CIMB Islamic Bank Berhad: Condensed Interim Financial Statements - 30 June 2021

Transcription

1. - - - CIMB ISLAMIC BANK BERHAD Company No : 200401032872 (671380-H) CONDENSED INTERIM FINANCIAL STATEMENTS UNAUDITED STATEMENTS OF FINANCIAL POSITION AS AT 30 JUNE 2021 Note ASSETS Cash and short term funds Deposits and placements with banks and other financial institutions Financial investments at fair value through profit or loss Debt instruments at fair value through other comprehensive income Debt instruments at amortised cost Islamic derivative financial instruments Financing, advances and other financing/loans Other assets Tax recoverable Deferred taxation Amount due from holding company and ultimate holding company Amount due from related companies Investment in subsidiaries Property, plant and equipment Right-of-use assets Intangible assets Goodwill TOTAL ASSETS LIABILITIES AND EQUITY Deposits from customers Investment accounts of customers Deposits and placements of banks and other financial institutions Collateralised Commodity Murabahah Investment accounts due to designated financial institutions Financial liabilities designated at fair value through profit or loss Islamic derivative financial instruments Amount due to related companies Other liabilities Lease liabilities Provision for taxation Sukuk Subordinated Sukuk TOTAL LIABILITIES A6 A6 A7 A8 A9 A27(i) A10 A11 96,302,909 2,678,870 2,799,014 299,236 4,751,241 71,610 557,847 8,643 470,405 2,365 3,000 186,155 1,118,336 109,249,631 1,000,000 5,965,551 6,965,551 420,000 7,385,551 118,427,497 1,000,000 5,612,772 6,612,772 420,000 7,032,772 116,282,403 1,000,000 5,966,905 6,966,905 420,000 7,386,905 118,627,082 1,000,000 5,614,034 6,614,034 420,000 7,034,034 116,443,048 A29 11,746,888 130,174,385 8,730,980 125,013,383 11,746,888 130,373,970 8,730,980 125,174,028 A27(ii) 46,826,932 51,459,641 46,826,932 51,459,641 6.97 6.61 6.97 6.61 A15 A16 A27(i) A17 A18 Perpetual preference shares TOTAL EQUITY TOTAL EQUITY AND LIABILITIES COMMITMENTS AND CONTINGENCIES Net assets per ordinary share attributable to owners of the Parent (RM) 12,577,466 50,046 5,034,429 3,670,899 8,501,654 522,847 84,916,816 412,506 3,007 85,777 311,109 167 1,348 2,220 56,112 136,000 116,282,403 The Bank 31 December 2020 RM'000 12,577,420 50,046 5,034,429 3,670,899 8,501,654 522,847 84,916,816 573,186 3,007 85,777 311,109 167 11 1,348 2,220 56,112 136,000 116,443,048 A12 A13 A14 12,769,897 140,270 6,157,827 4,126,495 9,195,046 377,157 84,638,958 386,574 149,542 308,195 829 1,139 1,942 37,626 136,000 118,427,497 118,427,495.87 (1.13) 96,000,964 5,075,349 2,618,127 433,744 4,484,200 496,135 358,168 428 289,738 2,112 14,573 150,111 1,118,297 111,041,946 30 June 2021 RM'000 12,769,851 140,270 6,157,827 4,126,495 9,195,046 377,157 84,638,958 586,194 149,542 308,195 829 11 1,139 1,942 37,626 136,000 118,627,082 118,627,080 (2) 96,350,602 5,075,349 2,618,127 433,744 4,484,200 496,135 358,168 428 288,442 2,112 14,573 1,118,297 111,240,177 EQUITY Capital and reserves attributable to equity holder of the Bank Ordinary share capital Reserves RESTRICTED AGENCY INVESTMENT ACCOUNT (*) TOTAL ISLAMIC BANKING ASSET The Group 31 December 30 June 2021 2020 RM'000 RM'000 96,649,535 2,678,870 2,799,014 299,236 4,751,241 71,610 557,847 8,643 469,317 2,365 3,000 1,118,336 109,409,014 * The disclosure is in accordance with the requirements of Bank Negara Malaysia guideline on Financial Reporting for Islamic Banking Institutions. The unaudited condensed interim financial statements should be read in conjunction with the audited financial statements for the financial year ended 31 December 2020. Page 1
2. 0 CIMB ISLAMIC BANK BERHAD Company No : 200401032872 (671380-H) CONDENSED INTERIM FINANCIAL STATEMENTS UNAUDITED STATEMENT OF INCOME FOR THE FINANCIAL PERIOD 30 JUNE 2021 Note Income derived from investment of depositors' funds and others Income derived from investment of investment account Income derived from investment of shareholder's funds Modification loss Expected credit losses on financing, advances and other financing/loans Expected credit losses made for commitments and contingencies Other expected credit losses Total distributable income Income attributable to depositors and others Profit distributed to investment account holder Total net income Personnel expenses Other overheads and expenditures Profit before taxation and zakat Taxation Profit for the financial period The Group 2nd Quarter Ended Six Months Ended 30 June 30 June 30 June 30 June 2020 2021 2020 2021 RM'000 RM'000 RM'000 RM'000 A19 933,864 973,710 1,835,355 2,013,670 A20 78,716 98,927 145,747 209,026 A21 127,358 - 89,180 (185,345) 299,811 - 204,127 (185,345) A22(a) (106,997) (94,040) (181,742) (154,833) (15,521) (3,564) 1,013,856 (418,431) (44,542) 550,883 (3,293) (293,542) 254,048 (61,436) 192,612 192,612 - (12,899) 1,734 871,267 (551,732) (62,195) 257,340 (5,072) (240,921) 11,347 198 11,545 11,545 - (19,013) (3,808) 2,076,350 (858,116) (79,580) 1,138,654 (9,640) (555,872) 573,142 (138,402) 434,740 434,740 - (17,738) (720) 2,068,187 (1,177,255) (140,778) 750,154 (11,430) (471,830) 266,894 (60,299) 206,595 206,595 - A22(b) A23 A24 A25 A26 Page 2
3. 0 CIMB ISLAMIC BANK BERHAD Company No : 200401032872 (671380-H) CONDENSED INTERIM FINANCIAL STATEMENTS UNAUDITED STATEMENT OF COMPREHENSIVE INCOME FOR THE FINANCIAL PERIOD 30 JUNE 2021 The Group 2nd Quarter Ended Six Months Ended 30 June 30 June 30 June 30 June 2020 2021 2020 2021 RM'000 RM'000 RM'000 RM'000 Profit for the financial period 192,612 11,545 434,740 206,595 - 31 Other comprehensive income/(expense): Items that may be reclassified subsequently to profit or loss Fair value changes on financial liabilities designated at fair value attributable to own credit risk Debt instruments at fair value through other comprehensive income - Net gain/(loss) from change in fair value - Realised gain transferred to statement of income on disposal - Changes in expected credit losses - Income tax effects Other comprehensive income for the period, net of tax Total comprehensive income for the financial period Earnings per share (sen) B3 - - 28,591 42,141 37,513 67,400 (81,676) (75,954) 13,769 68,994 (8,995) 3,400 (7,955) (16,028) (1,530) (12,329) (36,391) 3,706 26,963 (51,966) 828 (4,087) 28,591 37,513 (81,676) 13,800 221,203 49,058 353,064 220,395 19.26 1.15 43.47 20.66 The unaudited condensed interim financial statements should be read in conjunction with the audited financial statements for the financial year ended 31 December 2020. Page 3
4. - CIMB ISLAMIC BANK BERHAD Company No : 200401032872 (671380-H) CONDENSED INTERIM FINANCIAL STATEMENTS UNAUDITED STATEMENT OF INCOME FOR THE FINANCIAL PERIOD 30 JUNE 2021 Note Income derived from investment of depositors' funds and others Income derived from investment of investment account Income derived from investment of shareholder's funds Modification loss Expected credit losses on financing, advances and other financing/loans Expected credit losses made for commitments and contingencies Other expected credit losses Total distributable income Income attributable to depositors and others Profit distributed to investment account holder Total net income Personnel costs Other overheads and expenditures Profit before taxation and zakat Taxation Profit for the financial period The Bank 2nd Quarter Ended Six Months Ended 30 June 30 June 30 June 30 June 2020 2021 2020 2021 RM'000 RM'000 RM'000 RM'000 A19 933,864 973,710 1,835,355 2,013,670 A20 78,716 98,927 145,747 209,026 A21 127,599 - 89,282 (185,345) 300,310 - 204,593 (185,345) A22(a) (106,997) (94,040) (181,742) (154,833) (15,521) (3,564) 1,014,097 (419,212) (44,542) 550,343 (3,293) (293,519) 253,531 (61,436) 192,095 192,095 (0) (12,899) 1,734 871,369 (552,559) (62,195) 256,615 (5,072) (240,890) 10,653 198 10,851 10,851 - (19,013) (3,808) 2,076,849 (858,572) (79,580) 1,138,697 (9,640) (555,823) 573,234 (138,402) 434,832 434,832 (0) (17,738) (720) 2,068,653 (1,177,665) (140,778) 750,210 (11,430) (471,767) 267,013 (60,299) 206,714 206,714 - A22(b) A23 A24 A25 A26 Page 4
5. - CIMB ISLAMIC BANK BERHAD Company No : 200401032872 (671380-H) CONDENSED INTERIM FINANCIAL STATEMENTS UNAUDITED STATEMENT OF COMPREHENSIVE INCOME FOR THE FINANCIAL PERIOD 30 JUNE 2021 The Bank 2nd Quarter Ended Six Months Ended 30 June 30 June 30 June 30 June 2020 2021 2021 2020 RM'000 RM'000 RM'000 RM'000 Profit for the financial period 192,095 10,851 434,832 206,714 Other comprehensive income/(expense): Items that will not be reclassified to profit or loss Fair value changes on financial liabilities designated at fair value attributable to own credit risk Items that may be reclassified subsequently to profit or loss Debt instruments at fair value through other comprehensive income - Net gain/(loss) from change in fair value - Realised gain transferred to statement of income on disposal - Changes in expected credit losses - Income tax effects Other comprehensive income for the period, net of tax Total comprehensive income for the financial period Earnings per share basis (sen) B3 - - - 31 28,591 42,141 37,513 67,400 (81,676) (75,954) 13,769 68,994 (8,995) 3,400 (7,955) (16,028) (1,530) (12,329) (36,391) 3,706 26,963 (51,966) 828 (4,087) 28,591 37,513 (81,676) 13,800 220,686 48,364 353,156 220,514 19.21 1.09 43.48 20.67 The unaudited condensed interim financial statements should be read in conjunction with the audited financial statements for the financial year ended 31 December 2020. Page 5
6. - CIMB ISLAMIC BANK BERHAD Company No : 200401032872 (671380-H) CONDENSED INTERIM FINANCIAL STATEMENTS UNAUDITED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL PERIOD ENDED 30 JUNE 2021 Attributable to owners of the Parent The Group 30 June 2021 At 1 January 2021 Profit for the financial period Other comprehensive expense (net of tax) - debt instruments at fair value through other comprehensive income Total comprehensive income for the financial period Share-based payment expense Shares released under Equity Ownership Plan Total transactions with owners recognised directly in equity Transfer to regulatory reserve At 30 June 2021 Ordinary share capital RM'000 Fair value reservedebt instruments at fair value through other comprehensive income RM'000 1,000,000 - 31,312 (81,676) (2,457) - - (81,676) - - - - (81,676) - - - - (50,364) (2,457) 1,000,000 Merger reserve RM'000 Capital contribution by Ultimate Holding Company RM'000 Capital reserve RM'000 Regulatory reserve RM'000 Share-based payment reserve RM'000 458 - 213,032 - 1,225 - - - - 458 (205,382) 7,650 Total RM'000 5,369,202 434,740 - 6,612,772 434,740 (81,676) - Perpetual preference shares RM'000 420,000 - Total Equity RM'000 7,032,772 434,740 (81,676) (81,676) - (81,676) - 353,064 572 (857) 427 (857) 145 - 434,740 - 353,064 572 (857) (430) 795 145 145 205,382 6,009,324 (285) 6,965,551 The unaudited condensed interim financial statements should be read in conjunction with the audited financial statements for the financial year ended 31 December 2020. Page 6 Retained earnings RM'000 420,000 (285) 7,385,551
7. 0 CIMB ISLAMIC BANK BERHAD Company No : 200401032872 (671380-H) CONDENSED INTERIM FINANCIAL STATEMENTS UNAUDITED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL PERIOD ENDED 30 JUNE 2021 Attributable to owners of the Parent The Group 30 June 2020 At 1 January 2020 Profit for the financial period Other comprehensive income (net of tax) - debt instruments at fair value through other comprehensive income - fair value changes on financial liabilities designated at fair value attributable to own credit risk Total comprehensive income for the financial period Share-based payment expense Issuance new shares Shares released under Equity Ownership Plan Total transactions with owners recognised directly in equity Transfer to regulatory reserve At 30 June 2020 Ordinary share capital RM'000 1,000,000 - Fair value reservedebt instruments at fair value through other comprehensive income RM'000 Merger reserve RM'000 Capital Regulatory reserve reserve * RM'000 RM'000 22,839 13,769 (2,457) - - 13,769 - - - - - - - - 31 - 13,769 - - - - 31 - 36,608 (2,457) 1,000,000 458 - 458 513,533 - Own credit risk reserve RM'000 (513,533) - Share-based payment reserve RM'001 (31) 31 - - * The regulatory reserve held against expected losses is reduced to 0%, a Covid-19 related measure to drawdown prudential buffers as permitted by BNM. The unaudited condensed interim financial statements should be read in conjunction with the audited financial statements for the financial year ended 31 December 2020. Page 7 1,231 - Retained earnings RM'000 4,575,241 206,595 - Total RM'000 6,110,814 206,595 13,800 Perpetual preference shares RM'000 220,000 - Total Equity RM'000 6,330,814 206,595 13,800 - - 13,769 - 13,769 - - 31 - 31 681 (906) 206,595 - 220,395 681 (906) 200,000 - (225) 1,006 513,533 5,295,369 (225) 6,330,984 200,000 420,000 220,395 681 200,000 (906) 199,775 6,750,984
