Kuwait Finance House (Malaysia) Berhad: Interim Report - 31 March 2017

Transcription

1. KUWAIT FINANCE HOUSE (MALAYSIA) BERHAD (672174-T) (Incorporated in Malaysia) Interim Report for the Period Ended 31 March 2017 Interim Condensed Statements of Financial Position Interim Condensed Consolidated Income Statements Interim Condensed Consolidated Statements of Comprehensive Income Interim Condensed Income Statements Interim Condensed Statements of Comprehensive Income Interim Condensed Statements of Changes in Equity Interim Condensed Statements of Cash Flows Selected Explanatory Notes to the Condensed Financial Statements Certification of Financial Statements 1 2 3 4 5 6 7 8 - 39 40
2. KUWAIT FINANCE HOUSE (MALAYSIA) BERHAD (672174-T) (Incorporated in Malaysia) INTERIM CONDENSED STATEMENTS OF FINANCIAL POSITION Note ASSETS Cash and short-term funds Deposits and placements with banks and other financial institutions Investment accounts due from designated financial institutions Hedging financial instruments Securities available-for-sale Securities held-to-maturity Financing, advances and other receivables Other assets Statutory deposits with Bank Negara Malaysia Musyarakah capital investment Investment in subsidiaries Property and equipment Intangible assets Deferred tax assets LIABILITIES Deposits from customers Investment accounts of customers Deposits and placements of banks and other financial institutions Hedging financial instruments Subordinated Murabahah Tawarruq Other liabilities SHAREHOLDER'S EQUITY Share capital Reserves Group 31 Mar 2017 31 Dec 2016 RM’000 RM’000 Bank 31 Mar 2017 RM’000 31 Dec 2016 RM’000 1,357,689 2,341,840 1,357,689 2,341,840 A3 238,995 171,073 267,152 199,165 A11 A7 A4 A4 A5 A6 11,119 4,361 1,224,187 60,448 6,416,639 193,711 201,100 5,898 12,041 10,120 189,196 9,925,504 8,563 5,956 1,092,402 61,251 6,494,270 190,369 201,000 5,898 13,633 10,719 198,329 10,795,303 11,119 4,361 1,191,203 60,448 6,416,639 193,232 201,100 5,898 14,357 11,599 9,901 189,197 9,933,895 8,563 5,956 1,059,538 61,251 6,494,270 189,975 201,000 5,898 15,069 13,276 10,363 198,329 10,804,493 A9 A11 4,399,142 11,119 4,329,342 8,563 4,325,380 11,119 4,295,095 8,563 A10 A7 A13 A12 3,319,032 348 447,671 77,711 8,255,023 4,261,411 1,163 451,070 96,977 9,148,525 3,433,669 348 447,672 77,118 8,295,306 4,336,014 1,163 451,070 96,141 9,188,046 A14 1,425,272 245,209 1,670,481 1,425,272 221,506 1,646,778 1,425,272 213,317 1,638,589 1,425,272 191,175 1,616,447 9,925,504 10,795,303 9,933,895 10,804,493 A8 TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY COMMITMENTS AND CONTINGENCIES A20 563,548 895,885 563,548 895,885 CAPITAL ADEQUACY Common Equity Tier I/ Tier I Capital Ratio Total Capital Ratio A21 A21 20.726% 28.202% 20.275% 27.722% 19.963% 27.468% 19.505% 26.979% NET ASSETS PER SHARE (RM) 1.17 1.16 1.15 1.13 These condensed consolidated statements of financial position should be read in conjunction with the accompanying explanatory notes attached to these interim financial statements. 1
3. KUWAIT FINANCE HOUSE (MALAYSIA) BERHAD (672174-T) (Incorporated in Malaysia) INTERIM CONDENSED CONSOLIDATED INCOME STATEMENTS Group Note Continuing operations Operating revenue 1st Quarter ended 31-Mar 2017 2016 RM'000 RM'000 Three-months ended 31-Mar 2017 2016 RM'000 RM'000 127,429 129,633 127,429 129,633 100,560 109,002 100,560 109,002 Income derived from investment of depositors' funds and others Income derived from investment of investment account funds Income derived from investment of shareholder's equity A15 A19 70 56 70 56 A16 26,799 20,575 26,799 20,575 127,429 129,633 127,429 129,633 - 45 - 45 Total gross income Impairment write-back on others Impairment write-back/(loss) on securities Impairment (charge)/write-back on financing (9,365) A17 Total distributable income - (9,365) - 22,429 13,316 22,429 13,316 140,494 142,994 140,494 142,994 Income attributable to the depositors A18 (63,471) (77,284) (63,471) (77,284) Profit distributed to investment account holders A19 (42) (34) (42) Total net income (34) 76,981 65,676 76,981 65,676 Personnel expenses (20,663) (20,822) (20,663) (20,822) Other overheads and expenditures (21,962) (20,391) (21,962) (20,391) Finance cost (6,978) (3,294) (6,978) (3,294) Profit before zakat and taxation 27,378 21,169 27,378 21,169 Taxation Net profit for the period (8,876) 18,503 (7,246) 13,923 (8,876) 18,503 (7,246) 13,923 Attributable to: Equity holders of the Bank 18,503 13,923 18,503 13,923 1.30 0.98 1.30 0.98 Earnings per share attributable to equity holders of the Bank - Basic/Diluted (sen) These condensed consolidated statements of comprehensive income should be read in conjunction with the accompanying explanatory notes attached to these interim financial statements. 2
4. KUWAIT FINANCE HOUSE (MALAYSIA) BERHAD (672174-T) (Incorporated in Malaysia) INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 1st Quarter ended 31-Mar 2017 2016 RM'000 RM'000 Group Net profit for the period Three-months ended 31-Mar 2017 2016 RM'000 RM'000 18,503 13,923 18,503 13,923 6,098 14,112 6,098 14,112 Other comprehensive income/(loss): Items that may be reclassified subsequenty to profit or loss: Securities available-for-sale: - Net unrealised gain/(loss) on securities available-for-sale - Net realised (loss)/gain on securities available-for-sale reclassified to the income statement (4) (2) (4) (2) (576) (3,651) (576) (3,651) (317) (713) (317) (713) Exchange differences on translation of foreign operations: Net income/(loss) taken to equity Income tax relating to components of other comprehensive (loss)/income Other comprehensive income/(loss) for the period, net of tax Total comprehensive income for the period 5,201 9,746 5,201 9,746 23,703 23,669 23,703 23,669 23,703 23,669 23,703 23,669 Total comprehensive income for the period attributable to equity holders of the Bank These condensed consolidated statements of comprehensive income should be read in conjunction with the accompanying explanatory notes attached to these interim financial statements. 3
5. KUWAIT FINANCE HOUSE (MALAYSIA) BERHAD (672174-T) (Incorporated in Malaysia) INTERIM CONDENSED INCOME STATEMENTS Bank Note Continuing operations Operating revenue 1st Quarter ended 31-Mar 2017 2016 RM'000 RM'000 Three-months ended 31-Mar 2017 2016 RM'000 RM'000 124,842 127,935 124,842 127,935 100,621 108,918 100,621 108,918 Income derived from investment of depositors' funds and others Income derived from investment of investment account funds Income derived from investment of shareholder's equity A15 A19 70 56 70 56 A16 24,151 18,961 24,151 18,961 124,842 127,935 124,842 127,935 Total gross income Impairment write-back on others Impairment write-back/(loss) on securities Impairment write-back on financing A17 Total distributable income (712) 45 (712) (9,365) - (9,365) (0) 22,429 13,316 22,429 13,316 137,194 141,296 137,194 141,296 (77,444) Income attributable to the depositors A18 (63,652) (77,444) (63,652) Profit distributed to investment account holders A19 (42) (34) (42) Total net income 45 73,501 (34) 63,818 73,501 63,818 Personnel expenses (19,791) (20,088) (19,791) (20,088) Other overheads and expenditures (21,428) (19,746) (21,428) (19,746) Finance cost (6,978) (3,294) (6,978) (3,294) Profit before zakat and taxation 25,304 20,690 25,304 20,690 Taxation Net profit for the period (8,871) 16,433 (7,241) 13,449 (8,871) 16,433 (7,241) 13,449 These condensed consolidated statements of comprehensive income should be read in conjunction with the accompanying explanatory notes attached to these interim financial statements. 4
