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RHB Bank Berhad: Interim Financial Statements - 31 December 2021

IM Insights
By IM Insights
2 years ago
RHB Bank Berhad: Interim Financial Statements - 31 December 2021Islamic banking, Murabahah, Sukuk, Wakalah, Zakat, Credit Risk, Net Assets, Provision, Receivables, Reserves, Restricted Investment Account, Sales, Unrestricted Investment Account

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  1. RHB BANK BERHAD Registration No . 196501000373 (6171-M) INTERIM FINANCIAL STATEMENTS AUDITED INCOME STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 Note 4th Quarter Ended 31 December 31 December 2021 2020 RM'000 RM'000 Twelve Months Ended 31 December 31 December 2021 2020 RM'000 RM'000 Group Interest income Interest expense Net interest income Other operating income Income from Islamic Banking business Net modification loss Net income Other operating expenses Operating profit before allowances Allowance for credit losses on financial assets Impairment losses made on other non-financial assets Profit before taxation and zakat Taxation and zakat Profit from continuing operations Profit from discontinued operation attributable to equity holders Net profit for the financial period/year A8 A9 1,603,285 (572,652) 1,030,633 389,040 535,173 (35,554) 1,919,292 (910,439) 1,008,853 (86,296) 922,557 (291,296) 631,261 1,702,074 (627,752) 1,074,322 550,965 468,349 (25,619) 2,068,017 (889,385) 1,178,632 (604,425) 574,207 (134,866) 439,341 6,328,493 (2,266,464) 4,062,029 1,876,441 2,095,091 (244,895) 7,788,666 (3,522,385) 4,266,281 (737,214) (314) 3,528,753 (905,621) 2,623,132 6,987,381 (3,225,973) 3,761,408 2,176,656 1,665,652 (418,004) 7,185,712 (3,386,723) 3,798,989 (1,145,086) (9,500) 2,644,403 (639,912) 2,004,491 631,261 439,341 2,623,132 34,661 2,039,152 631,165 96 631,261 438,631 710 439,341 2,618,388 4,744 2,623,132 2,032,530 6,622 2,039,152 B12 B12 15.3 15.3 10.9 10.9 64.7 64.7 49.8 49.8 B12 B12 15.3 15.3 10.9 10.9 64.7 64.7 50.7 50.7 A10 A32(b) A11 A12 A13 B5 Attributable to: - Equity holders of the Bank - Non-controlling interests Earnings per share (sen): - Profit from continuing operations attributable to equity holders of the Bank - Basic - Diluted - Profit attributable to equity holders of the Bank - Basic - Diluted This Interim Financial Statements should be read in conjunction with the Audited Financial Statements of the Group and the Bank for the financial year ended 31 December 2020. 1
  2. RHB BANK BERHAD Registration No . 196501000373 (6171-M) INTERIM FINANCIAL STATEMENTS AUDITED STATEMENTS OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 Note 4th Quarter Ended 31 December 31 December 2021 2020 RM'000 RM'000 Twelve Months Ended 31 December 31 December 2021 2020 RM'000 RM'000 Group Net profit for the financial period/year 631,261 Other comprehensive income/(loss) in respect of: (i) Items that will not be reclassified to profit or loss: (a) Actuarial gain/(loss) on defined benefit plan of subsidiaries (b) Equity instruments designated at fair value through other comprehensive income ('FVOCI') - Unrealised net gain/(loss) on revaluation (ii) Items that will be reclassified subsequently to profit or loss: (a) Foreign currency translation reserves - Currency translation differences (b) Realisation of foreign exchange reserve and net investment hedge from discontinued operation (c) Debt instruments measured at FVOCI - Unrealised net (loss)/gain on revaluation - Net transfer to income statements on disposal - Changes in expected credit losses and exchange differences Income tax relating to components of other comprehensive loss/(income) (1,125) Total comprehensive income attributable to: - Equity holders of the Bank - Non-controlling interests Total comprehensive income/(loss) attributable to equity holders of the Bank from: - Continuing operations - Discontinued operation 2,623,132 2,039,152 1,651 751 3,274 (169) (1,077) 31,074 59,314 (15,834) (82,539) 47,675 (95,268) - (75,603) - Other comprehensive (loss)/income, net of tax, for the financial period/year Total comprehensive income for the financial period/year 439,341 - (258,008) (10,825) (238,117) (55,537) (1,452,925) (419,799) 1,025,119 (401,665) (8,468) (3,529) (890) (6,401) 64,512 70,484 (229,917) 401,344 (308,664) 130,677 (1,345,371) 1,277,761 358,741 2,397,893 401,265 79 401,344 129,904 773 130,677 1,273,007 4,754 1,277,761 2,391,304 6,589 2,397,893 401,265 401,265 129,904 129,904 1,273,007 1,273,007 2,432,246 (40,942) 2,391,304 448,743 (150,029) This Interim Financial Statements should be read in conjunction with the Audited Financial Statements of the Group and the Bank for the financial year ended 31 December 2020. 2
  3. RHB BANK BERHAD Registration No . 196501000373 (6171-M) INTERIM FINANCIAL STATEMENTS AUDITED INCOME STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 Note 4th Quarter Ended 31 December 31 December 2021 2020 RM'000 RM'000 Twelve Months Ended 31 December 31 December 2021 2020 RM'000 RM'000 Bank Interest income Interest expense Net interest income Other operating income Income from Islamic Banking business Net modification loss Net income Other operating expenses Operating profit before allowances Allowance for credit losses on financial assets Impairment losses made on other non-financial assets Profit before taxation Taxation Net profit for the financial period/year A8 A9 A10 A32(b) A11 A12 A13 B5 1,584,635 (552,789) 1,031,846 209,646 1,367 (11,122) 1,231,737 (676,736) 555,001 (58,048) 496,953 (107,598) 389,355 1,689,973 (612,464) 1,077,509 450,056 1,803 826 1,530,194 (630,011) 900,183 (513,809) 386,374 (53,503) 332,871 6,242,587 (2,193,936) 4,048,651 1,179,730 5,450 (126,374) 5,107,457 (2,451,164) 2,656,293 (110,125) 2,546,168 (563,780) 1,982,388 6,930,514 (3,143,823) 3,786,691 1,750,090 4,272 (158,771) 5,382,282 (2,290,393) 3,091,889 (806,291) (52,500) 2,233,098 (433,493) 1,799,605 This Interim Financial Statements should be read in conjunction with the Audited Financial Statements of the Group and the Bank for the financial year ended 31 December 2020. 3
  4. RHB BANK BERHAD Registration No . 196501000373 (6171-M) INTERIM FINANCIAL STATEMENTS AUDITED STATEMENTS OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 4th Quarter Ended 31 December 31 December 2021 2020 RM'000 RM'000 Twelve Months Ended 31 December 31 December 2021 2020 RM'000 RM'000 Bank Net profit for the financial period/year 389,355 Other comprehensive income/(loss) in respect of: (i) Items that will not be reclassified to profit or loss: (a) Equity instruments designated at fair value through other comprehensive income ('FVOCI') - Unrealised net gain/(loss) on revaluation (ii) Items that will be reclassified subsequently to profit or loss: (a) Foreign currency translation reserves - Currency translation differences (b) Debt instruments measured at FVOCI - Unrealised net (loss)/gain on revaluation - Net transfer to income statements on disposal - Changes in expected credit losses and exchange differences Income tax relating to components of other comprehensive (loss)/income (160) 4,989 Other comprehensive (loss)/income, net of tax, for the financial period/year Total comprehensive income for the financial period/year 332,871 1,982,388 1,799,605 (1,324) 29,642 57,269 (12,805) 3,396 (25,082) (213,419) (10,695) (185,588) (50,762) (1,197,601) (327,955) 835,906 (361,720) (8,730) (3,359) (1,226) (6,008) 53,787 56,724 (174,228) 215,127 (197,114) 135,757 366,133 (1,127,611) 854,777 (113,805) 386,560 2,186,165 This Interim Financial Statements should be read in conjunction with the Audited Financial Statements of the Group and the Bank for the financial year ended 31 December 2020. 4
  5. RHB BANK BERHAD Registration No . 196501000373 (6171-M) INTERIM FINANCIAL STATEMENTS AUDITED STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2021 Group As at As at 31 December 31 December 2021 2020 RM'000 RM'000 Note ASSETS Cash and short-term funds Deposits and placements with banks and other financial institutions Investment account due from designated financial institutions Financial assets at fair value through profit or loss ('FVTPL') Financial assets at fair value through other comprehensive income ('FVOCI') Financial investments at amortised cost Loans, advances and financing Clients' and brokers' balances Reinsurance assets Other assets Derivative assets Statutory deposits Tax recoverable Deferred tax assets Investments in subsidiaries Investments in associates and joint venture Right of use assets Property, plant and equipment Goodwill Intangible assets TOTAL ASSETS LIABILITIES Deposits from customers Deposits and placements of banks and other financial institutions Obligations on securities sold under repurchase agreements Investment accounts Bills and acceptances payable Clients' and brokers' balances General insurance contract liabilities Other liabilities Derivative liabilities Recourse obligation on loans sold to Cagamas Berhad ('Cagamas') Provision for taxation and zakat Deferred tax liabilities Lease liabilities Borrowings Senior debt securities Subordinated obligations TOTAL LIABILITIES Bank As at As at 31 December 31 December 2021 2020 RM'000 RM'000 19,831,323 8,904,285 10,409,623 7,905,636 3,486,773 6,069,443 7,886,688 9,447,903 A14 - - 10,213,639 8,840,858 A15 2,778,239 4,462,106 840,410 2,285,301 A16 A17 A18 41,140,873 17,961,511 194,896,614 879,595 435,342 1,728,260 718,615 635,012 131,283 377,825 12 174,482 1,016,824 2,654,122 694,753 289,541,458 42,903,259 16,005,267 182,424,879 1,339,568 467,504 1,528,592 1,653,479 612,671 289,969 35,338 12 149,898 1,013,255 2,654,122 636,311 271,149,958 34,955,501 11,009,290 115,045,103 1,842,709 798,836 356,687 61,942 234,795 4,648,681 91,368 762,684 1,714,913 603,134 201,476,003 35,869,640 10,195,993 109,515,184 1,278,048 1,790,567 228,107 251,917 4,901,397 76,166 766,626 1,714,913 565,485 195,633,741 A20/B7(a) 218,732,585 203,470,783 137,552,576 134,310,974 A21/B7(a) 23,406,827 21,035,186 25,669,599 24,610,611 2,066,068 581,291 210,119 948,511 1,068,687 4,046,582 887,926 972,963 187,020 1,171,930 1,086,385 3,822,314 2,034,795 4,867,026 201,832 2,387,373 938,061 4,740,494 174,838 2,287,372 1,979,142 2,259,895 124,163 55 182,607 127,380 3,646,369 3,221,882 261,510,947 3,023,760 69,623 165,938 154,188 634,630 3,545,150 2,718,729 244,093,394 1,506,310 92,935 3,646,369 2,265,134 179,127,215 152,111 77,356 201,101 3,545,150 1,762,067 173,841,216 A19 B8 A22 A23 B8 B7(b) B7(c) B7(d) This Interim Financial Statements should be read in conjunction with the Audited Financial Statements of the Group and the Bank for the financial year ended 31 December 2020. 5
  6. RHB BANK BERHAD Registration No . 196501000373 (6171-M) INTERIM FINANCIAL STATEMENTS AUDITED STATEMENTS OF FINANCIAL POSITION (CONTINUED) AS AT 31 DECEMBER 2021 Group As at As at 31 December 31 December 2021 2020 RM'000 RM'000 Note Bank As at As at 31 December 31 December 2021 2020 RM'000 RM'000 EQUITY Share capital Reserves Equity attributable to holders of the Bank 7,612,612 20,385,716 27,998,328 6,994,103 20,029,732 27,023,835 7,612,612 14,736,176 22,348,788 6,994,103 14,798,422 21,792,525 Non-controlling interests ('NCI') TOTAL EQUITY 32,183 28,030,511 32,729 27,056,564 22,348,788 21,792,525 289,541,458 271,149,958 201,476,003 195,633,741 157,777,145 157,480,418 154,105,883 154,247,517 6.76 6.74 TOTAL LIABILITIES AND EQUITY COMMITMENTS AND CONTINGENCIES A28(a) NET ASSETS PER SHARE ATTRIBUTABLE TO EQUITY HOLDERS OF THE BANK (RM) This Interim Financial Statements should be read in conjunction with the Audited Financial Statements of the Group and the Bank for the financial year ended 31 December 2020. 6