8. - CIMB ISLAMIC BANK BERHAD Company No : 200401032872 (671380-H) CONDENSED INTERIM FINANCIAL STATEMENTS UNAUDITED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL PERIOD ENDED 30 JUNE 2021 Non-distributable The Bank 30 June 2021 At 1 January 2021 Profit for the financial period Other comprehensive expense (net of tax) - debt instruments at fair value through other comprehensive income Total comprehensive income for the financial period Share-based payment expense Shares released under Equity Ownership Plan Total transactions with owners recognised directly in equity Transfer to regulatory reserve At 30 June 2021 Distributable Ordinary share capital RM'000 Fair value reservedebt instruments at fair value through other comprehensive income RM'000 1,000,000 - 31,312 (81,676) (2,457) - - (81,676) - - - - (81,676) - - - - (50,364) (2,457) 1,000,000 Merger reserve RM'000 Capital reserve RM'000 Regulatory reserve RM'000 458 - 213,032 - 458 (205,382) 7,650 Share-based payment reserve RM'000 1,225 - - - - Retained earnings RM'000 Total RM'000 5,370,464 434,832 - 6,614,034 434,832 (81,676) - Perpetual preference shares RM'000 420,000 - Total Equity RM'000 7,034,034 434,832 (81,676) (81,676) - (81,676) - 353,156 572 (857) 427 (857) 145 - 434,832 - 353,156 572 (857) (430) 795 145 145 205,382 6,010,678 (285) 6,966,905 The unaudited condensed interim financial statements should be read in conjunction with the audited financial statements for the financial year ended 31 December 2020. Page 8 Capital contribution by Ultimate Holding Company RM'000 420,000 (285) 7,386,905
9. 0 CIMB ISLAMIC BANK BERHAD Company No : 200401032872 (671380-H) CONDENSED INTERIM FINANCIAL STATEMENTS UNAUDITED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL PERIOD ENDED 30 JUNE 2021 Non-distributable The Bank 30 June 2020 At 1 January 2020 Profit for the financial period Other comprehensive income (net of tax) - debt instruments at fair value through other comprehensive income - fair value changes on financial liabilities designated at fair value attributable to own credit risk Total comprehensive income for the period Share-based payment expense Issuance new shares Shares released under Equity Ownership Plan Total transactions with owners recognised directly in equity Transfer to regulatory reserve At 30 June 2020 Ordinary share capital RM'000 1,000,000 - Fair value reserve-debt instruments at fair value through other comprehensive income RM'000 Merger reserve RM'000 Distributable Capital Regulatory reserve reserve * RM'000 RM'000 (2,457) - - 13,769 - - - - - - 13,769 - - - - 31 31 - - 36,608 (2,457) 458 513,533 - (513,533) - (31) 31 Share-based payment reserve RM'001 22,839 13,769 1,000,000 458 - Own credit risk reserve RM'000 - 1,231 - 4,576,294 206,714 - Total RM'000 6,111,867 206,714 13,800 13,769 Perpetual preference shares RM'000 220,000 - (906) 206,714 - 31 220,514 681 (906) 200,000 - (225) 1,006 513,533 5,296,541 (225) 6,332,156 200,000 420,000 681 * The regulatory reserve held against expected losses is reduced to 0%, a Covid-19 related measure to drawdown prudential buffers as permitted by BNM. The unaudited condensed interim financial statements should be read in conjunction with the audited financial statements for the financial year ended 31 December 2020. Page 9 Retained earnings RM'000 Total Equity RM'000 6,331,867 206,714 13,800 13,769 31 220,514 681 200,000 (906) 199,775 6,752,156
10. 0 CIMB ISLAMIC BANK BERHAD Company No : 200401032872 (671380-H) CONDENSED INTERIM FINANCIAL STATEMENTS UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS FOR THE FINANCIAL PERIOD ENDED 30 JUNE 2021 The Group 30 June 30 June 2020 2021 RM'000 RM'000 The Bank 30 June 30 June 2021 2020 RM'000 RM'000 Profit before taxation and zakat 573,142 266,894 573,234 267,013 Adjustments for non-cash items (155,905) (38,366) (158,819) (42,610) 417,237 228,528 414,415 224,403 (978,676) 63,085 Operating profit before changes in working capital Net changes in operating assets Net changes in operating liabilities 2,061,237 Tax paid (161,311) Net cash generated from operating activities 1,338,487 4,780,863 (110,575) 4,961,901 (1,017,616) 2,064,041 (161,311) 1,299,529 63,085 4,738,689 (110,575) 4,915,602 Net cash flows (used in)/generated from investing activities (993,244) 18,845 (993,244) 18,845 Net cash flows (used in)/generated from financing activities (62,588) 100,092 (23,630) 146,391 Net change in cash and cash equivalents Cash and cash equivalents at beginning of the financial period Cash and cash equivalents at end of the financial period 282,655 12,627,512 12,910,167 5,080,838 7,932,618 13,013,456 282,655 12,627,466 12,910,121 5,080,838 7,932,572 13,013,410 Cash and cash equivalents comprise : Cash and short-term funds Deposits and placements with banks and other financial institutions Cash and cash equivalents at end of the financial year 12,769,897 140,270 12,910,167 12,812,888 200,568 13,013,456 12,769,851 140,270 12,910,121 12,812,842 200,568 13,013,410 The unaudited Condensedcondensed Unaudited Cash Flow Statement should beshould read inbe conjunction with the Annual Statements the financial ended 31 December The interim financial statements read in conjunction with Financial the audited financialfor statements foryear the financial year ended 31 December 2020 Page 10
11. PART A - EXPLANATORY NOTES A1 . 0 Basis of preparation a) The unaudited condensed interim financial statements for the financial period ended 30 June 2021 have been prepared under the historical cost convention, except for financial assets at fair value through profit or loss, debt instruments at fair value through other comprehensive income, derivative financial instruments, non-current assets/disposal groups held for sale and financial liabilities designated at fair value through profit or loss, that have been measured at fair value. The unaudited condensed interim financial statements have been prepared in accordance with MFRS 134 “Interim Financial Reporting” issued by the Malaysian Accounting Standards Board and paragraph 9.22 of Bursa Malaysia Securities Berhad's Listing Requirements. The unaudited condensed interim financial statements should be read in conjunction with the Group's and the Bank's audited financial statements for the financial year ended 31 December 2020. The explanatory notes attached to the condensed interim financial statements provide an explanation of events and transactions that are significant to an understanding of the changes in the financial position and performance of the Group and the Bank since the financial year ended 31 December 2020. The significant accounting policies and methods of computation applied in the unaudited condensed interim financial statements are consistent with those adopted in the most recent audited annual financial statements for the financial year ended 31 December 2020, and modified for the adoption of the following accounting standards applicable for financial periods beginning on or after 1 June 2020 and 1 January 2021: ● Amendments to MFRS 16 “COVID-19 Related Rent Concessions” (1 June 2020) ● Interest rate benchmark reform-Phase 2 (Amendments to MFRS 9, MFRS 139, MFRS 7, MFRS 4 and MFRS 16) (1 January 2021) The adoption of the above amendments to published standards did not give rise to material financial impact to the Group except for Interest rate benchmark reform-Phase 2 (Amendments to MFRS 9, MFRS 139, MFRS 7, MFRS 4 and MFRS 16) where the Group is still in the midst of assessing the impact of the above amendments to published standards. b) Resurgence of the Covid-19 pandemic has disrupted economic activity with the rising number of cases having caused the country to go into lockdown. Many financial institutions continue to provide economic stimulus and financing repayment programs, as Bank Negara Malaysia and the Malaysian Government have implemented fiscal measures to address market disruptions and disparities as the economic headwinds continues to cause uncertainty. As Covid-19 vaccines are being rolled-out more aggressively nation-wide and various stimulus measures are being undertaken, the economic growth will gain momentum but is expected to be uneven. The Bank continues to support its customers impacted by the economic downturn over the past year and continues to provide targeted assistance programs particularly to those within the directly impacted sectors. The Bank will continuously assess the extent of the impact of the Covid-19 pandemic as the duration of the potential disruptions remains uncertain. A2. Changes in estimates There were no material changes to financial estimates made in respect of the current financial period that had previously been announced or disclosed other than those disclosed under the basis of preparation. Page 11
12. PART A - EXPLANATORY NOTES (CONTINUED) RM'000 A3. 0 RM'000 RM'000 RM'000 Issuance and repayment of debt equity securities During the period, Ziya Capital Bhd ("Ziya") undertook a partial redemption of its Sukuk amounting to RM36 million. A4. Proposed dividend There were no dividends paid or proposed for the financial period ended 30 June 2021. A5. Significant events after the reporting period There were no significant events other than those disclosed under issuance and repayment of debt equity securities that had occured between 30 June 2021 and the date of this announcement. A6 Cash and short-term funds and Deposits and placements with banks and other financial institutions As at 30 June 2021, the expected credit losses in deposit placements maturing within one month and deposits and placements with banks and other financial institutions are both RMNil respectively (2020:both RMNil respectively). The 12-month expected credit losses made in the income statement during the financial period is amounting to RMNil (2020: RMNil). The Group and the Bank 30 June 31 December 2021 2020 RM'000 RM'000 A7 Financial assets at fair value through profit or loss Money market instruments Unquoted In Malaysia Malaysian Government treasury bills Islamic negotiable instruments of deposits Islamic commercial papers Government Investment Issues Islamic Cagamas bonds Unquoted securities In Malaysia Corporate Sukuk 297,878 2,693,050 2,097,694 528,476 22,571 5,639,669 288,829 1,195,653 2,809,208 396,416 7,545 4,697,651 297,878 2,693,051 2,097,694 528,476 22,571 5,639,670 288,829 1,195,653 2,809,208 396,416 7,545 4,697,651 518,157 6,157,826 336,778 5,034,429 518,157 6,157,827 336,778 5,034,429 Page 12
13. PART A - EXPLANATORY NOTES (CONTINUED) RM'000 A8 0 RM'000 RM'000 RM'000 Debt instruments at fair value through other comprehensive income The Group and the Bank 30 June 31 December 2021 2020 RM'000 RM'000 Money market instruments Unquoted In Malaysia Government Investment Issues Islamic Cagamas bonds Malaysian Government Sukuk Islamic commercial papers Unquoted securities In Malaysia Corporate Sukuk Outside Malaysia Corporate Sukuk 798,816 5,164 803,980 628,152 57,150 20,997 706,299 798,816 5,164 803,980 628,152 57,150 20,997 24,803 731,102 3,276,462 2,893,404 3,276,462 2,893,404 46,053 4,126,495 46,393 3,646,096 46,053 4,126,495 46,393 3,670,899 Expected credit losses movement for debt instruments at fair value through other comprehensive income: The following expected credit losses is not recognised in the statement of financial position as the carrying amount of debt instruments at fair value through other comprehensive income is equivalent to their fair value. The Group and the Bank At 1 January 2021 Total charge to Income Statement: New financial assets purchased Financial assets that have been derecognised Change in credit risk At 30 June 2021 The Group and the Bank At 1 January 2020 Changes in expected credit losses due to transferred within stages: Transferred to Stage 1 Total charge to Income Statement: New financial assets purchased Financial assets that have been derecognised Change in credit risk At 31 December 2020 Lifetime expected Lifetime credit lossesexpected credit 12-month not credit losses expected credit impaired -Credit impaired losses (Stage 1) (Stage 2) (Stage 3) Total 1,914 - - 1,914 3,706 8,700 (295) (4,699) - - 3,706 8,700 (295) (4,699) 5,620 - - 5,620 Lifetime expected Lifetime credit lossesexpected credit 12-month not credit losses expected credit impaired -Credit impaired losses (Stage 1) (Stage 2) (Stage 3) 1,749 117 117 48 14,376 (450) (13,878) 1,914 Page 13 Total 99 - 1,848 (117) (117) - - 18 18 - 66 14,376 (450) (13,860) - - 1,914
