Deutsche Bank Malaysia Interim Financials Statements 3Q 2017

Transcription

1. Deutsche Bank Deutsche Bank (Malaysia) Berhad (Company No. 312552-W) (Incorporated in Malaysia) and its subsidiaries Unaudited Condensed Interim Financial Statements for the Financial Period ended 30 September 2017 Domiciled in Malaysia Registered office: Level 18, Menara IMC No. 8 Jalan Sultan Ismail 50250 Kuala Lumpur
2. Deutsche Bank Consolidated Statements of Financial Position As at 30 September 2017 - Unaudited Group Note Assets Cash and short term funds Deposits and placements of banks and other financial institutions Reverse repurchase agreements Financial assets held-for-trading Financial investments available-for-sale Loans , advances and financing Other assets Tax recoverable Statutory deposit with Bank Negara Malaysia Investments in subsidiary companies Property, plant and equipment Deferred tax assets 12 13 14 15 31 December 2016 RM’000 RM’000 RM’000 RM’000 4,909,683 4,608,452 4,909,683 4,608,452 200,000 486,127 1,402,940 1,591 1,938,440 2,131,738 - 1,126 608,641 635,245 1,591 1,890,528 3,849,865 2,970 200,000 486,127 1,402,940 1,591 1,938,440 2,131,738 - 1,126 608,641 635,245 1,591 1,890,528 3,849,865 2,970 16 4,735,184 4,285,140 4,735,204 4,285,160 17 18 1,557,059 3,102,592 2,514 __________ 9,397,349 ----------------173,599 1,587,217 __________ 1,760,816 ----------------11,158,165 ========== 108,136,450 ========== 1,441,194 4,406,607 __________ 10,132,941 ----------------173,599 1,581,830 __________ 1,755,429 ----------------11,888,370 ========== 112,693,840 ========== 1,557,059 3,102,592 2,514 __________ 9,397,369 ----------------173,599 1,587,217 __________ 1,760,816 ----------------11,158,185 ========== 108,136,450 ========== 1,441,194 4,406,607 __________ 10,132,961 ----------------173,599 1,581,830 __________ 1,755,429 -----------------11,888,390 ========== 112,693,840 ========== Total liabilities Share capital Reserves Shareholders’ funds Total liabilities and shareholders’ funds Commitments and contingencies 30 September 2017 55,000 250,000 55,000 250,000 20 20 4,101 4,191 4,101 4,191 28,545 35,761 28,545 35,761 __________ __________ __________ __________ 11,158,165 11,888,370 11,158,185 11,888,390 ========== ========== ========== ========== Total assets Liabilities and shareholders’ funds Deposits from customers Deposits and placements of banks and other financial institutions Other liabilities Tax payable Bank 30 September 31 December 2017 2016 25 The unaudited condensed interim financial statements should be read in conjunction with the audited financial statements for the Group and the Bank for the year ended 31 December 2016. Deutsche Bank (Malaysia) Berhad Unaudited Condensed Interim Financial Statements ended 30 September 2017 (Company No. 312552-W) 1
3. Deutsche Bank Consolidated Statements Of Profit Or Loss And Other Comprehensive Income For The Financial Period Ended 30 September 2017 - Unaudited Group and Bank Nine months ended Three months ended Note Interest income Interest expense 19 20 Net interest income Net income from Islamic Banking Operations 26 Non-interest income 21 Operating income Other operating expenses 22 Operating profit Allowance written back / (made) for impairment on loans, advances and financing 23 Profit before tax Tax expense Net profit / Total comprehensive income for the period Earnings per share (sen) 30 September 2017 30 September 2016 30 September 30 September 2017 2016 RM’000 RM’000 RM’000 RM’000 185,628 (57,896) _______ 127,732 148,134 (54,888) _______ 93,246 65,687 (20,750) _______ 44,937 51,820 (16,528) _______ 35,292 2,075 595 786 142 186,830 _______ 316,637 (117,068) _______ 199,569 212,126 _______ 305,967 (108,172) _______ 197,795 53,772 _______ 99,495 (47,417) _______ 52,078 68,281 _______ 103,715 (38,394) _______ 65,321 2,573 _______ 202,142 (49,716) _______ (1,973) _______ 195,822 (48,328) _______ (362) _______ 51,716 (12,414) _______ 502 _______ 65,823 (15,871) _______ 152,426 ======= 147,494 ======= 39,302 ======= 49,952 ======= 87.8 sen ======= 85.0 sen ======= 22.6 sen ======= 28.8 sen ======= The unaudited condensed interim financial statements should be read in conjunction with the audited financial statements for the Group and the Bank for the year ended 31 December 2016. Deutsche Bank (Malaysia) Berhad Unaudited Condensed Interim Financial Statements ended 30 September 2017 (Company No. 312552-W) 2
