Login Get Started
HelpDesk
 Embed  Download
  of  

or
Sign in to continue reading...

Public Islamic Bank Berhad: Condensed Interim Financial Statements - 31 December 2019

IM Insights
By IM Insights
4 years ago
Public Islamic Bank Berhad: Condensed Interim Financial Statements - 31 December 2019

Hibah, Islamic banking, Murabahah, Musharakah, Sukuk, Zakat, Credit Risk, Net Assets, Provision, Receivables, Reserves, Sales, Musharakah Mutanaqisah

Organisation Tags (3)


Create FREE account or Login to add your comment
Comments (0)


Transcription

  1. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) CONDENSED INTERIM FINANCIAL STATEMENTS AUDITED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2019 Note ASSETS Cash and balances with banks Financial assets at fair value through profit or loss Derivative financial assets Financial investments at fair value through other comprehensive income Financial investments at amortised cost Financing and advances Other assets Statutory deposits with Bank Negara Malaysia Deferred tax assets Collective investment Investment in an associated company Right-of-use assets Property and equipment A8 A9 A10 A11 A12 TOTAL ASSETS LIABILITIES Deposits from customers Deposits from banks Bills and acceptances payable Derivative financial liabilities Senior Sukuk Murabahah Subordinated Sukuk Murabahah Lease liabilities Other liabilities Provision for zakat and taxation Deferred tax liabilities A13 A14 A15 TOTAL LIABILITIES 31 December 2019 RM’000 31 December 2018 RM’000 3,139,455 249,541 - 2,127,231 30,310 3,946 9,528,034 3,743,715 49,728,576 71,437 1,800,450 549,042 45,000 18,707 4,005 8,654,277 3,186,041 45,629,999 69,628 1,891,250 2,637 530,514 45,000 3,079 68,877,962 62,173,912 59,374,011 2,453,316 377 90,130 519,862 1,000,000 19,385 396,753 19,888 264 53,639,575 1,982,936 204 23,601 519,775 999,887 451,580 11,299 - 63,873,986 57,628,857 The Audited Condensed Interim Financial Statements should be read in conjunction with the audited annual financial statements of the Bank for the year ended 31 December 2018. 1
  2. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) CONDENSED INTERIM FINANCIAL STATEMENTS AUDITED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2019 Note EQUITY Share capital Regulatory reserves Other reserves Retained profits TOTAL EQUITY 31 December 2019 RM’000 2,732,717 309,431 16,939 1,944,889 5,003,976 TOTAL LIABILITIES AND EQUITY COMMITMENTS AND CONTINGENCIES A28 CAPITAL ADEQUACY Before deducting interim dividend * Common Equity Tier I Capital Ratio Tier I Capital Ratio Total Capital Ratio A27 After deducting interim dividend * Common Equity Tier I Capital Ratio Tier I Capital Ratio Total Capital Ratio Net assets per share attributable to ordinary equity holder of the Bank (RM) 31 December 2018 RM’000 2,732,717 259,285 (1,509) 1,554,562 4,545,055 68,877,962 62,173,912 10,168,972 10,404,744 12.362% 12.362% 16.192% 12.087% 12.087% 16.116% 12.362% 12.362% 16.192% 11.955% 11.955% 15.984% 21.64 19.66 * Refer to interim dividend declared subsequent to the financial year end. The Audited Condensed Interim Financial Statements should be read in conjunction with the audited annual financial statements of the Bank for the year ended 31 December 2018. 2
  3. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) CONDENSED INTERIM FINANCIAL STATEMENTS AUDITED STATEMENT OF PROFIT OR LOSS FOR THE 4TH QUARTER AND FINANCIAL YEAR ENDED 31 DECEMBER 2019 Note Income derived from investment of depositors' funds and others Income derived from investment of shareholder's funds (Allowance) / Writeback of allowance for impairment on financing and advances Allowance for impairment on other assets Total distributable income Income attributable to depositors and others Total net income Personnel expenses Other overheads and expenditures Financial Year Ended 31 December 31 December 2019 2018 RM’000 RM’000 A16 680,564 657,194 2,710,707 2,566,476 A17 56,672 54,996 224,485 210,079 A18 (6,284) 2,415 (41,756) (32,256) A19 A20 A21 Profit before zakat and taxation Zakat Taxation Profit for the period / year Earnings per share - basic / diluted (sen) 4th Quarter Ended 31 December 31 December 2019 2018 RM’000 RM’000 (79) 730,873 (446,429) 284,444 (5,827) (114,839) (107) 714,498 (435,105) 279,393 (5,334) (103,068) (232) 2,893,204 (1,787,697) 1,105,507 (21,243) (441,976) (461) 2,743,838 (1,693,021) 1,050,817 (19,248) (412,980) 163,778 (75) (39,108) 124,595 170,991 (65) (40,061) 130,865 642,288 (300) (149,834) 492,154 618,589 (260) (144,332) 473,997 A22 53.9 56.6 212.9 205.0 The Audited Condensed Interim Financial Statements should be read in conjunction with the audited annual financial statements of the Bank for the year ended 31 December 2018. 3
  4. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) CONDENSED INTERIM FINANCIAL STATEMENTS AUDITED STATEMENT OF COMPREHENSIVE INCOME FOR THE 4TH QUARTER AND FINANCIAL YEAR ENDED 31 DECEMBER 2019 4th Quarter Ended 31 December 31 December 2019 2018 RM’000 RM’000 Profit for the period / year 124,595 130,865 Financial Year Ended 31 December 31 December 2019 2018 RM’000 RM’000 492,154 473,997 Other comprehensive (loss) / income: Items that will not be reclassified to profit or loss: Defined benefit reserves: - (Loss) / Gain on remeasurements of defined benefit plans Items that may be reclassified to profit or loss: Revaluation reserves: - Net change in revaluation of financial investments at fair value through other comprehensive income Hedging reserves: - Net change in cash flow hedges Income tax relating to components of other comprehensive (loss) / income: - Defined benefit reserves - Revaluation reserves - Hedging reserves Other comprehensive income / (loss) for the period / year, net of tax Total comprehensive income for the period / year (2,563) 1,573 (2,563) 1,573 9,954 3,322 98,501 5,316 5,961 15,915 (7,456) (4,134) (71,664) 26,837 180 5,496 615 (2,389) (1,431) (3,205) (377) (797) 1,790 616 615 (23,640) 17,199 (5,826) (377) (1,276) (43) (1,696) 10,147 (1,945) 18,448 5,373 510,602 479,370 134,742 128,920 The Audited Condensed Interim Financial Statements should be read in conjunction with the audited annual financial statements of the Bank for the year ended 31 December 2018. 4
  5. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) CONDENSED INTERIM FINANCIAL STATEMENTS AUDITED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 Share Capital RM’000 At 1 January 2019 - as previously stated - effect of changes in accounting policies (Note A31) At 1 January 2019, as restated Profit for the year Other comprehensive income / (loss) for the year Total comprehensive income / (loss) for the year Transactions with owner / other equity movements: Transfer to regulatory reserves Dividends paid At 31 December 2019 <------------------------------ Non-distributable -------------------------------> Distributable Reserve Reserves Profit Defined Revaluation Equalisation Hedging Benefit Regulatory Retained Reserves Reserves Reserves Reserves Reserves Profits RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 2,732,717 2,732,717 7,308 7,308 172 172 (15,195) (15,195) 6,206 6,206 - 74,861 74,861 - (54,465) (54,465) (1,948) (1,948) - - - 2,732,717 82,169 172 (69,660) 259,285 259,285 - - 50,146 50,146 4,258 309,431 1,554,562 (5,438) 1,549,124 4,545,055 (5,438) 4,539,617 492,154 492,154 492,154 18,448 510,602 (50,146) (46,243) (96,389) (46,243) (46,243) 1,944,889 The Audited Condensed Interim Financial Statements should be read in conjunction with the audited annual financial statements of the Bank for the year ended 31 December 2018. 5 Total Equity RM’000 5,003,976
  6. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) CONDENSED INTERIM FINANCIAL STATEMENTS AUDITED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 Share Capital RM’000 At 1 January 2018 Profit for the year Other comprehensive income for the year Total comprehensive income for the year Transactions with owner / other equity movements: Transfer to regulatory reserves Dividends paid At 31 December 2018 <------------------------------ Non-distributable -------------------------------> Distributable Reserves Reserve Profit Defined Revaluation Equalisation Hedging Benefit Regulatory Retained Reserves Reserves Reserves Reserves Reserves Profits RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 2,732,717 3,268 172 - 4,040 4,040 - - - - 2,732,717 7,308 172 (15,332) Total Equity RM’000 5,010 194,070 1,238,267 4,158,172 137 137 1,196 1,196 - 473,997 473,997 473,997 5,373 479,370 - - 65,215 65,215 (65,215) (92,487) (157,702) (92,487) (92,487) 6,206 259,285 (15,195) 1,554,562 4,545,055 The Audited Condensed Interim Financial Statements should be read in conjunction with the audited annual financial statements of the Bank for the year ended 31 December 2018. 6