  7. RHB BANK BERHAD Registration No . 196501000373 (6171-M) INTERIM FINANCIAL STATEMENTS AUDITED STATEMENTS OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 Attributable to equity holders of the Bank Group Share Capital RM’000 Statutory Reserves RM’000 Regulatory Reserves RM’000 FVOCI Reserves RM’000 Translation Reserves RM’000 Other Reserves RM’000 Retained Profits RM’000 Total Shareholders' Equity RM’000 Noncontrolling Interests RM’000 Total Equity RM’000 Balance as at 1 January 2021 6,994,103 515 51,672 1,855,531 518,376 23,331 17,580,307 27,023,835 32,729 27,056,564 Net profit for the financial year - - - - - - 2,618,388 2,618,388 4,744 2,623,132 Foreign currency translation reserves: - Currency translation differences - - - 23 44,034 - 3,590 47,647 28 47,675 - - - (19,444) 31,074 - - 19,444 - 31,074 - 31,074 - - - (1,452,925) (419,799) (890) - - - Actuarial gain/(loss) on defined benefit plan of subsidiaries - - - - - - 767 Income tax relating to components of other comprehensive loss/(income) - - - 449,433 - - (688) Other comprehensive (loss)/income, net of tax, for the financial year - - - (1,412,528) 44,034 - 23,113 Total comprehensive income/(loss) for the financial year - - - (1,412,528) 44,034 - 2,641,501 Dividends paid - - - - - - Financial assets measured at FVOCI: - Equity instruments - Net gain on disposal - Unrealised net gain on revaluation - Debt instruments - Unrealised net loss on revaluation - Net transfer to income statements on disposal - Changes in expected credit losses and exchange differences Shares issued pursuant to Dividend Reinvestment Plan ('DRP') (917,023) - (1,452,925) (419,799) (890) 767 (16) 751 448,745 (2) 448,743 (1,345,381) 1,273,007 (917,023) 10 4,754 (5,300) (1,345,371) 1,277,761 (922,323) 618,509 - - - - - 618,509 - 618,509 Transfer to statutory reserves - 104,130 - - - - (104,130) - - - Transfer to regulatory reserves - - 276,457 - - - (276,457) - - - 7,612,612 104,645 328,129 443,003 562,410 23,331 27,998,328 32,183 28,030,511 Balance as at 31 December 2021 - (1,452,925) (419,799) (890) 18,924,198 This Interim Financial Statements should be read in conjunction with the Audited Financial Statements of the Group and the Bank for the financial year ended 31 December 2020. 7
  8. RHB BANK BERHAD Registration No . 196501000373 (6171-M) INTERIM FINANCIAL STATEMENTS AUDITED STATEMENTS OF CHANGES IN EQUITY (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 Attributable to equity holders of the Bank Group Share Capital RM’000 Statutory Reserves RM’000 Regulatory Reserves RM’000 FVOCI Reserves RM’000 Translation Reserves RM’000 Other Reserves RM’000 Retained Profits RM’000 Total Shareholders' Equity RM’000 Noncontrolling Interests RM’000 Total Equity RM’000 Balance as at 1 January 2020 6,994,103 513 838,992 1,328,060 688,866 23,331 15,901,529 25,775,394 35,415 25,810,809 Net profit for the financial year - - - - - - 2,032,530 2,032,530 6,622 2,039,152 - - - (94,887) - - (95,206) - - - - (75,603) - - (75,603) - (75,603) - - - 1,060 59,314 59,314 - 59,314 - - - Actuarial gain on defined benefit plan of subsidiaries - - - Income tax relating to components of other comprehensive income - - - (149,637) Other comprehensive income/(loss), net of tax, for the financial year - - - 527,471 (170,490) - Total comprehensive income/(loss) for the financial year - - - 527,471 (170,490) Dividends paid/payable - - - - Transfer to statutory reserves - 2 - - Transfer from regulatory reserves - - 6,994,103 515 Foreign currency translation reserves: - Currency translation differences - Realisation of foreign exchange reserve and net investment hedge from discontinued operation Financial assets measured at FVOCI: - Equity instruments - Net loss on disposal - Unrealised net gain on revaluation - Debt instruments - Unrealised net gain on revaluation - Net transfer to income statements on disposal - Changes in expected credit losses and exchange differences Balance as at 31 December 2020 (319) 1,025,119 (401,665) (6,401) - (787,320) 51,672 - - (1,060) - - - - - - 3,241 - - (388) 3,241 33 (95,268) 1,025,119 (401,665) (6,401) 3,274 (150,025) (4) (150,029) 1,793 358,774 (33) 358,741 - 2,034,323 2,391,304 6,589 2,397,893 - - (1,142,863) (1,142,863) (9,275) (1,152,138) - - (2) - - - 1,855,531 518,376 23,331 - - - 787,320 - - - 17,580,307 27,023,835 32,729 27,056,564 This Interim Financial Statements should be read in conjunction with the Audited Financial Statements of the Group and the Bank for the financial year ended 31 December 2020. 8 1,025,119 (401,665) (6,401) (62)
  9. RHB BANK BERHAD Registration No . 196501000373 (6171-M) INTERIM FINANCIAL STATEMENTS AUDITED STATEMENTS OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 Bank Share Capital RM’000 Regulatory Reserves RM’000 Non-Distributable FVOCI Reserves RM’000 Translation Reserves RM’000 Distributable Retained Profits RM’000 Total Equity RM’000 Balance as at 1 January 2021 6,994,103 - 1,578,045 349,672 12,870,705 21,792,525 Net profit for the financial year - - - - 1,982,388 1,982,388 Foreign currency translation reserves: - Currency translation differences - - - 3,396 - 3,396 - - (17,494) 29,642 - 17,494 - 29,642 - - (1,197,601) (327,955) (1,226) - - Income tax relating to components of other comprehensive loss - - - - Other comprehensive (loss)/income, net of tax, for the financial year - - (1,148,501) 3,396 17,494 Total comprehensive income/(loss) for the financial year - - (1,148,501) 3,396 1,999,882 Dividends paid - - Financial assets measured at FVOCI: - Equity instruments - Net gain on disposal - Unrealised net gain on revaluation - Debt instruments - Unrealised net loss on revaluation - Net transfer to income statements on disposal - Changes in expected credit losses and exchange differences Shares issued pursuant to DRP Transfer to regulatory reserves Balance as at 31 December 2021 618,509 366,133 - - - - - 227,289 - - 7,612,612 227,289 429,544 353,068 (917,023) - (1,197,601) (327,955) (1,226) 366,133 (1,127,611) 854,777 (917,023) 618,509 (227,289) 13,726,275 22,348,788 This Interim Financial Statements should be read in conjunction with the Audited Financial Statements of the Group and the Bank for the financial year ended 31 December 2020. 9
  10. RHB BANK BERHAD Registration No . 196501000373 (6171-M) INTERIM FINANCIAL STATEMENTS AUDITED STATEMENTS OF CHANGES IN EQUITY (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 Bank Share Capital RM’000 Regulatory Reserves RM’000 Non-Distributable FVOCI Reserves RM’000 Translation Reserves RM’000 Distributable Retained Profits RM’000 Total Equity RM’000 Balance as at 1 January 2020 6,994,103 352,506 1,165,505 374,754 11,862,355 20,749,223 Net profit for the financial year - - - - 1,799,605 1,799,605 Foreign currency translation reserves: - Currency translation differences - - - - - 898 57,269 - - - 835,906 (361,720) (6,008) - - 835,906 (361,720) (6,008) Income tax relating to components of other comprehensive income - - (113,805) - - (113,805) Other comprehensive income/(loss), net of tax, for the financial year - - 412,540 (25,082) Total comprehensive income/(loss) for the financial year - - 412,540 (25,082) Dividends paid/payable - - - - Transfer from regulatory reserves - - - 352,506 - 1,578,045 349,672 12,870,705 21,792,525 Financial assets measured at FVOCI: - Equity instruments - Net loss on disposal - Unrealised net gain on revaluation - Debt instruments - Unrealised net gain on revaluation - Net transfer to income statements on disposal - Changes in expected credit losses and exchange differences Balance as at 31 December 2020 (352,506) 6,994,103 - (25,082) - (898) - (898) (25,082) 57,269 386,560 1,798,707 2,186,165 (1,142,863) (1,142,863) This Interim Financial Statements should be read in conjunction with the Audited Financial Statements of the Group and the Bank for the financial year ended 31 December 2020. 10
  11. RHB BANK BERHAD Registration No . 196501000373 (6171-M) INTERIM FINANCIAL STATEMENTS AUDITED STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 Group Cash flows from operating activities Profit before taxation and zakat: - Continuing operations - Discontinued operation Profit before taxation and zakat, including discontinued operation Adjustments for: Allowance for credit losses on loans, advances and financing Allowance for credit losses on other financial assets Property, plant and equipment: - Depreciation - Gain on disposal - Written off - Impairment losses Intangible assets: - Amortisation - Written off Right of use assets: - Depreciation - Gain on modification - Impairment losses Net allowance made on financial assets at FVOCI and financial investments at amortised cost Gain on disposal of a subsidiary Net gain on financial instruments Dividend income from financial assets at FVTPL and financial assets at FVOCI Net modification loss Interest expense on borrowings, senior debt securities, subordinated obligations and lease liabilities Other non-cash items Operating profit before working capital changes Decrease/(Increase) in operating assets: Deposits and placements with banks and other financial institutions Financial assets at FVTPL Loans, advances and financing Clients' and brokers' balances Other assets Statutory deposits Increase/(Decrease) in operating liabilities: Deposits from customers Deposits and placements of banks and other financial institutions Obligations on securities sold under repurchase agreements Investment accounts Bills and acceptances payable Clients' and brokers' balances Other liabilities Recourse obligation on loans sold to Cagamas Twelve Months Ended 31 December 31 December 2021 2020 RM'000 RM'000 3,528,753 3,528,753 2,644,403 33,130 2,677,533 926,211 (12,160) 1,372,465 17,550 122,342 (16,722) 443 193 112,564 (2,319) 25 - 128,511 1,209 117,646 4,766 72,104 (38) 121 74,137 (17) - 174,486 (752) (289,599) (54,876) 244,895 53,260 (55,017) (537,849) (59,877) 418,004 253,946 (2,009,515) 3,069,552 244,336 (2,114,897) 2,322,310 2,741,780 1,679,479 (13,369,630) 464,368 597,010 (9,312) (7,896,305) (4,963,537) 556,075 (11,297,877) (528,464) (496,144) 3,942,044 (12,787,903) 14,896,587 2,325,201 1,090,031 581,291 22,623 (223,419) (494,768) (763,865) 17,433,681 13,070,755 (310,598) (1,075,043) (67,861) 347,764 380,045 (512,236) 11,832,826 This Interim Financial Statements should be read in conjunction with the Audited Financial Statements of the Group and the Bank for the financial year ended 31 December 2020. 11
  12. RHB BANK BERHAD Registration No . 196501000373 (6171-M) INTERIM FINANCIAL STATEMENTS AUDITED STATEMENTS OF CASH FLOWS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 Twelve Months Ended 31 December 31 December 2021 2020 RM'000 RM'000 Group Cash flows from operating activities (continued) Cash generated from operations Interest paid Net tax and zakat paid Net cash generated from operating activities Cash flows from investing activities Net purchase of financial assets at FVOCI and financial investments at amortised cost Property, plant and equipment: - Purchase - Proceeds from disposal Intangible assets: - Purchase Financial assets at FVOCI and financial investments at amortised cost: - Interest received - Investment income received Dividend income received from financial assets at FVTPL and financial assets at FVOCI Net cash inflow from disposal of subsidiaries Contingent consideration received arising from disposal of subsidiaries Net cash generated from/(used in) investing activities Cash flows from financing activities Net repayment of borrowings Proceeds from issuance of senior debt securities Redemption of senior debt securities Proceeds from issuance of subordinated notes Redemption of subordinated notes Dividends paid to equity holders of the Bank Dividends paid to NCI Principal lease payments Net cash used in financing activities Net increase/(decrease) in cash and cash equivalents Effects of exchange rate differences Cash and cash equivalents: - at the beginning of the financial year - at the end of the financial year Cash and cash equivalents comprise the following: - Cash and short term funds 12,606,928 (254,927) (749,187) 11,602,814 1,367,233 (245,855) (615,478) 505,900 (1,723,260) (3,942,087) (127,619) 23,977 (138,266) 3,110 (191,640) (131,815) 1,552,428 415,516 54,876 494 219 4,991 1,677,747 357,963 59,877 136,201 15,961 (1,961,309) (522,955) 2,075,557 (2,092,558) 500,000 (699,519) (5,300) (71,990) (816,765) (529,049) 300,000 1,000,000 (1,000,000) (741,858) (9,275) (66,531) (1,046,713) 10,791,040 135,998 (2,502,122) (221,585) 8,904,285 19,831,323 11,627,992 8,904,285 19,831,323 8,904,285 This Interim Financial Statements should be read in conjunction with the Audited Financial Statements of the Group and the Bank for the financial year ended 31 December 2020. 12