4. Deutsche Bank Consolidated Statements Of Changes In Equity For The Financial Period Ended 30 September 2017 <---------------------------Attributable to owner of the Bank------------------------------------------> <----------Non-distributable-------------> Distributable Group and Bank Share capital RM’000 Share premium RM’000 Other reserves RM’000 Retained profits RM’000 Total reserves RM’000 Proposed dividend RM’000 At 1 January 2017 173,599 357,763 188,280 1,035,787 1,581,830 - 1,755,429 Transfer pursuant to BNM revised policy * - - 174,722 - - - Net profit/ Total comprehensive income for the period - - - 152,426 152,426 - 152,426 Dividend paid - - - (147,039) (147,039) - (147,039) --------------------------------------------------------------------------------------------------------------------------------173,599 357,763 13,558 1,215,896 1,587,217 1,760,816 ========================================================================== At 30 September 2017 At 1 January 2016 173,599 357,763 188,280 988,748 1,534,791 - 1,708,390 Net profit/ Total comprehensive income for the period - - - 147,494 147,494 - 147,494 Dividend paid - - - (100,000) (100,000) - (100,000) ----------------------------------------------------------------------------------------------------------------------- ---------173,599 357,763 188,280 1,036,242 1,582,285 1,755,884 ========================================================================== At 30 September 2016 * (174,722) Total RM’000 Bank Negara Malaysia (“BNM”) had on 3 May 2017 issued a revised policy document on Capital Funds (“Revised Policy Document”). This supersedes the guideline issued by BNM previously, namely Capital Funds dated 1 July 2013. The key changes in the Revised Policy Document are: (a) the removal of the requirement on maintenance of a reserve fund; and (b) the revised component of capital funds shall exclude share premium and reserve fund During the financial period ended 30 September 2017, the Group and the Bank has transferred RM174,722,000 from other reserves to its retained profits pursuant to the Revised Policy Document. The unaudited condensed interim financial statements should be read in conjunction with the audited financial statements for the Group and the Bank for the year ended 31 December 2016 Deutsche Bank (Malaysia) Berhad Unaudited Condensed Interim Financial Statements ended 30 September 2017 (Company No. 312552-W) 3
5. Deutsche Bank Condensed Consolidated Statements Of Cash Flows For The Financial Period Ended 30 September 2017 Group and Bank 30 September 30 September 2017 2016 RM ’000 RM’000 Profit before taxation Adjustments for non-operating and non-cash items Operating profit before working capital changes Changes in working capital: Net changes in operating assets Net changes in operating liabilities Income tax paid Net cash generated from/ (used in) operations Cash flows from investing activities: Purchase of plant and equipment Proceeds from disposal of plant and equipment Net cash used in investing activities Cash flows from financing activities: Dividend paid Net cash used in financing activities Net increase/ (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the period Cash and cash equivalents at end of the period Analysis of cash and cash equivalents: Cash and short-term funds 202,142 631 _________ 202,773 195,822 705 _________ 196,527 1,021,160 (738,106) (37,017) _________ 448,810 --------------- 404,903 (2,381,020) (36,600) _________ (1,816,190) --------------- (640) 100 _________ (540) --------------- (746) _________ (746) --------------- (147,039) _________ (147,039) --------------- (100,000) _________ (100,000) --------------- 301,231 4,608,452 _________ 4,909,683 _________ (1,916,936) 5,856,232 _________ 3,939,296 _________ 4,909,683 _________ 3,939,296 _________ The unaudited condensed interim financial statements should be read in conjunction with the audited financial statements for the Group and the Bank for the year ended 31 December 2016. Deutsche Bank (Malaysia) Berhad Unaudited Condensed Interim Financial Statements ended 30 September 2017 (Company No. 312552-W) 4