6. KUWAIT FINANCE HOUSE (MALAYSIA) BERHAD (672174-T) (Incorporated in Malaysia) INTERIM CONDENSED STATEMENTS OF COMPREHENSIVE INCOME 1st Quarter ended 31-Mar 2017 2016 RM'000 RM'000 Bank Net profit for the period Three-months ended 31-Mar 2017 2016 RM'000 RM'000 16,433 13,449 16,433 13,449 6,030 17,229 6,030 13,635 (4) - Other comprehensive income/(loss): Securities available-for-sale: - Net unrealised gain/(loss) on securities available-for-sale - Net realised (loss)/gain on securities available-for-sale reclassified to the income statement (4) - Income tax relating to components of other comprehensive (loss)/income Other comprehensive income/(loss) for the period, net of tax Total comprehensive income for the period (317) (713) 5,709 12,922 5,709 12,922 22,142 26,371 22,142 26,371 (317) (713) These condensed consolidated statements of comprehensive income should be read in conjunction with the accompanying explanatory notes attached to these interim financial statements. 5
7. KUWAIT FINANCE HOUSE (MALAYSIA) BERHAD (672174-T) (Incorporated in Malaysia) INTERIM CONDENSED STATEMENTS OF CHANGES IN EQUITY Non-distributable Share Capital RM’000 Statutory Reserve RM’000 Translation Reserve RM’000 Group At 1 Jan 2017 Total comprehensive (loss)/income At 31 Mar 2017 1,425,272 1,425,272 158,385 158,385 7,090 (576) 6,514 At 1 Jan 2016 Total comprehensive (loss)/income At 31 Mar 2016 1,425,272 1,425,272 158,385 158,385 4,702 (3,651) 1,051 Bank At 1 Jan 2017 Total comprehensive income At 31 Mar 2017 1,425,272 1,425,272 158,385 158,385 At 1 Jan 2016 Total comprehensive (loss)/income At 31 Mar 2016 1,425,272 1,425,272 158,385 158,385 Distributable Availablefor-sale Reserve RM’000 Retained Earnings RM’000 Total Equity RM’000 (9,254) 5,777 (3,477) 65,285 18,503 83,788 1,646,778 23,703 1,670,481 (14,450) 13,397 (1,053) 93,562 13,923 107,485 1,667,471 23,669 1,691,140 - (9,000) 5,709 (3,291) 41,790 16,433 58,223 1,616,447 22,142 1,638,589 - (13,918) 12,922 (996) 71,500 13,449 84,949 1,641,239 26,371 1,667,610 These condensed consolidated statements of changes in equity should be read in conjunction with the accompanying explanatory notes attached to these interim financial statements. 6
8. KUWAIT FINANCE HOUSE (MALAYSIA) BERHAD (672174-T) (Incorporated in Malaysia) INTERIM CONDENSED STATEMENTS OF CASH FLOWS Group 31-Mar 2017 RM'000 27,378 (1,162) 26,216 Profit before zakat and taxation Adjustments for non-cash items Operating profit before changes in working capital 31-Mar 2016 RM'000 21,169 (3,827) 17,342 Bank 31-Mar 2017 RM'000 25,304 (493) 24,812 31-Mar 2016 RM'000 20,690 (3,930) 16,760 Changes in the working capital Net changes in operating assets Net changes in operating liabilities Zakat and taxation refund/(paid) Net cash generated from operating activities 26,258 (906,936) (25) (880,702) 222,680 (611,762) (20) (389,102) 26,259 (899,100) (872,842) 224,105 (585,335) (361,230) Net purchases of assets Net cash used in investing activities (136,178) (136,178) 18,835 18,835 (136,120) (136,120) (7,404) (7,404) Net change in cash and cash equivalents Cash and cash equivalents at beginning of the period Exchange differences on translation of opening balances Cash and cash equivalents at end of the period (990,664) 2,341,840 (352,925) 1,558,023 (984,151) 2,341,840 (351,874) 1,558,023 6,514 1,357,689 1,051 1,206,149 1,357,689 1,206,149 These condensed consolidated statements of cash flows should be read in conjunction with the accompanying explanatory notes attached to these interim financial statements. 7