  7. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) CONDENSED INTERIM FINANCIAL STATEMENTS AUDITED CONDENSED STATEMENT OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 31 December 2019 RM’000 Profit before zakat and taxation Adjustments for non-cash items Operating profit before working capital changes Changes in working capital: Net changes in operating assets Net changes in operating liabilities Cash generated from operations Zakat and tax paid Net cash generated from operating activities Net cash used in investing activities Net cash (used in) / generated from financing activities 31 December 2018 RM’000 642,288 (6,072) 636,216 618,589 33,876 652,465 (4,300,878) 6,143,110 2,478,448 (142,752) 2,335,696 (1,276,418) (47,054) (3,605,528) 4,203,068 1,250,005 (167,902) 1,082,103 (3,018,993) 427,253 Net change in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year 1,012,224 2,127,231 3,139,455 (1,509,637) 3,636,868 2,127,231 Note: Cash and balances with banks Less: Balances with banks with original maturity more than three months Cash and cash equivalents at end of the year 3,139,455 3,139,455 2,127,231 2,127,231 The Audited Condensed Interim Financial Statements should be read in conjunction with the audited annual financial statements of the Bank for the year ended 31 December 2018. 7
  8. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) Part A - Explanatory Notes Pursuant to Malaysian Financial Reporting Standard ("MFRS") 134 and Policy Document on Financial Reporting for Islamic Banking Institutions Issued by Bank Negara Malaysia A1. Basis of Preparation The audited condensed interim financial statements for the 4th quarter and financial year ended 31 December 2019 have been prepared under the historical cost convention except for the following assets and liabilities which are stated at fair values: financial assets at fair value through profit or loss ("FVTPL"), financial investments at fair value through other comprehensive income ("FVOCI") and derivative financial instruments. The audited condensed interim financial statements have been prepared in accordance with MFRS 134: Interim Financial Reporting issued by the Malaysian Accounting Standards Board (“MASB”). The audited condensed interim financial statements should be read in conjunction with the audited annual financial statements of the Bank for the financial year ended 31 December 2018. The explanatory notes attached to the audited condensed interim financial statements provide an explanation of events and transactions that are significant to an understanding of the changes in the financial position and performance of the Bank since the financial year ended 31 December 2018. The significant accounting policies and methods of computation applied in the audited condensed interim financial statements are consistent with those adopted in the most recent annual financial statements for the financial year ended 31 December 2018, except for the adoption of the following during the current financial year: Effective for annual periods commencing on or after 1 January 2019 - MFRS 16 Leases - Plan Amendment, Curtailment or Settlement (Amendments to MFRS 119 Employee Benefits) The main effects of the adoption of MFRS and Amendments to MFRS above are summarised below: (a) MFRS 16 Leases - MFRS 16 ‘Leases’ supersedes MFRS 117 ‘Leases’ and its related interpretations. MFRS 16 introduces a single accounting model for a lessee and eliminates the classification of leases by the lessee as either finance leases (on-balance sheet) or operating leases (off-balance sheet). The details and financial effects of the adoption of MFRS 16 are discussed in Note A31 Changes in Accounting Policies. (b) Plan Amendment, Curtailment or Settlement (Amendments to MFRS 119 Employee Benefits) - The amendments to MFRS 119 require an entity to use updated actuarial assumptions to determine current service cost and net interest for the remainder of the reporting period after the plan amendment, curtailment or settlement when the entity remeasures its net defined benefit liability (asset). As there are no proposed changes in the terms or membership of the Bank's defined benefit plan which may result in plan amendment, curtailment or settlement, the adoption of the amendments did not have any financial impact on the financial statements of the Bank. Bank Negara Malaysia ("BNM")'s Revised Policy Documents on Credit Risk and Financial Reporting for Islamic Banking Institutions On 27 September 2019, BNM issued the revised policy documents on Credit Risk and Financial Reporting for Islamic Banking Institutions which are effective on 1 October 2019. The revised policy documents were updated to clarify the classification of a credit facility as credit-impaired, specifically the treatment of rescheduled and restructured credit facilities. The application of the revised policy documents only affected disclosure and classification of a rescheduled and restructured credit facility as credit-impaired and did not have any financial impact to the Bank. 8
  9. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) A1. Basis of Preparation (continued) Change in Management Remuneration Policy During the current financial year, the Bank revised its remuneration policy in which a new assessment process was established to align with revised internal remuneration policy to determine variable pay compensation for employees of the Bank. The effects of the realignment of variable pay compensation have been adjusted to the opening retained profits as at 1 January 2019. The financial effects of the realignment of variable pay compensation are discussed in Note A31 Changes in Accounting Policies. The following MFRS and Amendments to MFRSs have been issued by MASB but are not yet effective to the Bank: Effective for annual periods commencing on or after 1 January 2020 Interest Rate Benchmark Reform (Amendments to MFRS 9, MFRS 139 and MFRS 7) Effective for annual periods commencing on or after 1 January 2021 MFRS 17 Insurance Contracts Interest Rate Benchmark Reform (Amendments to MFRS 9, MFRS 139 and MFRS 7) - These amendments provide relief on existing hedge accounting requirements from potential effects of the uncertainty caused by interbank offer rates. Companies would continue to apply those hedge accounting requirements assuming that the interest rate benchmark associated with the hedged item, hedged risk and/or hedging instruments are based is not altered as a result of the interest rate benchmark reform. In addition, companies are not required to apply the retrospective assessment under MFRS 139, but continue to apply hedge accounting to a hedging relationship for which effectiveness is outside of the 80% - 125% range during the period of uncertainty arising from the reform. MFRS 17 Insurance Contracts - MFRS 17 introduces consistent accounting for all insurance contracts based on a current measurement model. Under MFRS 17, the general model requires entities to recognise and measure a group of insurance contracts at: (i) a risk-adjusted present value of future cash flows that incorporates information that is consistent with observable market information; plus (ii) an amount representing the unearned profit in the group of contracts. The adoption of MFRS 17 will not have any financial impact on the financial statements of the Bank as it is not applicable to the Bank. A2. Auditors' Report on Preceding Annual Financial Statements The auditors' report on the audited annual financial statements for the financial year ended 31 December 2018 was not qualified. A3. Comments about Seasonal or Cyclical Factors The operations of the Bank were not materially affected by any seasonal or cyclical factors in the current financial year. 9
  10. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) A4. Unusual Items Due to Their Nature, Size or Incidence There were no unusual items affecting the assets, liabilities, equity, net income or cash flows of the Bank in the current financial year. A5. Changes in Estimates There were no material changes in estimates of amounts reported in prior financial years that have a material effect in the current financial year. A6. Debt and Equity Securities Saved as disclosed below, there were no issuances of shares, share buy-backs and repayment of debt and equity securities by the Bank. RM5.0 Billion Sukuk Murabahah Programme ("Programme'') The Bank had early redeemed the first tranche of Subordinated Sukuk Murabahah of RM500 million in nominal value under the Programme during the current financial year. On 31 October 2019, the Bank issued the third tranche of RM500 million in nominal value of Subordinated Sukuk Murabahah under the Programme due in 2029 callable in 2024. The Subordinated Sukuk Murabahah bear profit at the rate of 3.75% per annum payable semi-annually. A7. Dividends Paid, Distributed and Declared During the financial year ended 31 December 2019, a second interim dividend of 20.0 sen per ordinary share, in respect of the financial year ended 31 December 2018, amounting to RM46,243,400 was paid on 22 February 2019. No dividend has been proposed for the financial year ended 31 December 2019. 10