6. Deutsche Bank Explanatory Notes To The Interim Financial Statements For The Financial Period Ended 30 September 2017 1 . Basis of preparation The unaudited interim financial statements for the financial period ended 30 September 2017 have been prepared under the historical cost convention except for reverse repurchase agreements, financial assets held-for-trading and derivative financial instruments which are stated at fair values. The unaudited interim financial statements have been prepared in accordance with MFRS 134, Interim Financial Reporting issued by the Malaysian Accounting Standards Board (“MASB”). The unaudited interim financial statements should be read in conjunction with the audited annual financial statements for the Group and the Bank for the financial year ended 31 December 2016. The explanatory notes attached to the 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 year ended 31 December 2016. The unaudited interim financial statements incorporated those activities relating to the Islamic banking business. Islamic banking business refers generally to the acceptance of deposits under the principles of Shariah. The significant accounting policies and methods of computation applied in the unaudited interim financial statements are consistent with those adopted in the most recent audited annual financial statements for the year ended 31 December 2016, except for the adoption of the following Malaysian Financial Reporting Standard (“MFRS”), Amendments to MFRSs and IC Interpretation that have been issued by the Malaysian Accounting Standard Board(“MASB”):    Amendments to MFRS 12, Disclosure of Interests in Other Entities (Annual Improvements to MFRS Standards 2014-2016 Cycle) Amendments to MFRS 107, Statement of Cash Flows – Disclosure Initiative Amendments to MFRS 112, Income Taxes – Recognition of Deferred Tax Assets for Unrealised Losses The following are accounting standards, amendments and interpretations of the MFRS framework that have been issued by MASB but have not been adopted by the Group and the Bank: MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2018          MFRS 9, Financial Instruments (2014) MFRS 15, Revenue from Contracts with Customers Clarifications to MFRS15, Revenue from Contract Customers IC Interpretation 22, Foreign Currency Transactions and Advance Consideration Amendments to MFRS 1, First-time Adoption of Malaysian Financial Reporting Standards (Annual Improvements to MFRS Standards 2014-2016 Cycle) Amendments to MFRS 2, Share-based Payment – Classification and Measurement of Sharebased Payment Transactions Amendments to MFRS 4, Insurance Contracts – Applying MFRS 9 Financial Instruments with MFRS 4 Insurance Contracts Amendments to MFRS 128, Investments in Associates and Joint Ventures (Annual Improvements to MFRS Standards 2014-2016 Cycle) Amendments to MFRS 140, Investment Property – Transfers of Investment Property MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2019   MFRS 16, Leases IC Interpretation 23, Uncertainty over Income Tax Treatments Deutsche Bank (Malaysia) Berhad Unaudited Condensed Interim Financial Statements ended 30 September 2017 (Company No. 312552-W) 5
7. Deutsche Bank 1 . Basis of preparation (continued) MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2021  MFRS 17, Insurance Contracts MFRSs, Interpretations and amendments effective for a date yet to be confirmed  Amendments to MFRS 10, Consolidated Financial Statements and MFRS 128, Investments in Associates and Joint Ventures – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture The Group and the Bank plan to apply the abovementioned standards, amendments and interpretations, where applicable:  from the annual period beginning on 1 January 2018 for those accounting standards, amendments or interpretations that are effective for annual periods beginning on or after 1 January 2018; and,  from the annual period beginning on 1 January 2019 for those accounting standards, amendments or interpretations that are effective for annual periods beginning on or after 1 January 2019. The initial application of the accounting standards, amendments and interpretations are not expected to have any material financial impact to the current period and prior period financial statements of the Group and the Bank except as mentioned in the subsequent paragraphs: (i) MFRS 9, Financial Instruments MFRS 9 replaces the guidance in MFRS 139, Financial