14. PART A - EXPLANATORY NOTES (CONTINUED) - The Group 30 June 31 December 2021 2020 RM'000 RM'000 A9 Debt instruments at amortised cost Money market instruments Unquoted In Malaysia Government Investment Issues Islamic Cagamas bonds Malaysian Government Sukuk Khazanah bonds 0 - 3,322,758 67,957 101,329 89,047 3,581,091 2,926,780 52,912 Unquoted securities In Malaysia Corporate Sukuk 5,618,627 Amortisation of premium net of accretion of discount Less: Expected credit loss -4381 (291) The Group and the Bank 30 June 31 December 2021 2020 RM'000 RM'000 2,979,692 3,322,758 67,957 101,329 89,047 3,581,091 2,926,780 52,912 101,341 89,047 3,170,080 5,333,167 5,618,627 5,333,167 (4,381) (291) 9,195,046 9,195,046 (1,409) (184) 8,501,654 (a) Included in debt instruments at amortised cost is exposures to Restricted Profit Sharing Investment Accounts ("RPSIA"), as part of an arrangement between CIMB Islamic Bank Berhad and third party amounting to RM146,138,000 (31 December 2020: RM Nil). Expected credit losses movement for debt instruments at amortised cost: The Group and the Bank At 1 January 2021 Total charge to Income Statement: New financial assets purchased Change in credit risk At 30 June 2021 The Group and the Bank At 1 January 2020 Total charge to Income Statement: New financial assets purchased Change in credit risk At 31 December 2020 Lifetime Lifetime expected credit expected credit losses 12-month losses (not (Credit expected credit credit impaired impaired losses (Stage 1) - Stage 2) Stage 3) Total 184 - - 184 107 460 (353) 291 - - 107 460 (353) 291 Lifetime Lifetime expected credit expected credit losses 12-month losses (not (Credit expected credit credit impaired impaired losses (Stage 1) - Stage 2) Stage 3) 395 (211) 1,113 (1,324) 184 Page 14 - - - - Total 395 (211) 1,113 (1,324) 184
15. PART A - EXPLANATORY NOTES (CONTINUED) 5,798,640 1,826,632 84,065 63,220,106 1,224,749 12,212,149 0 2,892 A10 (i) By type and Shariah contract 30 June 2021 Sale-based contracts At amortised cost Bai' Bithaman Ajil RM'000 Bai' al-'inah RM'000 208 1,020 527,367 36,826 685,703 - 4,700,790 1,097,641 - 1,249,896 5,798,639 Murabahah RM'000 Cash line^ Term financing House Financing Syndicated Financing Hire purchase receivables Other term financing Bills receivable Islamic trust receipts Claims on customers under acceptance credits Staff financing** Revolving credits Credit card receivables Gross financing, advances and other financing/loans, at amortised cost Fair value changes arising from fair value hedge 2,892 - Total RM'000 29,778 1,795,834 - 6,733 77,333 - 24,197,810 1,843,349 31,043,501 197,811 4,821,947 - 1,183,467 41,282 - 12,212,149 - - 128,256 30,082,067 1,873,127 12,212,149 33,978,258 534,100 36,826 763,036 197,811 4,821,947 128,256 1,826,632 84,066 63,220,107 1,224,749 12,212,149 2,892 128,256 Less: Expected credit losses Net financing, advances and other financing/loans, at amortised cost 85,747,386 2,755 85,750,141 (1,111,183) 84,638,958 Total net financing, advances and other financing/loans 84,638,958 Page 15 - Ujrah RM'000 1,115,689 Includes current account in excess The Bank is the beneficial owner of the asset. The ownership of the asset will be transferred to the customer via sale at the end of the Ijarah financing. The Bank is the owner of the asset. The ownership of the asset will be transferred to the customer via sale at the end of the Ijarah financing. Includes financing to Directors of the Group and the Bank amounting to RM2,330,037 (2020:RM2,081,719). - Others - ^ * # ** - Bai' al-Dayn RM'000 The Group and the Bank Lease-based contracts Loan contract Ijarah Al-Ijarah Muntahiah Bi-al- Thumma AlTamlik * Bai' # Tawarruq Qard RM'000 RM'000 RM'000 RM'000 1,119,809
16. PART A - EXPLANATORY NOTES (CONTINUED) 0 A10 Financing, advances and other financing/loans (i) By type and Shariah contract (continued) 31 December 2020 The Group and the Bank Sale-based contracts At amortised cost Cash line^ Term financing House Financing Syndicated Financing Hire purchase receivables Other term financing Bills receivable Islamic trust receipts Claims on customers under acceptance credits Staff financing** Revolving credits Credit card receivables Gross financing, advances and other, at amortised cost financing/loans Murabahah RM'000 - Bai' Bithaman Ajil RM'000 Bai' al-'inah RM'000 268 842 Bai' al-Dayn RM'000 334,959 96,492 691,902 - 4,937,835 1,168,761 - 39,111 5,004,003 - 31,043 84,911 - 21,574,218 2,082,395 31,036,109 171,716 4,603,440 - 1,227,897 44,811 - 11,380,856 - 1,123,353 6,106,864 5,043,956 115,954 60,504,076 1,272,708 11,380,856 - - - - Lease-based contracts Ijarah Al-Ijarah Muntahiah Bi al- Thumma AlTamlik * Bai' # Tawarruq RM'000 RM'000 RM'000 - 1,036,198 - - - Loan contract Others Qard RM'000 Ujrah RM'000 Total RM'000 8,907 - 134,389 1,046,215 27,739,950 2,121,506 11,380,856 37,253,684 366,002 96,492 776,813 171,716 4,603,440 134,389 8,907 134,389 85,691,063 Fair value changes arising from fair value hedges 3,835 85,694,898 (975,403) 84,719,495 Less: Expected credit losses Net financing, advances and other financing/loans, at amortised cost At fair value through profit or loss: Term financing Syndicated Financing Gross financing, advances and other financing/loans, at fair value through profit or loss The Group and the Bank - - - - 197,321 - - - - 197,321 - - - - 197,321 - - - - 197,321 Total net financing, advances and other financing/loans ^ * # ** 84,916,816 Includes current account in excess The Bank is the beneficial owner of the asset. The ownership of the asset will be transferred to the customer via sale at the end of the Ijarah financing The Bank is the owner of the asset. The ownership of the asset will be transferred to the customer via sale at the end of the Ijarah financing. Includes financing to Directors of the Group and the Bank amounting to RM2,330,037 (2020:RM2,081,719). Page 16
17. PART A - EXPLANATORY NOTES (CONTINUED) 0 A10 Financing, advances and other financing/loans (continued) (i) By type and Shariah contract (continued) The Group and the Bank 30 June 31 December 2021 2020 RM'000 RM'000 Total Gross financing, advances and other financing/loans 85,747,386 85,747,386 - At amortised cost - At fair value through profit or loss 85,691,063 197,321 85,888,384 (a) The Group and the Bank have undertaken fair value hedges on the profit rate risk of financing, advances and other financing/loans of RM73,058,000 (2020: RM78,322,000) using Islamic profit rate swaps. (b) Included in financing, advances and other financing/loans are exposures to Restricted Profit Sharing Investment Accounts ("RPSIA"), as part of an arrangement between CIMB Islamic Bank Berhad and CIMB Bank Berhad. CIMB Bank Berhad is exposed to risks and rewards on RPSIA financing and will account for all the expected credit losses for financing arising thereon. As at 30 June 2021, the gross carrying amount to RPSIA financing is RM4,428,734,000 (31 December 2020: RM4,703,553,000) and the 12-month expected credit losses relating to this RPSIA amounting to RM80,213,000 (31 December 2020: RM104,169,000) is recognised in the Financial Statements of CIMB Bank Berhad. (c) Movement of Qard financing The Group and the Bank 30 June 31 December 2021 2020 RM'000 RM'000 At 1 January 2021/2020 New disbursement Repayment As at 30 June/31 December Sources of Qard fund: Depositors' fund Shareholders' fund Uses of Qard fund: Personal use Business purpose 8,907 1,278 (7,293) 2,892 5,910 5,072 (2,075) 8,907 2,710 182 2,892 8,401 506 8,907 285 2,607 2,892 469 8,438 8,907 85,747,386 85,747,386 85,888,384 85,888,384 (ii) By geographical distribution: Malaysia 85,747,386 85,747,386 Page 17 85,888,384 85,888,384
18. PART A - EXPLANATORY NOTES (CONTINUED) 0 A10 Financing, advances and other financing/loans (continued) The Group and the Bank 30 June 31 December 2021 2020 RM'000 RM'000 (iii) By type of customer : Domestic non-bank financial institutions Domestic business enterprises - Small medium enterprises - Others Government and statutory bodies Individuals Other domestic entities Foreign entities Gross financing, advances and other financing/loans - 2,307,114 2,384,864 2,307,114 (1) - 11,717,859 9,675,087 3,485,484 57,876,284 227,451 599,105 85,888,384 12,151,698 9,344,160 405,571 60,642,329 252,669 566,095 85,747,386 11,717,859 9,675,087 3,485,484 57,876,284 227,451 599,105 85,888,384 171,776 10,220,238 2,460,723 187,364 11,155,929 2,421,778 171,776 10,220,238 2,460,723 (1) 27,568,174 45,467,473 85,888,384 29,894,703 42,087,612 85,747,386 27,568,174 45,467,473 85,888,384 (1) - 2,318,285 134,389 1,801,730 28,484,583 7,885,765 340,901 532 14,019,757 11,635,714 15,992,835 3,273,893 85,888,384 2,189,960 128,256 1,801,510 30,875,813 8,025,915 363,573 427 13,619,143 12,452,666 13,439,720 2,850,403 85,747,386 2,318,285 134,389 1,801,730 28,484,583 7,885,765 340,901 532 14,019,757 11,635,714 15,992,835 3,273,893 85,888,384 3,110,628 395,122 3,164,474 183,773 1,709,629 2,498,659 1,210,456 3,665,528 8,753,965 60,970,427 84,725 85,747,386 3,131,487 654,850 3,109,434 283,688 1,647,676 2,335,206 4,207,790 3,547,681 8,688,348 58,200,960 81,264 85,888,384 (iv) By profit rate sensitivity : Fixed rate - House financing - Hire purchase receivables - Others Variable rate - House financing - Others Gross financing, advances and other financing/loans - (v) By economic purpose : Personal use Credit card Construction Residential property Non-residential property Purchase of fixed assets other than land and building Merger and acquisition Purchase of securities Purchase of transport vehicles Working capital Other purpose Gross financing, advances and other financing/loans - (vi) By economic sector: Primary agriculture Mining and quarrying Manufacturing Electricity, gas and water supply Construction Transport, storage and communications Education, health and others Wholesale and retail trade, and restaurants and hotels Finance, insurance/takaful, real estate and business activities Household Others Gross financing, advances and other financing/loans Page 18
19. PART A - EXPLANATORY NOTES (CONTINUED) 0 A10 Financing, advances and other financing/loans (continued) The Group 31 December 30 June 2018 2017 RM'000RM'000 The Group and the Bank 31 December 30 June 2020 2021 RM'000 RM'000 (vii) By residual contractual maturity : Within one year One year to less than three years Three years to less than five years Five years and more Gross financing, advances and other financing/loans - 7,913,989 1,432,432 3,594,044 72,806,921 85,747,386 10,817,368 1,412,871 2,754,591 70,903,554 85,888,384 - 36,843 1,762 1,312 1 ###### ###### 65 - 87,766 - 99,852 - ###### ### 18,257 ### ###### 18,035 1,043 742 261,653 106,874 2,023 107,075 722,286 18,493 1,238,224 36,843 1,762 1,312 370,505 123,188 65 87,766 99,852 757,692 18,257 1,497,242 ### ###### ### ###### 1,238,224 1,238,224 1,497,242 1,497,242 20,321 1 642,199 17,036 2,527 6,036 84,400 41,873 423,827 4 1,238,224 19,370 1,340 694,217 1 16,505 3,796 3,567 92,310 39,048 627,086 2 1,497,242 (1) (1) (viii) Credit impaired financing by economic purpose : Personal use Credit card Construction Residential property Non-residential property Purchase of fixed assets other than land & building Purchase of securities Purchase of transport vehicles Working capital Other purpose Gross credit impaired financing, advances and other financing/loans (ix) Credit impaired financing by geographical distribution: Malaysia (x) Credit impaired financing by economic sector: Primary agriculture Mining and quarrying Manufacturing Electricity, gas and water supply Construction Transport, storage and communications Education, health and others Wholesale and retail trade, and restaurants and hotels Finance, insurance/takaful, real estate and business activities Household Others Gross credit impaired financing, advances and other financing/loans Page 19
