HSBC Amanah Malaysia Berhad: Condensed Interim Financial Statements - 31 March 2017

Transcription

1. HSBC AMANAH MALAYSIA BERHAD (Company No. 807705-X) (Incorporated in Malaysia) UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS 31 MARCH 2017 Domiciled in Malaysia. Registered Office : 10th Floor, North Tower 2, Leboh Ampang, 50100 Kuala Lumpur
2. HSBC AMANAH MALAYSIA BERHAD (Company No. 807705-X) (Incorporated in Malaysia) UNAUDITED CONDENSED STATEMENT OF FINANCIAL POSITION AT 31 MARCH 2017 31 Mar 2017 RM'000 31 Dec 2016 RM'000 1,636,603 492 1,749,234 12,673,110 332,120 32,796 342,462 6,265 9,026 10,506 2,359,591 488 1,368,574 11,743,263 395,748 80,041 325,462 7,237 10,395 10,285 16,792,614 16,301,084 18 8,905,883 8,726,543 19 2,443,660 22,022 383,054 1,105,536 1,755,017 637,189 1,951,602 23,632 490,755 1,185,135 1,756,001 646,265 15,252,361 14,779,933 660,000 880,253 50,000 1,471,151 1,540,253 1,521,151 16,792,614 16,301,084 2,850,671 19,643,285 2,230,065 18,531,149 21,910,652 22,149,853 Note Assets Cash and short-term funds Financial assets held-for-trading Financial investments available-for-sale Financing and advances Derivative financial assets Other assets Statutory deposits with Bank Negara Malaysia Equipment Deferred tax assets Tax recoverable 10 11 12 13 15 16 17 Total assets Liabilities Deposits from customers Deposits and placements from banks and other financial institutions Bills and acceptances payable Derivative financial liabilities Other liabilities Multi-Currency Sukuk Programme Subordinated Commodity Murabahah Financing 15 20 21 22 Total liabilities Equity Share capital Reserves Total equity attributable to owner of the Bank Total liabilities and equity Restricted investment accounts Total Islamic Banking asset [1] [1] Commitments and Contingencies [1] 29 The disclosure is in accordance with the requirements of Bank Negara Malaysia's Guideline on Financial Reporting for Islamic Banking Institutions dated 5 February 2016. The unaudited condensed interim financial statements should be read in conjunction with the audited financial statements of the Bank for the financial year ended 31 December 2016 and the accompanying explanatory notes on pages 6 to 32 attached to the unaudited condensed interim financial statements. The unaudited condensed interim financial statements were approved by the Board of Directors on 26 April 2017. 1
3. HSBC AMANAH MALAYSIA BERHAD (Company No. 807705-X) (Incorporated in Malaysia) UNAUDITED CONDENSED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE FINANCIAL PERIOD ENDED 31 MARCH 2017 Nine Months Ended 31 Mar 2017 31 Mar 2016 RM'000 RM'000 Note Income derived from investment of depositors' funds and others Income derived from investment of shareholder's funds Impairment losses on financing 23 165,466 178,450 24 25 34,580 (39,140) 44,125 (47,888) 160,906 174,687 (77,722) (96,600) 83,184 78,087 (60,300) (62,909) Profit before tax 22,884 15,178 Tax expense (5,258) (2,090) Profit for the financial period 17,626 13,088 Total distributable income Income attributable to depositors 26 Total net income Operating expenses 27 Other comprehensive income/(expense) Items that will subsequently be reclassified to profit or loss when specific conditions are met: Own credit reserves: Change in fair value Income tax effect Available-for-sale reserve: Change in fair value Amount transferred to profit or loss Income tax effect Other comprehensive income for the financial period, net of tax 246 (59) 1,695 (407) 3,931 (3,055) (210) 1,475 666 Total comprehensive income for the financial period 19,101 13,754 Profit attributable to the owner of the Bank Total comprehensive income attributable to the owner of the Bank 17,626 13,088 19,101 13,754 17.6 sen 13.1 sen Basic earnings per RM0.50 ordinary share The unaudited condensed interim financial statements should be read in conjunction with the audited financial statements of the Bank for the financial year ended 31 December 2016 and the accompanying explanatory notes on pages 6 to 32 attached to the unaudited condensed interim financial statements. The unaudited condensed interim financial statements were approved by the Board of Directors on 26 April 2017. 2