  11. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) A8. Financial Assets at Fair Value through Profit or Loss ("FVTPL") 31 December 2019 RM’000 31 December 2018 RM’000 - 30,310 Money market instruments: Negotiable Islamic Debt Certificates 249,541 - Total financial assets at FVTPL 249,541 30,310 At fair value Government securities and treasury bills: Malaysian Government Investment Issues A9. Financial Investments at Fair Value through Other Comprehensive Income ("FVOCI") At fair value Government securities and treasury bills: Malaysian Government Investment Issues 31 December 2019 RM’000 31 December 2018 RM’000 9,528,034 8,654,277 The following expected credit losses ("ECL") for debt instruments are not recognised in the statement of financial position as the carrying amount of debt instruments at FVOCI is equivalent to their fair value: 12-Month ECL (Stage 1) RM’000 Lifetime ECL Not CreditCreditImpaired Impaired (Stage 2) (Stage 3) RM’000 RM’000 Total RM’000 At 1 January 2019 New financial investments purchased Net allowance made Amount derecognised Changes in models / risk parameters At 31 December 2019 1,465 1,715 31 (1,608) (1) 1,602 - - 1,465 1,715 31 (1,608) (1) 1,602 At 1 January 2018 New financial investments purchased Net allowance made Amount derecognised At 31 December 2018 987 1,217 12 (751) 1,465 - - 987 1,217 12 (751) 1,465 11
  12. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) A10. Financial Investments at Amortised Cost At amortised cost Government securities and treasury bills: Malaysian Government Investment Issues Non-money market instruments: Debt securities - Unquoted corporate sukuk Allowance for impairment 31 December 2019 RM’000 31 December 2018 RM’000 3,006,702 2,373,305 737,650 813,276 (637) Total financial investments at amortised cost 3,743,715 (540) 3,186,041 Movements in allowances for impairment on debt instruments which reflect the ECL model on impairment are as follows: 12-Month ECL (Stage 1) RM’000 Lifetime ECL Not CreditCreditImpaired Impaired (Stage 2) (Stage 3) RM’000 RM’000 Total RM’000 At 1 January 2019 New financial investments purchased Net allowance written back Amount derecognised At 31 December 2019 540 142 (21) (24) 637 - - 540 142 (21) (24) 637 At 1 January 2018 New financial investments purchased Net allowance made Amount derecognised At 31 December 2018 509 321 1 (291) 540 - - 509 321 1 (291) 540 12
  13. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) A11. Financing and Advances a. By type and contract 31 December 2019 Bai' Bithaman Ajil RM’000 At amortised cost Cash line 1,732,493 Term financing - House financing 5,105,404 - Syndicated financing 1,266,197 - Hire purchase receivables - Other term financing 4,941,919 Credit card receivables Bills receivables Trust receipts Claims on customers under acceptance credits Revolving credits 181,477 Staff financing Gross financing and advances 13,227,490 Less : Allowance for impairment on financing and advances - Expected credit losses - Stage 1: 12-Month ECL - Stage 2: Lifetime ECL not credit-impaired - Stage 3: Lifetime ECL credit-impaired Ijarah Thumma Al-Bai' RM’000 Musharakah Mutanaqisah Murabahah RM’000 RM’000 Bai' Inah RM’000 Total Financing and Advances RM’000 Others RM’000 - - - - - 1,732,493 8,310,016 8,870 8,318,886 1,550,596 1,550,596 15,488,932 10,923,096 85,664 26,497,692 2,110 3,415 195,437 200,962 208,138 30,375 238,513 20,594,336 1,266,197 8,310,016 17,623,749 30,375 2,110 3,415 195,437 181,477 94,534 50,034,139 (305,563) (129,065) (90,576) (85,922) Net financing and advances 49,728,576 13
  14. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) A11. Financing and Advances (continued) a. By type and contract (continued) 31 December 2018 Bai' Bithaman Ajil RM’000 At amortised cost Cash line 1,639,516 Term financing - House financing 4,553,457 1,441,460 - Syndicated financing - Hire purchase receivables - Other term financing 3,468,827 Credit card receivables Bills receivables Trust receipts Claims on customers under acceptance credits Revolving credits 221,221 Staff financing 11,324,481 Gross financing and advances Less : Allowance for impairment on financing and advances - Expected credit losses - Stage 1: 12-Month ECL - Stage 2: Lifetime ECL not credit-impaired - Stage 3: Lifetime ECL credit-impaired Ijarah Thumma Al-Bai' RM’000 Musharakah Mutanaqisah Murabahah RM’000 RM’000 Bai' Inah RM’000 Total Financing and Advances RM’000 Others RM’000 - - - - - 1,639,516 9,662,180 8,212 9,670,392 1,681,610 1,681,610 13,161,403 9,724,292 73,307 22,959,002 2,267 5,200 173,522 180,989 105,517 21,776 127,293 17,714,860 1,441,460 9,662,180 14,980,246 21,776 2,267 5,200 173,522 221,221 81,519 45,943,767 (313,768) (144,142) (77,514) (92,112) Net financing and advances 45,629,999 All the financing and advances are located in Malaysia. 14
  15. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) A11. Financing and Advances (continued) b. By class Retail financing * - House financing - Hire purchase - Credit cards - Other financing ^ Corporate financing Gross financing and advances 31 December 2019 RM’000 31 December 2018 RM’000 20,594,336 8,310,016 30,375 15,975,442 44,910,169 5,123,970 50,034,139 17,714,860 9,662,180 21,776 14,844,687 42,243,503 3,700,264 45,943,767 * Included in retail financing are financing granted to individual customers and mid-market commercial enterprises. ^ Included in other financing are term financing, trade financing, cash line and revolving credits. c. By type of customer Domestic non-bank financial institutions - Others Domestic business enterprises - Small and medium enterprises - Others Government and statutory bodies Individuals Other domestic entities Foreign entities Gross financing and advances 31 December 2019 RM’000 31 December 2018 RM’000 1,587,879 1,054,681 9,253,552 2,651,101 1,005,773 35,326,968 4,991 203,875 50,034,139 8,548,276 1,595,022 1,308,324 33,236,546 5,334 195,584 45,943,767 31 December 2019 RM’000 31 December 2018 RM’000 273,262 8,309,305 3,125,661 574,874 9,661,717 3,456,622 34,120,141 4,205,770 50,034,139 29,659,488 2,591,066 45,943,767 d. By rate of return sensitivity Fixed rate - House financing - Hire purchase receivables - Other fixed rate financing Variable rate - Base rate / base financing rate plus - Cost plus Gross financing and advances 15
  16. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) A11. Financing and Advances (continued) e. By residual contractual maturity Maturity within one year More than one year to three years More than three years to five years More than five years Gross financing and advances 31 December 2019 RM’000 31 December 2018 RM’000 2,883,519 3,000,768 4,444,876 39,704,976 50,034,139 2,826,936 3,109,731 3,422,211 36,584,889 45,943,767 31 December 2019 RM’000 31 December 2018 RM’000 8,318,886 32,255,720 21,138,886 11,116,834 2,891,612 30,375 700 510,885 5,882,984 142,977 50,034,139 9,670,391 27,988,101 18,203,122 9,784,979 2,783,502 21,776 820 390,561 5,060,802 27,814 45,943,767 31 December 2019 RM’000 31 December 2018 RM’000 910,538 169,036 1,448,787 4,791 1,972,635 2,678,149 397,533 2,055,679 3,628,663 1,345,141 35,423,187 50,034,139 920,845 52,234 858,775 4,141 1,432,328 2,408,990 414,538 1,517,189 3,464,881 1,543,232 33,326,614 45,943,767 f. By economic purpose Purchase of transport vehicles Purchase of landed properties (of which: - residential - non-residential) Personal use Credit card Purchase of consumer durables Construction Working capital Other purpose Gross financing and advances g. By sectors Agriculture, hunting, forestry and fishing Mining and quarrying Manufacturing Electricity, gas and water Construction Wholesale & retail trade and restaurants & hotels Transport, storage and communication Finance, insurance and business services Real estate Community, social and personal services Households Gross financing and advances 16