20. PART A - EXPLANATORY NOTES (CONTINUED) A10 Financing, advances and other financing/loans (continued) (xi) Movements in the expected credit losses for financing, advances and other financing/loans are as follows: Financing, advances and other financing/loans at amortised cost: The Group and the Bank 12-month expected credit losses (Stage 1) RM'000 Lifetime expected credit losses-not credit impaired (Stage 2) RM'000 Lifetime expected credit losses -Credit impaired (Stage 3) RM'000 254,404 173,745 231,714 (57,849) (120) 381,846 (108,587) (216,939) 181,211 (72,859) 339,153 (65,158) (14,775) (123,362) 72,979 975,403 - (147,129) 33,162 (22,683) (157,608) 17 4 281,041 290,717 1,755 (17,018) 305,980 (4) 82 20 564,074 66,822 28,942 (39,534) 77,414 (80,474) 5,725 266,068 210,410 63,859 (39,701) (39,534) 225,786 (80,478) 99 5,749 1,111,183 At 1 January 2021 Changes in expected credit losses due to transferred within stages: Transferred to Stage 1 Transferred to Stage 2 Transferred to Stage 3 Total charge to Income Statement: New financial assets originated Financial assets that have been derecognised Writeback in respect of full recoveries Change in credit risk Write-offs Foreign exchange differences Other movements Page 20 Total RM'000
21. PART A - EXPLANATORY NOTES (CONTINUED) A10 Financing, advances and other financing/loans (continued) (xi) Movements in the expected credit losses for financing, advances and other financing/loans are as follows: Financing, advances and other financing/loans at amortised cost: The Group and the Bank At 1 January 2020 Changes in expected credit losses due to transferred within stages: Transferred to Stage 1 Transferred to Stage 2 Transferred to Stage 3 Total charge to Income Statement: New financial assets originated Financial assets that have been derecognised Writeback in respect of full recoveries Change in credit risk Write-offs Other movements 12-month Lifetime expected Lifetime expected credit expected credit credit losses-not credit losses losses impaired -Credit impaired (Stage 1) (Stage 2) (Stage 3) RM'000 RM'000 RM'000 134,567 132,054 168,027 (126,796) 105,759 (231,780) (775) 115,144 (82,281) 339,942 (142,517) 11,652 (23,478) (108,162) 143,292 246,643 81,920 (51,255) 215,978 (221) 211 254,404 134,861 5,138 (19,025) 148,748 (70) (143) 381,846 244,907 61,547 (60,469) 243,829 (89,915) 4,482 339,153 Page 21 Total RM'000 434,648 626,411 148,605 (70,280) (60,469) 608,555 (90,206) 4,550 975,403
22. PART A - EXPLANATORY NOTES (CONTINUED) Exempted Foreign Credit Market The credit risk for risk exchange, disclosure. equivalent arises is the from potential amount the possibility rate change isof and arrived in equity that value atthe aare using and counter-party caused commodity credit by movement may conversion related unable contracts in 30 market factor to meet as are rates per subject the or Bank prices. terms toNegara market of The aon contract Malaysia contractual risk andcourse in circulars. credit which amounts risk. There The Current There operations syndicated were were tax no no expense pre-acquisition extraordinary material of term the loan isinterest Group determined gain facility items and profits loss the during according on USD136 during Bank disposal the million financial to not of financial the investments subject unsecured tax period laws period to any ended ofbe or term ended each material properties loan jurisdiction 30 June facilityhas seasonal June 2005. other 2005. in than or matured which cyclical in the the factors. ordinary Group 24 May operates 2005. ofthe and business. includes all changes in theor group composition for the financial period ended 30 June 2005. A10 Financing, advances and other financing/loans (continued) (xii) Movements in credit impaired financing, advances and other financing/loans Gross carrying amount movement of financing, advances and other financing/loans at amortised cost classified as credit impaired: The Group and the Bank Lifetime expected credit losses -Credit impaired (Stage 3) Total RM'000 RM'000 1,497,242 1,497,242 (69,317) (69,317) (53,684) (53,684) (560,874) (560,874) 545,241 545,241 123,637 123,637 (80,474) (80,474) (206,611) (206,611) (26,252) (26,252) At 1 January 2021 Transfer within stages Transferred to Stage 1 Transferred to Stage 2 Transferred to Stage 3 New financial assets originated Write-offs Amount fully recovered Other movements At 30 June 2021 1,238,225 1,238,225 The Group and the Bank Lifetime expected credit losses -Credit impaired (Stage 3) (Stage 3) Total RM'000 RM'000 1,242,097 1,242,097 493,309 493,309 (156,296) (156,296) (475,367) (475,367) 1,124,972 1,124,972 358,118 358,118 (89,915) (89,915) (391,882) (391,882) (114,485) (114,485) At 1 January 2020 Transfer within stages Transferred to Stage 1 Transferred to Stage 2 Transferred to Stage 3 New financial assets originated Write-offs Amount fully recovered Other changes in financing, advances and other financing/loans At 31 December 2020 1,497,242 1,497,242 The Group and the Bank Ratio of credit impaired financing to total financing, advances and other financing/loans Page 22 30 June 2021 31 December 2020 1.44% 1.74%
23. PART A - EXPLANATORY NOTES (CONTINUED) - 0 - A11 Other assets 30 June 2021 RM'000 Deposits and prepayments Sundry debtors net of expected credit losses Collateral pledged for derivative transactions Treasury related receivables Clearing accounts The Group 31 December 2020 RM'000 7,542 211,052 144,730 17,876 5,374 386,574 30 June 2021 RM'000 9,069 235,912 25,250 35,678 106,597 412,506 The Group 31 December 2020 RM'000 30 June 2021 RM'000 The Bank 31 December 2020 RM'000 7,542 410,672 144,730 17,876 5,374 586,194 30 June 2021 RM'000 9,069 396,592 25,250 35,678 106,597 573,186 The Bank 31 December 2020 RM'000 A12 Deposits from customers (i) By type of deposit Savings deposits Commodity Murabahah (via Tawarruq arrangement)* 6,425,767 6,425,767 5,195,321 5,195,321 6,425,767 6,425,767 5,195,321 5,195,321 Demand deposits Qard Commodity Murabahah (via Tawarruq arrangement)* 15,024,205 12,800,429 2,223,776 15,123,852 12,859,028 2,264,824 15,024,205 12,800,429 2,223,776 15,123,852 12,859,028 2,264,824 Term deposits Commodity Murabahah Deposits-i (via Tawarruq arrangement) Fixed Return Income Account-i (via Tawarruq arrangement)* Negotiable Islamic Debt Certificate (NIDC) Hybrid (Bai Bithamin Ajil (BBA) and Bai al-Dayn) 74,414,148 75,847,891 74,763,786 76,194,517 46,242,331 46,720,074 46,591,969 47,066,700 27,971,861 29,028,255 27,971,861 29,028,255 199,956 99,562 199,956 99,562 Specific investment account Mudharabah 99,183 99,183 98,672 98,672 99,183 99,183 98,672 98,672 Others Qard 37,661 37,661 37,173 37,173 37,661 37,661 37,173 37,173 96,000,964 96,302,909 96,350,602 96,649,535 *included Qard contract of RM635,178,000 (2020:RM429,534,000) Page 23
24. PART A - EXPLANATORY NOTES (CONTINUED) - 30 June 2021 RM'000 0 - The Group 31 December 2020 RM'000 30 June 2021 RM'000 The Bank 31 December 2020 RM'000 A12 Deposits from customers (continued) (ii) Maturity structures of term deposits and investment accounts. Due within six months Six months to less than one year One year to less than three years Three years to less than five years Five years and more 61,035,077 13,327,853 121,687 5,385 23,329 74,513,331 - 66,419,984 9,365,547 134,341 3,589 23,102 75,946,563 61,384,716 13,327,853 121,687 5,385 23,329 74,862,970 - (1.00) 66,766,610 9,365,547 134,341 3,589 23,102 76,293,189 - (iii) By type of customer Government and statutory bodies Business enterprises Individuals Others 4,810,058 32,202,235 29,868,014 29,120,657 96,000,964 - 4,755,946 29,739,057 29,055,068 32,752,838 96,302,909 - 4,810,058 32,202,235 29,868,014 29,470,295 96,350,602 - 4,755,946 29,739,057 29,055,068 33,099,464 96,649,535 - The Group and the Bank 31 December 30 June 2020 2021 RM'000 RM'000 A13 Investment accounts of customers Unrestricted investment accounts (Mudharabah) -without maturity Special Mudharabah Investment Account -with maturity Term Investment Account-i Unrestricted investment accounts (Wakalah) -without maturity Daily Investment Account-i Restricted investment accounts (Mudharabah) -with maturity Restricted Profit Sharing Investment Account (RPSIA) 856,366 831,454 856,366 831,454 4,072,294 1,847,416 4,072,294 1,847,416 551 146,138 5,075,349 551 - 146,138 5,075,349 2,678,870 1,050 2,536,685 5,000 256,279 2,799,014 830 2,238,501 5,000 373,796 2,618,127 1,050 2,536,685 5,000 256,279 2,799,014 2,352,420 110,000 2,645,844 - 2,462,420 2,645,844 2,352,420 110,000 155,707 2,618,127 2,645,844 153,170 2,799,014 2,678,870 The underlying assets for the investments are hire purchase, house financing,other term financing and marketable securities. A14 Deposits and placements of banks and other financial institutions Licensed investment banks Licensed banks Bank Negara Malaysia Other financial institutions 830 2,238,501 5,000 373,796 2,618,127 The maturity structure of deposits and placements from financial institutions are as follows: Due within six months Six months to less than one year Three years to five years Page 24
25. PART A - EXPLANATORY NOTES (CONTINUED) - 0 - The Group and the Bank 31 December 30 June 2020 2021 RM'000 RM'000 A15 Investment accounts due to designated financial institutions Restricted investment accounts Mudharabah 4,484,200 4,751,241 4,484,200 4,751,241 By type of counterparty Licensed banks 4,484,200 4,751,241 4,484,200 4,751,241 The underlying assets for the investments are deposit placement with financial institutions, syndicated term financing, revolving credit and other term financing. A16 Financial liabilities designated at fair value through profit or loss 2,233 Deposits from customers - structured investments 496,135 71,610 The Group and the Bank have issued structured investments, and have designated them at fair value in accordance with MFRS9. The Group and the Bank have the ability to do this when designating these instruments at fair value reduces an accounting mismatch, is managed by the Group and the Bank on the basis of its fair value, or includes terms that have substantive derivative characteristics. The carrying amount of the Group and the Bank as at 30 June 2021 of financial liabilities designated at fair value were RM 12,950,000 lower (31 December 2020:RM650,000 lower) than the contractual amount at maturity. The fair value changes of the financial liabilities that are attributable to the changes in own credit risk are not significant. 30 June 2021 RM'000 The Group 31 December 2020 RM'000 30 June 2021 RM'000 The Bank 31 December 2020 RM'000 A17 Other liabilities Accruals and other payables Clearing accounts Expected credit losses for commitments and contigencies Collateral received for derivative transactions Structured deposits Treasury related payables Others A17(a) Page 25 37,553 20,223 53,168 170,168 37,553 20,223 53,168 170,168 95,483 21,280 26,185 48,178 40,836 289,738 76,450 86,100 38,448 13,960 32,111 470,405 95,483 21,280 26,185 48,178 39,540 288,442 76,450 86,100 38,448 13,960 31,023 469,317
26. PART A - EXPLANATORY NOTES (CONTINUED) - 0 - A17 Other liabilities (continued) (a) Expected credit losses movement of financing commitments and financial guarantee contracts are as follows: The Group and the Bank 12-month expected credit losses (Stage 1) At 1 January 2021 Changes in expected credit losses due to transferred within stages: Transferred to Stage 1 Transferred to Stage 2 Transferred to Stage 3 Total charge to Income Statement: New exposures Exposures derecognised or matured Change in credit risk Foreign exchange differences Other movements At 30 June 2021 The Group and the Bank Lifetime expected credit losses -not credit impaired (Stage 2) Lifetime expected credit losses -Credit impaired (Stage 3) Total 46,852 23,066 6,532 76,450 17,078 19,349 (2,233) (38) 6,804 38,645 (17,204) (14,637) 4 (17) 70,721 (12,931) (16,749) 5,520 (1,702) 10,624 56 (2,958) 13,526 17 14 20,790 (4,147) (2,600) (3,287) 1,740 1,586 (272) 1,858 3 3,974 19,014 38,701 (20,434) 747 21 95,485 12-month expected credit losses (Stage 1) Lifetime expected credit losses -not credit impaired (Stage 2) Lifetime expected credit losses -Credit impaired (Stage 3) Total At 1 January 2020 Changes in expected credit losses due to transferred within stages: Transferred to Stage 1 Transferred to Stage 2 Transferred to Stage 3 Total charge to Income Statement: New exposures Exposures derecognised or matured Change in credit risk Other movements At 31 December 2020 36,471 6,572 2,500 45,543 1,427 7,306 (5,868) (11) 8,224 70,168 (30,359) (31,585) 730 46,852 (4,348) (6,029) 7,771 (6,090) 21,473 183 (4,816) 26,106 (631) 23,066 2,921 (1,277) (1,903) 6,101 1,235 (1,068) 2,303 (124) 6,532 30,932 70,351 (36,243) (3,176) (25) 76,450 As at 30 June 2021, the gross carrying amount of financing commitments and financial guarantee contracts that are credit impaired for the Group and the Bank is RM32,996,000 (2020: RM40,036,000) respectively. Page 26
