatory requirements. • Shared responsibility for regulatory compliance, premised on the concept of 3 lines of defence: 1st Line of Defence [Management, Business and support units] 2 nd Line of Defence [Compliance Department] 3 rd Line of Defence [Internal Audit Department] 120 120 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL • The 1st line of defence is formed by Management, the business and support units. These are the primary parties responsible for managing compliance risk and obligations, and the delivery of compliant outcomes; • The 2nd line of defence is formed by the Compliance Department, to ensure Bank Muamalat manages risk holistically, including compliance risks; and • The 3rd line of defence is formed by the Internal Audit Department, who will provide an independent assurance to the Board that the overall Compliance Policy operates as intended. • Formations of dedicated Compliance function, which will coordinate the management of Bank Muamalat’s compliance risk, implement a compliance programme across Bank Muamalat to ensure effective operationalisation of the Compliance Policy. The Chief Compliance Officer, who is administratively reported to the Chief Executive Officer, will have unrestricted access to the Board Risk Management Committee, and if necessary, the Board. • Embedding the Compliance Policy within the operations of Bank Muamalat, thus making regulatory compliance risk management an integral part of Bank Muamalat’s business activities.
      123. ACCOUNTABILITY The Board and Management of Bank Muamalat further pledge to ensure the implementation of the following drivers of effective compliance culture : Compliance Reporting & Resolution Leadership Engagement Compliance Monitoring Compliance Management & Mitigation Training and Communication Training and Communication Compliance Culture Compliance Culture • Leadership commitment, engagement and sponsorship of the compliance programme • Education and communication to improve compliance knowledge and awareness • Implementation of policies, procedures and internal controls to effectively manage compliance risk • Appropriate mechanisms to identify, capture, escalate, analyse and respond to issues or breaches associated to compliance obligations • Promotion of an environment that encourages employees to seek guidance, raise concerns and report potential noncompliance incidences • Demonstration of active enforcement of penalties for non-compliance Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Bank Muamalat also explicitly recognises the importance of maintaining continuous efforts and initiatives in assisting the Government of Malaysia and Bank Negara Malaysia in combating illicit and money laundering activities, as well as, financing of terrorism activities through the use of the banking system. With infrastructure and processes in place, Bank Muamalat has demonstrated its full commitment and support in ensuring compliance with the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA) as one of the responsible Reporting Institution. Foreign Account Tax Compliance Act Bank Muamalat is committed to comply with the reporting requirements and timeline imposed by the US Treasury for reporting of Foreign Account Tax Compliance Act (FATCA). Bank Muamalat has registered itself as a Registered Deemed Compliant Foreign Financial Institution and has communicated our Global Intermediary Identification Number to all correspondent banks. Common Reporting Standard Common Reporting Standards (CRS) is an initiative that involves governments obtaining information from their financial institutions and exchanging data automatically with other nations. As Malaysia has signed up to the Organisation for Economic Co-operation and Development’s CRS, Bank Muamalat is committed to comply with the requirements. BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 121
      124. CODE OF CONDUCT & ETHICAL PRINCIPLES Bank Muamalat is committed to maintaining the highest standards of conduct at the workplace and in business engagements. Our business must be conducted fairly, professionally, impartially and in full compliance of Shariah principles. The Code and Ethic/Conduct reflects and reinforces Bank Muamalat’s values as an Islamic Bank and it is designed to assist the stakeholders in understanding the ethical principles: • Uphold good reputation and public confidence by providing 100% Shariah Compliant products and services as a preferred Islamic financial service provider; • Treat all stakeholders which include the employees, business partners, customers and communities with full respect and dignity and appreciate the diversity of our workforce; • Adhere to all rules and regulation including Statutory Regulatory Requirements, Shariah Principles as well as Bank Muamalat’s internal policy and guidelines; 122 122 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL • Protect all customers’ information from improper disclosure, abuse or loss. However, customers’ information may be made available to third parties with written consent of the respective customer or when disclosure is authorised by Governmental, judicial bodies, agencies or regulators; • Work in a professional manner for the benefit of customer during the relationship, whereby Bank Muamalat is responsible for the protection of any financial interests of the customer; and • Do the right thing at all times without compromise. As a preferred Islamic Financial provider, Bank Muamalat is clear and sincere in what we say and do. As a custodian of public fund, Bank Muamalat is committed to protect and monitor consumer’s deposit and other financial assets through the development of an efficient system to help eliminate fraud or misconduct and improve productivity in operations.