  17. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) A11. Financing and Advances (continued) h. Movements in credit-impaired financing and advances ("impaired financing") are as follows: At 1 January Impaired during the year Reclassified as non-credit impaired Recoveries Amount written off Financing converted to foreclosed properties Closing balance Gross impaired financing as a percentage of gross financing and advances 31 December 2019 RM’000 31 December 2018 RM’000 277,731 673,499 (533,038) (56,730) (76,223) (10,189) 244,386 673,794 (506,901) (50,578) (77,993) (4,977) 275,050 277,731 0.55% 0.60% i. Impaired financing and advances by economic purpose Purchase of transport vehicles Purchase of landed properties (of which: - residential - non-residential) Personal use Credit card Working capital Other purpose 31 December 2019 RM’000 31 December 2018 RM’000 72,786 170,061 146,493 23,568 26,291 262 5,628 22 275,050 95,087 150,269 120,726 29,543 27,605 264 4,491 15 277,731 31 December 2019 RM’000 31 December 2018 RM’000 50 2 1,032 8,924 7,337 1,393 3,107 75 1,578 251,552 275,050 258 1,053 2,607 7,130 7,399 672 7,800 118 2,339 248,355 277,731 j. Impaired financing and advances by sectors Agriculture, hunting, forestry and fishing Mining and quarrying Manufacturing Construction Wholesale & retail trade and restaurants & hotels Transport, storage and communication Finance, insurance and business services Real estate Community, social and personal services Households All the impaired financing and advances are located in Malaysia. 17
  18. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) A11. Financing and Advances (continued) k. Movements in loss allowance for financing which reflect the ECL model on impairment are as follows: Lifetime ECL Not CreditCreditImpaired Impaired (Stage 2) (Stage 3) RM’000 RM’000 12-Month ECL (Stage 1) RM’000 At 1 January 2019 Changes due to financing and advances recognised as at 1 January 2019: - Transfer to Stage 1: 12-Month ECL - Transfer to Stage 2: Lifetime ECL not credit-impaired - Transfer to Stage 3: Lifetime ECL credit-impaired 144,142 77,514 92,112 26,312 33,077 (8,301) (26,128) (18,011) (6,949) - (6,494) 20,668 (14,174) - (2,841) 3,112 - (271) New financing and advances originated Net remeasurement due to changes in credit risk Modifications to contractual cash flows of financing and advances Changes in models / risk parameters Financing and advances derecognised (other than write-off) Amount written off Amount transferred to allowance for impairment loss on foreclosed properties Total RM’000 313,768 13,573 5,450 560 19,583 (35,741) 7,894 93,909 66,062 (457) (11,609) (37) 10,303 (7,155) (2,247) 753 912 259 (394) (7,935) (17,337) - - (76,223) (76,223) - - (155) (155) At 31 December 2019 129,065 90,576 85,922 305,563 At 1 January 2018 Changes due to financing and advances recognised as at 1 January 2018: - Transfer to Stage 1: 12-Month ECL - Transfer to Stage 2: Lifetime ECL not credit-impaired - Transfer to Stage 3: Lifetime ECL credit-impaired 152,098 96,030 86,122 334,250 36,425 42,920 (20,561) (35,568) (15,864) (7,352) - (6,162) 18,260 (12,098) - (3,253) 3,586 - (333) New financing and advances originated Net remeasurement due to changes in credit risk Modifications to contractual cash flows of financing and advances Financing and advances derecognised (other than write-off) Amount written off At 31 December 2018 18 21,308 10,213 425 31,946 (58,301) 1,615 103,831 47,145 862 527 (301) (34) (7,087) (9,749) - - 144,142 77,514 (5,271) (22,107) (77,993) (77,993) 92,112 313,768
  19. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) A12. Other Assets 31 December 2019 RM’000 31 December 2018 RM’000 38,921 203 15,206 543 16,564 71,437 48,261 165 9,899 3,668 7,635 69,628 31 December 2019 RM’000 31 December 2018 RM’000 At amortised cost Savings deposit - Qard 6,716,978 6,479,885 Demand deposit - Qard 4,816,878 4,338,942 22,959 23,149 41,363,757 35,286,960 6,453,439 7,510,639 59,374,011 53,639,575 Deferred handling fees Income receivable Other receivables, deposits and prepayments Employee benefits Foreclosed properties A13. Deposits from Customers a. By type of deposit and contract Term deposit - Negotiable Islamic Debt Certificate - Bai' Bithaman Ajil - Commodity Murabahah - Special term deposit account - Qard 19
  20. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) A13. Deposits from Customers (continued) b. By type of customer Federal and state governments Local government and statutory authorities Business enterprises Individuals Foreign customers Others 31 December 2019 RM’000 31 December 2018 RM’000 2,348,406 879,729 9,791,744 23,466,357 601,272 22,286,503 59,374,011 1,507,963 449,917 9,857,402 23,759,284 802,711 17,262,298 53,639,575 31 December 2019 RM’000 31 December 2018 RM’000 41,567,949 6,270,511 883 812 47,840,155 29,468,215 13,323,915 28,313 305 42,820,748 31 December 2019 RM’000 31 December 2018 RM’000 2,418,115 7,559 17,368 10,274 2,453,316 1,947,551 10,016 20,399 4,970 1,982,936 c. The maturity structure of term deposits are as follows: Due within six months More than six months to one year More than one year to three years More than three years to five years A14. Deposits from Banks At amortised cost Non-Mudharabah Fund Licensed banks Licensed investment banks Bank Negara Malaysia Other financial institutions 20
  21. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) A15. Other Liabilities Income payable Other payables and accruals Accrued restoration costs Profit Equalisation Reserves Allowance for impairment on financing commitments and financial guarantees 31 December 2019 RM’000 31 December 2018 RM’000 360,567 29,127 569 31 406,625 39,138 31 6,459 396,753 5,786 451,580 Movements in allowance for impairment on financing commitments and financial guarantees are as follows: 12-Month ECL (Stage 1) RM’000 At 1 January 2019 Changes due to financing commitments and financial guarantees recognised as at 1 January 2019: - Transfer to Stage 1: 12-Month ECL - Transfer to Stage 2: Lifetime ECL not credit-impaired - Transfer to Stage 3: Lifetime ECL credit-impaired 4,480 New financing commitments and financial guarantees originated Net remeasurement due to changes in credit risk Modifications to contractual cash flows of financing and advances Changes in models / risk parameters Financing commitments and financial guarantees derecognised Lifetime ECL Not CreditCreditImpaired Impaired (Stage 2) (Stage 3) RM’000 RM’000 1,171 Total RM’000 135 5,786 428 473 (389) (445) (39) (28) - (44) 87 (43) - (1) (31) 32 - 910 244 36 1,190 (847) (168) 158 (857) 773 124 1 42 1 939 (519) (76) (5) (600) At 31 December 2019 5,225 906 328 6,459 At 1 January 2018 Changes due to financing commitments and financial guarantees recognised as at 1 January 2018: - Transfer to Stage 1: 12-Month ECL - Transfer to Stage 2: Lifetime ECL not credit-impaired - Transfer to Stage 3: Lifetime ECL credit-impaired New financing commitments and financial guarantees originated Net remeasurement due to changes in credit risk Financing commitments and financial guarantees derecognised 4,585 1,220 273 6,078 At 31 December 2018 522 567 (403) (499) (119) (68) - (44) 108 (64) - (1) (12) 13 - - 2,338 1,765 573 (1,193) 57 (15) (1,151) (1,199) (276) (4) (1,479) 4,480 21 1,171 135 5,786
  22. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) A16. Income Derived from Investment of Depositors' Funds and Others 4th Quarter Ended 31 December 31 December 2019 2018 RM’000 RM’000 Income derived from investment of: (a) Term deposits (b) Other deposits Financial Year Ended 31 December 31 December 2019 2018 RM’000 RM’000 528,488 152,076 680,564 523,120 134,074 657,194 2,145,556 565,151 2,710,707 2,040,865 525,611 2,566,476 420,252 422,221 1,690,459 1,641,869 60,105 25,688 3,112 509,157 54,277 23,949 3,230 503,677 233,421 99,170 10,651 2,033,701 185,746 95,466 30,926 1,954,007 2,639 511,796 3,262 506,939 12,666 2,046,367 25,645 1,979,652 4,225 2,221 2,530 4,610 3,931 1,097 17,392 12,338 5,669 15,768 16,389 5,493 3,419 433 41,337 5,010 1,377 7 883 905 35 102 3,417 1,309 16,181 523,120 13,504 7,161 99,189 2,145,556 12,973 5,443 61,213 2,040,865 a. Income derived from investment of term deposits: Finance income and Hibah Financing and advances Financial investments at fair value through other comprehensive income Financial investments at amortised cost Balances with banks Financial assets at fair value through profit or loss Total finance income and Hibah Other operating income Fee and commission income: - Commissions - Service charges and fees - Other fee income Net gains and losses on financial instruments: - Net gain arising from sale of financial investments at fair value through other comprehensive income - (Loss) / Gain representing ineffective portions of hedging derivatives - Others Gross distribution income from collective investment Other income Total other operating income (901) 187 3,254 1,757 16,692 528,488 22