  13. RHB BANK BERHAD Registration No . 196501000373 (6171-M) INTERIM FINANCIAL STATEMENTS AUDITED STATEMENTS OF CASH FLOWS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 Bank Cash flows from operating activities Profit before taxation Adjustments for: Allowance for credit losses on loans, advances and financing Allowance for credit losses on other financial assets Property, plant and equipment: - Depreciation - Gain on disposal - Written off Intangible assets: - Amortisation - Written off Right of use assets: - Depreciation - Gain on modification Impairment loss on investment in a subsidiary Net allowance made on financial assets at FVOCI and financial investments at amortised cost Net gain on financial instruments Loss on liquidation of a subsidiary Dividend income from financial assets at FVOCI Dividend income from subsidiaries Net modification loss Interest expense on borrowings, senior debt securities, subordinated obligations and lease liabilities Other non-cash items Operating profit before working capital changes Decrease/(Increase) in operating assets: Deposits and placements with banks and other financial institutions Investment account due from designated financial institutions Financial assets at FVTPL Loans, advances and financing Other assets Statutory deposits Increase/(Decrease) in operating liabilities: Deposits from customers Deposits and placements of banks and other financial institutions Obligations on securities sold under repurchase agreements Bills and acceptances payable Other liabilities Recourse obligation on loans sold to Cagamas Twelve Months Ended 31 December 31 December 2021 2020 RM'000 RM'000 2,546,168 2,233,098 259,344 (1,398) 1,019,203 4,042 100,459 (214) 29 92,591 (2,209) 1 110,350 1,209 100,434 - 55,299 - 52,083 (4) 52,500 178,352 (221,920) 52 (4,099) (247,903) 126,374 54,612 (462,751) (4,404) (580,585) 158,771 198,699 (1,528,563) 1,572,238 182,023 (1,683,948) 1,215,457 1,702,129 (1,372,781) 1,392,285 (5,759,756) 342,140 (126,816) (3,822,799) (4,098,229) (611,524) 432,624 (3,653,911) (1,100,007) 2,380,258 (6,650,789) 2,984,024 1,052,455 123,471 26,528 (502,999) 1,506,310 5,189,789 2,822,311 5,635,585 995,764 (30,784) 1,031,246 (1,265,757) 9,188,365 This Interim Financial Statements should be read in conjunction with the Audited Financial Statements of the Group and the Bank for the financial year ended 31 December 2020. 13
  14. RHB BANK BERHAD Registration No . 196501000373 (6171-M) INTERIM FINANCIAL STATEMENTS AUDITED STATEMENTS OF CASH FLOWS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 Twelve Months Ended 31 December 31 December 2021 2020 RM'000 RM'000 Bank Cash flows from operating activities (continued) Cash generated from operations Interest paid Net tax paid Net cash generated from operating activities Cash flows from investing activities Net purchase of financial assets at FVOCI and financial investments at amortised cost Property, plant and equipment: - Purchase - Proceeds from disposal Intangible assets: - Purchase Interest received from financial assets at FVOCI and financial investments at amortised cost Dividend income received from subsidiaries Dividend income received from financial assets at FVOCI Proceeds received from liquidation of a subsidiary Capital reduction in a subsidiary Additional investment in a subsidiary Net cash generated from investing activities Cash flows from financing activities Net repayment of borrowings Proceeds from issuance of senior debt securities Redemption of senior debt securities Proceeds from issuance of subordinated notes Redemption of subordinated notes Dividends paid to equity holders of the Bank Principal lease payments Net cash used in financing activities 2,939,228 (204,988) (393,722) 2,340,518 3,753,033 (183,821) (350,750) 3,218,462 (1,255,791) (1,689,715) (93,098) 215 (106,198) 2,765 (152,893) 1,539,464 246,703 4,099 527 267,773 (15,645) 541,354 (117,565) 1,607,002 580,585 4,404 (39,418) 241,860 (201,079) 2,075,557 (2,092,558) 500,000 (699,519) (55,310) (472,909) (644,344) 300,000 1,000,000 (800,000) (741,858) (50,348) (936,550) Net increase in cash and cash equivalents Effects of exchange rate differences Cash and cash equivalents: - at the beginning of the financial year - at the end of the financial year 2,408,963 95,024 2,523,772 (121,029) 7,905,636 10,409,623 5,502,893 7,905,636 Cash and cash equivalents comprise the following: - Cash and short term funds 10,409,623 7,905,636 This Interim Financial Statements should be read in conjunction with the Audited Financial Statements of the Group and the Bank for the financial year ended 31 December 2020. 14
  15. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A1. Basis Of Preparation The interim financial statements are audited and have been prepared in compliance with Malaysian Financial Reporting Standard ('MFRS') 134, 'Interim Financial Reporting' issued by Malaysian Accounting Standards Board ('MASB') and should be read in conjunction with the audited financial statements of the Group and the Bank for the financial year ended 31 December 2020. The accounting policies and presentation adopted by the Group and the Bank for the interim financial statements are consistent with those adopted in the audited financial statements for the financial year ended 31 December 2020, except for the adoption of the following during the current financial year: (a) Accounting standards, annual improvements and amendments to MFRS which are effective and applicable for the Group and the Bank for financial period beginning on or after 1 January 2021: - Amendments to MFRS 9, MFRS 139, MFRS 7, MFRS 4 and MFRS 16 – ‘Interest Rate Benchmark Reform - Phase 2’ - Amendments to MFRS 16 - COVID-19 Related Rent Concessions The adoption of the above accounting standards, annual improvements and amendments do not give rise to any material financial impact to the Group and the Bank. (b) Changes in regulatory requirements - measures issued by Bank Negara Malaysia ('BNM') (i) Targeted repayment assistance ('TRA') I Targeted repayment assistance under Program Strategik Memperkasa Rakyat dan Ekonomi Tambahan ('PEMERKASA+') TRA under PEMERKASA+ was announced on 31 May 2021. The TRA was applicable to all borrowers/customers who have lost their employment, B40 borrowers/customers registered under Bantuan Sara Hidup ('BSH') or Bantuan Prihatin Rakyat ('BPR'), SMEs and microenterprises with loans/financing facilities not more than RM150,000 whose loans/financing were approved on or before 30 June 2021 and not in arrears for more than 90 days. All these affected borrowers/customers may opt for 3-month deferment of instalment or a 50% reduction in their monthly instalment payment for a period of 6 months. II 6-month moratorium under Perlindungan Rakyat dan Pemulihan Ekonomi ('PEMULIH') On 6 July 2021, BNM announced that individuals, microenterprise borrowers and SMEs affected by the COVID-19 pandemic may start applying for the 6-month moratorium from 7 July 2021 onwards, in line with Government's PEMULIH. The moratorium applies to ringgit and foreign currency denominated loans/financing approved on or before 30 June 2021, not in arrears exceeding 90 days and customers must not be adjudicated bankrupts or under bankruptcy proceedings. All individuals, SMEs and microenterprises may opt for 6-month deferment of instalment or 50% reduction in their monthly instalment payment for a period of 6 months. There will be no compounding interest/profit and any penalty interest/profit during the moratorium period. (ii) Waiver of interest On 14 October 2021, BNM announced that B50 individuals who continue to be affected by the COVID-19 pandemic and are under an existing repayment assistance program, may start applying for financial assistance under the Financial Management and Resilience Programme ('URUS') managed by AKPK from 15 November 2021 until 31 March 2022. Under URUS, AKPK will provide the customer with a personalised financial plan that is developed holistically, taking into account the customer’s financial circumstances and ability to afford repayment of all the customer’s financing obligations. The financial plan will encompass options of either an interest/profit waiver of three months or an interest/profit waiver of three months together with reduced instalments of up to 24 months. Customers who are not eligible for URUS may apply for assistance under AKPK's Financial Resilience Support Scheme ('FIRST'), which includes features such as reduced instalments, extended financing tenures and financial resilience support programmes. In addition, for eligible B50 customers who have signed up for the Group and the Bank's flood relief assistance programmes, the URUS application closing date has been extended to 31 July 2022, or upon the expiry of the flood relief assistance programme, whichever is earlier. The financial impact arising from the adoption of the above measures is as disclosed in Note A11. 15
  16. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A2. Auditors' Report The auditors' report for the financial year ended 31 December 2020 was not subject to any qualification. A3. Seasonal Or Cyclical Factors The business operations of the Group and the Bank have not been affected by any material seasonal or cyclical factors. A4. Exceptional Or Unusual Items There were no exceptional or unusual items for the financial year ended 31 December 2021, other than the additional modification loss as disclosed in Note A11. A5. Changes In Estimates There were no material changes in estimates of amounts reported in prior financial years that have a material effect for the financial year ended 31 December 2021. A6. Changes In Debt and Equity Securities There were no issuances and repayments of debt and equity securities, share buy-backs, share cancellations, shares held as treasury shares and resale of treasury shares for the financial year ended 31 December 2021, other than as disclosed below: (a) Issuance of new shares (i) The Bank has on 8 July 2021 increased its issued and paid up share capital from RM6,994,102,955 to RM7,262,932,796 via the issuance of 58,314,499 new ordinary shares at RM4.61 per share arising from the Dividend Reinvestment Plan (‘DRP’) relating to the single-tier final dividend of 7.65 sen in respect of the financial year ended 31 December 2020; and (ii) The Bank has on 3 November 2021 increased its issued and paid up share capital from RM7,262,932,796 to RM7,612,611,635 via the issuance of 74,558,388 new ordinary shares at RM4.69 per share arising from the DRP relating to the single-tier interim dividend of 15.00 sen per share in respect of the financial year ended 31 December 2021, of which the shareholders may elect to reinvest up to 10.00 sen per RHB Bank Share. The new ordinary shares issued during the financial year rank pari passu in all respects with the existing shares of the Bank. (b) Issuance of subordinated notes and senior notes (i) The Bank had on 28 April 2021 issued Subordinated Notes of RM500 million in nominal value under a RM5 billion (or its equivalent in other currencies) multi-currency medium term note programme ('Subordinated Notes'). The Subordinated Notes is issued for a tenure of 10 non-callable 5 years with a fixed coupon rate of 3.65% per annum, payable semi-annually in arrears throughout the entire tenure; (ii) The Bank had on 29 June 2021 completed its fourth issuance of USD500 million senior unsecured notes ('Senior Notes') under the USD5 billion (or its equivalent in other currencies) euro medium term note programme. The Senior Notes were priced at 5-year US Treasury +78 bps or yield of 1.658% and will pay a coupon of 1.658% per annum. The tenure of the Senior Notes is for 5 years, maturing on 29 June 2026; and (iii) The Bank had on 6 October 2021 fully redeemed its existing USD500 million Senior Notes in nominal value issued under its USD5 billion euro medium term note programme in October 2016. 16