4. HSBC AMANAH MALAYSIA BERHAD (Company No. 807705-X) (Incorporated in Malaysia) UNAUDITED CONDENSED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL PERIOD ENDED 31 MARCH 2017 Non-distributable AvailableOwn for-sale Credit Reserve [1] reserve RM'000 RM'000 Share capital RM'000 Share premium RM'000 Statutory reserve RM'000 50,000 610,000 50,000 - - - - - - - 1,288 Total other comprehensive income - - - Total comprehensive income for the financial period - - 2017 Balance at 1 January Total comprehensive income for the financial period Profit for the financial period Other comprehensive income, net of tax Available-for-sale reserve: Net change in fair value Transfer relating to Companies Act 2016 [1] Transactions with the owner, recorded directly in equity Share based payment transactions Balance at 31 March 610,000 (610,000) Retained profits RM'000 Total RM'000 34,000 783,295 1,521,151 - - 17,626 17,626 187 - - - 1,475 1,288 187 - - - 1,475 - 1,288 187 - - 17,626 19,101 - - - - - - - - - 1 - - 1 187 404 34,000 800,921 1,540,253 - - 660,000 - 50,000 (5,259) - Regulatory reserve RM'000 403 - (6,547) Distributable Capital contribution reserve RM'000 [1] With effect from 1 January 2017, the Group has early applied the requirements for the presentation of gains and losses on financial liabilities designated at fair value through profit or loss in paragraph 5.7.1(c), 5.7.7-5.7.9, 7.2.14 and B5.7.5-B5.7.20 of MFRS 9 Financial Instruments, without applying the other requirements of MFRS 9. The early adoption is applied prospectively. The unaudited condensed interim financial statements should be read in conjunction with the audited financial statements of the Bank for the financial year ended 31 December 2016 and the accompanying explanatory notes on pages 6 to 32 attached to the unaudited condensed interim financial statements. The unaudited condensed interim financial statements were approved by the Board of Directors on 26 April 2017. 3
5. HSBC AMANAH MALAYSIA BERHAD (Company No. 807705-X) (Incorporated in Malaysia) UNAUDITED CONDENSED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL PERIOD ENDED 31 MARCH 2017 (Cont'd) Non-distributable AvailableStatutory for-sale Distributable Capital contribution Regulatory Retained Total RM'000 Share Share capital RM'000 premium RM'000 reserve RM'000 reserve RM'000 reserve RM'000 reserve RM'000 profits RM'000 50,000 610,000 50,000 4,946 1,058 34,000 701,902 1,451,906 - - - - - - 13,088 13,088 - - - - - - Total other comprehensive income - - - 666 - - - 666 Total comprehensive income for the financial period - - - 666 - - 13,088 13,754 Transactions with the owner, recorded directly in equity Share based payment transactions - - - - 50,000 610,000 50,000 5,612 2016 Balance at 1 January Total comprehensive income for the financial period Profit for the financial period Other comprehensive income, net of tax Available-for-sale reserve: Net change in fair value Net amount transferred to profit or loss Balance at 31 March 2,988 (2,322) (615) 443 34,000 2,988 (2,322) (615) 714,990 1,465,045 The unaudited condensed interim financial statements should be read in conjunction with the audited financial statements of the Bank for the financial year ended 31 December 2016 and the accompanying explanatory notes on pages 6 to 32 attached to the unaudited condensed interim financial statements. The unaudited condensed interim financial statements were approved by the Board of Directors on 26 April 2017. 4
6. HSBC AMANAH MALAYSIA BERHAD (Company No. 807705-X) (Incorporated in Malaysia) UNAUDITED CONDENSED CASH FLOW STATEMENT FOR THE FINANCIAL PERIOD ENDED 31 MARCH 2017 31 Mar 2017 RM'000 31 Mar 2016 RM'000 Profit before tax Adjustments for non-operating and non-cash items 22,884 39,174 15,178 52,114 Operating profit before working capital changes 62,058 67,292 Changes in working capital: Net changes in operating assets Net changes in operating liabilities Income tax paid (883,742) 511,167 (4,576) 368,169 (2,503,168) (5,384) Net cash used in operating activities (315,093) (2,073,091) Net cash (used in)/generated from investing activities Net cash used in financing activities (379,198) (28,697) 304,405 (29,200) (407,895) 275,205 Net changes in cash and cash equivalents Cash and cash equivalents at 1 January (722,988) 2,359,591 (1,797,886) 4,750,390 Cash and cash equivalents at 31 March 1,636,603 2,952,504 Analysis of cash and cash equivalents Cash and short-term funds 1,636,603 2,952,504 The unaudited condensed interim financial statements should be read in conjunction with the audited financial statements of the Bank for the financial year ended 31 December 2016 and the accompanying explanatory notes on pages 6 to 32 attached to the unaudited condensed interim financial statements. The unaudited condensed interim financial statements were approved by the Board of Directors on 26 April 2017. 5