  23. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) A16. Income Derived from Investment of Depositors' Funds and Others (continued) 4th Quarter Ended 31 December 31 December 2019 2018 RM’000 RM’000 Financial Year Ended 31 December 31 December 2019 2018 RM’000 RM’000 b. Income derived from investment of other deposits: Finance income and Hibah Financing and advances Financial investments at fair value through other comprehensive income Financial investments at amortised cost Balances with banks Financial assets at fair value through profit or loss Total finance income and Hibah Other operating income Fee and commission income: - Commissions - Service charges and fees - Other fee income Net gains and losses on financial instruments: - Net gain arising from sale of financial investments at fair value through other comprehensive income - (Loss) / Gain representing ineffective portions of hedging derivatives - Others Gross distribution income from collective investment Other income Total other operating income 120,805 108,216 445,276 422,852 17,211 7,351 880 146,247 13,923 6,137 820 129,096 61,484 26,122 2,806 535,688 47,838 24,586 7,965 503,241 775 147,022 831 129,927 3,336 539,024 6,605 509,846 1,217 666 691 1,182 1,007 281 4,581 3,250 1,493 4,061 4,221 1,415 1,203 109 10,889 1,290 354 3 233 238 9 27 876 335 4,147 134,074 3,557 1,886 26,127 565,151 3,341 1,401 15,765 525,611 (223) 55 939 506 5,054 152,076 23
  24. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) A17. Income Derived from Investment of Shareholder's Funds 4th Quarter Ended 31 December 31 December 2019 2018 RM’000 RM’000 Finance income and Hibah Financing and advances Financial investments at fair value through other comprehensive income Financial investments at amortised cost Balances with banks Financial assets at fair value through profit or loss Total finance income and Hibah Other operating income Fee and commission income: - Commissions - Service charges and fees - Other fee income Net gains and losses on financial instruments: - Net gain arising from sale of financial investments at fair value through other comprehensive income - (Loss) / Gain representing ineffective portions of hedging derivatives - Others Gross distribution income from collective investment Other income Total other operating income 45,053 44,385 176,870 169,008 6,436 2,750 332 54,571 5,687 2,519 353 52,944 24,422 10,376 1,114 212,782 19,120 9,827 3,183 201,138 284 54,855 353 53,297 1,325 214,107 2,640 203,778 454 241 267 483 414 117 1,820 1,291 593 1,623 1,687 566 390 48 4,325 516 (93) 21 140 (1) 92 95 3 10 1,413 749 10,378 224,485 1,336 560 6,301 210,079 349 188 1,817 56,672 24 Financial Year Ended 31 December 31 December 2019 2018 RM’000 RM’000 360 138 1,699 54,996
  25. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) A18. Allowance for Impairment on Financing and Advances 4th Quarter Ended 31 December 31 December 2019 2018 RM’000 RM’000 Expected credit losses Impaired financing written off Impaired financing recovered 14,861 (8,577) 6,284 4,863 1 (7,279) (2,415) Financial Year Ended 31 December 31 December 2019 2018 RM’000 RM’000 68,846 (27,090) 41,756 57,219 2 (24,965) 32,256 A19. Income Attributable to Depositors and Others 4th Quarter Ended 31 December 31 December 2019 2018 RM’000 RM’000 Deposits from customers - Non-Mudharabah fund Deposits from banks - Non-Mudharabah fund Sukuk Murabahah Lease liabilities Financial Year Ended 31 December 31 December 2019 2018 RM’000 RM’000 407,773 397,288 1,641,031 1,556,913 23,756 14,681 219 446,429 20,334 17,483 435,105 86,650 59,206 810 1,787,697 79,429 56,679 1,693,021 A20. Personnel expenses 4th Quarter Ended 31 December 31 December 2019 2018 RM’000 RM’000 Salaries, allowances and bonuses Pension costs Others 4,165 653 1,009 5,827 25 3,562 1,068 704 5,334 Financial Year Ended 31 December 31 December 2019 2018 RM’000 RM’000 15,523 2,495 3,225 21,243 14,284 2,717 2,247 19,248
  26. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) A21. Other Overheads and Expenditures 4th Quarter Ended 31 December 31 December 2019 2018 RM’000 RM’000 Establishment costs - Depreciation - Rental - Insurance - Water and electricity - General repairs and maintenance - Others Marketing expenses - Advertisement and publicity - Others Administration and general expenses - Communication expenses - Legal and professional fees - Others Cost of resource sharing charged by Public Bank Berhad * Recovery of expenses Financial Year Ended 31 December 31 December 2019 2018 RM’000 RM’000 443 358 46 243 673 1,763 89 434 205 40 89 228 1,085 1,754 854 190 977 1,872 5,647 365 1,707 710 168 392 773 4,115 318 285 603 209 3,851 4,060 1,694 1,220 2,914 1,950 12,211 14,161 667 1,712 4,604 6,983 830 1,218 3,963 6,011 3,635 6,088 18,530 28,253 3,336 6,472 20,509 30,317 109,343 95,287 416,753 375,994 (3,375) (11,591) (11,607) 441,976 412,980 (3,853) 114,839 103,068 * The type of resource sharing rendered by Public Bank Berhad to the Bank in Malaysia are as follows: 4th Quarter Ended 31 December 31 December 2019 2018 RM’000 RM’000 Credit related Non-credit branch support Other administration function 26 Financial Year Ended 31 December 31 December 2019 2018 RM’000 RM’000 57,800 31,839 19,704 51,038 28,080 16,169 216,926 127,181 72,646 203,480 107,534 64,980 109,343 95,287 416,753 375,994
  27. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) A22. Earnings Per Share (EPS) a) Basic EPS The calculation of the basic earnings per share is based on the net profit attributable to the equity holder of the Bank divided by the weighted average number of ordinary shares in issue during the 4th quarter and financial year ended 31 December 2019. 4th Quarter Ended 31 December 31 December 2019 2018 RM’000 RM’000 Net profit attributable to equity holder of the Bank (RM’000) 124,595 130,865 492,154 473,997 Weighted average number of shares (’000) 231,217 231,217 231,217 231,217 53.9 56.6 212.9 205.0 Basic EPS (sen) b) Financial Year Ended 31 December 31 December 2019 2018 RM’000 RM’000 Diluted EPS The Bank has no dilution in its earnings per share in the current and the preceding financial year as there are no dilutive potential ordinary shares. A23. Performance Review The Bank reported a higher pre-tax profit of RM642.3 million for the financial year ended 31 December 2019, which was 3.8% or RM23.7 million higher as compared to pre-tax profit of RM618.6 million for the financial year ended 31 December 2018. The higher profit was primarily due to higher other operating income of RM52.5 million, higher net finance income of RM11.5 million and lower allowance for impairment on other assets of RM0.3 million offset by higher other operating expenses of RM31.0 million and higher allowance for impairment on financing and advances of RM9.6 million. A24. Prospects for 2020 The global economic outlook remains uncertain with risks skewed to the downside. Heightened trade tension, policy uncertainties as well as the impact from the Covid-19 outbreak are drags to business confidence, investment decisions and global trades. However, global monetary conditions are expected to remain accommodative in support of growth. Among advanced economies, the United States of America's economy is expected to grow moderately in 2020 supported by stable labour market and accommodative financial conditions. The economy in euro area is expected to be backed by wage growth and accommodative monetary policy, but with Brexit as a main hurdle within the region. In Japan, fiscal stimulus is expected to mitigate the anticipated decline in private consumption following sales tax increase in October 2019 while spending and investments associated with the 2020 Olympics will support economic growth. Asia is projected to grow at a moderated rate in 2020 amid slower growth in China and ongoing trade tensions. 27
  28. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) A24. Prospects for 2020 (continued) The Malaysian economy is expected to be supported by the private sector in 2020. Household spending will be supportive of growth, underpinned by stable employment conditions. However, downside risks to the economy is expected to emanate from protracted trade tensions, uncertainties in the global economic and financial conditions, weakness in commodity-related sectors and the prolonged impact from the Covid-19 outbreak. Notwithstanding the challenging macro environment, Malaysia’s banking system remains orderly, underpinned by ample liquidity and strong capital buffers. Monetary and financial conditions remain accommodative and supportive of economic growth. The Overnight Policy Rate was reduced by 25 basis points to 2.75% in January 2020. Malaysia's inflation is expected to remain modest in 2020, in the absence of strong demand pressures. The Bank will continue to leverage on its strength to further grow its business and sustain its market position in key retail segments. The Bank remains focused in its pursuit of operational efficiency and prudent credit risk management while upholding strong corporate governance and sound risk management practices. The Bank is expected to sustain its market position in residential property