Instruments: Recognition and Measurement on the classification and measurement of financial assets and financial liabilities, and on hedge accounting. (ii) MFRS 15, Revenue from Contracts with Customers MFRS 15 replaces the guidance in MFRS 111, Construction Contracts, MFRS 118, Revenue, IC Interpretation 13, Customer Loyalty Programmes, IC Interpretation 15, Agreements for Construction of Real Estate, IC Interpretation 18, Transfers of Assets from Customers and IC Interpretation 131, Revenue - Barter Transactions Involving Advertising Services. (iii) MFRS 16, Leases MFRS 16 replaces the guidance in MFRS 117, Leases, IC Interpretation 4, Determining whether an Arrangement contains a Lease, IC Interpretation 115, Operating Leases – Incentives and IC Interpretation 127, Evaluating the Substance of Transactions Involving the Legal Form of a Lease. (iv) Amendments to MFRS 128, Investments in Associates and Joint Ventures (Annual Improvements to MFRS Standards 2014-2016 Cycle) The amendments clarify that an entity, which is a venture capital organisation, or a mutual fund, unit trust or similar entities, has an investment-by-investment choice to measure its investments in associates and joint ventures at fair value. The Group and the Bank are currently assessing the financial impact that may arise from the adoption of MFRS 9, MFRS 15, MFRS 16 and amendments to MFRS 128. Deutsche Bank (Malaysia) Berhad Unaudited Condensed Interim Financial Statements ended 30 September 2017 (Company No. 312552-W) 6
8. Deutsche Bank 2 . Audit report The audit report on the audited annual financial statements of the Group and the Bank for the financial year ended 31 December 2016 was not subject to any qualification. 3. Seasonality or Cyclicality of Operations The business operations of the Group and the Bank are not subject to material seasonal or cyclical fluctuations. 4. Unusual Items Due to Their Nature, Size or Incidence There were no unusual items affecting assets, liabilities, equity, net income or cash flows of the Group and of the Bank for the financial period ended 30 September 2017. 5. Changes in Estimates There were no significant changes in estimates of amounts reported in prior financial years that have a material effect on the financial results and position of the Group and the Bank for the financial period ended 30 September 2017. 6. Issuance and Repayment of Debt and Equity Securities There were no issuance and repayment of debt and equity securities during the financial period ended 30 September 2017. 7. Dividend Paid Since the end of the previous financial year, the Bank paid the final dividend of 84.7 sen per ordinary share totalling RM147,039,000 in respect of the financial year ended 31 December 2016. The dividend was paid on 22 June 2017. 8. Material Events There were no material events subsequent to the reporting date that require disclosure or adjustments to the unaudited condensed interim financial statements. 9. Changes in the composition of the Group There were no changes in the composition of the Group for the financial period ended 30 September 2017. 10. Review of Performance The Bank recorded profit before taxation for the financial period ended 30 September 2017 of RM202.1 million compared to RM195.8 million profit for the previous corresponding period. Operating income increased by RM10.6 million (+3.5%) from RM306.0 million to RM316.6 million, mainly attributed to net interest income increased by RM34.5 million (+37.0%) from RM93.2 million to RM127.7 million, primarily driven by higher interest income earned from loan and advances and financial assets held for trading. Noninterest income decreased by RM25.3 million (-11.9%) from RM212.1 million to RM186.8 million, mainly driven by lower net gain on financial assets held for trading. Total assets registered a decrease of RM0.7 billion or 6.1% from RM11.9 billion as at 31 December 2016 to RM11.2 billion as at 30 September 2017. The Bank’s total common equity tier 1 ratio and total capital ratio remained strong at 21.2% and 21.5%, respectively. Deutsche Bank (Malaysia) Berhad Unaudited Condensed Interim Financial Statements ended 30 September 2017 (Company No. 312552-W) 7