      126. 2 2BANK BANKMUAMALAT MUAMALAT MALAYSIA BERHADBERHAD (6175-W) (6175-W) • annual report 2016 REPORT 2017 MALAYSIA | ANNUAL
      127. FINANCIAL STATEMENTS CONTENTS Financial Statements 124 132 132 133 134 138 140 142 143 144 145 146 150 Directors ’ report Statement by directors Statutory declaration Report of the Shariah committee Independent auditors’ report Consolidated statement of financial position Statement of financial position Statements of profit or loss Statements of other comprehensive income Consolidated statement of changes in equity Statement of changes in equity Statements of cash flows Notes to the financial statements BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 123
      128. 124 124 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      129. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 125
      130. 126 126 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      131. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 127
      132. 128 128 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      133. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 129
      134. 130 130 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      135. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 131
      136. 132 132 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      137. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 133
      138. 134 134 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      139. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 135
      140. 136 136 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      141. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 137
      142. 138 138 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      143. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 139
      144. 140 140 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      145. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 141
      146. 142 142 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      147. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 143
      148. 144 144 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      149. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 145
      150. 146 146 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      151. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 147
      152. 148 148 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      153. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 149
      154. 150 150 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      155. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 151
      156. 152 152 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      157. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 153
      158. 154 154 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      159. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 155
      160. 156 156 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      161. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 157
      162. 158 158 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      163. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 159
      164. 160 160 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      165. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 161
      166. 162 162 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      167. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 163
      168. 164 164 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      169. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 165
      170. 166 166 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      171. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 167
      172. 168 168 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      173. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 169
      174. 170 170 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      175. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 171
      176. 172 172 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      177. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 173
      178. 174 174 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      179. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 175
      180. 176 176 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      181. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 177
      182. 178 178 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      183. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 179
      184. 180 180 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      185. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 181
      186. 182 182 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      187. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 183
      188. 184 184 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      189. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 185
      190. 186 186 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      191. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 187
      192. 188 188 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      193. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 189
      194. 190 190 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      195. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 191
      196. 192 192 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      197. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 193
      198. 194 194 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      199. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 195
      200. 196 196 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      201. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 197
      202. 198 198 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      203. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 199
      204. 200 200 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      205. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 201
      206. 202 202 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      207. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 203
      208. 204 204 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      209. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 205
      210. 206 206 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      211. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 207
      212. 208 208 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      213. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 209
      214. 210 210 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      215. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 211
      216. 212 212 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      217. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 213
      218. 214 214 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      219. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 215
      220. 216 216 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      221. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 217
      222. 218 218 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      223. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 219
      224. 220 220 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      225. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 221
      226. 222 222 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      227. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 223
      228. 224 224 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      229. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 225
      230. 226 226 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      231. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 227
      232. 228 228 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      233. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 229
      234. 230 230 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      235. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 231
      236. 232 232 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      237. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 233
      238. 234 234 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      239. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 235
      240. 236 236 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      241. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 237
      242. 238 238 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      243. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 239
      244. 240 240 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      245. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 241
      246. 242 242 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      247. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 243
      248. 244 244 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      249. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 245
      250. 246 246 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      251. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 247
      252. 248 248 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      253. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 249
      254. 250 250 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      255. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 251
      256. 252 252 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      257. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 253
      258. 254 254 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      259. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 255
      260. 256 256 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      261. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 257
      262. 258 258 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      263. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 259
      264. 260 260 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      265. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 261
      266. 262 262 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      267. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 263
      268. 264 264 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      269. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 265
      270. 266 266 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      271. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 267
      272. 268 268 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      273. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 269
      274. 270 270 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      275. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 271
      276. 272 272 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      277. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 273
      278. 274 274 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      279. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 275
      280. 276 276 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      281. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 277
      282. 278 278 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      283. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 279
      284. 280 280 BANK MUAMALAT MALAYSIA BERHAD (6175-W)(6175-W) • annual |report 2016 REPORT 2017 BANK MUAMALAT MALAYSIA BERHAD ANNUAL
      285. FINANCIAL STATEMENTS BANK MUAMALAT MALAYSIA BERHAD (6175-W) | ANNUAL REPORT 2017 281