  17. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A7. Dividends Paid During the financial year ended 31 December 2021: (a) An interim single-tier dividend of 10.00 sen per share in respect of the financial year ended 31 December 2020, amounting to RM401,004,562 which has been accounted for in the shareholders’ equity as an appropriation of retained profits for the financial year ended 31 December 2020 was paid on 9 February 2021; (b) A final single-tier dividend of 7.65 sen per share in respect of the financial year ended 31 December 2020, amounting to RM306,768,499 was approved by the Board of Directors on 27 January 2021. This final dividend consists of an electable portion of 7.65 sen which can be elected to be reinvested into new ordinary shares in accordance with the DRP. The reinvestment rate subsequent to the completion of the DRP was 87.65% and total cash dividend of RM37,938,659 was paid on 8 July 2021; (c) An interim single-tier dividend of 15.00 sen per share in respect of the financial year ended 31 December 2021, amounting to RM610,254,018, consisting of cash portion of 5.00 sen per share and an electable portion of 10.00 sen per share has been declared by the Board of Directors on 27 August 2021. The reinvestment rate subsequent to the completion of the DRP was 85.96% and total cash dividend of RM260,575,178 was paid on 3 November 2021; and (d) At the forthcoming Annual General Meeting, a single-tier final dividend in respect of the current financial year of 25.00 sen per share amounting to RM1,035,730,000, consisting of cash portion of 15.00 sen per share and an electable portion of 10.00 sen per share will be proposed for shareholders’ approval. The single-tier final dividend was approved by the Board of Directors on 26 January 2022. Subject to the relevant regulatory approvals being obtained, the Board of Directors, in its absolute discretion, recommends that the shareholders’ of the Bank be given an option to elect to reinvest the electable portion of the proposed single-tier final dividend into new ordinary shares in the Bank in accordance with the approved DRP as disclosed in Note B6(b). 17
  18. l RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A8. Interest Income 4th Quarter Ended 31 December 31 December 2021 2020 RM'000 RM'000 Group Loans and advances Money at call and deposits and placements with banks and other financial institutions Financial assets at FVTPL Financial assets at FVOCI - debt instruments Financial investments at amortised cost Others Of which: Interest income accrued on impaired financial assets Twelve Months Ended 31 December 31 December 2021 2020 RM'000 RM'000 1,191,551 1,273,946 4,676,580 5,192,892 29,828 9,285 263,028 106,612 2,981 1,603,285 20,544 15,717 286,577 100,315 4,975 1,702,074 99,109 46,427 1,099,120 391,936 15,321 6,328,493 84,895 63,731 1,199,568 426,602 19,693 6,987,381 12,626 31,141 76,520 71,504 1,096,027 1,190,757 4,317,429 4,848,253 58,983 42,412 187,138 173,792 69,742 9,243 257,962 92,068 610 1,584,635 70,949 10 15,703 281,136 88,250 756 1,689,973 268,299 46,290 1,078,290 342,988 2,153 6,242,587 288,753 70 63,431 1,175,362 376,381 4,472 6,930,514 11,795 30,952 72,934 70,795 Bank Loans and advances Money at call and deposits and placements with banks and other financial institutions Investment account due from designated financial institutions Securities purchased under resale agreements Financial assets at FVTPL Financial assets at FVOCI - debt instruments Financial investments at amortised cost Others Of which: Interest income accrued on impaired financial assets 18
  19. l RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A9. Interest Expense 4th Quarter Ended 31 December 31 December 2021 2020 RM'000 RM'000 Group Deposits and placements of banks and other financial institutions Deposits from customers Obligations on securities sold under repurchase agreements Recourse obligation on loans sold to Cagamas Subordinated obligations Senior debt securities Borrowings Others Twelve Months Ended 31 December 31 December 2021 2020 RM'000 RM'000 47,647 454,627 49,498 520,777 172,519 1,821,787 314,995 2,657,885 4,858 6,309 24,425 23,749 930 10,107 572,652 2,636 17,584 26,437 4,084 6,736 627,752 15,972 6,309 91,038 114,487 7,861 36,491 2,266,464 18,619 11,045 74,735 103,853 23,801 21,040 3,225,973 50,648 424,612 57,231 491,059 199,528 1,699,206 350,945 2,527,099 16,612 6,309 21,955 23,749 8,904 552,789 16,133 15,141 26,437 979 5,484 612,464 61,293 6,309 81,238 114,487 485 31,390 2,193,936 60,309 11,045 62,033 103,853 13,087 15,452 3,143,823 Bank Deposits and placements of banks and other financial institutions Deposits from customers Obligations on securities sold under repurchase agreements Recourse obligation on loans sold to Cagamas Subordinated obligations Senior debt securities Borrowings Others 19
  20. l RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A10. Other Operating Income 4th Quarter Ended 31 December 31 December 2021 2020 RM'000 RM'000 Group Fee income - Service charges and fees - Commission - Guarantee fees - Commitment fees - Brokerage income - Fund management fees - Unit trust fee income - Corporate advisory fees - Underwriting and arrangement fees - Other fee income - Fee and commission expenses Net gain/(loss) arising from financial assets at FVTPL - Net (loss)/gain on disposal - Unrealised net gain/(loss) on revaluation - Dividend income Net (loss)/gain on revaluation of derivatives Net gain/(loss) on fair value hedges 38,251 45,472 6,856 10,770 65,090 73,153 29,627 4,714 4,608 34,592 313,133 (64,167) 248,966 44,700 42,940 6,248 11,187 134,645 65,809 49,352 5,416 6,434 19,293 386,024 (92,234) 293,790 143,306 200,159 31,229 42,711 382,072 293,167 182,471 34,625 12,706 99,881 1,422,327 (328,010) 1,094,317 (11,654) 10,204 9,770 8,320 2,969 (2,995) 10,340 10,314 (64,655) 14,691 50,080 116 260,573 62,743 54,640 377,956 3,715 35,413 (50,434) (162,985) (396) Net gain/(loss) arising from derecognition of financial investments at amortised cost Net gain arising from financial assets at FVOCI - Net gain on debt instruments on disposal - Dividend income Other income Net foreign exchange gain Insurance underwriting surplus before management expenses Gain on disposal of property, plant and equipment Gain on disposal of a subsidiary Gain on modification of right of use assets Rental income Other operating income Other non-operating income 20 Twelve Months Ended 31 December 31 December 2021 2020 RM'000 RM'000 143,014 156,698 30,374 42,495 450,885 256,118 127,694 19,926 16,086 63,185 1,306,475 (278,737) 1,027,738 108 11 4,256 - - 14,924 10,860 5 10,865 50,822 124 50,946 328,104 4,796 332,900 362,166 5,237 367,403 64,740 98,570 189,711 269,003 40,184 17 430 7,817 4,382 117,570 38,818 2,147 4 560 7,746 12,549 160,394 235,022 16,752 752 1,973 23,958 16,439 484,607 216,464 2,319 17 2,007 23,273 49,214 562,297 389,040 550,965 1,876,441 2,176,656 (9)
  21. l RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A10. Other Operating Income (continued) 4th Quarter Ended 31 December 31 December 2021 2020 RM'000 RM'000 Bank Fee income - Service charges and fees - Commission - Guarantee fees - Commitment fees - Corporate advisory fees - Underwriting and arrangement fees - Other fee income 37,388 53,286 6,802 10,368 163 4,708 112,715 Net (loss)/gain arising from financial assets at FVTPL - Net (loss)/gain on disposal - Unrealised net (loss)/gain on revaluation Net (loss)/gain on revaluation of derivatives Net gain/(loss) on fair values hedges Net gain arising from financial assets at FVOCI - Net gain on debt instruments on disposal - Dividend income Dividend income from subsidiaries Other income Net foreign exchange gain Gain on disposal of property, plant and equipment Loss on liquidation of a subsidiary Gain on modification of right of use assets Rental income Other operating income Other non-operating income 131,001 246,337 31,066 41,170 5,082 465 19,019 474,140 122,542 183,123 29,615 41,126 243 22,486 399,135 (7,645) 973 (6,672) (1,238) 6,144 4,906 (97,834) (4,052) (101,886) 129,365 (4,455) 124,910 4,458 4,946 (18,849) (28,131) (396) Net gain/(loss) arising from derecognition of financial investments at amortised cost 37,604 53,623 6,168 10,840 5,807 114,042 Twelve Months Ended 31 December 31 December 2021 2020 RM'000 RM'000 108 11 - - 14,924 10,696 10,696 50,762 50,762 327,720 4,099 331,819 361,725 4,404 366,129 26,675 201,675 247,903 580,585 50,565 70 601 6,644 4,290 62,170 48,521 2,195 4 2,895 5,825 14,177 73,617 187,459 214 (52) 9,175 21,254 13,618 231,668 219,752 2,209 4 11,324 20,729 49,197 303,215 209,646 450,056 1,179,730 4,256 (9) 1,750,090 A11. Net Modification Loss In connection with the Covid-19 pandemic, BNM and the Ministry of Finance have introduced several relief measures to customers/borrowers. As a result, the Group and the Bank have recognised a loss arising from the modification of cash flows of the loan/financing. This loss is set-off against the fair value gain on concessionary funding received as part of the Covid-19 relief measures. The net modification loss is unwound through the income statements over the remaining tenure of the loan/financing and funding. 21
  22. l RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A12. Other Operating Expenses 4th Quarter Ended 31 December 31 December 2021 2020 RM'000 RM'000 Group Personnel costs - Salaries, allowances and bonuses - Defined contribution plan - Other staff related costs Establishment costs - Property, plant and equipment: - Depreciation - Written off - Intangible assets: - Amortisation - Written off - Right of use assets: - Depreciation - Rental of premises - Rental of equipment - Insurance - Water and electricity - Repair and maintenance - Security and escorting expenses - Information technology expenses - Others Marketing expenses - Sales commission - Advertisement and publicity - Others Administration and general expenses - Communication expenses - Legal and professional fees - Others 22 Twelve Months Ended 31 December 31 December 2021 2020 RM'000 RM'000 423,283 67,771 34,570 525,624 393,843 61,751 44,234 499,828 1,721,315 249,149 167,205 2,137,669 1,654,640 236,076 150,860 2,041,576 33,199 2 29,053 1 122,342 443 111,586 25 35,886 1,209 28,664 5 128,511 1,209 115,397 5 18,986 5,124 2,418 6,448 6,019 10,493 11,025 72,041 2,160 205,010 17,029 5,532 3,010 4,556 6,672 9,475 11,985 74,928 5,199 196,109 72,104 23,727 9,992 21,299 23,172 32,438 43,909 280,196 13,501 772,843 70,336 26,188 10,163 20,475 27,228 31,945 45,596 271,937 16,578 747,459 26,740 24,136 17,470 68,346 34,649 27,065 23,221 84,935 117,299 59,590 64,413 241,302 106,396 55,760 78,063 240,219 35,201 42,230 34,028 111,459 51,557 13,417 43,539 108,513 141,773 74,855 153,943 370,571 165,723 38,487 153,259 357,469 910,439 889,385 3,522,385 3,386,723