9. Deutsche Bank 11 . Prospects Global growth is expected to close higher in 2017 as notable upswing in the global economic activities is seen in most aspects of investment, trade and industrial production. US economy is expected to continue with its moderate expansion in the near term reflecting supportive financial conditions and improved business and consumer confidence. Whilst in the euro region, recovery is expected to gather its momentum as exports improved due to pick up in global trade and growth in domestic demand. On the local front, overnight policy rate remains at 3.00%. The Malaysia economy is anticipated to continue on steady growth as economic indicators signalling positive outlook, notably in the manufacturing and energy sectors where it records upticks in industrial activities. The Bank remains competitive with the solid frameworks around capital and liquidity management, risk controls and enhanced internal processes. We continue to be relentless in our commitment towards client centricity and in driving product innovation to deliver sustainable performance. The Bank looks forward to contribute to the economic growth and wellbeing of the communities which we operate and to create positive impact for our clients, investors, employees and society at large. 12. Financial assets held-for-trading At fair value Malaysian Government Securities Malaysian Investment Issue Treasury Bills Cagamas bonds 13. Group and Bank 30 September 31 December 2017 2016 RM’000 RM’000 1,092,744 296,192 14,004 _________ 1,402,940 ========= 490,502 142,658 2,085 _________ 635,245 ========= Financial investments available-for-sale Group and Bank 30 September 31 December 2017 2016 RM’000 RM’000 At cost Unquoted shares 1,591 ======== 1,591 ======== Deutsche Bank (Malaysia) Berhad Unaudited Condensed Interim Financial Statements ended 30 September 2017 (Company No. 312552-W) 8
10. Deutsche Bank 14 . Loans, advances and financing At amortised cost Overdrafts Term loans - housing loans - other term loans Bills receivable Claims on customers under acceptance credits Staff loans Unearned interest Gross loans, advances and financing Allowance for impaired loans and financing - Collective assessment - Individual assessment Net loans, advances and financing Group and Bank 30 September 31 December 2017 2016 RM’000 RM’000 131,582 13,135 256,676 258,351 1,315,846 3,083 _________ 1,978,673 (25,936) _________ 1,952,737 130,457 15,059 228,226 677,220 871,013 3,356 _________ 1,925,331 (17,803) _________ 1,907,528 (14,234) (63) _________ 1,938,440 ========= (16,822) (178) _________ 1,890,528 ========= The maturity structure of gross loans, advances and financing are as follows: Group and Bank 30 September 31 December 2017 2016 RM’000 RM’000 Maturing within one year More than one to three years More than three to five years More than five years 1,924,659 15,488 1,601 10,989 _________ 1,952,737 ========= 1,870,033 23,161 1,527 12,807 _________ 1,907,528 ========= Gross loans, advances and financing analysed by type of customer are as follows: Group and Bank 30 September 31 December 2017 2016 RM’000 RM’000 Domestic banking institutions Domestic non-bank financial institutions Domestic business enterprises Government and statutory bodies Individuals Foreign entities 356,694 1,179,557 147,388 16,218 252,880 _________ 1,952,737 ========= 2,546 229,504 874,918 109,782 18,415 672,363 _________ 1,907,528 ========= Deutsche Bank (Malaysia) Berhad Unaudited Condensed Interim Financial Statements ended 30 September 2017 (Company No. 312552-W) 9
11. Deutsche Bank 14 . Loans, advances and financing (continued) Gross loans, advances and financing analysed by interest / profit rate sensitivity are as follows: Group and Bank 30 September 31 December 2017 2016 RM’000 RM’000 Fixed rate - Other fixed rate loan / financing Variable rate - Base lending rate plus - Cost-plus - Other variable rates 3,083 3,231 48,944 1,898,985 1,725 _________ 1,952,737 ========= 42,347 1,859,986 1,964 _________ 1,907,528 ========= Gross loans, advances and financing analysed by their geographical distribution are as follows: Group and Bank 30 September 31 December 2017 2016 RM’000 RM’000 Malaysia China Singapore India Vietnam Turkey Others 1,699,857 3,664 57,017 2,197 174,599 15,403 _________ 1,952,737 ========= 1,235,165 102,124 175,237 326,747 10,667 30,746 26,842 _________ 1,907,528 ========= Gross loans, advances and financing analysed by their economic sector are as follows: Group and Bank 30 September 31 December 2017 2016 RM’000 RM’000 Mining and Quarrying Manufacturing Construction Wholesale & retail trade and restaurants & hotels Transport, storage and communication Finance, insurance and business services Education, health and others Household 240,375 98,988 198,560 630,513 620,695 147,388 16,218 _________ 1,952,737 ========= 2,748 339,073 72,004 205,397 242,332 917,777 109,782 18,415 _________ 1,907,528 ========= Deutsche Bank (Malaysia) Berhad Unaudited Condensed Interim Financial Statements ended 30 September 2017 (Company No. 312552-W) 10