9. KUWAIT FINANCE HOUSE (MALAYSIA) BERHAD (672174-T) (Incorporated in Malaysia) Part A - Explanatory Notes Pursuant to Guidelines on Financial Reporting for Licensed Islamic Bank (BNM/GP8-i) Issued by Bank Negara Malaysia A1 Performance Review The Group recorded profit before zakat and taxation of RM27.4 million and the Bank recorded profit before zakat and taxation of RM25.3 million for the period ended 31 Mar 2017. A2 OUTLOOK FOR 2017 The Malaysian economy is expected to expand between 4.3% to 4.8% in 2017 (2016: 4.2%), underpinned by domestic demand, especially private sector expenditure. Malaysia's accommodative monetary and fiscal policies in 2017 will help to support private consumption, which will remain the key driver of GDP growth throughout the year. Although the headline inflation to range between 3.0% to 4.0% in 2017, underlying inflation is expected to increase only slightly. On the supply side, services will continue to account for the largest share of GDP and Malaysia's global pre-eminence in the provision of Islamic finance will support the growth of the financial services sector. The upside risks to growth may come from the positive spillovers from expansionary policies by major economies. However, several downside risks remain such as slower global growth, volatility in capital flows and exchange rates as well as weaker consumer and business sentiments but Malaysia's strong fundamentals will provide resilience in confronting these risks. Overall, we continue to expect BNM to keep the overnight policy rate (OPR) steady throughout 2017 and the current monetary policy stance is appropriate to support the economic activity. A3 Deposits and Placements with Banks and Other Financial Institutions Group 31 Mar 2017 31 Dec 2016 RM'000 RM'000 Other financial institutions 238,995 238,995 171,073 171,073 8 Bank 31 Mar 2017 RM'000 267,152 267,152 31 Dec 2016 RM'000 199,165 199,165
10. KUWAIT FINANCE HOUSE (MALAYSIA) BERHAD (672174-T) (Incorporated in Malaysia) Part A - Explanatory Notes Pursuant to Guidelines on Financial Reporting for Licensed Islamic Bank (BNM/GP8-i) Issued by Bank Negara Malaysia A4 Securities i) Securities Available-For-Sale Group 31 Mar 2017 31 Dec 2016 RM'000 RM'000 Bank 31 Mar 2017 RM'000 31 Dec 2016 RM'000 At fair value Unquoted securities - Islamic private debt securities/sukuks - Government guaranteed sukuk Mutual Fund At cost Unquoted shares in Malaysia Property funds Collective Investment Scheme ii) 411,722 739,499 - 444,691 573,686 - 398,552 739,499 - 431,467 573,686 - 1,151,220 1,018,377 1,138,051 1,005,153 36,100 19,815 17,052 72,967 36,100 19,640 18,285 74,025 36,100 17,052 53,152 36,100 18,285 54,385 1,224,187 1,092,402 1,191,203 1,059,538 Securities Held-To-Maturity Group 31 Mar 2017 31 Dec 2016 RM'000 RM'000 At amortised cost Unquoted Islamic private debt securities/sukuk 60,448 61,251 9 Bank 31 Mar 2017 RM'000 60,448 31 Dec 2016 RM'000 61,251
11. KUWAIT FINANCE HOUSE (MALAYSIA) BERHAD (672174-T) (Incorporated in Malaysia) Part A - Explanatory Notes Pursuant to Guidelines on Financial Reporting for Licensed Islamic Bank (BNM/GP8-i) Issued by Bank Negara Malaysia A5 Financing, Advances and Other Receivables i) At amortised cost Group and Bank 31 Mar 2017 31 Dec 2016 RM'000 RM'000 Term financing House financing Personal financing Leasing financing Syndicated financing Cashline financing Hire purchase receivables Other term financing Staff financing Less: Impairment allowances on financing Collective assessment Individual assessment Net financing, advances and other receivables ii) By contract 795,482 1,193,481 42,952 277,611 6,092 577,106 3,862,526 9,962 762,988 1,212,692 50,117 331,139 6,053 541,130 3,947,680 11,578 6,765,212 6,863,378 (139,421) (209,152) 6,416,639 (139,421) (229,687) 6,494,270 Group and Bank 31 Mar 2017 31 Dec 2016 RM'000 RM'000 Ijarah Muntahia Bittamlik (lease ended with ownership) Murabahah (cost-plus) Mudharabah (profit sharing) Qard (benevolent financing) Musyarakah (profit and loss sharing) Istisna' 2,108,037 4,349,036 68,953 787 237,079 1,320 6,765,212 iii) By type of customer 2,053,752 4,499,057 71,378 1,043 236,813 1,335 6,863,378 Group and Bank 31 Mar 2017 31 Dec 2016 RM'000 RM'000 Domestic business enterprises Individuals Other domestic entities Foreign entities Government Domestic non-bank financial institutions 4,115,815 2,580,861 14,100 54,436 6,765,212 10 4,210,604 2,533,727 14,299 104,748 104,748 6,863,378