27. PART A - EXPLANATORY NOTES (CONTINUED) - - 0 A18 Subordinated sukuk The Group and the Bank a) The RM850 million unsecured subordinated Sukuk (“the Sukuk”) is part of the Tier II Junior Sukuk programme which was approved by the Securities Commission on 22 May 2009. Under the programme, the Bank is allowed to raise Tier II capital of up to RM2.0 billion in nominal value outstanding at any one time. The first tranche of the Sukuk of RM300 million under the first issuance was issued at par on 25 September 2009 and is due on 25 September 2024, with optional redemption on 25 September 2019 or any periodic payment date thereafter. The Sukuk bears a profit rate of 5.85% per annum payable semiannually in arrears. The Bank redeemed in full, the first tranche of the Sukuk of RM300 million on its first optional redemption date of 25 September 2019. On 21 April 2011, the second tranche of the Sukuk of RM250 million was issued at par and is due on 21 April 2021, with optional redemption on 21 April 2016 or any periodic payment date thereafter. The Sukuk bears a profit rate of 4.2% per annum payable semi-annually in arrears. The Bank redeemed in full, the second tranche of the Sukuk of RM250 million on its first optional redemption date of 21 April 2016. On 18 September 2012, the third tranche of the Sukuk of RM300 million was issued at par and is due on 15 September 2022, with the optional redemption on 18 September 2017 or any periodic payment date thereafter. The Sukuk bears a profit rate of 4.00% per annum, payable semi-annually in arrears. The Bank redeemed in full, the third tranche of the Sukuk of RM300 million on its first optional redemption date of 18 September 2017. The Sukuk qualify as Tier II capital for the purpose of the total capital ratio computation (subject to gradual phase-out treatment under Basel III). b) On 21 September 2016, the Bank had issued RM10 million Tier II Junior Sukuk (“the Sukuk”) at par and is due on 21 September 2026, with optional redemption on 21 September 2021 or any periodic payment date thereafter. The Sukuk bears a profit rate of 4.55% per annum. The Sukuk is part of the Basel III Tier II Junior Sukuk programme which was approved by the Securities Commission on 22 September 2014. Under the programme, the Bank is allowed to raise Tier II capital of up to RM5.0 billion in nominal value outstanding at any one time. The RM10 million Sukuk qualify as Tier II Capital for the purpose of the total capital ratio computation of the Bank. c) On 28 December 2017, the Bank had issued RM300 million Tier II Junior Sukuk ("the Sukuk") at par and is due on 28 December 2027, with optional redemption on 28 December 2022 or any periodic payment date thereafter. The Sukuk bears a profit rate of 4.70% per annum. The Sukuk is part of the Basel III Tier II Junior Sukuk programme which was approved by the Securities Commission on 22 September 2014. Under the programme, the Bank is allowed to raise Tier II capital of up to RM5.0 billion nominal value outstanding at any one time. The RM300 million Sukuk qualify as Tier II Capital for the purpose of the total capital ratio computation of the Bank. d) On 25 September 2019, the Bank had issued RM800 million Tier II Junior Sukuk (“the Sukuk”) at par and is due on 25 September 2029, with optional redemption on 25 September 2024 or any periodic payment date thereafter. The Sukuk bears a profit rate of 3.75% per annum. The Sukuk is part of the Basel III Tier II Junior Sukuk programme which was approved by the Securities Commission on 22 September 2014. Under the programme, the Bank is allowed to raise Tier II capital of up to RM5.0 billion nominal value outstanding at any one time. The RM800 million Sukuk qualify as Tier II Capital for the purpose of the total capital ratio computation of the Bank. Page 27
28. PART A - EXPLANATORY NOTES (CONTINUED) - 2nd Quarter Ended 30 June 30 June 2021 2020 RM'000 RM'000 Six Months Ended 30 June 30 June 2021 2020 RM'000 RM'000 A19 Income derived from investment of depositors' funds and others The Group and the Bank Income derived from investment of : a) General investment deposits b) Specific investment deposits c) Other deposits 685,756 478 247,630 933,864 707,565 672 265,473 973,710 265,473 708,238 1,357,706 951 476,698 1,835,355 1,457,053 1,478 555,139 2,013,670 524,266 6,799 24,746 62,186 40,398 658,395 (5,977) 652,418 526,527 3,754 24,882 56,930 44,268 656,361 (4,068) 652,293 1,054,328 13,556 47,923 123,371 82,195 3 1,321,376 (11,462) 1,309,914 1,082,646 10,934 48,623 113,257 83,094 1,338,554 (6,832) 1,331,722 10,308 17,233 679,959 9,174 1,577 16,257 679,301 20,565 908 35,190 1,366,577 23,206 3,337 32,853 1,391,118 6,129 4,369 1,760 10,232 6,628 3,604 (1,637) 3,781 (5,418) 13,312 9,887 3,425 6,194 10,953 25,343 35,152 (8,202) 4,121 (939) 7,362 27,608 3,603 (40,415) (13,106) (732) 15,566 63,298 a) Income derived from investment of general investment deposits Financing,advances and other financing/loans - Profit income - Unwinding income^ Debt instruments at fair value through other comprehensive income Debt instrument at amortised cost Money at call and deposit with financial institutions Reverse Collateralised Commodity Murabahah Accretion of discount less amortisation of premium Other finance income for financial assets at fair value through profit or loss - Financial investments at fair value through profit or loss - Financing, advances and other financing/loans - Net accretion of discount less amortisation of premium Total finance income and hibah Other operating income - Net gain/(loss) arising from financial investments at fair value through profit or loss: - realised - unrealised - Net gain from sale of investment in debt instruments at fair value through comprehensive income - Net unrealised (loss)/gain arising from financing, advances and other financings at fair value through profit or loss - Net (loss)/gain from foreign exchange transactions Fee and commission income - Guarantee fee 1,676 685,756 656 707,565 4,235 1,357,706 2,637 1,457,053 478 672 951 1,478 b) Income derived from investment of specific investment deposits Money at call and deposit with financial institutions ^ Unwinding income is income earned on credit impaired financing, advances and other financing/loans Page 28
29. PART A - EXPLANATORY NOTES (CONTINUED) - 2nd Quarter Ended 30 June 30 June 2021 2020 RM'000 RM'000 Six Months Ended 30 June 30 June 2021 2020 RM'000 RM'000 A19 Income derived from investment of depositors funds and others (continued) The Group and the Bank c) Income derived from investment of other deposits Financing,advances and other financing/loans - Profit income - Unwinding income^ Debt instruments at fair value through other comprehensive income Debt instrument at amortised cost Money at call and deposit with financial institutions Accretion of discount less amortisation of premium Other finance income for financial assets at fair value through profit or loss - Financial investments at fair value through profit or loss - Financing, advances and other financing/loans - Net accretion of discount less amortisation of premium Total finance income and hibah Other operating income - Net gain/(loss) arising from financial investments at fair value through profit or loss: - realised - unrealised - Net gain from sale of investment in debt instruments at fair value through comprehensive income - Net unrealised (loss)/gain arising from financing, advances and other financings at fair value through profit or loss - Net (loss)/gain from foreign exchange transactions Fee and commission income - Guarantee fee 189,316 2,455 8,936 22,456 14,588 237,751 (2,158) 235,593 197,549 1,408 9,335 21,360 16,609 246,261 (1,527) 244,734 370,014 4,759 16,837 43,314 28,837 463,761 (4,028) 459,733 412,480 4,183 18,511 43,129 31,615 509,918 (2,595) 507,323 3,722 6,223 245,538 3,442 592 6,100 254,868 7,219 310 12,344 479,606 8,865 1,272 12,514 529,974 2,212 1,577 635 3,839 2,487 1,352 (435) 1,377 (1,812) 5,029 3,746 1,283 2,236 4,109 8,764 13,462 (2,962) 1,486 (352) 2,762 10,358 1,228 (13,943) (4,386) (272) 5,933 24,152 606 247,630 247 265,473 1,478 476,698 1,013 555,139 74,739 1 1,498 852 77,090 89,773 7,593 1,560 98,926 140,764 1 1,498 1,810 144,073 197,324 7,593 4,105 209,022 1,622 78,712 98,926 1,642 145,715 209,022 4 78,716 1 98,927 32 145,747 4 209,026 ^ Unwinding income is income earned on credit impaired financing, advances and other financing/loans A20 Income derived from investment of investment account The Group and The Bank Financing,advances and other financing/loans - Profit income - Unwinding income^ Debt instrument at amortised cost Money at call and deposit with financial institutions Accretion of discount less amortisation of premium Fees and commission income - Service charges and fees ^ Unwinding income is income earned on credit impaired financing, advances and other financing/loans Page 29
30. PART A - EXPLANATORY NOTES (CONTINUED) - 2nd Quarter Ended 30 June 30 June 2021 2020 RM'000 RM'000 Six Months Ended 30 June 30 June 2021 2020 RM'000 RM'000 A21 Income derived from investment of shareholder's funds The Group Financing,advances and other financing/loans - Profit income - Unwinding income^ Debt instruments at fair value through other comprehensive income Debt instrument at amortised cost Money at call and deposit with financial institutions Accretion of discount less amortisation of premium Other finance income for financial assets at fair value through profit or loss - Financial investments at fair value through profit or loss - Financing, advances and other financing/loans - Net accretion of discount less amortisation of premium Total finance income and hibah Other operating income - Net gain/(loss) arising from financial assets at fair value through profit or loss: - realised - unrealised - Net gain from sale of investment in debt instruments at fair value through comprehensive income - Net unrealised (loss)/gain arising from financing, advances and other financings at fair value through profit or loss - Net (loss)/gain from foreign exchange transactions - Net loss arising from hedging activities -Net gain/(loss) arising from financial liabilities designated at fair value through profit or loss - realised - unrealised -Net gain/(loss) arising from derivative financial instrument - realised - unrealised Fee and commission income - Guarantee fee - Service charge and fee - Commission fee Total fee and commission income Less : fee and commission expense Net fee and commission income Other income 47,871 621 2,260 5,679 3,689 60,120 (546) 59,574 46,451 330 2,195 5,023 3,905 57,904 (359) 57,545 95,444 1,227 4,340 11,170 7,440 119,621 (1,038) 118,583 101,252 1,038 4,535 10,573 7,731 125,129 (631) 124,498 941 1,573 62,088 809 140 1,435 59,929 1,862 81 3,185 123,711 2,192 313 3,070 130,073 559 399 160 903 585 318 565 966 2,284 3,351 (749) 6 (82) 650 1,734 323 (3,640) 2 (62) 1,458 560 4,001 (427) 4,428 14,433 38,889 (24,456) 499 (334) 833 (5,933) 2,048 (7,981) 11,652 (649) 12,301 69,307 24,497 44,810 (3,220) (447) (2,773) 1,781 (13,326) 15,107 18,815 (1,263) 79,790 5,074 153 31,244 21,236 52,633 (6,328) 46,305 58 17,370 17,879 35,307 (4,988) 30,319 383 45,503 63,631 109,517 (13,470) 96,047 253 31,578 46,512 78,343 (10,127) 68,216 195 89,180 263 299,811 764 204,127 150 127,358 ^ Unwinding income is income earned on credit impaired financing, advances and other financing/loans Page 30 (138) 346 (484) 1,206 906 300