12. Deutsche Bank 14 . Loans, advances and financing (continued) Movements in impaired loans, advances and financing are as follows: Group and Bank 30 September 31 December 2017 2016 RM’000 RM’000 Balance at 1 January Classified as impaired during the period/ year Reclassified as non-impaired during the period/ year Amount recovered Amount written off At 30 September 2017/ 31 December 2016 Gross impaired loans as a percentage of gross loans, advances and financing 2,634 442 (437) (289) (130) ______ 2,220 ====== 2,982 638 (540) (446) ______ 2,634 ====== 0.11% ====== 0.14% ====== Movement in the allowance for impaired loans, advances and financing are as follows: Group and Bank 30 September 31 December 2017 2016 RM’000 RM’000 Collective Assessment Allowance At 1 January Allowance (recovered)/ made during the period/ year At 30 September 2017/ 31 December 2016 16,822 (2,588) ______ 14,234 ====== 9,268 7,554 ______ 16,822 ====== Group and Bank 30 September 31 December 2017 2016 RM’000 RM’000 Individual Assessment Allowance At 1 January Allowance made during the period/ year Amount recovered Amount written off At 30 September 2017/ 31 December 2016 178 29 (14) (130) _____ 63 ===== 315 126 (263) _____ 178 ===== Impaired loans, advances and financing analysed by economic sector and geographical distribution are as follows: Group and Bank 30 September 31 December 2017 2016 RM’000 RM’000 Household (Malaysia) 2,220 ______ 2,220 ====== 2,634 ______ 2,634 ====== Deutsche Bank (Malaysia) Berhad Unaudited Condensed Interim Financial Statements ended 30 September 2017 (Company No. 312552-W) 11
13. Deutsche Bank 15 . Other assets Group and Bank 30 September 31 December 2017 2016 RM’000 RM’000 Interest / Income receivable Margin placed with exchange Derivatives Other debtors, deposits and prepayments 16. 15,978 4,013 1,463,828 647,919 ________ 2,131,738 ======== 7,928 21,761 2,778,605 1,041,571 ________ 3,849,865 ======== Deposits from customers Group Bank 30 September 31 December Demand deposits Savings deposits Fixed deposits Other deposits 30 September 31 December 2017 RM’000 2016 RM’000 2017 RM’000 2016 RM’000 3,906,046 3,143 370,704 455,291 _________ 4,735,184 ========= 3,907,414 3,136 115,040 259,550 _________ 4,285,140 ========= 3,906,066 3,143 370,704 455,291 _________ 4,735,204 ========= 3,907,434 3,136 115,040 259,550 _________ 4,285,160 ========= The maturity structure of fixed deposits and other deposits are as follows:Group and Bank 30 September 31 December Due within six months More than six months to one year More than one year to three years More than five years 2017 RM’000 2016 RM’000 610,477 107,410 108,108 ________ 825,995 ======== 276,094 6,813 207 91,476 ________ 374,590 ======== The deposits are sourced from the following types of customers: Group Bank 30 September 31 December 30 September 2017 RM’000 Business enterprises Individuals Foreign customers Others 31 December 2016 RM’000 2017 RM’000 2016 RM’000 3,686,414 3,564,977 20,924 25,728 274,925 109,666 752,921 584,769 _________ _________ 4,735,184 4,285,140 ========= ========= 3,686,434 20,924 274,925 752,921 _________ 4,735,204 ========= 3,564,997 25,728 109,666 584,769 _________ 4,285,160 ========= Deutsche Bank (Malaysia) Berhad Unaudited Condensed Interim Financial Statements ended 30 September 2017 (Company No. 312552-W) 12
14. Deutsche Bank 17 . Deposits and placements of banks and other financial institutions Group and Bank 30 September 31 December 2017 2016 RM’000 RM’000 Other financial institutions 18. 1,557,059 _________ 1,557,059 ========= 1,441,194 _________ 1,441,194 ========= Other liabilities Group and Bank 30 September 31 December 2017 2016 RM’000 RM’000 Interest payable Bills payable Derivatives Employee benefits Other liabilities 2,498 39,590 1,637,997 13,870 1,408,637 _________ 3,102,592 ========= 2,378 57,070 2,819,612 13,464 1,514,083 _________ 4,406,607 ========= Deutsche Bank (Malaysia) Berhad Unaudited Condensed Interim Financial Statements ended 30 September 2017 (Company No. 312552-W) 13