financing and vehicle hire purchase financing by leveraging on its established market presence. In tandem with the Government’s initiatives, the Bank will continue to drive market expansion through sales and marketing efforts to promote affordable housing backed by competitive pricing and flexible financing product packages. Despite the challenging business environment, the small and medium enterprises (“SME”) sector is expected to remain resilient with strong fundamentals and various expansionary measures proposed in the Budget 2020 announcement. The Bank will continue to expand its SME financing portfolio by seizing growth opportunities with innovative products and services offered by the Bank. The Bank will continue to expand its corporate financing business and to further strengthen its relationships with existing customers. In the face of heightened market uncertainties, the Bank's treasury operations will remain vigilant in its business approach and continue to maintain a prudent risk profile while further strengthening its risk management capabilities to weather any potential market stress. The Bank will continue to work closely with AIA PUBLIC Takaful Bhd to offer products that are competitive. The Bank will also continue to conduct sales activities and increase cross-selling initiatives while launching more attractive incentive campaigns to meet customers’ needs. For long-term sustainability, the Bank will continue to improve its service delivery standards and infrastructure while leveraging on the advancement of technology to provide seamless banking experience across its multidelivery channels and touchpoints. A25. Subsequent Events There were no material events subsequent to the end of the reporting year that require disclosure or adjustments to the audited condensed interim financial statements. 28
  29. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) A26. Segment Information 4th Quarter Ended 31 December 2019 <----------------------------- Operating Segments ----------------------------> Treasury and Capital Corporate Market Head Hire Retail Purchase Operations Banking Operations Office RM’000 RM’000 RM’000 RM’000 RM’000 Intersegment Elimination RM’000 External revenue Revenue from other segments Total revenue 108,168 326 108,494 438,832 118,980 557,812 51,582 251 51,833 56,109 5,728 61,837 82,528 1,806 84,334 Net finance income Other operating income Net income Other operating expenses Writeback of allowance / (Allowance) for impairment on financing and advances Writeback of allowance / (Allowance) for impairment on other assets Profit / (Loss) before zakat and taxation 25,723 572 26,295 (14,823) 190,879 12,292 203,171 (81,877) 9,874 1,746 11,620 (895) (3,680) 3,182 (498) (1,296) 44,448 5,771 50,219 (21,775) 7,173 (12,928) (529) 18,645 2 108,368 29 10,196 27 (1,767) (108) 28,336 (127,091) (127,091) Total RM’000 737,219 737,219 - 267,244 23,563 290,807 (120,666) - (6,284) - (79) 163,778
  30. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) A26. Segment Information (continued) 4th Quarter Ended 31 December 2018 <----------------------------- Operating Segments ----------------------------> Treasury and Capital Hire Retail Corporate Market Head Purchase Operations Banking Operations Office RM’000 RM’000 RM’000 RM’000 RM’000 External revenue Revenue from other segments Total revenue 129,271 360 129,631 418,453 109,011 527,464 Net finance income Other operating income Net income Other operating expenses (Allowance) / Writeback of allowance for impairment on financing and advances Allowance for impairment on other assets Profit before zakat and taxation 30,690 609 31,299 (15,548) 169,534 14,206 183,740 (73,613) (2,427) 13,324 (11,617) 98,510 30 39,958 417 40,375 7,435 41 7,476 (584) 16,459 23,351 58,769 24,412 83,181 65,739 19,468 85,207 Intersegment Elimination RM’000 (153,668) (153,668) Total RM’000 712,190 712,190 7,401 295 7,696 (878) 39,998 6,876 46,874 (17,779) - 255,058 22,027 277,085 (108,402) (104) 6,714 (3) 29,092 - 2,415 (107) 170,991
  31. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) A26. Segment Information (continued) Financial Year Ended 31 December 2019 <----------------------------- Operating Segments ----------------------------> Treasury and Capital Hire Retail Corporate Market Head Purchase Operations Banking Operations Office RM’000 RM’000 RM’000 RM’000 RM’000 External revenue Revenue from other segments Total revenue 458,898 741 459,639 Net finance income Other operating income Net income Other operating expenses Allowance for impairment on financing and advances Writeback of allowance / (Allowance) for impairment on other assets Profit before zakat and taxation 109,799 2,489 112,288 (58,783) (1,346) 700,068 51,665 751,733 (317,784) (39,217) 52,159 2 394,734 Cost income ratio Gross financing and advances Financing growth Impaired financing and advances Impaired financing ratio Deposits from customers Deposit growth Segment assets Reconciliation of segment assets to total assets: Investment in an associated company Unallocated assets Total assets 52.4% 8,310,499 -14.0% 72,773 0.9% 8,241,805 1,709,065 473,266 2,182,331 42.3% 36,599,670 12.3% 202,277 0.6% 52,908,849 14.9% 53,682,464 192,071 723 192,794 Intersegment Elimination RM’000 260,055 31,587 291,642 314,430 38,278 352,708 36,864 1,750 38,614 (1,657) (1,193) (11,855) 39,169 27,314 (4,498) - 176,925 40,621 217,546 (80,497) - - 1,011,801 135,694 1,147,495 (463,219) (41,756) 35,764 141 22,957 (375) 136,674 - (232) 642,288 4.3% 5,123,970 38.5% 11,722 -85.9% 5,106,898 16.5% 6,453,440 -14.1% 8,833,856 37.0% 8,978,280 (544,595) (544,595) Total RM’000 (16,012,879) 2,934,519 2,934,519 40.4% 50,034,139 8.9% 275,050 0.5% 59,374,011 10.7% 68,830,424 45,000 2,538 68,877,962 31
  32. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) A26. Segment Information (continued) Financial Year Ended 31 December 2018 <----------------------------- Operating Segments ----------------------------> Treasury and Capital Hire Retail Corporate Market Head Purchase Operations Banking Operations Office RM’000 RM’000 RM’000 RM’000 RM’000 External revenue Revenue from other segments Total revenue 548,952 930 549,882 Net finance income Other operating income Net income Other operating expenses (Allowance) / Writeback of allowance for impairment on financing and advances Writeback of allowance / (Allowance) for impairment on other assets Profit before zakat and taxation 138,622 2,481 141,103 (63,290) 638,030 53,912 691,942 (284,883) 28,412 1,878 30,290 (1,778) (27,279) (18,955) 13,978 50,534 49 388,153 42,490 Cost income ratio Gross financing and advances Financing growth Impaired financing and advances Impaired financing ratio Deposits from customers Deposit growth Segment assets Reconciliation of segment assets to total assets: Investment in an associated company Unallocated assets Total assets 44.9% 9,662,667 -11.2% 95,067 1.0% 9,574,274 1,579,555 467,491 2,047,046 41.2% 32,580,836 16.4% 182,664 0.6% 46,045,834 6.4% 46,866,882 156,300 989 157,289 5.9% 3,700,264 18.0% 83,102 55.5% 3,687,172 245,554 71,495 317,049 39,470 4,925 44,395 (3,255) - Intersegment Elimination RM’000 246,191 62,147 308,338 155,721 20,083 175,804 (79,022) - (298) 40,842 (212) 96,570 7.3% 7,510,639 22.0% 9,430,276 44.9% 6,718,819 (603,052) (603,052) Total RM’000 2,776,552 2,776,552 - 1,000,255 83,279 1,083,534 (432,228) - (32,256) - (461) 618,589 (14,152,883) 39.9% 45,943,767 9.4% 277,731 0.6% 53,639,575 8.4% 62,124,540 45,000 4,372 62,173,912 32
  33. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) A27. Capital Adequacy (a) The capital adequacy ratios of the Bank below are disclosed pursuant to the requirements of BNM's Capital Adequacy Framework for Islamic Banks (CAFIB-Basel II) - Disclosure Requirements (Pillar 3): 31 December 2019 31 December 2018 Before deducting interim dividend * Common Equity Tier I ("CET I") capital ratio Tier I capital ratio Total capital ratio 12.362% 12.362% 16.192% 12.087% 12.087% 16.116% After deducting interim dividend * CET I capital ratio Tier I capital ratio Total capital ratio 12.362% 12.362% 16.192% 11.955% 11.955% 15.984% * Refer to interim dividend declared subsequent to the financial year end. 31 December 2019 RM’000 31 December 2018 RM’000 Components of CET I, Tier I and Tier II capital: CET I capital / Tier I capital Share capital Other reserves Retained profits Less: Deferred tax assets, net Less: Defined benefit pension fund assets Less: Investment in an associated company deducted from CET I capital Total CET I capital / Tier I capital 2,732,717 41,234 1,944,889 (413) (45,000) 4,673,427 2,732,717 9,495 1,554,562 (2,637) (2,788) (45,000) 4,246,349 Tier II capital Stage 1 and Stage 2 expected credit loss allowances Qualifying regulatory reserves Subordinated Sukuk Murabahah Total Tier II capital 228,011 219,862 1,000,000 1,447,873 229,312 186,378 999,887 1,415,577 Total capital 6,121,300 5,661,926 33