7. HSBC AMANAH MALAYSIA BERHAD (Company No 807705-X) (Incorporated in Malaysia) NOTES TO THE FINANCIAL STATEMENTS 1 General Information HSBC Amanah Malaysia Berhad (the Bank) is a licensed Islamic Bank under the Islamic Financial Services Act, 2013. The principal activities of the Bank are Islamic banking and related financial services. There were no significant changes in these activities during the financial period. The Bank is a public limited liability company, incorporated and domiciled in Malaysia. The registered office of the Bank is located at 10th floor, North Tower, 2, Leboh Ampang, 50100 Kuala Lumpur. The immediate parent bank and ultimate holding company during the financial period are HSBC Bank Malaysia Berhad (HBMY) and HSBC Holdings Plc, respectively. The financial statements were approved and authorised for issue by the Board of Directors on 26 April 2017. 2 Basis of Preparation The unaudited condensed interim financial statements for the financial period ended 31 March 2017 have been prepared under the historical cost convention except for the following assets and liabilities which are stated at fair values: financial instruments held-for-trading, financial investments available-for-sale, derivative financial instruments and financial instruments fair valued through profit and loss. The unaudited condensed interim financial statements for the financial period ended 31 March 2017 have been prepared in accordance with the requirements of Malaysian Financial Reporting Standards (MFRS) 134: Interim Financial Reporting issued by the Malaysian Accounting Standards Board (MASB) and Bank Negara Malaysia (BNM) requirements on Shariah related disclosures. The unaudited condensed interim financial statements do not include all of the information required for full annual financial statements, and should be read in conjunction with the audited financial statements of the Bank for the financial year ended 31 December 2016. The explanatory notes attached in the unaudited condensed interim financial statements provide an explanation of events and transactions that are significant for an understanding of the changes in the financial position and performance of the Bank since the financial year ended 31 December 2016. All 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 year ended 31 December 2016. (i) Standards and amendments to published standards that are effective and applicable to the Bank The new accounting standards and amendments to published accounts that are effective and applicable to the Bank for the financial year beginning on 1 January 2017 are as follows: • Amendments to MFRS 107 ‘Statement of Cash Flows – Disclosure Initiative’ (effective from 1 January 2017) introduce an additional disclosure on changes in liabilities arising from financing activities. • Amendments to MFRS 112 ‘Income Taxes - Recognition of Deferred Tax Assets for Unrealised Losses’ clarify the requirements for recognising deferred tax assets on unrealised losses arising from deductible temporary difference on asset carried at fair value. In addition, in evaluating whether an entity will have sufficient taxable profits in future periods against which deductible temporary differences can be utilised, the amendments require an entity to compare the deductible temporary differences with future taxable profits that excludes tax deductions resulting from the reversal of those temporary differences. The amendments shall be applied retrospectively. 6
8. HSBC Amanah Malaysia Berhad 807705-X NOTES TO THE FINANCIAL STATEMENTS (Cont'd) 2 Basis of Preparation (Cont'd) (ii) Standards, amendments to published standards and interpretations to existing standards that are applicable to the Bank but not yet effective The Bank will apply these standards, amendments to published standards from: a. Financial year beginning on/after 1 January 2018 • Amendments to MFRS 140 ‘Classification on ‘Change in Use’ – Assets transferred to, or from, Investment Properties’ clarify that to transfer to, or from investment properties there must be a change in use. A change in use would involve an assessment of whether a property meet, or has ceased to meet, the definition of investment property. The change must be supported by evidence that the change in use has occurred and a change in management’s intention in isolation is not sufficient to support a transfer of property. The amendments also clarify the