12. KUWAIT FINANCE HOUSE (MALAYSIA) BERHAD (672174-T) (Incorporated in Malaysia) Part A - Explanatory Notes Pursuant to Guidelines on Financial Reporting for Licensed Islamic Bank (BNM/GP8-i) Issued by Bank Negara Malaysia A5 Financing, Advances and Other Receivables (cont'd.) Group and Bank 31 Mar 2017 31 Dec 2016 RM'000 RM'000 (iv) By residual contractual maturity 3,726,770 249,482 137,789 2,651,171 6,765,212 Maturity within one year More than one year to three years More than three years to five years More than five years 3,879,579 225,908 139,689 2,618,202 6,863,378 Group and Bank 31 Mar 2017 31 Dec 2016 RM'000 RM'000 (v) By geographical distribution 6,748,479 5,077 11,656 6,765,212 Malaysia Middle East Other countries vi) By profit rate sensitivity 6,846,625 5,170 11,583 6,863,378 Group and Bank 31 Mar 2017 31 Dec 2016 RM'000 RM'000 Fixed rate - House financing - Hire purchase receivables - Syndicated financing - Term financing Variable rate - House financing - Term financing 15,021 577,106 277,611 1,651,427 7,550 541,130 331,139 1,593,095 785,145 3,458,902 6,765,212 760,197 3,630,267 6,863,378 Group and Bank 31 Mar 2017 31 Dec 2016 RM'000 RM'000 vii) By economic purpose Merger and acquisition Purchase of securities Purchase of transport vehicles Purchase of landed properties residential non-residential Purchase of fixed assets Working capital Construction Personal use Other purposes 11 212,093 580,588 219,242 544,890 828,614 940,545 78,572 1,775,902 451,283 1,210,605 687,010 6,765,212 798,690 949,149 86,632 1,852,617 467,263 1,230,718 714,177 6,863,378
13. KUWAIT FINANCE HOUSE (MALAYSIA) BERHAD (672174-T) (Incorporated in Malaysia) Part A - Explanatory Notes Pursuant to Guidelines on Financial Reporting for Licensed Islamic Bank (BNM/GP8-i) Issued by Bank Negara Malaysia A5 Financing, Advances and Other Receivables (cont'd.) viii) By sector Group and Bank 31 Mar 2017 31 Dec 2016 RM'000 RM'000 621,080 154,152 262,747 2,580,861 772,299 337,299 1,279,294 225,499 466,511 65,470 6,765,212 Construction Electricity, gas and water Finance, insurance and business services Household Manufacturing Agriculture, hunting, forestry & fishing Real Estate Transports, storage and communication Wholesale & retail trade and restaurants & hotels Others 616,724 157,686 321,489 2,533,727 794,955 336,615 1,317,458 238,021 477,180 69,523 6,863,378 (ix) Financing by types and Shariah contract Group and Bank 31 Mar 2017 Ijarah Muntahia Bittamlik/ Al-Ijarah Thumma Al-Bai'/ (lease ended with ownership) Murabahah (costplus) Mudharabah (profit sharing) Musyarakah (profit and loss sharing) Qard (benevolent financing) Istisna' Total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 767,268 92 - 26,802 - 1,320 795,482 Personal financing - 1,193,002 - - 479 - 1,193,481 Leasing financing - 17,705 25,247 - - - 42,952 63,764 213,847 - - - - 277,611 House financing Syndicated financing Cashline financing - 6,092 - - - - 6,092 Hire purchase receivables 569,997 - - 7,109 - - 577,106 Other term financing 698,301 2,917,558 43,705 202,962 0 - 3,862,526 8,707 740 - 207 307 - 9,962 2,108,037 4,349,035 68,953 237,078 787 1,320 6,765,212 Murabahah (cost- Mudharabah (profit Musyarakah (profit sharing) and loss sharing) plus) Qard (benevolent financing) Istisna' Total Staff financing 31 Dec 2016 Ijarah Muntahia Bittamlik/ Al-Ijarah Thumma Al-Bai'/ (lease ended with ownership) RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 735,129 93 - 26,432 - 1,335 762,988 Personal financing - 1,212,205 - - 487 - 1,212,692 Leasing financing - 22,443 27,673 - - - 50,117 62,901 268,239 - - - - 331,139 House financing Syndicated financing Cashline financing - 6,053 - - - - 6,053 Hire purchase receivables 533,921 - - 7,209 - - 541,130 Other term financing 711,504 2,989,509 43,705 202,962 0 - 3,947,680 10,297 515 - 210 556 - 11,578 2,053,751 4,499,056 71,379 236,811 1,043 1,335 6,863,378 Staff financing 12