31. PART A - EXPLANATORY NOTES (CONTINUED) - 2nd Quarter Ended 30 June 30 June 2021 2020 RM'000 RM'000 Six Months Ended 30 June 30 June 2021 2020 RM'000 RM'000 A21 Income derived from investment of shareholder's funds (continued) The Bank Financing,advances and other financing/loans - Profit income - Unwinding income^ Debt instruments at fair value through other comprehensive income Debt instrument at amortised cost Money at call and deposit with financial institutions 47,871 621 2,260 5,679 3,689 60,120 (546) 59,574 46,451 330 2,195 5,023 3,905 57,904 (359) 57,545 95,444 1,227 4,340 11,170 7,440 119,621 (1,038) 118,583 101,252 1,038 4,535 10,573 7,731 125,129 (631) 124,498 941 1,573 62,088 809 140 1,435 59,929 1,862 81 3,185 123,711 2,192 313 3,070 130,073 Other operating income - Net gain/(loss) arising from financial assets at fair value through profit or loss: - realised - unrealised 559 399 160 903 585 318 - Net gain from sale of investment in debt instruments at fair value through comprehensive income 565 966 2,284 3,351 (749) 6 (82) 650 1,734 323 (3,640) 2 (62) 1,458 560 4,001 (427) 4,428 14,433 38,889 (24,456) 499 (334) 833 (5,933) 2,048 (7,981) 11,652 (649) 12,301 69,307 24,497 44,810 (3,220) (447) (2,773) 1,781 (13,326) 15,107 18,815 (1,263) 79,790 5,074 153 31,484 21,236 52,873 (6,328) 46,545 58 17,472 17,879 35,409 (4,988) 30,421 383 46,002 63,631 110,016 (13,470) 96,546 253 32,044 46,512 78,809 (10,127) 68,682 195 89,282 263 300,310 764 204,593 Accretion of discount less amortisation of premium Other finance income for financial assets at fair value through profit or loss - Financial investments at fair value through profit or loss - Financing, advances and other financing/loans - Net accretion of discount less amortisation of premium Total finance income and hibah - Net unrealised (loss)/gain arising from financing, advances and other financings at fair value through profit or loss - Net (loss)/gain from foreign exchange transactions - Net gain arising from hedging activities -Net gain/(loss) arising from financial liabilities designated at fair value through profit or loss - realised - unrealised - Net gain/(loss) arising from derivative financial instrument - realised - unrealised Fee and commission income - Guarantee fee - Service charge and fee - Commission fee Total fee and commission income Less : fee and commission expense Net fee and commission income Other income - Sundry income 151 127,599 ^ Unwinding income is income earned on credit impaired financing, advances and other financing/loans. Page 31 (138) 346 (484) 1,206 906 300
32. PART A - EXPLANATORY NOTES (CONTINUED) - 2nd Quarter Ended 30 June 30 June 2021 2020 RM'000 RM'000 Six Months Ended 30 June 30 June 2021 2020 RM'000 RM'000 A22(a) Expected credit losses on financing, advances and other financing/loans The Group and the Bank Expected credit losses on financing, advances and other financing/loans at amortised cost: -Expected credit losses on financing, advances and other financing/loans 118,956 Credit impaired financing, advances and other financing/loans : - recovered - written off (12,423) 464 106,997 103,212 (9,542) 370 94,040 210,410 174,505 (29,551) 883 181,742 (20,607) 935 154,833 A22(b) Other expected credit losses made/(written back) The Group and the Bank Expected credit losses made/(written back) on: - Debt instrument at fair value through other comprehensive income - Debt instrument at amortised cost - Money at call and deposits and placements with banks and other financial institutions - Other receivables 3,400 170 (1,530) (210) 3,706 107 828 (138) - 4 2 (1,734) - 4 26 720 (6) 3,564 Page 32 (5) 3,808
33. PART A - EXPLANATORY NOTES (CONTINUED) - 2nd Quarter Ended 30 June 30 June 2021 2020 RM'000 RM'000 A23 Six Months Ended 30 June 30 June 2021 2020 RM'000 RM'000 Income attributable to depositors and others The Group Deposits from customers - Mudharabah - Non-Mudharabah Deposits and placements of banks and other financial institutions - Non-Mudharabah Others - Financial liabilities designated at fair value through profit or loss - Recourse obligation on loans and financing sold to Cagamas - Sukuk - Subordinated Sukuk - Structured deposits - Collateralised Commodity Murabahah - Others 478 397,454 672 516,139 951 815,407 1,478 1,099,432 4,982 7,401 11,273 17,813 1,547 827 11,108 33 1,980 22 418,431 485 14,449 1,273 11,108 189 16 551,732 1,895 2,914 22,095 81 3,457 43 858,116 1,755 29,843 4,243 22,216 422 53 1,177,255 478 397,454 672 516,139 951 815,407 1,478 1,099,432 4,982 7,401 11,273 17,813 1,547 11,108 33 1,980 1,630 419,212 485 14,449 11,108 189 2,116 552,559 1,895 22,095 81 3,457 3,413 858,572 1,755 29,843 22,216 422 4,706 1,177,665 25,849 18,693 44,542 33,582 28,613 62,195 50,499 29,081 79,580 75,228 65,550 140,778 The Bank Deposits from customers - Mudharabah - Non-Mudharabah Deposits and placements of banks and other financial institutions - Non-Mudharabah Others - Financial liabilities designated at fair value through profit or loss - Recourse obligation on loans and financing sold to Cagamas - Subordinated Sukuk - Structured deposits - Collateralised Commodity Murabahah - Others A24 Profit distributed to investment account holder The Group and the Bank -Restricted -Unrestricted Page 33
34. PART A - EXPLANATORY NOTES (CONTINUED) - 2nd Quarter Ended 30 June 30 June 2021 2020 RM'000 RM'000 A25 Six Months Ended 30 June 30 June 2021 2020 RM'000 RM'000 Personnel expenses The Group and the Bank Salaries, allowances and bonuses Pension costs (defined contribution plan) Staff incentives and other staff payments Medical expenses Share-based expense1 Others A26 2,222 569 135 44 145 178 3,293 4,474 470 14 50 64 5,072 7,442 1,079 523 108 145 343 9,640 9,664 948 464 108 246 11,430 122 138 192 16,690 339 4 115 17,600 363 92 84 2,098 262 53 6 65 3,023 249 277 197 18,707 658 8 1,005 21,101 710 277 97 4,197 559 128 15 342 6,325 475 5 480 1,163 363 1,526 180 64 244 1,035 2,738 3,773 641 505 24 54 100 704 3,956 267,193 2,285 275,462 154 23 37 1,224 285 1,065 2,154 228,792 2,638 236,372 767 508 25 122 100 1,932 7,124 519,609 4,340 534,527 659 54 107 2,198 1,035 2,302 4,448 446,023 4,906 461,732 293,542 240,921 555,872 471,830 Other overheads and expenditures The Group Establishment Depreciation of property, plant equipment Depreciation of right-of-use assets Rental Amortisation of intangible assets Repairs and maintenance Outsourcing expenses Utility expenses Others Marketing Advertisement and publicity Others General expenses Consultancy and professional fees Legal expenses Stationery Postages Donation Incidental expenses on banking operations Takaful Group service expense Others The long term incentive plan (“LTIP”) was implemented by CIMBGH in June 2021. The LTIP awards ordinary shares and share options of the Company to eligible employees of the Group. The eligibility of participation in the LTIP shall be at the discretion of the LTIP Committee of CIMBGH, and the awarded shares and share options will be vested in stages at predetermined dates subject to continued employment and performance conditions. 1 Page 34
35. PART A - EXPLANATORY NOTES (CONTINUED) - 2nd Quarter Ended 30 June 30 June 2021 2020 RM'000 RM'000 A26 Six Months Ended 30 June 30 June 2021 2020 RM'000 RM'000 Other overheads and expenditures (continued) The Bank Establishment Depreciation of property, plant equipment Depreciation of right-of-use assets Rental Amortisation of intangible assets Repairs and maintenance Outsourcing expenses Utility expenses Others Marketing Advertisement and publicity Others General expenses Consultancy and professional fees Legal expenses Stationery Postages Donation Incidental expenses on banking operations Takaful Group service expense Others Page 35 122 138 192 16,690 339 4 115 17,600 363 92 84 2,098 262 53 6 64 3,022 249 277 197 18,707 658 8 1,005 21,101 710 277 97 4,197 559 128 15 342 6,325 475 5 480 1,163 363 1,526 180 64 244 1,035 2,738 3,773 641 505 24 54 100 704 3,956 267,193 2,262 275,439 154 23 37 1,224 285 1,065 2,154 228,792 2,608 236,342 767 508 25 122 100 1,932 7,124 519,609 4,291 534,478 659 54 107 2,198 1,035 2,302 4,448 446,023 4,843 461,669 293,519 240,890 555,823 471,767
36. PART A - EXPLANATORY NOTES (CONTINUED) 0 A27 Islamic derivative financial instruments, commitments and contingencies (i) Islamic derivative financial instruments The following tables summarise the contractual or underlying principal amounts of trading derivative and financial instruments held for hedging purposes. The principal or contractual amounts of these instruments reflect the volume of transactions outstanding at the end of the reporting period, and do not represent amounts of risk. Trading derivative financial instruments are revalued on a gross position basis and the unrealised gains or losses are reflected in "Islamic Derivative Financial Instruments" Assets and Liabilities respectively. 30 June 2021 The Group and the Bank Principal Amount RM’000 31 December 2020 Fair values assets RM’000 Fair values liabilities RM’000 Principal amount RM’000 Fair values assets RM’000 Fair values liabilities RM’000 Foreign exchange derivatives Currency forwards - Less than one year - One year to three years - More than three years 9,643,602 8,918,380 319,118 406,104 160,346 82,107 26,018 52,221 (126,343) (56,813) (23,946) (45,584) 9,784,130 8,850,406 527,620 406,104 187,192 110,178 30,881 46,133 (256,745) (188,844) (28,605) (39,296) Currency swaps - Less than one year - One year to three years - More than three years 8,463,700 8,463,516 184 - 38,593 38,593 - (40,605) (40,569) (36) - 8,318,263 8,318,090 173 - 118,983 118,983 - (83,499) (83,473) (26) - Currency spots - Less than one year 33,646 33,646 17 17 (17) (17) 59,437 59,437 118 118 (82) (82) Currency options - Less than one year 102,881 102,881 172 172 (172) (172) 264,718 264,718 947 947 (939) (939) 1,141,344 398,420 742,924 96,504 48,423 48,081 (93,339) (48,367) (44,972) 1,555,059 811,391 743,668 87,826 58,959 28,867 (85,253) (58,891) (26,362) 19,385,173 295,632 (260,476) 19,981,607 395,066 (426,518) 5,371,470 1,080,855 2,735,579 1,555,036 75,616 8,890 43,508 23,218 (89,348) (8,717) (46,539) (34,092) 11,213,722 6,537,030 2,945,961 1,730,731 122,486 20,543 55,948 45,995 (122,309) (20,301) (58,438) (43,570) - - - 37,194 24,956 12,238 1,717 1,713 4 (1,717) (1,713) (4) Credit related contracts Total return swaps - More than three years 41,000 41,000 1,739 1,739 (1,739) (1,739) 41,500 41,500 2,024 2,024 (2,024) (2,024) Commodity related derivatives Commodity Swap - Less than one year 17,530 17,530 4,011 4,011 (3,657) (3,657) - - - Commodity options - Less than one year - One year to three years 21,484 21,484 - 69 69 (69) (69) - 7,555 4,732 2,823 1,554 33 1,521 (1,340) (33) (1,307) Hedging derivatives Islamic profit rate swaps - More than three years 153,058 128,058 90 31 (2,879) (2,879) 78,008 78,008 - (3,939) (3,939) 24,989,715 377,157 (358,168) 31,359,586 Cross currency profit rate swaps - Less than one year - One year to three years - More than three years Islamic profit rate derivatives Islamic profit rate swaps - Less than one year - One year to three years - More than three years Equity related derivatives Equity options - Less than one year - More than three years Total derivative assets/(liabilities) - Page 36 522,847 (557,847)