same principle applies to assets under construction. • IC Interpretation 22 ‘Foreign Currency Transactions and Advance Consideration’ applies when an entity recognises a non-monetary asset or non-monetary liability arising from the payment or receipt of advance consideration. MFRS 121 requires an entity to use the exchange rate at the ‘date of the transaction’ to record foreign currency transactions. IC Interpretation 22 provides guidance how to determine ‘the date of transaction’ when a single payment/receipt is made, as well as for situations where multiple payments/receipts are made. The date of transaction is the date when the payment or receipt of advance consideration gives rise to the non-monetary asset or non-monetary liability when the entity is no longer exposed to foreign exchange risk. If there are multiple payments or receipts in advance, the entity should determine the date of the transaction for each payment or receipt. An entity has the option to apply IC Interpretation 22 retrospectively or prospectively. • MFRS 9 ‘Financial Instruments’ will replace MFRS 139 ‘Financial Instruments: Recognition and Measurement’. MFRS 9 retains but simplifies the mixed measurement model in MFRS 139 and establishes three primary measurement categories for financial assets: amortised cost, fair value through profit or loss and fair value through OCI. The basis of classification depends on the entity's business model and the cash flow characteristics of the financial asset. Investments in equity instruments are always measured at fair value through profit or loss with an irrevocable option at inception to present changes in fair value in OCI (provided the instrument is not held for trading). A debt instrument is measured at amortised cost only if the entity is holding it to collect contractual cash flows and the cash flows represent principal and profit. For liabilities, the standard retains most of the MFRS 139 requirements. These include amortised cost accounting for most financial liabilities, with bifurcation of embedded derivatives. The main change is that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change due to an entity’s own credit risk is recorded in other comprehensive income rather than the profit or loss, unless this creates an accounting mismatch. With effect from 1 January 2017, the Bank has early applied this requirements for the presentation of gains and losses on financial liabilities designated at fair value through profit or loss without applying the other requirements of MFRS 9. The early adoption is applied prospectively from 2017 and onwards. MFRS 9 introduces an expected credit loss model on impairment for all financial assets that replaces the incurred loss impairment model used in MFRS 139. The expected credit loss model is forward-looking and eliminates the need for a trigger event to have occurred before credit losses are recognised. • MFRS 15 ‘Revenue from contracts with customers’ (effective from 1 January 2018) replaces MFRS 118 ‘Revenue’ and MFRS 111 ‘Construction contracts’ and related interpretations. The core principle in MFRS 15 is that an entity recognises revenue to depict the transfer of promised goods or services to the customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Revenue is recognised when a customer obtains control of goods or services, i.e. when the customer has the ability to direct the use of and obtain the benefits from the goods or services. 7
9. HSBC Amanah Malaysia Berhad 807705-X NOTES TO THE FINANCIAL STATEMENTS (Cont'd) 2 Basis of Preparation (Cont'd) (ii) Standards, amendments to published standards and interpretations to existing standards that are applicable to the Bank but not yet effective (Cont'd) a. Financial year beginning on/after 1 January 2018 (Cont'd) A new five-step process is applied before revenue can be recognised: • • • • • Identify contracts with customers Identify the separate performance obligations Determine the transaction price of the contract; Allocate the transaction price to each of the separate performance obligations; and Recognise the revenue as each performance obligation is satisfied. Key provisions of the new standard are as follows: • • • • • Any bundled goods or services that are distinct must be separately recognised, and any discounts or rebates on the contract price must generally be allocated to the separate elements. If the consideration varies (such as for incentives, rebates, performance fees, royalties, success of an outcome