  23. l RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A12. Other Operating Expenses (continued) 4th Quarter Ended 31 December 31 December 2021 2020 RM'000 RM'000 Bank Personnel costs - Salaries, allowances and bonuses - Defined contribution plan - Other staff related costs Establishment costs - Property, plant and equipment: - Depreciation - Written off - Intangible assets: - Amortisation - Written off - Right of use assets: - Depreciation - Rental of premises - Rental of equipment - Insurance - Water and electricity - Repair and maintenance - Security and escorting expenses - Information technology expenses Marketing expenses - Sales commission - Advertisement and publicity - Others Administration and general expenses - Communication expenses - Legal and professional fees - Others Operating expenses allocated to subsidiaries 23 Twelve Months Ended 31 December 31 December 2021 2020 RM'000 RM'000 364,779 54,676 38,874 458,329 334,238 50,931 35,842 421,011 1,342,763 204,879 123,855 1,671,497 1,251,049 192,754 114,117 1,557,920 27,590 1 23,767 - 100,459 29 92,591 1 30,829 1,209 25,122 - 110,350 1,209 100,434 - 14,729 4,703 2,403 7,905 4,125 8,292 11,942 58,966 172,694 12,777 4,280 2,988 6,706 4,497 6,654 12,299 54,281 153,371 55,299 19,395 9,936 26,755 16,140 25,534 46,987 214,474 626,567 52,083 17,295 10,131 24,353 18,065 24,233 47,731 197,407 584,324 32,696 21,058 10,718 64,472 31,600 27,590 9,850 69,040 111,562 49,681 37,822 199,065 93,647 50,088 36,272 180,007 23,245 44,083 24,955 92,283 33,909 21,439 27,699 83,047 101,747 103,816 98,660 304,223 115,912 85,713 88,311 289,936 (111,042) (96,458) (350,188) (321,794) 676,736 630,011 2,451,164 2,290,393
  24. l RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A13. Allowance for Credit Losses on Financial Assets 4th Quarter Ended 31 December 31 December 2021 2020 RM'000 RM'000 Group Twelve Months Ended 31 December 31 December 2021 2020 RM'000 RM'000 Charge/(Writeback) Loans, advances and financing: - Net charge/(writeback) - Bad debts recovered - Bad debts written off Financial assets at FVOCI Financial investments at amortised cost Other financial assets (16,742) (105,597) 46,574 (75,765) 581,250 (87,759) 55,957 549,448 760,182 (351,323) 166,029 574,888 1,207,891 (297,242) 164,730 1,075,379 (8,578) 176,191 (5,552) 86,296 (3,597) 56,721 1,853 604,425 (1,117) 175,603 (12,160) 737,214 (6,364) 59,624 16,447 1,145,086 (39,319) (98,021) 24,514 (112,826) 495,320 (81,084) 40,089 454,325 138,470 (326,173) 120,874 (66,829) 884,209 (271,566) 134,994 747,637 (8,840) 180,832 (1,118) 58,048 (3,427) 60,515 2,396 513,809 (1,453) 179,805 (1,398) 110,125 (5,971) 60,583 4,042 806,291 Bank Charge/(Writeback) Loans, advances and financing: - Net charge/(writeback) - Bad debts recovered - Bad debts written off Financial assets at FVOCI Financial investments at amortised cost Other financial assets A14. Investment Account Due From Designated Financial Institutions This investment account which is exposure to Restricted Profit Sharing Investment Account ('RPSIA'), is an arrangement by the Bank with its wholly-owned subsidiary, RHB Islamic Bank Berhad ('RHB Islamic Bank'). The underlying assets of RHB Islamic Bank for the RPSIA are as follows: Bank As at As at 31 December 31 December 2021 2020 RM'000 RM'000 Principal Personal financing Other term financing Short-term funds Unquoted securities 1,500,000 7,064,457 490,000 1,009,105 10,063,562 24 1,000,000 6,917,534 811,775 8,729,309
  25. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A15. Financial Assets at Fair Value Through Profit or Loss ('FVTPL') Group As at As at 31 December 31 December 2021 2020 RM'000 RM'000 Bank As at As at 31 December 31 December 2021 2020 RM'000 RM'000 Mandatory measured at fair value Money market instruments: Malaysian Government Securities Malaysian Government Investment Issues 204,324 426,309 656,342 1,582,566 204,324 374,216 656,342 1,474,888 Quoted securities: In Malaysia Shares, exchange traded funds and warrants Unit trusts Corporate bond/sukuk 74,375 37,850 2,351 209,443 69,450 3,482 2,351 3,482 Outside Malaysia Shares, exchange traded funds and warrants Unit trusts 94,946 24,386 210,408 25,676 - 3,400 - 83,095 1,024,098 64,766 52,781 1,022,686 36 79,677 64,766 51,370 36 115,076 626,663 2,778,239 95,783 533,453 4,462,106 115,076 840,410 95,783 2,285,301 Unquoted securities: In Malaysia Corporate bond/sukuk Unit trusts Commercial paper Outside Malaysia Corporate bond/sukuk Private equity funds 25
  26. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A16. Financial Assets at Fair Value Through Other Comprehensive Income ('FVOCI') Group As at As at 31 December 31 December 2021 2020 RM'000 RM'000 At fair value (a) Debt instruments (b) Equity instruments Bank As at As at 31 December 31 December 2021 2020 RM'000 RM'000 40,380,841 760,032 41,140,873 42,148,529 754,730 42,903,259 34,234,752 720,749 34,955,501 35,158,058 711,582 35,869,640 2,764,067 7,813,683 119,450 1,699,602 97,221 71,888 985,101 629,542 2,126,537 25,151 689,032 1,906,961 8,126,745 102,082 48,408 397,744 54,580 73,100 866,267 654,851 2,247,864 86,290 723,066 2,631,159 6,212,432 70,082 1,401,075 97,221 985,101 629,542 2,126,537 25,151 689,032 1,768,796 6,391,365 91,926 54,580 866,267 654,851 2,247,864 86,290 723,066 18,265,619 51,111 23,300,160 51,155 14,273,472 51,111 18,712,642 51,155 5,042,837 40,380,841 3,509,256 42,148,529 5,042,837 34,234,752 3,509,256 35,158,058 2,218 1,922 - - 757,418 752,403 720,748 711,580 396 760,032 405 754,730 1 720,749 2 711,582 (a) Debt instruments Money market instruments: Malaysian Government Securities Malaysian Government Investment Issues Cagamas bonds Khazanah bonds Negotiable instruments of deposits Other foreign government investment issues Sukuk Perumahan Kerajaan Singapore Government Securities Thailand Government Securities Singapore Government Treasury Bills Thailand Central Bank Bonds Singapore Housing Development Board Unquoted securities: In Malaysia Corporate bond/sukuk Perpetual notes/sukuk Outside Malaysia Corporate bond/sukuk (b) Equity instruments Quoted securities: Outside Malaysia Shares Unquoted securities: In Malaysia Shares Outside Malaysia Shares Included in financial investments at FVOCI of the Group and the Bank are corporate bond/sukuk, which are pledged as collateral for obligations on securities sold under repurchase agreements amounting to RM1,552,000,000 (2020: RM733,000,000) and RM1,921,000,000 (2020: RM2,088,000,000) respectively. 26
  27. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A16. Financial Assets at Fair Value Through Other Comprehensive Income ('FVOCI') (continued) (a) Movement in credit impaired financial assets at FVOCI Group and Bank As at As at 31 December 31 December 2021 2020 RM'000 RM'000 Balance as at the beginning of the financial year Balance as at the end of the financial year 1,020 1,020 1,020 1,020 (b) Movement in allowance for credit losses recognised in FVOCI reserves Group 31 December 2021 Balance as at the beginning of the financial year Changes in credit risk Purchases and origination Changes to model methodologies Derecognition and disposal Exchange differences Balance as at the end of the financial year 12-month ECL (Stage 1) RM’000 Lifetime ECL not credit impaired (Stage 2) RM’000 Lifetime ECL credit impaired (Stage 3) RM’000 37,729 (15,323) 13,759 6,168 (5,664) 227 36,896 134 (43) (14) 77 - 37,863 (15,366) 13,759 6,168 (5,678) 227 36,973 44,264 (20) (3,860) 6,723 (9,341) (37) 37,729 20 27 87 134 - 44,264 (3,833) 6,810 (9,341) (37) 37,863 Total RM’000 31 December 2020 Balance as at the beginning of the financial year Transfer to lifetime ECL not credit impaired (Stage 2) Changes in credit risk Purchases and origination Derecognition and disposal Exchange differences Balance as at the end of the financial year 27
  28. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A16. Financial Assets at Fair Value Through Other Comprehensive Income ('FVOCI') (continued) (b) Movement in allowance for credit losses recognised in FVOCI reserves (continued) Bank 31 December 2021 Balance as at the beginning of the financial year Changes in credit risk Purchases and origination Changes to model methodologies Derecognition and disposal Exchange differences Balance as at the end of the financial year 12-month ECL (Stage 1) RM’000 Lifetime ECL not credit impaired (Stage 2) RM’000 Lifetime ECL credit impaired (Stage 3) RM’000 35,723 (15,297) 12,791 6,168 (5,058) 227 34,554 134 (43) (14) 77 - 35,857 (15,340) 12,791 6,168 (5,072) 227 34,631 41,865 (20) (3,712) 5,797 (8,170) (37) 35,723 20 27 87 134 - 41,865 (3,685) 5,884 (8,170) (37) 35,857 Total RM’000 31 December 2020 Balance as at the beginning of the financial year Transfer to lifetime ECL not credit impaired (Stage 2) Changes in credit risk Purchases and origination Derecognition and disposal Exchange differences Balance as at the end of the financial year 28
  29. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A17. Financial Investments at Amortised Cost Group As at As at 31 December 31 December 2021 2020 RM'000 RM'000 At amortised cost Money market instruments: Malaysian Government Securities Malaysian Government Investment Issues Cagamas bonds Khazanah bonds Negotiable instruments of deposits Wakala Global Sukuk Sukuk Perumahan Kerajaan Singapore Government Treasury Bills Sukuk (Brunei) Incorporation Brunei Central Bank Bills Unquoted securities: In Malaysia Corporate bond/sukuk Corporate loan stocks Allowance for credit losses Bank As at As at 31 December 31 December 2021 2020 RM'000 RM'000 700,667 2,739,575 622,800 158,182 500,595 110,981 648,047 30,872 15,439 427,341 2,816,735 477,050 198,175 28,928 111,014 577,258 30,411 - 607,910 2,069,843 607,715 20,694 100,934 648,047 30,872 15,439 334,463 2,058,384 477,050 39,958 20,666 100,983 577,258 30,411 - 13,008,637 23,835 18,559,630 11,684,211 25,853 16,376,976 7,427,355 11,528,809 6,845,749 10,484,922 (598,119) 17,961,511 (371,709) 16,005,267 (519,519) 11,009,290 (288,929) 10,195,993 (i) Included in financial investments at amortised cost of the Group and the Bank are corporate bond/sukuk, which are pledged as collateral for obligations on securities sold under repurchase agreements amounting to RM384,000,000 (2020: RM224,000,000) and RM2,750,000,000 (2020: RM2,571,000,000) respectively. (ii) Included in financial investments at amortised cost of the Group are exposures to Restricted Investment Account ('RIA'), as part of the arrangement between RHB Islamic Bank and other investors based on Mudharabah concept between two parties, investors and RHB Islamic Bank. The investors will provide capital and the business venture is managed solely by RHB Islamic Bank. The profit of the business venture will be shared based on pre-agreed ratios with RHB Islamic Bank as Mudharib (manager or manager of funds), and losses shall be borne solely by investors. As at 31 December 2021, gross exposure to RIA financing funded by investors at the Group is RM357,870,000 (2020: RMNil). The portfolio expected credit losses for financial investments at amortised cost relating to RIA is borne solely by the investors. 29