15. Deutsche Bank 19 . Interest income Group and Bank Nine months ended Three months ended 30 September 30 September 30 September 30 September 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000 Loans, advances and financing Money at call and deposit placements with financial institutions Reverse repurchase agreements Financial assets held for trading Of which: Interest income earned on impaired loans, advances and financing 54,914 38,470 20,020 12,627 89,459 10,084 31,171 _______ 185,628 ======= 85,701 4,919 19,044 _______ 148,134 ======= 31,722 3,614 10,331 _______ 65,687 ======= 32,165 1,311 5,717 _______ 51,820 ======= 97 ======= 119 ======= 31 ======= 36 ======= 20. Interest expense Group and Bank Nine months ended Three months ended 30 September 30 September 30 September 30 September 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000 Deposits and placements of banks and other financial institutions Repurchase agreements Deposits from customers 8,505 8,760 3,268 2,801 49,391 ______ 57,896 ====== 57 46,071 ______ 54,888 ====== 17,482 ______ 20,750 ====== 1 13,726 ______ 16,528 ====== Deutsche Bank (Malaysia) Berhad Unaudited Condensed Interim Financial Statements ended 30 September 2017 (Company No. 312552-W) 14
16. Deutsche Bank 21 . Non-interest income Group and Bank Nine months ended Three months ended 30 September 30 September 30 September 30 September 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000 Fee income: Commissions Service charges and fees Guarantee fees Fee expense: Commissions Service charges and fees Net fee income 10,600 21,839 3,049 _______ 35,488 ------------ 12,301 27,195 4,167 _______ 43,663 ------------ 2,890 7,070 1,085 _______ 11,045 ------------ 3,144 8,040 1,373 _______ 12,557 ------------ (2,618) (7,581) _______ (10,199) _______ 25,289 ------------ (4,437) (7,383) _______ (11,820) _______ 31,843 ------------ (1,188) (2,604) _______ (3,792) _______ 7,253 ------------ (1,119) (2,215) _______ (3,334) _______ 9,223 ------------ Net gains from financial instruments: Net gain arising on financial assets held for trading: Realised gain 16,068 Unrealised gain/ (loss) 998 32,676 373 5,668 477 Net (loss)/ gain arising on trading derivatives: Realised (loss)/ gain (114,175) Unrealised revaluation (loss)/ gain (138,232) 220,175 (188,189) (42,080) 6,863 271,432 (266,800) 15,759 (1,209) Foreign exchange gain 392,601 97,121 77,857 31,044 Gross dividend income 73 93 28 48 Gain from disposal of plant and equipment 84 - (16) - 4,124 _______ 161,541 -----------186,830 ======= 18,034 _______ 180,283 -----------212,126 ======= (2,278) _______ 46,519 -----------53,772 ======= 8,784 _______ 59,058 -----------68,281 ======= Other income: Other operating income, net Deutsche Bank (Malaysia) Berhad Unaudited Condensed Interim Financial Statements ended 30 September 2017 (Company No. 312552-W) 15
17. Deutsche Bank 22 . Other operating expenses Group and Bank Nine months ended Three months ended 30 September 30 September 30 September 30 September 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000 Personnel costs - Salaries, allowances and bonuses - Others Establishment costs - Rental - Depreciation - Others Marketing expenses Administration and general expenses - Intercompany expenses - Communication - Others 36,105 11,612 34,778 10,724 11,906 2,784 10,766 3,150 2,180 715 4,570 1,374 2,183 705 4,259 1,547 726 221 2,079 445 727 226 2,323 567 42,577 1,400 16,535 ______ 117,068 ====== 37,799 1,524 14,653 ______ 108,172 ====== 19,132 614 9,510 ______ 47,417 ====== 13,451 522 6,662 ______ 38,394 ====== The number of employees of the Group and the Bank at the end of the period was 225 (September 2016 225). 23. Allowance for impairment on loans, advances and financing Group and Bank Nine months ended Three months ended 30 September 30 September 30 September 30 September 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000 Individual assessment allowance - made during the period - written back Collective assessment allowance - recovered/(made) during the period Recoveries from bad debt written off (29) 14 (99) 218 (22) 2 (83) 172 2,588 (3,783) (342) (1,278) ______ 2,573 ====== 1,691 ______ (1,973) ====== ______ (362) ====== 1,691 ______ 502 ====== Deutsche Bank (Malaysia) Berhad Unaudited Condensed Interim Financial Statements ended 30 September 2017 (Company No. 312552-W) 16