etc.), minimum amounts of revenue must be recognised if they are not at significant risk of reversal. The point at which revenue is able to be recognised may shift: some revenue which is currently recognised at a point in time at the end of a contract may have to be recognised over the contract term and vice versa. There are new specific rules on licenses, warranties, non-refundable upfront fees, and consignment arrangements, to name a few. As with any new standard, there are also increased disclosures. b. Financial year beginning on/after 1 January 2019 • MFRS 16 ‘Leases’ MFRS 16 ‘Leases’ supersedes MFRS 117 ‘Leases’ and the related interpretations. Under MFRS 16, a lease is a contract (or part of a contract) that conveys the right to control the use of an identified asset for a period of time in exchange for consideration. MFRS 16 eliminates the classification of leases by the lessee as either finance leases (on balance sheet) or operating leases (off balance sheet). MFRS 16 requires a lessee to recognise a “right-of-use” of the underlying asset and a lease liability reflecting future lease payments for most leases. The right-of-use asset is depreciated in accordance with the principle in MFRS 116 ‘Property, Plant and Equipment’ and the lease liability is accreted over time with profit expense recognised in the income statement. For lessors, MFRS 16 retains most of the requirements in MFRS 117. Lessors continue to classify all leases as either operating leases or finance leases and account for them differently. The initial application of the above accounting standards, amendments and interpretation are not expected to have any material financial impacts to the current and prior year’s financial statement of the Bank upon its first adoption, except for MFRS 9. 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. The Bank is currently assessing the financial impact that may arise from the adoption of MFRS 9. The financial statements of the Bank have been prepared on the historical cost basis, except for the following assets and liabilities as explained in their respective accounting policy notes: • • • Trading assets and liabilities Financial investments Derivatives and hedge accounting 8
10. HSBC Amanah Malaysia Berhad 807705-X NOTES TO THE FINANCIAL STATEMENTS (Cont'd) 3 Auditors' Report On Preceding Annual Financial Statements The audit report on the audited financial statements for the financial year ended 31 December 2016 was not subject to any qualification. 4 Seasonality or Cyclical Factors The business operations of the Bank are not subject to material seasonal or cyclical fluctuations. 5 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 Bank for the financial period ended 31 March 2017. 6 Changes in Estimates The preparation of financial information requires the use of estimates. The use of available information and the application of judgement are inherent in the formation of estimates; actual results in the future may differ from those reported. Management believes that critical accounting policies where judgement is necessarily applied are those which relate to impairment allowances for financing and advances, the valuation of financial instruments and the impairment allowance of available-for-sale financial investments. There were no material changes in estimates of amounts reported in prior financial years that have a material effect on the financial results and position of the Bank for the financial period ended 31 March 2017. 7 Debt and Equity Securities There were no other issuances, cancellations, repurchases, resale or repayment of other debt or equity securities during the financial period ended 31 March 2017. 8 Dividend No interim dividend was declared nor paid during the financial period ended 31 March 2017. 9 Significant and Subsequent Events There were no material events subsequent to the date of the statement of financial position that require disclosure or adjustments to the unaudited condensed interim financial statements. 9