  30. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A17. Financial investments at amortised cost (continued) (a) Movement in credit impaired financial investments at amortised cost Group As at As at 31 December 31 December 2021 2020 RM'000 RM'000 Balance as at the beginning of the financial year Transferred to lifetime ECL credit impaired (Stage 3) Purchases and origination Derecognition Exchange differences Balance as at the end of the financial year 140,252 608,076 496,948 (8,925) 287 1,236,638 140,425 (38) (135) 140,252 Bank As at As at 31 December 31 December 2021 2020 RM'000 RM'000 62,805 (3,260) 287 59,832 62,978 (38) (135) 62,805 The credit impaired financial investments at amortised cost relate to certain exposures to RIA, of which exposure with other investors amounted to RM357,870,000 (2020: RMNil). (b) Movement in allowance for credit losses Group 31 December 2021 Balance as at the beginning of the financial year Transferred to 12-month ECL (Stage 1) Transferred to lifetime ECL not credit impaired (Stage 2) Transferred to lifetime ECL credit impaired (Stage 3) Changes in credit risk Purchases and origination Derecognition Transfer from loans, advances and financing Exchange differences Balance as at the end of the financial year 12-month ECL (Stage 1) RM’000 Lifetime ECL not credit impaired (Stage 2) RM’000 Lifetime ECL credit impaired (Stage 3) RM’000 11,871 123 (238) 5,953 3,354 (2,486) 22 18,599 220,148 (123) 238 (270,509) 805 735 (12) 50,496 1,778 139,690 270,509 167,254 289 577,742 371,709 174,012 4,089 (2,498) 50,496 311 598,119 23,081 (11,371) 5,923 (5,753) (9) 11,871 149,285 70,917 135 (189) 220,148 139,863 (38) (135) 139,690 312,229 59,508 6,058 (5,942) (144) 371,709 Total RM’000 31 December 2020 Balance as at the beginning of the financial year Changes in credit risk Purchases and origination Derecognition Exchange differences Balance as at the end of the financial year 30
  31. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A17. Financial investments at amortised cost (continued) (b) Movement in allowance for credit losses (continued) Bank 31 December 2021 Balance as at the beginning of the financial year Transferred to lifetime ECL credit impaired (Stage 3) Changes in credit risk Purchases and origination Derecognition Transfer from loans, advances and financing Exchange differences Balance as at the end of the financial year 12-month ECL (Stage 1) RM’000 Lifetime ECL not credit impaired (Stage 2) RM’000 6,674 6,316 1,706 (1,136) 13,560 220,013 (270,509) 50,496 - 16,970 (10,355) 2,028 (1,969) 6,674 149,096 70,917 220,013 Lifetime ECL credit impaired (Stage 3) RM’000 62,242 270,509 172,919 289 505,959 Total RM’000 288,929 179,235 1,706 (1,136) 50,496 289 519,519 31 December 2020 Balance as at the beginning of the financial year Changes in credit risk Purchases and origination Derecognition Exchange differences Balance as at the end of the financial year 31 62,415 (38) (135) 62,242 228,481 60,524 2,028 (1,969) (135) 288,929
  32. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A18. Loans, Advances and Financing (a) By type Group As at As at 31 December 31 December 2021 2020 RM'000 RM'000 Bank As at As at 31 December 31 December 2021 2020 RM'000 RM'000 At amortised cost Overdrafts Term loans/financing Housing loans/financing Syndicated term loans/financing Hire purchase receivables/financing Other term loans/financing Bills receivables Trust receipts Claims on customers under acceptance credits Share margin financing Staff loans/financing Credit/charge card receivables Revolving credits/financing Gross loans, advances and financing Fair value changes arising from fair value hedges 5,532,681 71,111,818 11,045,645 9,822,724 78,045,017 5,466,845 653,169 4,159,728 2,002,139 98,006 1,936,629 8,637,366 198,511,767 (5,036) 198,506,731 (3,610,117) 194,896,614 Less: Allowance for credit losses Net loans, advances and financing 5,591,112 65,651,613 9,903,531 9,614,361 72,934,923 3,765,638 562,226 3,699,294 2,185,523 108,452 2,021,947 10,074,892 186,113,512 117,725 186,231,237 (3,806,358) 182,424,879 4,132,651 46,003,666 6,556,269 659,328 42,722,512 5,084,332 612,561 3,142,641 308,609 84,543 1,665,110 6,426,835 117,399,057 (3,248) 117,395,809 (2,350,706) 115,045,103 4,414,180 44,045,052 5,613,808 1,015,862 41,164,003 3,378,674 525,147 2,934,996 356,465 97,201 1,747,981 7,116,639 112,410,008 8,681 112,418,689 (2,903,505) 109,515,184 (i) Included in loans, advances and financing are housing loans/financing sold to Cagamas with recourse to the Group and the Bank amounting to RM2,225,525,000 (2020: RM2,896,091,000) and RM1,484,141,000 (2020: RMNil) respectively. (ii) Included in loans, advances and financing of the Group are exposures to Unrestricted Investment Account ('URIA'), as part of the arrangement between RHB Islamic Bank and other investors based on Wakalah concept, a trust-based contract in which a party (muwakkil) appoints another party as his agent (wakil) to perform a particular task, in matters that may be delegated, either voluntarily or with imposition of a fee. The fee shall be recognised based on agreement. Profit generated/losses incurred is based on net distributable income calculated. Net distributable income is derived after deducting Wakalah fee, direct expenses and provisions (if any). Losses (if any) will be borne solely by the investors unless such losses are due to RHB Islamic Bank’s misconduct, negligence or breach of specified terms in the contract between the investors and RHB Islamic Bank. As at 31 December 2021, gross exposure to URIA financing funded by investors at the Group is RM220,670,000 (2020: RMNil). The portfolio expected credit losses for financing and advances relating to URIA is borne solely by the investors. 32
  33. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A18. Loans, Advances and Financing (continued) (b) By type of customer Group As at As at 31 December 31 December 2021 2020 RM'000 RM'000 Domestic non-bank financial institutions Domestic business enterprises: Small medium enterprises Others Government and statutory bodies Individuals Other domestic entities Foreign entities Bank As at As at 31 December 31 December 2021 2020 RM'000 RM'000 3,430,530 4,028,623 666,638 710,488 29,383,897 32,293,478 6,283,148 99,273,422 160,349 27,686,943 198,511,767 28,122,412 28,960,697 6,512,428 95,182,250 149,412 23,157,690 186,113,512 22,250,233 16,367,652 31,290 55,295,411 29,323 22,758,510 117,399,057 22,614,690 14,938,302 65,260 55,495,220 27,685 18,558,363 112,410,008 (c) By geographical distribution Group As at As at 31 December 31 December 2021 2020 RM'000 RM'000 Bank As at As at 31 December 31 December 2021 2020 RM'000 RM'000 172,332,475 1,746,020 19,445,961 1,721,007 184,037 2,829,014 119,169 131,127 2,957 198,511,767 96,258,254 19,445,961 1,510,805 184,037 117,399,057 Malaysia Labuan Offshore Singapore Thailand Brunei Cambodia Lao Indonesia Vietnam 33 163,801,243 2,321,773 15,567,576 1,548,312 172,571 2,353,437 159,617 188,983 186,113,512 95,236,486 15,567,576 1,433,375 172,571 112,410,008
  34. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A18. Loans, Advances and Financing (continued) (d) By interest/profit rate sensitivity Group As at As at 31 December 31 December 2021 2020 RM'000 RM'000 Fixed rate - Housing loans/financing - Hire purchase receivables/financing - Other fixed rate loans/financing Variable rate - Base lending/financing rate plus - Cost-plus - Other variable rates Bank As at As at 31 December 31 December 2021 2020 RM'000 RM'000 135,102 1,766,382 22,688,406 107,350 2,559,984 21,721,680 99,571 659,306 10,741,916 87,334 1,015,862 9,035,344 114,224,412 47,374,156 12,323,309 198,511,767 105,332,857 46,787,748 9,603,893 186,113,512 70,246,144 24,772,398 10,879,722 117,399,057 68,875,787 25,523,231 7,872,450 112,410,008 (e) By economic sector Group As at As at 31 December 31 December 2021 2020 RM'000 RM'000 Agriculture, hunting, forestry and fishing Mining and quarrying Manufacturing Electricity, gas and water Construction Wholesale and retail trade and restaurant and hotel Transport, storage and communication Finance, insurance, real estate and business services Government and government agencies Education, health and others Household sector Others 34 Bank As at As at 31 December 31 December 2021 2020 RM'000 RM'000 4,610,387 264,975 10,937,418 1,364,316 13,550,490 3,500,827 565,203 9,717,560 1,734,819 13,318,314 3,033,089 174,710 8,118,520 620,024 8,002,112 1,967,721 258,361 7,143,108 1,362,272 8,121,305 19,795,696 8,335,675 17,874,802 7,410,118 15,843,095 1,666,529 14,876,841 1,929,825 23,400,844 3,268,051 6,185,353 105,954,813 843,749 198,511,767 21,491,620 3,497,372 6,099,353 100,026,690 876,834 186,113,512 16,772,102 31,290 2,103,605 60,581,296 452,685 117,399,057 14,896,692 65,260 2,019,308 59,403,172 366,143 112,410,008
  35. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A18. Loans, Advances and Financing (continued) (f) By purpose Group As at As at 31 December 31 December 2021 2020 RM'000 RM'000 Purchase of securities Purchase of transport vehicles Purchase of landed property: - Residential - Non-residential Purchase of property, plant and equipment other than land and building Personal use Credit card Purchase of consumer durables Construction Working capital Merger and acquisition Other purposes Bank As at As at 31 December 31 December 2021 2020 RM'000 RM'000 12,233,918 9,576,193 12,046,734 9,248,129 4,948,181 381,053 4,794,695 628,177 70,018,468 19,610,259 63,791,998 19,503,376 45,760,232 13,527,848 43,335,901 13,792,771 2,279,642 11,680,382 1,936,629 9,085 7,208,836 46,478,307 2,662,058 14,817,990 198,511,767 2,440,925 11,063,576 2,021,947 12,014 7,704,997 42,834,976 1,804,322 13,640,518 186,113,512 1,485,510 6,805,381 1,665,111 9,085 5,903,401 28,036,825 46,214 8,830,216 117,399,057 1,718,619 6,456,314 1,747,981 12,014 6,051,960 26,324,964 489,461 7,057,151 112,410,008 (g) By remaining contractual maturities Group As at As at 31 December 31 December 2021 2020 RM'000 RM'000 Bank As at As at 31 December 31 December 2021 2020 RM'000 RM'000 36,484,052 11,839,045 17,100,913 133,087,757 198,511,767 27,087,299 5,089,861 9,831,533 75,390,364 117,399,057 Maturity within one year One year to three years Three years to five years Over five years 35 41,798,823 8,390,912 13,464,779 122,458,998 186,113,512 32,547,239 3,420,980 5,759,252 70,682,537 112,410,008
  36. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A18. Loans, Advances and Financing (continued) (h) Impaired loans, advances and financing (i) Movement in impaired loans, advances and financing Group As at As at 31 December 31 December 2021 2020 RM'000 RM'000 Balance as at the beginning of the financial year Transfer to 12-month ECL (Stage 1) Transfer to lifetime ECL not credit impaired (Stage 2) Transfer to lifetime ECL credit impaired (Stage 3) Purchases and origination Derecognition Amount written off Modification of contractual cash flow Disposal of a subsidiary Exchange differences Other movements Balance as at the end of the financial year Bank As at As at 31 December 31 December 2021 2020 RM'000 RM'000 3,181,282 (76,826) 3,479,175 (81,820) 2,354,397 (59,146) 2,623,781 (61,711) (413,319) (285,113) (359,552) (242,488) 1,362,455 350,971 (338,536) (1,192,245) (362) 20,654 56,433 757,571 453,405 (581,479) (548,226) (1,308) (1,874) (9,049) - 505,604 301,989 (250,908) (795,112) (350) 7,785 39,925 559,554 297,792 (393,580) (426,865) (1,069) (1,017) - 2,950,507 3,181,282 1,744,632 2,354,397 (ii) By economic sector Group As at As at 31 December 31 December 2021 2020 RM'000 RM'000 Agriculture, hunting, forestry and fishing Mining and quarrying Manufacturing Electricity, gas and water Construction Wholesale and retail trade and restaurant and hotel Transport, storage and communication Finance, insurance, real estate and business services Education, health and others Household sector Others 36 Bank As at As at 31 December 31 December 2021 2020 RM'000 RM'000 11,396 2,876 228,378 12,606 343,966 49,306 196,348 405,332 258,065 334,416 4,919 2,876 178,040 495 295,349 40,740 4,518 296,285 253,821 286,425 287,307 275,606 311,533 351,259 192,431 260,172 205,386 336,673 276,180 684,197 794,530 33,465 2,950,507 248,228 11,878 988,055 26,862 3,181,282 242,405 5,266 560,901 1,778 1,744,632 214,185 2,324 710,475 3,565 2,354,397