14. KUWAIT FINANCE HOUSE (MALAYSIA) BERHAD (672174-T) (Incorporated in Malaysia) Part A - Explanatory Notes Pursuant to Guidelines on Financial Reporting for Licensed Islamic Bank (BNM/GP8-i) Issued by Bank Negara Malaysia A5 Financing, Advances and Other Receivables (cont'd.) Group and Bank 31 Mar 2017 31 Dec 2016 RM'000 RM'000 x) Purpose and Source of Qard financing As at 1 January Source of Qard fund: - Depositors' Fund - Shareholders' Fund 1,043 51 43 8 Uses of Qard fund: - Financing for asset purchase - Staff Benevolent Closing balance xi) Movements in impaired financing, advances and other receivables 1,147 1,104 915 189 (308) (258) (50) (1,208) (1,001) (207) 787 1,043 Group and Bank 31 Mar 2017 31 Dec 2016 RM'000 RM'000 At 1 Jan Impaired during the period/year - Impaired during the period/year - Reclassified to performing during the year - Amount recovered - Amount written off Closing balance Less : Individual impairment Net impaired financing, advances and other receivables Ratio of net impaired financing, advances and other receivables to gross financing, advances and other receivables less individual impairment 478,060 (20,899) 10,829 (1,315) (30,413) 457,161 (209,152) 550,898 (72,838) 223,973 (7,316) (149,115) (140,380) 478,060 (229,687) 248,009 248,373 3.78% 3.74% xii) Movements in impairment and allowance on financing Group and Bank 31 Mar 2017 31 Dec 2016 RM'000 RM'000 Collective impairment At 1 Jan Allowance charged during the year Closing balance As % of total gross financing, advances and other receivables less individual impairment 139,421 92,212 - 47,208 139,421 139,421 2.13% 13 2.10%
15. KUWAIT FINANCE HOUSE (MALAYSIA) BERHAD (672174-T) (Incorporated in Malaysia) Part A - Explanatory Notes Pursuant to Guidelines on Financial Reporting for Licensed Islamic Bank (BNM/GP8-i) Issued by Bank Negara Malaysia A5 Financing, Advances and Other Receivables (cont'd.) xii) Movements in impairment and allowance on financing (cont'd.) Group and Bank 31 Mar 2017 31 Dec 2016 RM'000 RM'000 Individual impairment At 1 Jan 229,687 320,664 Allowance reversed during the year - Allowance made - Allowance written-back (20,535) 7,157 (27,692) 49,403 151,157 (101,754) Amount written off - Closing balance 209,152 (140,380) 229,687 xiii) Impaired financing by sector Group and Bank 31 Mar 2017 31 Dec 2016 RM'000 RM'000 Agriculture, hunting, forestry and fishing Construction Electricity, gas and water Finance, insurance and business services Household Manufacturing Mining and quarrying Real Estate Transport, storage and communication Wholesale & retail trade and restaurants & hotels - 14 79 7,402 53,371 186,692 79 9,337 46,392 191,926 197,331 7,109 5,177 457,161 217,688 7,209 5,429 478,060
16. KUWAIT FINANCE HOUSE (MALAYSIA) BERHAD (672174-T) (Incorporated in Malaysia) Part A - Explanatory Notes Pursuant to Guidelines on Financial Reporting for Licensed Islamic Bank (BNM/GP8-i) Issued by Bank Negara Malaysia A6 Other Assets Group 31 Mar 2017 31 Dec 2016 RM'000 RM'000 Deposits and prepayments Amount due from subsidiaries Amount due from other related parties Fee receivable Sundry debtors Commodity assets Tax recoverable Gold depository 12,622 (0) Bank 31 Mar 2017 RM'000 31 Dec 2016 RM'000 8,222 - 12,312 4 7,991 4 51,561 371 2,894 126,263 51,561 742 2,895 126,949 51,561 371 2,721 126,263 51,561 742 2,728 126,949 193,711 190,369 193,232 189,975 The amount