11. HSBC Amanah Malaysia Berhad 807705-X NOTES TO THE FINANCIAL STATEMENTS (Cont'd) 10 Cash and Short-Term Funds Cash and balances with banks and other financial institutions Money at call and interbank placements maturing within one month 11 31 Dec 2016 RM'000 151,603 189,591 1,485,000 2,170,000 1,636,603 2,359,591 31 Mar 2017 RM'000 31 Dec 2016 RM'000 492 488 492 488 31 Mar 2017 RM'000 31 Dec 2016 RM'000 1,615,441 109,485 24,308 1,368,574 - 1,749,234 1,368,574 Financial Assets Held-for-Trading At fair value Money market instruments: Malaysian Government Islamic bonds 12 31 Mar 2017 RM'000 Financial Investments Available-for-Sale At fair value Money market instruments: Malaysian Government Islamic bonds Negotiable instruments of deposit Islamic Treasury Bill The maturity structure of money market instruments held as financial investments available-for-sale is as follows: Maturing within one year More than one year to three years More than three years to five years Over five years 559,440 732,950 436,699 20,145 1,749,234 10 180,224 732,449 435,846 20,055 1,368,574
12. HSBC Amanah Malaysia Berhad 807705-X NOTES TO THE FINANCIAL STATEMENTS (Cont'd) 13 Financing and Advances (i) By type and Shariah contracts At amortised cost 31 Mar 2017 Cash line-i Term financing: House financing Hire purchase receivables Lease receivables Syndicated term financing Other term financing Trust receipts Claims on customers under acceptance credits Bills receivables Staff financing-i Credit cards-i Revolving credit Other financing Gross financing and advances Sale-based contracts Commodity Bai Bithaman Murabahah Ajil RM'000 RM'000 Bai Al-Inah RM'000 Lease-based contracts Ijarah Ijarah Thumma Al-Bai RM'000 RM'000 Equity-based contracts Diminishing Musharakah RM'000 Ujrah Total RM'000 RM'000 85,542 - - - - - - 85,542 1,152,876 2,858,312 857,110 265 6,358 - 87 2,377 - 197,893 - 4,386,561 1,005,032 - - 4,386,826 197,893 2,377 1,152,876 3,869,789 857,110 494,457 110,410 2,523 991,544 - - 309 - - - 3,322 1,152 797,895 - 494,457 110,410 6,154 797,895 991,544 1,152 6,552,774 6,623 396 2,377 197,893 5,396,067 797,895 12,954,025 Less: Allowance for impaired financing Collective allowances for impairment Individual allowances for impairment (205,571) (75,344) Total net financing and advances 12,673,110 11
13. HSBC Amanah Malaysia Berhad 807705-X NOTES TO THE FINANCIAL STATEMENTS (Cont'd) 13 Financing and Advances (Cont'd) (i) By type and Shariah contracts (Cont'd) 31 Dec 2016 Cash line-i Term financing: House financing Hire purchase receivables Lease receivables Syndicated term financing Other term financing Trust receipts Claims on customers under acceptance credits Bills receivables Staff financing-i Credit cards-i Revolving credit Other financing Gross financing and advances Sale-based contracts Commodity Bai Bithaman Murabahah Ajil RM'000 RM'000 Bai Al-Inah RM'000 Lease-based contracts Ijarah Ijarah Thumma Al-Bai RM'000 RM'000 Equity-based contracts Diminishing Musharakah RM'000 Ujrah Total RM'000 RM'000 97,840 - - - - - - 97,840 650,266 2,834,338 462,235 404 8,115 - 350 2,738 - 208,921 - 4,356,230 1,024,700 - - 4,356,634 208,921 2,738 650,266 3,867,503 462,235 504,375 110,272 2,617 950,161 - - 361 - - - 3,215 1,187 787,710 - 504,375 110,272 6,193 787,710 950,161 1,187 5,612,104 8,519 711 2,738 208,921 5,385,332 787,710 12,006,035 Less: Allowance for impaired financing Collective allowances for impairment Individual allowances for impairment (200,015) (62,757) Total net financing and advances 11,743,263 12
14. HSBC Amanah Malaysia Berhad 807705-X NOTES TO THE FINANCIAL STATEMENTS (Cont'd) 13 Financing and Advances (Cont'd) (ii) 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 31 Mar 2017 RM'000 31 Dec 2016 RM'000 653,666 638,263 1,998,439 3,159,100 9,543 5,942,785 1,435 1,189,057 1,821,064 2,397,737 10,316 5,901,851 1,466 1,235,338 12,954,025 12,006,035 31 Mar 2017 RM'000 31 Dec 2016 RM'000 265 197,894 3,200,290 398 208,921 2,784,299 5,467,380 4,088,196 5,471,227 3,541,190 12,954,025 12,006,035 31 Mar 2017 RM'000 31 Dec 2016 RM'000 5,264,842 626,331 1,097,908 5,964,944 4,356,186 654,513 1,111,456 5,883,880 12,954,025 12,006,035 (iii) By profit rate sensitivity Fixed rate: House financing Hire purchase receivables Other financing Variable rate: BR/BFR plus Cost-plus (iv) By residual contractual maturity Maturing within one year More than one year to three years More than three years to five years Over five years 13