  34. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) A27. Capital Adequacy (continued) (a) The capital adequacy ratios of the Bank (continued): The total risk-weighted assets of the Bank are computed based on the following approaches: (i) Standardised Approach for Credit Risk; (ii) Standardised Approach for Market Risk; and (iii) Basic Indicator Approach for Operational Risk. The capital adequacy ratios of the Bank are computed in accordance with BNM's Capital Adequacy Frameworks for Islamic Banks on Capital Components and Risk-Weighted Assets. The minimum regulatory capital adequacy ratios before including capital conservation buffer and countercyclical capital buffer ("CCyB") for CET I capital ratio, Tier I capital ratio and total capital ratio are 4.5%, 6.0% and 8.0% respectively. Banking institutions are also required to maintain a capital conservation buffer of 2.5% and a CCyB above the minimum regulatory capital adequacy ratios. A CCyB is required to be maintained if this buffer is applied by regulators in countries which the Bank has exposures to, determined based on the weighted average of prevailing CCyB rates applied in those jurisdictions. The Bank has applied CCyB on its private sector credit exposures outside Malaysia in line with the respective jurisdictions' requirement to maintain their CCyB. Where the prevailing CCyB rate applied in jurisdiction outside Malaysia is more than 2.5%, the CCyB rate for that jurisdiction is capped at 2.5% for the purpose of calculating the Bank's CCyB, unless specified otherwise by BNM. The Bank's CCyB which are determined based on the weighted average of prevailing CCyB rates of its private sector credit exposures outside Malaysia are insignificant due to its immaterial exposures. The CCyB is not a requirement for exposures in Malaysia yet but may be applied by regulators in the future. (b) The breakdown of risk-weighted assets by each major risk category of the Bank is as follows: Credit risk Market risk Operational risk 34 31 December 2019 RM’000 31 December 2018 RM’000 35,829,825 7,951 1,966,233 33,255,195 10,374 1,866,679 37,804,009 35,132,248
  35. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) A28. Commitments and Contingencies The notional amount of the commitments and contingencies of the Bank are as follows: 31 December 2019 RM’000 31 December 2018 RM’000 25,473 69,023 2,876 97,372 25,202 59,691 1,220 86,113 5,183,440 2,098,784 138,127 21,247 7,441,598 4,863,537 1,797,778 126,922 6,788,237 2 394 130,000 500,000 2,000,000 2,630,002 900,000 630,000 2,000,000 3,530,394 10,168,972 10,404,744 Contingent Liabilities Direct credit substitutes Transaction-related contingent items Short term self-liquidating trade-related contingencies Commitments Other commitments, such as formal standby facilities and credit lines, with an original maturity of: - exceeding one year - not exceeding one year Unutilised credit card lines Forward asset purchases Derivative Financial Instruments Foreign exchange related contracts: - up to one year Profit rate related contracts: - up to one year - more than one year to five years - more than five years A29. Credit Exposures Arising From Credit Transactions With Connected Parties Outstanding credit exposures with connected parties (RM’000) 31 December 2019 31 December 2018 209,552 485,988 Percentage of outstanding credit exposures with connected parties as proportion of total credit exposures 0.39% 0.98% Percentage of outstanding credit exposures with connected parties which is impaired or in default 0.06% 0.00% 35
  36. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) A30. Fair Value Measurements Determination of Fair Value and Fair Value Hierarchy For financial instruments measured at fair value, where available, quoted and observable market prices in an active market or dealer price quotations are used to measure fair value. These include listed equity securities, price quotations from Bond Pricing Agency Malaysia and broker quotes on Bloomberg/Reuters. Where such quoted and observable market prices are not available, fair values are determined using appropriate valuation techniques, which include the use of mathematical models, such as discounted cash flow models and option pricing models, comparison to similar instruments for which market observable prices exist and other valuation techniques. The valuation techniques used incorporate assumptions regarding discount rates, profit rate yield curves, estimates of future cash flows and other factors, as applicable. Changes in these assumptions could materially affect the fair values derived. The Bank generally uses widely recognised valuation techniques with market observable inputs, if available, for the determination of fair value, which require minimal management judgment and estimation, due to the low complexity of the financial instruments held. The Bank classifies its financial instruments which are measured at fair value according to the following hierarchy, reflecting the significance of inputs used in making the fair value measurements: Level 1 - Quoted market prices: quoted prices (unadjusted) in active markets for identical instruments; Level 2 - Fair values based on observable inputs: inputs other than quoted prices included within Level 1 that are observable for the instrument, whether directly (i.e. prices) or indirectly (i.e. derived from prices), are used; and Level 3 - Fair values derived using unobservable inputs: inputs used are not based on observable market data and the unobservable inputs may have a significant impact on the valuation of the financial instruments. 36
  37. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) A30. Fair Value Measurements (continued) Determination of Fair Value and Fair Value Hierarchy (continued) The following tables show the Bank's financial instruments which are measured at fair value at the reporting date analysed by the various levels within the fair value hierarchy: 31 December 2019 Level 1 RM’000 Level 2 RM’000 Level 3 RM’000 Total RM’000 Financial assets Financial assets at fair value through profit or loss - Money market instruments - 249,541 - 249,541 Financial investments at fair value through other comprehensive income - Government securities and treasury bills - 9,528,034 - 9,528,034 Derivative financial assets - - - - Total financial assets measured at fair value - 9,777,575 - 9,777,575 Financial liabilities Derivative financial liabilities - 90,130 - 90,130 Total financial liabilities measured at fair value - 90,130 - 90,130 37
  38. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) A30. Fair Value Measurements (continued) Determination of Fair Value and Fair Value Hierarchy (continued) The following tables show the Bank's financial instruments which are measured at fair value at the reporting date analysed by the various levels within the fair value hierarchy (continued): 31 December 2018 Level 1 RM’000 Level 2 RM’000 Level 3 RM’000 Total RM’000 Financial assets Financial assets at fair value through profit or loss - Government securities and treasury bills - 30,310 - 30,310 Financial investments at fair value through other comprehensive income - Government securities and treasury bills - 8,654,277 - 8,654,277 Derivative financial assets - 3,946 - 3,946 Total financial assets measured at fair value - 8,688,533 - 8,688,533 Financial liabilities Derivative financial liabilities - 23,601 - 23,601 Total financial liabilities measured at fair value - 23,601 - 23,601 There were no transfers between Level 1 and Level 2 of the fair value hierarchy during the financial year (2018 : None). 38