  37. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A18. Loans, Advances and Financing (continued) (h) Impaired loans, advances and financing (continued) (iii) By purpose Group As at As at 31 December 31 December 2021 2020 RM'000 RM'000 Purchase of securities Purchase of transport vehicles Purchase of landed property: - Residential - Non-residential Purchase of property, plant and equipment other than land and building Personal use Credit card Purchase of consumer durables Construction Working capital Other purposes Bank As at As at 31 December 31 December 2021 2020 RM'000 RM'000 29,901 46,803 35,392 66,693 18,272 12,520 25,048 14,979 593,169 385,600 648,636 379,793 422,881 291,286 454,832 273,214 22,488 92,969 20,045 588 61,395 1,535,097 162,452 2,950,507 28,109 191,429 27,229 885 97,811 1,557,327 147,978 3,181,282 19,254 81,577 17,844 588 61,021 728,830 90,559 1,744,632 24,187 183,944 23,619 885 70,838 1,191,595 91,256 2,354,397 (iv) By geographical distribution Group As at As at 31 December 31 December 2021 2020 RM'000 RM'000 Malaysia Labuan Offshore Singapore Thailand Brunei Cambodia Lao Indonesia 1,669,228 678,850 372,719 94,355 4,806 127,567 2,982 2,950,507 37 1,968,795 265,901 761,963 61,364 6,590 103,851 12,102 716 3,181,282 Bank As at As at 31 December 31 December 2021 2020 RM'000 RM'000 1,283,736 372,719 83,371 4,806 1,744,632 1,533,431 761,963 52,413 6,590 2,354,397
  38. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A18. Loans, Advances and Financing (continued) (h) Impaired loans, advances and financing (continued) (v) Movement in allowance for credit losses 12-month ECL (Stage 1) RM’000 Group 31 December 2021 Balance as at the beginning of the financial year 812,037 Changes due to financial assets recognised in the opening balance that have been: - Transferred to 12-month ECL (Stage 1) - Transferred to lifetime ECL not credit impaired (Stage 2) - Transferred to lifetime ECL credit impaired (Stage 3) Changes in credit risk Purchases and origination Bad debts written off Changes to model methodologies Derecognition Transfer to financial investments at amortised cost Exchange differences Other movements Balance as at the end of the financial year Lifetime ECL not credit impaired (Stage 2) RM’000 1,385,283 Lifetime ECL credit impaired (Stage 3) RM’000 1,609,038 Total RM’000 3,806,358 259,949 (236,692) (23,257) - (51,684) 157,604 (105,920) - (9,678) 198,587 (86,802) (165,890) 96,480 (32,697) - (37,862) 115,170 7,191 (78,646) (814) 1,015,663 164,989 72,551 (79,599) (145,393) (50,496) 5,546 1,186,991 953,753 24,452 (973,008) 3,426 (239,850) 5,916 56,433 1,407,463 1,080,880 212,173 (973,008) (68,982) (463,889) (50,496) 10,648 56,433 3,610,117 567,095 864,051 1,548,936 2,980,082 179,319 (156,045) (23,274) - (45,425) 93,250 (47,825) - (3,267) 130,627 (38,185) (100,980) 41,452 (29,647) - 5,772 192,534 (83,571) (420) 812,037 527,920 163,456 (68,327) (837) 1,385,283 563,362 48,261 (377,862) (141,724) (1,560) (728) 1,609,038 31 December 2020 Balance as at the beginning of the financial year Changes due to financial assets recognised in the opening balance that have been: - Transferred to 12-month ECL (Stage 1) - Transferred to lifetime ECL not credit impaired (Stage 2) - Transferred to lifetime ECL credit impaired (Stage 3) Changes in credit risk Purchases and origination Bad debts written off Derecognition Disposal of a subsidiary Exchange differences Balance as at the end of the financial year 38 1,097,054 404,251 (377,862) (293,622) (1,560) (1,985) 3,806,358
  39. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A18. Loans, Advances and Financing (continued) (h) Impaired loans, advances and financing (continued) (v) Movement in allowance for credit losses (continued) 12-month ECL (Stage 1) RM’000 Bank 31 December 2021 Balance as at the beginning of the financial year 638,222 Changes due to financial assets recognised in the opening balance that have been: - Transferred to 12-month ECL (Stage 1) - Transferred to lifetime ECL not credit impaired (Stage 2) - Transferred to lifetime ECL credit impaired (Stage 3) Changes in credit risk Purchases and origination Bad debts written off Changes to model methodologies Derecognition Transfer to financial investments at amortised cost Exchange differences Other movements Balance as at the end of the financial year Lifetime ECL not credit impaired (Stage 2) RM’000 1,037,670 Lifetime ECL credit impaired (Stage 3) RM’000 1,227,613 Total RM’000 2,903,505 209,160 (190,921) (18,239) - (40,356) 128,133 (87,777) - (8,965) 159,839 (78,917) (141,705) 87,882 (18,134) - (131,942) 90,684 18,054 (67,860) 1,278 708,275 133,483 22,994 (65,964) (88,123) (50,496) 1,050 848,909 416,384 17,851 (687,210) 3,371 (210,462) 4,184 39,925 793,522 324,042 802,764 148,967 (130,984) (17,983) - (34,802) 69,675 (34,873) - (2,984) 111,181 (34,081) (95,390) 37,065 (15,791) - 110,131 163,955 (70,641) (446) 638,222 289,607 102,631 (62,068) 126 1,037,670 415,150 42,533 (285,614) (107,089) (666) 1,227,613 417,925 131,529 (687,210) (44,539) (366,445) (50,496) 6,512 39,925 2,350,706 31 December 2020 Balance as at the beginning of the financial year Changes due to financial assets recognised in the opening balance that have been: - Transferred to 12-month ECL (Stage 1) - Transferred to lifetime ECL not credit impaired (Stage 2) - Transferred to lifetime ECL credit impaired (Stage 3) Changes in credit risk Purchases and origination Bad debts written off Derecognition Exchange differences Balance as at the end of the financial year 39 1,179,090 2,305,896 814,888 309,119 (285,614) (239,798) (986) 2,903,505
  40. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A19. Other Assets Group As at As at 31 December 31 December 2021 2020 RM'000 RM'000 Other receivables Cash collateral in relation to derivative transactions Deposits Prepayments Amount receivable for release of units from funds Amount due from subsidiaries 40 Bank As at As at 31 December 31 December 2021 2020 RM'000 RM'000 889,136 920,774 277,203 454,334 417,368 45,191 168,715 407,594 43,477 120,392 417,368 34,910 112,499 407,594 30,637 67,678 207,850 1,728,260 36,355 1,528,592 1,000,729 1,842,709 317,805 1,278,048
  41. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A20. Deposits from Customers (a) By type of deposits Group As at As at 31 December 31 December 2021 2020 RM'000 RM'000 Bank As at As at 31 December 31 December 2021 2020 RM'000 RM'000 50,781,048 14,824,462 152,875,804 251,271 218,732,585 40,926,635 12,042,346 84,332,324 251,271 137,552,576 Demand deposits Savings deposits Fixed/investment deposits Negotiable instruments of deposits 49,511,159 13,267,557 140,273,598 418,469 203,470,783 41,522,937 10,913,587 81,455,981 418,469 134,310,974 (b) By type of customer Group As at As at 31 December 31 December 2021 2020 RM'000 RM'000 Bank As at As at 31 December 31 December 2021 2020 RM'000 RM'000 18,660,846 114,383,371 78,274,077 7,414,291 218,732,585 5,283,361 75,741,317 50,124,540 6,403,358 137,552,576 Government and statutory bodies Business enterprises Individuals Others 20,183,118 103,449,050 72,922,998 6,915,617 203,470,783 6,656,689 70,758,550 50,626,789 6,268,946 134,310,974 (c) By maturity structure of fixed/investment deposits and negotiable instruments of deposits Group As at As at 31 December 31 December 2021 2020 RM'000 RM'000 Due within six months Six months to one year One year to three years Three years to five years 116,302,584 34,741,291 1,795,252 287,948 153,127,075 41 105,692,228 32,833,137 1,625,159 541,543 140,692,067 Bank As at As at 31 December 31 December 2021 2020 RM'000 RM'000 61,461,628 22,171,387 685,359 265,221 84,583,595 63,247,679 17,843,488 657,610 125,673 81,874,450
  42. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A21. Deposits and Placements of Banks and Other Financial Institutions Note Licensed banks Licensed Islamic banks Licensed investment banks BNM/Other central banks Other financial institutions Group As at As at 31 December 31 December 2021 2020 RM'000 RM'000 16,696,377 1,295,130 651,864 4,178,053 585,403 23,406,827 (a) 16,933,907 948,447 947,073 1,983,092 222,667 21,035,186 Bank As at As at 31 December 31 December 2021 2020 RM'000 RM'000 20,638,171 607,550 4,026,170 397,708 25,669,599 20,834,955 1,307 1,712,484 1,861,342 200,523 24,610,611 (a) Included in deposits and placements by BNM/other central banks are amounts received under the Government scheme as part of the COVID-19 relief measures for the purpose of lending/financing to SMEs at a concessionary rate and with maturity period ranging between two to nine years. A22. Investment Accounts Note Mudharabah Restricted Investment Account Wakalah Unrestricted Investment Account (a) (b) Group As at As at 31 December 31 December 2021 2020 RM'000 RM'000 360,520 220,771 581,291 - By type of counterparty: - Licensed banks 360,520 - Investment asset (principal): - Unquoted securities 357,870 - 220,771 - 176,536 44,134 220,670 - (a) Mudharabah Restricted Investment Account (b) Wakalah Unrestricted Investment Account By type of counterparty: - Business enterprises Investment asset (principal): - Personal financing - Housing financing 42
  43. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A23. Other Liabilities Group As at As at 31 December 31 December 2021 2020 RM'000 RM'000 Other creditors and accruals Amount payable for redemption units Contract liabilities Short term employee benefits Accrual for operational expenses Prepaid instalments Cash collateral pledged for derivative transactions Structured deposits Remisiers' trust deposits Dividend payable Amount due to trust funds Amount due to subsidiaries 43 Bank As at As at 31 December 31 December 2021 2020 RM'000 RM'000 1,308,668 348,404 205,971 455,763 265,925 22,406 1,304,456 58,430 244,711 389,914 220,404 29,946 853,092 63,000 361,228 197,033 22,406 504,368 84,000 298,803 171,107 29,946 112,719 771,311 97,828 457,587 4,046,582 428,280 356,712 92,060 401,005 296,396 3,822,314 112,719 771,311 6,584 2,387,373 428,280 356,712 401,005 13,151 2,287,372