15. HSBC Amanah Malaysia Berhad 807705-X NOTES TO THE FINANCIAL STATEMENTS (Cont'd) 13 Financing and Advances (Cont'd) (v) By sector Agriculture, hunting, forestry & fishing Mining and quarrying Manufacturing Electricity, gas and water Construction Real estate Wholesale & retail trade, restaurants & hotels Transport, storage and communication Finance, takaful and business services Household - Retail Others 31 Mar 2017 RM'000 31 Dec 2016 RM'000 119,972 252,430 1,363,006 29,630 375,286 870,610 911,737 599,114 1,032,859 6,581,205 818,176 136,372 218,194 1,187,941 32,907 354,645 821,854 816,323 186,721 929,714 6,536,695 784,669 12,954,025 12,006,035 31 Mar 2017 RM'000 31 Dec 2016 RM'000 4,390,146 835,497 1,828 358 1,916,595 380,159 4,869,262 560,180 4,359,849 853,008 1,847 366 1,893,592 343,443 3,943,120 610,810 12,954,025 12,006,035 31 Mar 2017 RM'000 31 Dec 2016 RM'000 1,452,090 1,551,855 9,487,708 462,372 1,405,240 1,569,412 8,565,903 465,480 12,954,025 12,006,035 (vi) By purpose Purchase of landed property: Residential Non-residential Purchase of transport vehicles Purchase of fixed assets excluding land & building Consumption credit Construction Working capital Other purpose (vii) By geographical distribution Northern Region Southern Region Central Region Eastern Region Concentration by location for financing and advances is based on the location of the customer. The Northern region consists of the states of Perlis, Kedah, Penang, Perak, Pahang, Kelantan and Terengganu. The Southern region consists of the states of Johor, Malacca and Negeri Sembilan. The Central region consists of the states of Selangor and the Federal Territory of Kuala Lumpur. The Eastern region consists of the states of Sabah, Sarawak and the Federal Territory of Labuan. 14
16. HSBC Amanah Malaysia Berhad 807705-X NOTES TO THE FINANCIAL STATEMENTS (Cont'd) 13 Financing and Advances (Cont'd) (viii) Assets under Management The details of assets under management in respect of the Syndicated Investment Agency Financing (SIAF)/Investment Agency Account (IAA) financing are as below. The exposures and the corresponding risk weighted amount are reported in investors' financial statements. 31 Mar 2017 RM'000 31 Dec 2016 RM'000 Under SIAF/IAA arrangement 2,477,623 1,733,132 Total net financing and advances 2,477,623 1,733,132 31 Mar 2017 RM'000 31 Dec 2016 RM'000 373,048 33,836 496,933 - 406,884 496,933 31 Mar 2017 RM'000 31 Dec 2016 RM'000 2,569,151 2,569,151 1,832,519 1,832,519 Principal amount under SIAF/IAA arrangement Irrevocable commitments to extend credit: Maturity not exceeding one year Maturity exceeding one year Total commitments and contingencies Total RWA for Credit Risk Principal amount Risk weighted 15
17. HSBC Amanah Malaysia Berhad 807705-X NOTES TO THE FINANCIAL STATEMENTS (Cont'd) 13 Financing and Advances (Cont'd) (viii) Assets under Management (Cont'd) The RPSIA is with the Bank's holding company, HSBC Bank Malaysia Berhad (HBMY), and the contract is based on the Mudharabah principle where HBMY provides the funds, whilst the assets are managed by the Bank. The profits of the underlying assets are shared based on pre-agreed ratios, whilst risks on the financing are borne by HBMY. Hence, the underlying assets and allowances for impairment arising thereon, if any, are recognised and accounted for by HBMY. Effective 31 March 2015, SIAF/IAA replaces RPSIA for new financing and advances. The SIAF/IAA arrangement is based on the Wakalah principle where HBMY, solely or together with other financial institutions provide the funds, whilst the assets are managed by the Bank (as the Wakeel or agent). However, in the arrangement, the profits of the underlying assets are recognised by HBMY and the other financial institutions proportionately in relation to the funding provided in the syndication arrangement. At the same time, risks on the financing are also proportionately borne by HBMY and the other financial institutions. Hence, the underlying assets and allowances for impairment arising thereon, if any, are proportionately recognised and accounted for by HBMY and the other financial institutions. The recognition and derecognition treatments of the above are in accordance to Note 3(e) on financial instruments in the audited financial statements of the Bank for the financial year ended 31 December 2016. 14 Impaired Financing (i) Movements in impaired financing and advances 31 Mar 2017 RM'000 (ii) 31 Dec 2016 RM'000 Balance at 1 January Classified as impaired during the financial period/year Reclassified as performing Amount recovered Amount written off 303,526 104,731 (35,694) (17,260) (32,177) 235,279 358,706 (122,829) (49,831) (117,799) Balance at 31 March/December 323,126 303,526 31 Mar 2017 RM'000 31 Dec 2016 RM'000 Movements in allowance for impaired financing Collective allowance for impairment Balance at 1 January Made during the financial period/year Amount released Amount written off 200,015 43,136 (7,155) (30,425) 140,264 211,487 (58,264) (93,472) Balance at 31 March/December 205,571 200,015 31 Mar 2017 RM'000 31 Dec 2016 RM'000 Individual allowance for impairment Balance at 1 January Made during the financial period/year Amount released Amount reinstated/(written off) 62,757 19,347 (9,335) 2,575 68,647 30,041 (18,115) (17,816) Balance at 31 March/December 75,344 62,757 16