18. Deutsche Bank 24 . Capital adequacy Group and Bank 30 September 31 December 2017 2016 RM’000 RM’000 Components of Tier 1 and Tier 2 capital are as follows:Tier 1 capital Paid-up share capital Share premium Statutory reserve Retained profits Less: Deferred tax assets Total common equity tier 1(CET 1) / Total tier 1 capital 173,599 357,763 1,063,470 (35,761) ________ 1,559,071 173,599 357,763 174,722 1,035,787 (35,761) ________ 1,706,110 9,267 13,558 ________ 1,581,896 ======== 11,351 13,558 ________ 1,731,019 ======== 21.201% 21.511% ======== 21.868% 22.187% ======== Tier 2 capital Collective assessment allowance# Regulatory reserve Total Capital / Capital base Common equity tier 1(CET 1) / Tier 1 capital ratio Total capital ratio # Excludes collective assessment allowance on impaired loan restricted from Tier 2 capital of the Bank of RM4,967,000 (31 December 2016:RM5,471,000) Deutsche Bank (Malaysia) Berhad Unaudited Condensed Interim Financial Statements ended 30 September 2017 (Company No. 312552-W) 17
19. Deutsche Bank 24 . Capital adequacy (continued) The capital adequacy ratios of the Group and of the Bank are computed in accordance with Bank Negara Malaysia’s Capital Adequacy Framework (Capital Components and Basel II – Risk-weighted Assets) reissued on 13 October 2015 and became effective from 1 January 2016. The Group and the Bank have adopted the Standardised Approach for Credit Risk and Market Risk, and the Basic Indicator Approach for Operational Risk. The minimum regulatory capital adequacy ratios before including capital conservation buffer and countercyclical capital buffer (CCyB) are 4.5% for CET1 Capital Ratio, 6.0% for Tier 1 Capital Ratio and 8.0% for Total Capital Ratio. The capital conservation buffer required to be maintained in the form of CET1 Capital above the minimum regulatory capital adequacy ratios requirement will be phased-in as follow: Calendar Year 2016 2017 2018 2019 onwards Capital Conservation Buffer 0.625% 1.250% 1.875% 2.500% The CCyB which is in a range of between 0% and 2.5% is not a requirement for exposure in Malaysia yet but may be applied by regulators in the future. The breakdown of risk-weighted assets (“RWA”) by each major risk category is as follows: Risk Type Risk Weighted Assets 30 September 2017 1 2 3 Total Credit risk Market risk Operational risk RM’000 4,421,214 2,279,971 652,699 7,353,884 31 December 2016 RM’000 4,617,845 2,570,452 613,663 7,801,960 Deutsche Bank (Malaysia) Berhad Unaudited Condensed Interim Financial Statements ended 30 September 2017 (Company No. 312552-W) 18
20. Deutsche Bank 24 . Capital adequacy (continued) The breakdown of risk-weighted assets (“RWA”) by exposures in each major risk category as at 30 September 2017 are as follows: RISK TYPE 1 Credit Risk On-Balance Sheet Exposures Sovereigns/Central Banks Gross Exposures Net Exposures Risk-Weighted Assets RM’000 RM’000 RM’000 4,577,276 4,391,105 - Banks, Development Financial Institutions (“DFIs”) and Multilateral Development Banks (“MDBs”) Insurance Companies, Securities Firms and Fund Managers Corporates Regulatory Retail Residential Mortgages Higher Risk Assets Other Assets Equity Exposure Defaulted Exposures Total On-Balance Sheet Exposures 2,131,139 1,409,791 13,767 383,182 1,631 2,157 8,518,943 2,131,139 1,409,791 13,767 383,182 1,631 2,157 8,332,772 680,776 1,409,271 4,818 381,272 1,861 2,157 Off-Balance Sheet Exposures OTC Derivatives Credit Derivatives Transaction related contingent Items Short Term Self Liquidating trade related contingencies Other commitments, such as formal standby facilities and credit lines 2,501,383 1,548 363,325 5,165 712,561 1,757,744 1,548 362,284 5,165 712,561 909,478 461 348,139 3,801 679,180 Total for Off-Balance Sheet Exposures 3,583,982 2,839,302 1,941,059 12,102,925 11,172,074 4,421,214 Total On and Off- Balance Sheet Exposures Deutsche Bank (Malaysia) Berhad Unaudited Condensed Interim Financial Statements ended 30 September 2017 (Company No. 312552-W) 2,480,155 19