due from holding company, subsidiaries and related parties are unsecured, profit-free and repayable on demand. A7 Hedging Financial Instruments Notional Amount RM’000 Fair Value Assets RM’000 Liabilities RM’000 Group and Bank At 31 Mar 2017 Forward foreign exchange related contracts Ijarah rental swap related contracts Total 56,677 181,691 238,368 358 4,003 4,361 302 46 348 At 31 Dec 2016 Forward foreign exchange related contracts Ijarah rental swap related contracts Total 85,225 199,152 284,377 994 4,962 5,956 1,113 50 1,163 A8 Musyarakah Capital Investment The Bank grants Musyarakah financing as part of the Bank's activities in accordance with the principles of Shariah. The equity participation that forms part of the financing structure is called Musyarakah capital investment which is caried at cost less any impairment loss. The Bank's participation in these entities involved is limited to safeguarding its interest under the Musyarakah financing. 15
17. KUWAIT FINANCE HOUSE (MALAYSIA) BERHAD (672174-T) (Incorporated in Malaysia) Part A - Explanatory Notes Pursuant to Guidelines on Financial Reporting for Licensed Islamic Bank (BNM/GP8-i) Issued by Bank Negara Malaysia A9 Deposits from Customers (i) By type of deposit Non Mudharabah Demand deposits Gold deposits Wakalah deposits Savings deposits Murabahah (ii) By type of customer Business enterprises Individuals Subsidiaries Government and statutory bodies Other enterprises (iii) By contractual maturity Due within six months More than six months to one year More than one year to three years Group 31 Mar 2017 31 Dec 2016 RM'000 RM'000 Bank 31 Mar 2017 RM'000 31 Dec 2016 RM'000 541,145 125,344 492 59,661 686,580 127,209 498 52,844 467,875 125,345 59,661 652,831 127,210 52,844 3,672,500 3,462,211 3,672,499 3,462,210 4,399,142 4,329,342 4,325,380 4,295,095 Group 31 Mar 2017 31 Dec 2016 RM'000 RM'000 1,940,269 362,014 1,549,507 547,352 4,399,142 1,760,948 385,418 1,249,020 933,956 4,329,342 Group 31 Mar 2017 31 Dec 2016 RM'000 RM'000 4,098,552 296,038 4,552 4,399,142 4,014,438 312,324 2,580 4,329,342 16 Bank 31 Mar 2017 RM'000 1,771,050 362,014 95,457 1,549,507 547,352 4,325,380 Bank 31 Mar 2017 RM'000 4,024,790 296,038 4,552 4,325,380 31 Dec 2016 RM'000 1,602,031 385,418 124,670 1,249,020 933,956 4,295,095 31 Dec 2016 RM'000 3,980,191 312,324 2,580 4,295,095
18. KUWAIT FINANCE HOUSE (MALAYSIA) BERHAD (672174-T) (Incorporated in Malaysia) Part A - Explanatory Notes Pursuant to Guidelines on Financial Reporting for Licensed Islamic Bank (BNM/GP8-i) Issued by Bank Negara Malaysia A10 Deposits and Placements of Banks and Other Financial Institutions Group 31 Mar 2017 31 Dec 2016 RM'000 RM'000 Murabahah Licensed Islamic banks Licensed investment banks Other financial institutions Bank 31 Mar 2017 RM'000 31 Dec 2016 RM'000 692,182 100,000 2,526,850 452,014 3,809,397 692,182 100,000 2,641,487 452,014 3,884,000 3,319,032 4,261,411 3,433,669 4,336,014 A11 INVESTMENT ACCOUNTS Group and Bank 31 Mar 2017 31 Dec 2016 RM’000 RM’000 As at 1 January 8,563 7,490 Net placement during the year 2,514 919 70 258 (28) (104) Income from investment Profit distributed to mudarib As at 31 December 11,119 8,563 Investment asset: Wadiah placement with BNM 11,119 8,563 Profit Sharing Ratio, Rate of Return and Performance Incentive Fee Investment account holder Average profit Average rate of sharing ratio return (%) (%) Unrestricted investment accounts: Less than 3 months 60 1.80 Group and Bank 31 Mar 2017 31 Dec 2016 RM’000 RM’000 2,338 2,789 7,925 4,529 856 1,245 11,119 8,563 Business enterprises Individuals Other enterprises 17