18. HSBC Amanah Malaysia Berhad 807705-X NOTES TO THE FINANCIAL STATEMENTS (Cont'd) 14 Impaired Financing (Cont'd) (iii) By contract Bai Bithaman Ajil (deferred payment sale) Ijarah Thumma Al-Bai (AITAB) (hire purchase) Murabahah (cost-plus) Musharakah (profit and loss sharing) Bai Al-Inah (sell and buy back) Ujrah (fee-based) 31 Mar 2017 RM'000 31 Dec 2016 RM'000 4 5,683 132,554 167,041 52 17,792 5 5,730 127,743 152,729 217 17,102 323,126 303,526 31 Mar 2017 RM'000 31 Dec 2016 RM'000 2,993 81 12,060 3,665 23,150 281,177 - 4,038 204 12,309 3,665 23,346 259,346 618 323,126 303,526 31 Mar 2017 RM'000 31 Dec 2016 RM'000 151,268 10,236 178 358 124,783 81 36,222 135,067 10,887 146 358 121,217 204 35,647 323,126 303,526 31 Mar 2017 RM'000 31 Dec 2016 RM'000 47,794 28,973 230,975 15,384 47,713 30,606 212,643 12,564 323,126 303,526 (iv) By sector Manufacturing Construction Wholesale & retail trade, restaurants & hotels Transport, storage and communication Finance, takaful and business services Household - Retail Others (v) By purpose Purchase of landed property: Residential Non-residential Purchase of transport vehicles Purchase of fixed assets excluding land & building Consumption credit Construction Working capital (vi) By geographical distribution Northern Region Southern Region Central Region Eastern Region 17
19. HSBC Amanah Malaysia Berhad 807705-X NOTES TO THE FINANCIAL STATEMENTS (Cont'd) 15 Derivative Financial Instruments Details of derivative financial instruments outstanding are as follows: Derivative financial instruments measured at their fair values together with their corresponding contract/notional amounts: 31 Mar 2017 Trading derivatives: Foreign exchange contracts - Forwards - Swaps - Options Profit rate related contracts - Swaps - Options Equity related contracts - Options purchased Contract / Notional Amount Up to 1 Year >1 - 5 Years Total RM'000 RM'000 RM'000 Positive Fair Value Up to 1 Year >1 - 5 Years Total RM'000 RM'000 RM'000 Negative Fair Value Up to 1 Year >1 - 5 Years Total RM'000 RM'000 RM'000 3,430,471 489,506 2,133,670 343,307 3,430,471 2,133,670 832,813 63,604 1,517 240,992 5,176 63,604 240,992 6,693 62,795 1,517 240,882 5,176 62,795 240,882 6,693 200,000 - 4,709,971 189,444 4,909,971 189,444 67 - 17,572 3,192 17,639 3,192 34 - 13,585 147 13,619 147 636,031 96,630 732,661 - 58,109 4,756,008 7,473,022 12,229,030 65,188 266,932 332,120 122,455 259,790 382,245 Hedging Derivatives: Fair Value Hedge Profit rate related contracts - Swaps 30,000 160,000 190,000 - - - 66 743 809 Sub- total 30,000 160,000 190,000 - - - 66 743 809 4,786,008 7,633,022 12,419,030 65,188 266,932 332,120 122,521 260,533 383,054 Sub- total Total - 18 - - 58,109
20. HSBC Amanah Malaysia Berhad 807705-X NOTES TO THE FINANCIAL STATEMENTS (Cont'd) 15 Derivative Financial Instruments (Cont'd) 31 Dec 2016 Trading derivatives: Foreign exchange contracts - Forwards - Swaps - Options Profit rate related contracts - Swaps - Options Equity related contracts - Options purchased Contract / Notional Amount Up to 1 Year >1 - 5 Years Total RM'000 RM'000 RM'000 Positive Fair Value Up to 1 Year >1 - 5 Years Total RM'000 RM'000 RM'000 Negative Fair Value Up to 1 Year >1 - 5 Years Total RM'000 RM'000 RM'000 2,582,361 9,718 2,159,793 345,197 2,582,361 2,159,793 354,915 111,609 1,018 261,215 4,789 111,609 261,215 5,807 112,797 1,018 264,349 4,789 112,797 264,349 5,807 1,200,000 - 4,770,174 189,444 5,970,174 189,444 470 - 14,075 2,545 14,545 2,545 384 - 8,906 135 9,290 135 765,236 109,766 875,002 27 - 27 95,176 2,180 97,356 4,557,315 7,574,374 12,131,689 113,124 395,748 209,375 280,359 489,734 Hedging Derivatives: Fair Value Hedge Profit rate related contracts - Swaps 90,000 190,000 280,000 - - - 59 962 1,021 Sub- total 90,000 190,000 280,000 - - - 59 962 1,021 4,647,315 7,764,374 12,411,689 113,124 209,434 281,321 490,755 Sub- total Total 282,624 282,624 395,748 Included in the net non-profit income is the net gains/(losses) arising from fair value hedges during the financial year as follows: 31 Mar 2017 31 Mar 2016 RM'000 RM'000 Gains/Losses on hedging instruments Gains on the hedged items attributable to the hedged risk 166 262 Net gains from fair value hedges 428 19 (1,441) 1,457 16