37. PART A - EXPLANATORY NOTES (CONTINUED) 0 A27 Islamic derivative financial instruments, commitments and contingencies (continued) (i) Islamic derivative financial instruments (continued) The Group's and the Bank's derivative financial instruments are subject to market, credit and liquidity risk, as follows: Market Risk Market risk is defined as any fluctuation in the value arising from changes in value of market risk factors such as profit rates, currency exchange rates, credit spreads, equity prices, commodities prices and their associated volatility. The contractual amounts provide only a measure of involvement in these types of transactions and do not represent the amounts subject to market risk. The Group's risk management department monitors and manages market risk exposure via stress testing of the Group's Value-at-Risk (VaR) model, in addition to reviewing and analysing its treasury trading starategy, positions and activities vis-à-vis changes in the financial market, monitoring limit usage, assessing limit adequacy, and verifying transaction prices. Credit Risk Credit risk arises when counterparties to derivative contracts, such as profit rate swaps, are not able to or willing to fulfil their obligation to pay the Group the positive fair value or receivable resulting from the execution of contract terms. As at 30 June 2021, the amount of credit risk in the Group and the Bank, measured in terms of the cost to replace the profitable contracts, was RM377,157,000 (31 December 2020: RM522,847,000). This amount will increase or decrease over the life of the contracts, mainly as a function of maturity dates and market rates or prices. Liquidity Risk Liquidity risk on derivatives is the risk that the derivative position cannot be closed out promptly. Exposure to liquidity risk is reduced through contracting derivatives where the underlying items are widely traded. Cash requirements of the derivatives Cash requirements of the derivatives may arise from margin requirements to post cash collateral with counterparties as fair value moves beyond the agreed upon threshold limits in the counterparties' favour, or upon downgrade in the Bank's credit ratings. As at 30 June 2021, the Group has posted cash collateral of RM144,730,000 (31 December 2020: RM25,250,000) on their derivative contracts. There have been no changes since the end of the previous financial year in respect of the following: a) the types of derivative financial contracts entered into and the rationale for entering into such contracts, as well as the expected benefits accruing from these contracts; b) the risk management policies in place for mitigating and controlling the risks associated with these financial derivative contracts; and c) the related accounting policies. The above information, policies and procedures in respect of derivative financial instruments of the Group and the Bank are disclosed in the audited annual financial statements for the financial year ended 31 December 2020. Page 37
38. PART A - EXPLANATORY NOTES (CONTINUED) 0 A27 Islamic derivative financial instruments, commitments and contingencies (continued) (ii) Commitments and contingencies The Group and the Bank Credit-related Direct credit substitutes Transaction-related contingent items Short-term self-liquidating trade-related contingencies Irrevocable commitments to extend credit : - maturity not exceeding one year - maturity exceeding one year Miscellaneous commitments and contingencies Total credit-related commitments and contingencies Treasury-related Foreign exchange related contracts : - less than one year - one year to five years - more than five years Profit rate related contracts : - less than one year - one year to five years - more than five years Equity related contracts : - less than one year - more than five years Credit related contracts: - one year to five years - more than five years Commodity related contracts : - less than one year - one year to five years Total treasury-related commitments and contingencies Page 38 30 June 2021 Principal amount 31 December 2020 Principal amount RM'000 RM'000 290,544 703,174 291,893 697,011 32,376 75,486 11,451,989 9,335,774 23,360 21,837,217 11,469,447 7,541,999 24,219 20,100,055 17,916,843 787,148 681,182 18,304,042 825,356 852,209 1,080,855 3,398,742 1,044,931 6,537,030 3,683,709 1,070,991 - 24,956 12,238 41,000 - 41,500 39,014 24,989,715 46,826,932 4,732 2,823 31,359,586 51,459,641
39. PART A - EXPLANATORY NOTES (CONTINUED) 0 A28 Capital Adequacy The capital adequacy framework applicable to the Malaysian banking entities is based on the Bank Negara Malaysia (“BNM”) Capital Adequacy Framework for Islamic Banks ("CAFIB") (Capital Components), of which the latest revision was issued on 9 December 2020. The revised guidelines took effect on 9 December 2020 for all banking institutions and financial holding companies and sets up the regulatory capital requirements concerning capital adequacy ratios and components of eligible regulatory capital in compliance with Basel III. The risk-weighted assets of the Bank Group and the Bank are computed in accordance with the CAFIB (Basel II - Risk-Weighted Assets), of which the latest revision was issued on 3 May 2019. The Internal Ratings Based (“IRB”) Approach adopted by CIMB Islamic Bank is applied for the major credit exposures with retail exposures on Advanced IRB approach and non-retail exposures on Foundation IRB approach. The remaining credit exposures and Market Risk are on the Standardised Approach while Operational Risk is based on the Basic Indicator Approach. The Group 30 June 31 December 2021 2020 (a) The capital adequacy ratios of the Group and Bank are as follows: Common equity tier 1 ratio Tier 1 ratio Total capital ratio The Bank 30 June 31 December 2021 2020 13.304% 14.097% 16.757% 13.790% 14.532% 17.022% 13.307% 14.100% 16.760% 30 June 2021 RM’000 31 December 2020 RM’000 30 June 2021 RM’000 31 December 2020 RM’000 43,386,807 806,027 3,928,214 48,121,048 41,382,111 869,519 3,633,392 45,885,022 43,386,922 806,027 3,928,286 48,121,235 41,382,225 869,519 3,633,429 45,885,173 31 December 2020 RM’000 30 June 2021 RM’000 31 December 2020 RM’000 13.788% 14.529% 17.019% (b) The breakdown of risk-weighted assets ("RWA") by each major risk category is as follows: Credit risk Market risk Operational risk Total risk-weighted assets (c) Components of Common Equity Tier 1, Additional Tier 1 and Tier 2 capitals are as follows: 30 June 2021 RM’000 Common Equity Tier 1 capital Ordinary share capital Other reserves Common Equity Tier 1 capital before regulatory adjustments 1,000,000 5,965,550 6,965,550 1,000,000 5,612,772 6,612,772 1,000,000 5,966,905 6,966,905 1,000,000 5,614,034 6,614,034 Less: Regulatory adjustments Goodwill Intangible assets Deferred tax assets Regulatory reserve Others Common Equity Tier 1 capital after regulatory adjustments (136,000) (37,016) (150,152) (7,650) 6,634,732 (136,000) (55,420) (86,469) (213,032) (17,221) 6,104,630 (136,000) (37,016) (150,152) (7,650) 6,636,087 (136,000) (55,420) (86,469) (213,032) (17,222) 6,105,891 Additional Tier 1 capital Perpetual preference shares Total Tier 1 capital 357,000 6,991,732 364,000 6,468,630 357,000 6,993,087 364,000 6,469,891 Tier 2 capital Subordinated notes Surplus eligible provisions over expected loss General provisions ^ Total Tier 2 capital 1,110,000 17,688 70,192 1,197,880 1,110,000 40,649 69,727 1,220,376 1,110,000 17,686 70,193 1,197,879 1,110,000 40,647 69,729 1,220,376 Total capital 8,189,612 7,689,006 8,190,966 7,690,267 ^ Total capital of the Group and the Bank has excluded general provisions from Tier 2 capital of RM27.4 million (2020: RM49.5 million). Page 39
40. PART A - EXPLANATORY NOTES (CONTINUED) A29 0 Restricted Agency Investment Account -RAIA The details of the Restricted Agency Investment Account (“RAIA”) financing are as below. The exposures and corresponding risk weighted amount are reported in investors’ financial statements. The Group and the Bank 30 June 31 December 2021 2020 RM'000 RM'000 RAIA arrangement Financing and advances Commitments and contingencies 8,746,888 3,000,000 11,746,888 5,030,980 3,700,000 8,730,980 The Group and the Bank 30 June 31 December 2021 2020 RM'000 RM'000 905,665 209,266 905,665 209,266 Total RWA for Credit Risk RAIA arrangement is with the Bank’s holding company, CIMB Bank, and the contract is based on the Wakalah principle where CIMB Bank provides the funds, whilst the assets are managed by the Bank (as the Wakeel or agent). In the arrangement, the Bank has transferred substantially all the risk and rewards of ownership of the Investment (i.e. the financing facility) to CIMB Bank. Accordingly, the underlying assets (including the undisbursed portion of the financing commitment) and allowance for impairment arising thereon, if any, are recognised and accounted for by CIMB Bank. Page 40
41. PART A - EXPLANATORY NOTES (CONTINUED) 0 A30 Segmental reporting Definition of segments Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker is the person or group that allocates resources to and assesses the performance of the operating segments of an entity. The Group has determined the Group Executive Committee as its chief operating decision-maker. The business segment results are prepared based on the Group’s internal management reporting, which reflect the organisation’s management reporting structure. Business segment reporting Definition of segments: The Group has four major operation divisions that form the basis on which the Group reports its segment information. Consumer Banking Consumer Banking provides everyday banking solutions to individual customers covering Islamic financial products and services such as residential property financing, non-residential property financing, personal financing, hire purchase financing , credit cards, wealth management, bancatakaful, remittance and foreign exchange, deposits and internet banking services. Commercial Banking Commercial Banking offers products and services for customer segments comprising small and medium-scale enterprises (“SMEs”) and midsized corporations. Their products and services include banking credit facilities, trade financing, cash management, online business banking platform, remittance and foreign exchange, as well as general deposit products. Wholesale Banking Wholesale Banking comprises Investment Banking, Corporate Banking, Treasury and Markets, Transaction Banking and Private Banking. Investment Banking includes end-to-end client coverage and advisory services. Client coverage focuses on marketing and delivering solutions to corporate and financial institutional clients whereas advisory offers financial advisory services to corporations on issuance of debt restructuring, initial public offerings, secondary offerings and general corporate advisory. Corporate Banking offers a broad spectrum of Islamic funding solutions ranging from trade, working capital lines and capital expenditure to leveraging, merger and acquisition, leveraged and project financing. Corporate Banking’s client managers partner with product specialists within the Group to provide a holistic funding solution, from cash management, trade finance, foreign exchange, custody and corporate financings, to derivatives, structured products and debt capital market. Treasury and Markets focuses on treasury activities and services which include foreign exchange, money market, derivatives and trading of capital market instruments. It includes the Group’s equity derivatives which develops and issues new equity derivatives instruments such as structured warrants and over-the-counter options to provide investors with alternative investment avenues. Transaction Banking comprises Trade Finance and Cash Management which provide various trade facilities and cash management solutions. Private Banking offers a full suite of wealth management solutions to high net worth individuals with access to a complete range of private banking services, extending from investment to securities financing to trust services. CIMB Digital Assets & Group Funding (previously known as Group Ventures & Partnerships and Funding) CIMB Digital Assets (previously Group Ventures & Partnerships) drives all strategic partnerships across business lines Group-wide and explores strategic equity joint ventures in the ecosystem space. Group Funding encompasses a wide range of activities from capital, balance sheet and fixed income investments and management, as well as the funding and incubation of corporate ventures and projects. Page 41
42. PART A - EXPLANATORY NOTES (CONTINUED) 0 A30 Segmental reporting (continued) The Group Wholesale Banking Consumer Banking Commercial Banking RM'000 CIMB Digital Assets & Group Funding RM'000 RM'000 RM'000 RM'000 (268,555) 473,715 205,160 2,856 208,016 (75,595) 906,122 (296,869) 609,253 90,244 699,497 (301,776) 242,507 12,140 254,647 35,379 290,026 (53,254) 298,790 (188,986) 109,804 35,874 145,678 (134,887) 1,178,864 1,178,864 164,353 1,343,217 (565,512) (22) (766) 132,421 (29) 397,721 236,772 (227) (17,912) 10,791 (249) (18,707) 777,705 7,448 (616) (3,026) 136,227 (152,497) (17,456) 4 227,772 (36,684) (941) 199,147 (9) (786) 9,996 (181,742) (19,013) (3,808) 573,142 (138,402) 434,740 30 June 2021 Net financing income: - external - inter-segment Other operating income Total income Overhead expenses Consist of : Depreciation of property, plant and equipment Amortisation of intangible assets Profit/(loss) before allowances Expected credit losses written back/(made) on financing, advances and other financing/loans Expected credit losses written back/(made) for commitments and contingencies Other expected credit losses written back/(made) Segment results Taxation Net profit for the financial period Page 42 Total