19. KUWAIT FINANCE HOUSE (MALAYSIA) BERHAD (672174-T) (Incorporated in Malaysia) Part A - Explanatory Notes Pursuant to Guidelines on Financial Reporting for Licensed Islamic Bank (BNM/GP8-i) Issued by Bank Negara Malaysia A12 Other Liabilities Group 31 Mar 2017 31 Dec 2016 RM'000 RM'000 Sundry creditors Accrued restoration cost (ii) Undistributed charity funds Other provisions and accruals 41,918 5,857 6,591 23,345 77,711 53,041 5,857 7,377 30,701 96,977 Bank 31 Mar 2017 RM'000 41,827 5,750 6,591 22,950 77,118 31 Dec 2016 RM'000 53,006 5,750 7,377 30,008 96,141 (i) The amount due from holding company, subsidiaries and related parties are unsecured, profit-free and repayable on demand. Group and Bank 31 Mar 2017 31 Dec 2016 RM’000 RM’000 (ii) Sources and uses of charity funds: Sources of charity funds: Undistributed charity funds as at 1 January Penalty charges / (Reversal) on late payment Total sources of funds during the year 7,377 3,217 10,594 Uses of charity funds: Contribution to Baitulmal Compensation of late payment charges Contribution to non profit organisations Aid to needy family Total uses of funds during the year (4,000) (3) (4,003) Closing balance 6,591 5,587 1,946 7,533 (108) (48) (156) 7,377 A13 Subordinated Murabahah Tawarruq The principal of subordinated Murabahah Tawarruq is a facility agreement with the holding company of the Bank, Kuwait Finance House K.S.C. The facility with principal and profit amount of USD101,191,667 or equivalent RM447,671,933 (2016: USD100,550,495 or equivalent RM451,069,519) is unsecured effective from 31 May 2007 which extended until 23 September 2018 and forms part of the Bank's Tier-2 capital. The Murabahah profit is determined with reference to London Interbank Offer Rate ("LIBOR"). A14 Share Capital Number of ordinary shares at RM1.00 each 31 Mar 2017 31 Dec 2016 Units'000 Units'000 Amount 31 Mar 2017 31 Dec 2016 RM’000 RM’000 Authorised: At 1 January/At closing balance 3,000,000 3,000,000 3,000,000 3,000,000 Issued and fully paid: At 1 January At 1 January/At closing balance 1,425,272 1,425,272 1,425,272 1,425,272 1,425,272 1,425,272 1,425,272 1,425,272 18
20. KUWAIT FINANCE HOUSE (MALAYSIA) BERHAD (672174-T) (Incorporated in Malaysia) Part A - Explanatory Notes Pursuant to Guidelines on Financial Reporting for Licensed Islamic Bank (BNM/GP8-i) Issued by Bank Negara Malaysia A15 Income derived from Investment of Depositors' Funds and Others 1st Quarter ended 31-Mar 2017 2016 RM'000 RM'000 Three-months ended 31-Mar 2017 2016 RM'000 RM'000 Group Finance income from financing, advances and other receivables 73,246 82,984 73,246 82,984 296 218 296 218 8,355 647 4 7,519 659 8,355 647 4 7,519 659 Money at call and deposits with financial institutions 12,984 14,958 12,984 14,958 Amortisation of premium less accretion of discounts Total finance income and hibah 95,528 (1,135) 94,393 106,342 (1,166) 105,176 95,528 (1,135) 94,393 106,342 (1,166) 105,176 Finance income from impaired financing Securities - Held-for-trading - Available-for-sale - Held-to-maturity Gain arising from sale of securities - Held-for-trading - Available-for-sale Foreign exchange gain - Realised Gain/(loss) on Ijarah rental swap obligation Bank Finance income from financing, advances and other receivables Finance income from impaired financing Securities - Held-for-trading - Available-for-sale - Held-to-maturity Money at call and deposits with financial institutions 3 - 327 - 3 327 - 5,424 2,590 5,424 2,590 740 909 740 909 100,560 109,002 100,560 109,002 73,388 83,061 73,388 83,061 296 219 296 219 8,318 649 4 7,314 660 8,318 649 4 7,314 660 13,046 95,697 (1,137) 94,560 Amortisation of premium less accretion of discounts Total finance income and hibah Gain arising from sale of securities - Held-for-trading Foreign exchange gain - Realised Gain/(loss) on Ijarah rental swap obligation 19 15,013 106,271 (1,166) 105,105 - 13,046 95,697 (1,137) 94,560 15,013 106,271 (1,166) 105,105 3 327 3 327 5,317 2,576 5,317 2,576 741 910 741 910 100,621 108,918 100,621 108,918