  39. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) A31. Changes in Accounting Policies (a) Effects of adoption of MFRS 16 Leases MFRS 16 ‘Leases’ supersedes MFRS 117 ‘Leases’ and its 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 introduces a single accounting model for a lessee and eliminates the classification of leases by the lessee as either finance leases (on-balance sheet) or operating leases (off-balance sheet). The Bank has adopted the requirements of MFRS 16 Leases on 1 January 2019 using the modified retrospective approach, with the cumulative effect of adopting MFRS 16 being recognised in equity as an adjustment to the opening balance of retained profits for the current year. Prior periods have not been restated. (i) Definition of a Lease On adoption of MFRS 16, the Bank has elected not to reassess whether a contract is, or contains lease at the date of initial application. Instead, for contracts entered into before the transition date, the Bank relied on the previous assessment made in accordance with MFRS 117 and IC Interpretation 4 Determining Whether an Arrangement contains a Lease. Therefore, the definition of a lease under MFRS 16 was applied only to contracts entered into or changed on or after 1 January 2019. (ii) As a Lessee As a lessee, the Bank previously classified leases as operating or finance leases based on its assessment of whether the lease transferred significantly all of the risks and rewards incidental to ownership of the underlying asset to the Bank. Under MFRS 16, the Bank recognises right-of-use assets and lease liabilities for most leases. Leases previously classified as operating leases under MFRS 117 At transition, lease liabilities were measured at the present value of the remaining lease payments, discounted using the Bank's incremental borrowing rate as of 1 January 2019. The carrying value of the lease liability also includes the extension options granted in favour of the Bank if it is reasonably certain the option will be exercised. Right-of-use assets were measured at their carrying amount as if MFRS 16 had been applied since the lease commencement date, discounted using the Bank's incremental borrowing rate at the date of initial application and include an estimate of costs to dismantle and remove the asset or to restore the asset or the site on which it is located at the end of the lease. 39
  40. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) A31. Changes in Accounting Policies (continued) (a) Effects of adoption of MFRS 16 Leases (continued) (ii) As a Lessee (continued) Leases previously classified as operating leases under MFRS 117 (continued) The Bank elected the following transition practical expedients on a lease-by-lease basis for measurement purposes upon the first-time application of the standard: - Relied on previous impairment assessments on whether leases are onerous as an alternative to performing an impairment review - there were no onerous contracts as at 1 January 2019; - Elected not to recognise the associated right-of-use assets and lease liabilities for lease contracts with remaining lease term not exceeding twelve (12) months at the date of initial application; - Excluded initial direct costs from the measurement of the right-of-use assets at the date of initial application; and - Used hindsight in determining the lease term where the contract contains options to extend or terminate the lease. 40
  41. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) A31. Changes in Accounting Policies (continued) (a) Effects of adoption of MFRS 16 Leases (continued) (iii) Financial Effects The weighted average of incremental borrowing rate applied to the lease liabilities on 1 January 2019 was 4.31%. The following table presents the reconciliation of lease liabilities as of 1 January 2019: RM'000 Future minimum lease payments as at 31 December 2018 - under cancellable operating leases Extension and termination options reasonably certain to be exercised Effect of discounting using incremental borrowing rate Lease liabilities recognised as at 1 January 2019 1,172 1,172 21,199 (5,120) 17,251 The recognised right-of-use assets relate to the following type of assets: RM'000 Land and buildings 16,555 (b) Effects of change in management remuneration policy During the current financial year, the Bank revised its remuneration policy in which a new assessment process was established to align with revised internal remuneration policy to determine variable pay compensation for employees of the Bank. The effects of the realignment of variable pay compensation have been adjusted to the opening retained profits as at 1 January 2019. The financial effects of the realignment of variable pay compensation are presented in Note A31(c). 41
  42. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) A31. Changes in Accounting Policies (continued) (c) Financial effects due to changes in accounting policies The following table analyses the impact, net of tax arising from changes in accounting policies on the statement of financial position of the Bank as at 1 January 2019: RM’000 Deferred tax assets Closing balance at 31 December 2018 - Recognition of deferred tax under MFRS 16 - Recognition of deferred tax arising from change in management remuneration policy Opening balance at 1 January 2019 2,637 322 661 3,620 Right-of-use assets Closing balance at 31 December 2018 - Recognition of right-of-use assets under MFRS 16 Opening balance at 1 January 2019 16,555 16,555 Lease liabilities Closing balance at 31 December 2018 - Recognition of lease liabilities under MFRS 16 Opening balance at 1 January 2019 17,251 17,251 Other liabilities Closing balance at 31 December 2018 - Recognition of accrued restoration costs under MFRS 16 - Recognition of provision arising from change in management remuneration policy Opening balance at 1 January 2019 Provision for zakat and taxation Closing balance at 31 December 2018 - Recognition of tax expense arising from change in management remuneration policy Opening balance at 1 January 2019 Retained profits Closing balance at 31 December 2018 - Recognition of right-of-use assets under MFRS 16 - Recognition of lease liabilities under MFRS 16 - Recognition of accrued restoration costs under MFRS 16 - Arising from change in management remuneration policy - Recognition of deferred tax expense under MFRS 16 - Recognition of deferred tax expense and tax expense arising from change in management remuneration policy Opening balance at 1 January 2019 451,580 648 5,810 458,038 11,299 (733) 10,566 1,554,562 16,555 (17,251) (648) (5,810) 322 1,394 1,549,124 The financial effects due to the changes in accounting policies have been adjusted to the statement of financial position and capital adequacy ratios of the Bank as at 1 January 2019. There are no changes to the comparatives in the statement of profit or loss and statement of cash flows of the Bank. A reconciliation of these changes is summarised in the following tables. 42
  43. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) A31. Changes in Accounting Policies (continued) (c) Financial effects due to changes in accounting policies (continued) 31 December 2018 RM’000 Statement of Financial Position ASSETS Cash and balances with banks Financial assets at fair value through profit or loss Derivative financial assets Financial investments at fair value through other comprehensive income Financial investments at amortised cost Financing and advances Other assets Statutory deposits with Bank Negara Malaysia Deferred tax assets Collective investment Investment in an associated company Right-of-use assets Property and equipment TOTAL ASSETS LIABILITIES Deposits from customers Deposits from banks Bills and acceptances payable Derivative financial liabilities Senior Sukuk Murabahah Subordinated Sukuk Murabahah Lease liabilities Other liabilities Provision for zakat and taxation TOTAL LIABILITIES 53,639,575 1,982,936 204 23,601 519,775 999,887 451,580 11,299 57,628,857 EQUITY Share capital Regulatory reserves Other reserves Retained profits TOTAL EQUITY 2,127,231 30,310 3,946 30,310 3,946 8,654,277 3,186,041 45,629,999 69,628 1,891,250 2,637 530,514 45,000 3,079 62,173,912 17,538 8,654,277 3,186,041 45,629,999 69,628 1,891,250 3,620 530,514 45,000 16,555 3,079 62,191,450 17,251 6,458 (733) 22,976 53,639,575 1,982,936 204 23,601 519,775 999,887 17,251 458,038 10,566 57,651,833 62,173,912 Net assets per share attributable to ordinary equity holder of the Bank (RM) 19.66 43 1 January 2019 RM’000 2,127,231 2,732,717 259,285 (1,509) 1,554,562 4,545,055 TOTAL LIABILITIES AND EQUITY Remeasurement RM’000 983 16,555 (5,438) (5,438) 17,538 2,732,717 259,285 (1,509) 1,549,124 4,539,617 62,191,450 19.63
  44. PUBLIC ISLAMIC BANK BERHAD Company Registration No .: 197301001433 (14328-V) (Incorporated in Malaysia) A31. Changes in Accounting Policies (continued) (c) Financial effects due to changes in accounting policies (continued) Based on the Capital Adequacy Frameworks issued by BNM, the “right-of-use assets” were accorded a risk weight of 100% for the computation of risk-weighted assets. 31 December 2018 RM’000 Capital adequacy CET I capital Tier I capital Total capital Risk-weighted assets Effects of Changes in Accounting Policies RM'000 1 January 2019 RM’000 4,246,349 4,246,349 5,661,926 (6,421) (6,421) (6,214) 4,239,928 4,239,928 5,655,712 35,132,248 16,555 35,148,803 Before deducting interim dividend * CET I capital ratio (%) Tier I capital ratio (%) Total capital ratio (%) 12.087% 12.087% 16.116% -0.024% -0.024% -0.025% 12.063% 12.063% 16.091% After deducting interim dividend * CET I capital ratio (%) Tier I capital ratio (%) Total capital ratio (%) 11.955% 11.955% 15.984% -0.024% -0.024% -0.025% 11.931% 11.931% 15.959% * Refer to interim dividend declared subsequent to the financial year end. 44