43. PART A - EXPLANATORY NOTES (CONTINUED) 0 A30 Segmental reporting (continued) The Group 30 June 2020 Net financing income: - external - inter-segment Other operating income Total income Overhead expenses Consist of : Depreciation of property, plant and equipment Amortisation of intangible assets Profit/(loss) before allowances Expected credit losses made on financing, advances and other financing/loans Expected credit losses made for commitments and contingencies Other expected credit losses made Segment results Taxation Net profit for the financial period Page 43 Wholesale Banking Consumer Banking Commercial Banking CIMB Digital Assets & Group Funding Total RM'000 RM'000 RM'000 RM'000 RM'000 (253,645) 476,952 223,307 17,103 240,410 (62,430) 541,381 (259,016) 282,365 65,588 347,953 (221,642) 230,118 (10,246) 219,872 31,952 251,824 (50,567) 240,436 (207,690) 32,746 50,512 83,258 (148,621) 758,290 758,290 165,155 923,445 (483,260) (23) (919) 177,980 (13,144) 108 (297) 164,647 (461) (40) 126,311 (120,445) (13,402) (2) (7,538) (6) 201,257 (21,233) (4,444) 175,580 (226) (3,232) (65,363) (11) (421) (65,795) (710) (4,197) 440,185 (154,833) (17,738) (720) 266,894 (60,299) 206,595
44. PART A - EXPLANATORY NOTES (CONTINUED) 0 A30 Segmental reporting (continued) Wholesale Banking Consumer Banking Commercial Banking RM'000 RM'000 RM'000 CIMB Digital Assets & Group Funding RM'000 Segment assets Unallocated assets Total assets 31,526,124 59,926,085 14,989,305 11,100,136 117,541,650 885,847 118,427,497 Segment liabilities Unallocated liabilities Total liabilities 55,531,326 35,424,290 12,941,088 6,840,503 110,737,207 304,739 111,041,946 13 - - 250 263 Wholesale Banking Consumer Banking Commercial Banking Total RM'000 RM'000 RM'000 CIMB Digital Assets & Group Funding RM'000 Segment assets Unallocated assets Total assets 32,600,783 57,236,022 14,457,243 11,116,109 115,410,157 872,246 116,282,403 Segment liabilities Unallocated liabilities Total liabilities 57,926,268 31,780,767 12,246,536 6,814,012 108,767,583 482,048 109,249,631 103 1,157 - 709 1,969 The Group 30 June 2021 Other segment items Capital expenditure The Group 31 December 2020 Other segment items Capital expenditure Page 44 Total RM'000 RM'000
45. PART A - EXPLANATORY NOTES (CONTINUED) 0 A31 Fair Value Estimation Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Determination of fair value and fair value hierarchy The fair value hierarchy has the following levels: Level 1 - Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 - Inputs to the valuation methodology include: - Quoted prices for similar assets and liabilities in active markets; or - Quoted prices for identical or similar assets and liabilities in non-active markets; or - Inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 - One or more inputs to the valuation methodology are unobservable and significant to the fair value measurement. Assets/liabilities are classified as Level 1 when the valuation is based on quoted prices for identical assets or liabilities in active markets. Assets/liabilities are regarded as being quoted in an active market if the prices are readily available from a published and reliable source and those prices represent actual and regularly occurring market transactions on an arm’s length basis. When fair value is determined using quoted prices of similar assets/liabilities in active markets or quoted prices of identical or similar assets and liabilities in non-active markets, such assets/liabilities are classified as Level 2. In cases where quoted prices are generally not available, the Group determines fair value based upon valuation techniques that use market parameters as inputs. Most valuation techniques employ observable market data, including but not limited to yield curves, equity prices, volatilities and foreign exchange rates. Assets/liabilities are classified as Level 3 if their valuation incorporates significant inputs that are not based on observable market data. Such inputs are determined based on observable inputs of a similar nature, historical observations or other analytical techniques. If prices or quotes are not available for an instrument or a similar instrument, fair value will be established by using valuation techniques or Mark-to-Model. Judgment may be required to assess the need for valuation adjustments to appropriately reflect unobservable parameters. The valuation models shall also consider relevant transaction data such as maturity. The inputs are then benchmarked and extrapolated to derive the fair value. Valuation Model Review and Approval ● Fair valuation of financial instruments is determined either through Mark-to-Market or Mark-to-Model methodology, as appropriate; ● Market Risk Management is mandated to perform mark-to-market, mark-to-model and rate reasonableness verification. Market price and/or rate sources for Mark-to-Market are validated by Market Risk Management as part and parcel of market data reasonableness verification; ● Valuation methodologies for the purpose of determining Mark-to-Model prices will be verified by Group Risk Management Quantitative Analysts before submitting to the Group Market Risk Committee ("GMRC") for approval; ● Mark-to-Model process shall be carried out by Market Risk Management in accordance with the approved valuation methodologies. Group Risk Management Quantitative analysts are responsible for independent evaluation and validation of the Group’s financial models used for valuation; ● Group Risk Management Quantitative analysts are the guardian of the financial models and valuation methodologies. Market rate sources and model inputs for the purpose of Mark-to-Model must be verified by Group Risk Management Quantitative analysts and approved by Regional Head, Market Risk Management and/or the GMRC; ● Model risk and unobservable parameter reserve must be considered to provide for the uncertainty of the model assumptions; ● The Group’s policy is to recognise transfers into and transfers out of fair value hierarchy levels as of the date of the event or change in circumstances that caused the transfer; and ● Independent price verification process shall be carried out by Market Risk Management to ensure that financial assets and liabilities are recorded at fair value. Page 45
46. PART A - EXPLANATORY NOTES (CONTINUED) 0 A31 Fair Value Estimation (continued) (i) The following table represents the assets and liabilities measured at fair value and classified by level with the following fair value hierarchy as at 30 June 2021 and 31 December 2020. 30 June 2021 Fair Value The Group and the Bank Recurring fair value measurements Financial assets Financial assets at fair value through profit or loss -Money market instruments -Unquoted securities Debt instruments at fair value through other comprehensive income -Money market instruments -Unquoted securities Derivative financial instruments -Trading derivatives -Hedging derivatives Financing, advances and other financing/loans at fair value through profit or loss Total Recurring fair value measurements Financial liabilities Derivative financial instruments -Trading derivatives -Hedging derivatives Financial liabilities designated at fair value through profit or loss Total Page 46 31 December 2020 Fair Value (Level 2) Total (Level 2) Total RM'000 RM'000 RM'000 RM'000 5,639,670 518,157 5,639,670 518,157 4,697,651 336,778 4,697,651 336,778 803,980 3,322,515 803,980 3,322,515 731,102 2,939,797 731,102 2,939,797 377,067 90 377,067 90 522,847 - 522,847 - 10,661,479 10,661,479 197,321 9,425,496 197,321 9,425,496 355,289 2,879 496,135 854,303 355,289 2,879 496,135 854,303 553,908 3,939 71,610 629,457 553,908 3,939 71,610 629,457
47. PART A - EXPLANATORY NOTES (CONTINUED) A32 Credit transactions and exposures with connected parties The Group and the Bank 30 June 31 December 2021 2020 RM'000 RM'000 Outstanding credit exposures with connected parties Percentage of outstanding credit exposures to connected parties as a proportion of total credit exposures Percentage of outstanding credit exposures with connected parties which is impaired or in default Page 47 778,272 943,065 0.6% 0.7% 0.0% 0.0%
48. PART B B1 0 Group performance review The Group recorded a pre-tax profit of RM573 .1 million for the financial period ended 30 June 2021, an increase of RM306.2 million or 114.7% compared to the previous corresponding period. Total income increased by RM39.4 million or 1.8% to RM2,280.9 million from previous corresponding period, mainly due to absence of modification loss of RM185.3 million as well as increased income derived from shareholders fund by RM95.7 million. This was offset with decreased of income derived from investments of depositors funds and others and income derived from investment of investment account by RM178.3 million and RM63.3 million respectively. For the six months ended 30 June 2021, the Group recorded net expected credit losses made on financing, advances and other financing/loans of RM181.7 million compared to RM154.8 million in the corresponding period last year. The increase in net allowance charged was mainly due to higher expected credit losses made on financing by RM35.9 million and it was partly offset with higher impaired financing recovered by RM8.9 million. The income attributable to depositors and profit distributed to investment account holder are both decreased by RM319.1 million and RM61.2 million respectively. The Group's gross financing,advances and other financing/loans reduced by 0.16% to RM85.7 billion for the six months period ended 30 June 2021. As at 30 June 2021, deposits from customers and investment accounts of customers stood at RM96.0 billion and RM5.1 billion, a decrease of RM0.3 billion and an increase RM2.4 billion respectively as compared to 31 December 2020. The Equity Tierhave 1, Tier Capitalfor Ratio Total Capital Ratio stoodchanges at 13.788%, 14.529% and 17.019% respectively. The Group's followingCommon comparative figures been1restated the and effects of adopting the above in accounting policies and reclassification of B2 Prospects for the current financial year The significant increase in Covid-19 cases has resulted in economic activity disruptions from the prolonged lockdowns. This may lead to headwinds on the top line growth momentum and asset quality pressure. Financing growth will likely be slower in line with our cautious stance, while capital market activity may remain muted. The Bank will continue to support its impacted customers and segments with its financing relief programs and will continue to enhance credit risk management strategies across segments. In addition, the Bank remains focused on executing its Forward23+ strategies, including RAROC optimisation, CASA accumulation, other income growth and prudent cost management. Despite this cautious second half 2021 outlook, overall the Bank expects 2021 to show improved financial performance. The Bank will continue to integrate value based intermediation (VBI) to better drive business decisions based on true costs and benefits to business and our stakeholders. B3 Computation of earnings per share (EPS) a) Basic EPS The Group and Bank basic EPS is calculated by dividing the net profit for the financial period by the weighted average number of ordinary shares in issue during the financial period. The Group 2nd Quarter Ended Six Months Ended 30 June 30 June 30 June 30 June 2021 2020 2021 2020 Net profit for the financial period (RM '000) Weighted average number of ordinary shares in issue ('000) Basic earnings per share (expressed in sen per share) 192,612 11,545 434,740 206,595 1,000,000 19.26 1,000,000 1.15 1,000,000 43.47 1,000,000 20.66 The Bank 2nd Quarter Ended Six Months Ended 30 June 30 June 30 June 30 June 2021 2020 2021 2020 Net profit for the financial period (RM '000) Weighted average number of ordinary shares in issue ('000) Basic earnings per share (expressed in sen per share) 192,095 10,851 434,832 206,714 1,000,000 19.21 1,000,000 1.09 1,000,000 43.48 1,000,000 20.67 b) Diluted EPS There were no dilutive potential ordinary shares outstanding as at 30 June 2021 and 30 June 2020. Page 48