  44. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A24. Segmental Reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decisionmaker, who is the person or group that allocates resources to and assesses the performance of the operating segments of an entity. The Group has determined its Management Committee as its chief operating decision-maker. Pursuant to the Group's internal management reporting framework, the Group has on 1 July 2021 set up Group Community Banking and Group Wholesale Banking, in line with a much leaner organisation structure that would reflect the Group’s focus and resolve to be more effective in pursuing its business strategies. The Group has restated the related corresponding segment information arising from the above and the change in revenue sharing for certain treasury related products which is now allocated to respective business segments from Group Treasury and Global Markets to adequately recognise and reward the efforts of respective business segment in the value chain. The Group's business segments can be organised into the following main segments reflecting the Group's internal reporting structure: (a) Group Community Banking ('GCB') GCB comprise Group Retail Banking and Group Small and Medium Enterprises ('SME's) Banking. Group Retail Banking focuses on providing products and services to individual customers. The products and services offered to customers include credit facilities (mortgages, non-residential mortgages, hire purchase, purchase of securities, credit cards and other personal loans and financing), remittances, deposits collection, investment related products, and bancassurance/bancatakaful products. Group SME Banking focuses on providing financing solutions to SMEs and family-owned enterprises, as well as trade and cash management solutions for SMEs. (b) Group Wholesale Banking ('GWB') GWB comprise the following key business portfolio/functional group: I. Group Treasury & Global Markets; and II. Group Corporate Banking and Investment Banking (‘Group CBIB’) which consist of Group Corporate Banking, Group Investment Banking, Group Asset Management, Group Commercial Banking, Group Transaction Banking and Group Economics. (i) Group Treasury and Global Markets offers a comprehensive suite of treasury products and solutions including foreign exchange ('FX'), derivatives, capital markets, structured products, money market investments and Islamic Treasury products catering to the hedging and investment needs of our diverse customers in Malaysia, Singapore and Thailand. This segment is also responsible for the overall management of the liquidity and funding needs of the Group as well as for investing excess capital and funds to enhance the returns for the Group. (ii) Group Corporate Banking provides a comprehensive suite of conventional and Shariah-compliant financing solutions to corporate clients whose shares are listed on stock exchanges locally and/or abroad, multinational companies, government and government agencies and government-linked companies. Financial solutions provided include working capital funding, trade financing, foreign currency hedging, project financing and syndication, as well as funding of corporate exercises. (iii) Group Investment Banking offers a full range of investment banking products and services covering primary markets, such as advisory (corporate and debt restructuring, mergers and acquisitions, takeovers), fundraising via both equity and debt instruments, and secondary markets including securities trading for both institutional and retail clients. The segment leverages on the Group’s regional platforms to provide cross-border transactional services to clients across ASEAN. 44
  45. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A24. Segmental Reporting (continued) The Group's business segments can be organised into the following main segments reflecting the Group's internal reporting structure (continued): (b) Group Wholesale Banking ('GWB') (continued) This segment also offers stockbroking and investment banking products and services to the Group's regional customers in Indonesia, Thailand, Hong Kong and Vietnam. In 2020, the Group has ceased its stockbroking business in Singapore pursuant to the disposal of RHB Securities Singapore Pte Ltd ('RHBSS') and the capital market business in Singapore was transferred to the Bank (Singapore Branch) which is now grouped under 'Group International Business'. The cessation of the operations of RHBSS has been accounted for as discontinued operation in accordance with MFRS 5 'Non-current Assets Held for Sale and Discontinued Operations'. (iv) Group Asset Management manages a full set of investment services and offerings including management of unit trust funds, investment management advisory, private mandates, product development and trustee services. (v) Group Commercial Banking offers a wide range of business solutions ranging from financing, deposits, cash management solutions, trade finance, FX and remittance among others for Commercial customers (Mid-size to Large-Size Private Companies). (vi) Group Transaction Banking offers a wide range of business solutions ranging from cash management solutions, trade finance and services including supply chain financing solutions among others for SME, Commercial & Large corporates. (vii) Group Economics which includes Foreign Exchange and Fixed Income Strategy, provides expert advice on Macroeconomic developments as well as local economic and sectoral trends. This segment is also responsible for engaging with corporate and institutional clients to provide advice on economic developments and trends. (c) Group International Business Group International Business primarily focuses on providing commercial and investment banking related products and services tailored to the specific needs of the customers in foreign countries in which the Group has operations. The Group currently has foreign presences in Singapore, Thailand, Brunei, Cambodia and Lao. (d) Insurance RHB Insurance Berhad provides general insurance for retail, SME, commercial and corporate customers. (e) Support Center and Others Support Center and Others comprise results from other business segments in the Group (nominee services, property investment and rental of premises and other related financial services). The results of these other businesses are not material to the Group and therefore do not render a separate disclosure and are reported in aggregate in the financial statements. The business segment results are prepared based on the Group's internal management reporting, which reflects the organisation's management reporting structure. Internal allocation of costs, for example, back office support, centralised cost, funding center and the application of transfer pricing, where appropriate, has been used in preparing the segmental reporting. 45
  46. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A24. Segmental Reporting (continued) Twelve months ended 31 December 2021 External revenue Inter-segment revenue Segment revenue Other operating expenses Including: Depreciation of property, plant and equipment Depreciation of right of use assets Amortisation of intangible assets Allowance for credit losses on financial assets Impairment losses made on other non-financial assets Profit/(Loss) before taxation and zakat Taxation and zakat Net profit for the financial year Group Community Banking RM'000 Group Wholesale Banking RM'000 Group International Business RM'000 3,709,209 3,709,209 3,466,234 43,079 3,509,313 713,920 1,295 715,215 241,426 (3,649) 237,777 (342,123) 16,464 (325,659) Insurance RM'000 Support Center and Others RM'000 InterSegment Elimination RM'000 Total RM'000 (57,189) (57,189) 7,788,666 7,788,666 (1,996,873) (957,819) (499,860) (119,636) (5,386) 57,189 (3,522,385) (81,142) (33,974) (82,898) (21,789) (17,163) (28,045) (17,100) (18,124) (13,864) (2,074) (2,616) (3,704) (237) (227) - - (122,342) (72,104) (128,511) (81,968) (552,020) (106,104) 2,878 - (737,214) (314) 1,999,160 109,251 - (314) 3,528,753 (905,621) 2,623,132 1,630,368 121,019 46 (331,045)
  47. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A24. Segmental Reporting (continued) As at 31 December 2021 Group Community Banking RM'000 Group Wholesale Banking RM'000 Group International Business RM'000 Insurance RM'000 Support Center and Others RM'000 Segment assets Investments in associates and joint venture Tax recoverable Deferred tax assets Unallocated assets Total assets 123,340,916 125,483,089 36,326,831 1,598,767 632,391 287,381,994 12 131,283 377,825 1,650,344 289,541,458 Segment liabilities Provision for taxation and zakat Deferred tax liabilities Borrowings Senior debt securities Subordinated obligations Unallocated liabilities Total liabilities 103,685,123 118,540,352 29,827,870 1,164,185 30,992 253,248,522 124,163 55 127,380 3,646,369 3,221,882 1,142,576 261,510,947 47 Total RM'000
  48. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A24. Segmental Reporting (continued) Twelve months ended 31 December 2020 Continuing Operations External revenue Inter-segment revenue Segment revenue Other operating expenses Including: Depreciation of property, plant and equipment Depreciation of right of use assets Amortisation of intangible assets Allowance for credit losses on financial assets Impairment losses made on other non-financial assets Profit/(Loss) before taxation and zakat Taxation and zakat Net profit for the financial year Group Community Banking RM'000 Group Wholesale Banking RM'000 Group International Business RM'000 3,581,388 3,581,388 3,149,800 38,565 3,188,365 609,182 906 610,088 275,334 (4,119) 271,215 (429,992) 16,727 (413,265) Insurance RM'000 Support Center and Others RM'000 InterSegment Elimination RM'000 Total RM'000 Discontinued Operation RM'000 Total RM'000 (52,079) (52,079) 7,185,712 7,185,712 95,207 95,207 7,280,919 7,280,919 (1,868,579) (955,777) (432,435) (122,745) (59,266) 52,079 (3,386,723) (61,140) (3,447,863) (76,079) (33,073) (77,436) (18,979) (17,073) (23,291) (14,159) (16,985) (11,467) (2,131) (2,573) (3,203) (238) (632) - - (111,586) (70,336) (115,397) (978) (3,801) (2,250) (112,564) (74,137) (117,647) (716,461) (264,717) (167,808) 4,639 (739) - (1,145,086) (937) (1,146,023) 996,348 (9,500) 1,958,371 153,109 (473,270) - (9,500) 2,644,403 (639,912) 2,004,491 9,845 48 33,130 1,531 34,661 (9,500) 2,677,533 (638,381) 2,039,152
  49. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A24. Segmental Reporting (continued) As at 31 December 2020 Segment assets Investments in associates and joint venture Tax recoverable Deferred tax assets Unallocated assets Total assets Segment liabilities Provision for taxation and zakat Deferred tax liabilities Borrowings Senior debt securities Subordinated obligations Unallocated liabilities Total liabilities Group Community Banking RM'000 Group Wholesale Banking RM'000 Group International Business RM'000 Insurance RM'000 Support Center and Others RM'000 115,763,923 118,809,470 32,057,015 1,634,295 1,343,384 269,608,087 12 289,969 35,338 1,216,552 271,149,958 93,379,558 113,216,688 26,619,204 1,167,613 405,510 234,788,573 69,623 165,938 634,630 3,545,150 2,718,729 2,170,751 244,093,394 49 Total RM'000
  50. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A25. Valuation of Property, Plant and Equipment The property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. A26. Events Subsequent to Balance Sheet Date There were no significant events subsequent to the balance sheet date that have not been reflected in the financial statements other than as disclosed below: (a) RHB Wealth Management Hong Kong Limited, an indirect wholly-owned subsidiary of the Bank, had been dissolved on 4 January 2022 pursuant to The Companies (Winding Up and Miscellaneous Provisions) Ordinance of Hong Kong, as further disclosed in Note B6(a). (b) The completion of the Proposed Disposal of PT RHB Asset Management Indonesia as further disclosed in Note B6(d). A27. Changes in the Composition of the Group There were no significant changes in the composition of the Group for the financial year ended 31 December 2021 other than the following: (a) RHB International Trust (L) Ltd ('RHBIT') ceased to be an indirect wholly-owned subsidiary of the Bank with effect from 11 March 2021 following the disposal by RHB Bank (L) Ltd ('RHBBL') as further disclosed in Note B10. Prior to the completion of the disposal of RHBIT, RHBBL has on 1 March 2021, completed the acquisition of the entire equity interest of RHB Corporate Services Sdn Bhd ('RHBCS') from RHBIT for a cash consideration of RM470,041 (equivalent to USD115,396). (b) RHB Finance Hong Kong Limited, an indirect wholly-owned subsidiary of the Bank, has been dissolved upon its deregistration as a legal entity on 17 March 2021 pursuant to Section 751 of The Companies (Winding Up and Miscellaneous Provisions) Ordinance of Hong Kong, as further disclosed in Note B6(a). (c) Capital repayment from RHB Investment Bank Berhad ('RHB Investment Bank') RHB Investment Bank has sought and obtained approval via a special resolution to reduce its issued and paid up ordinary share capital pursuant to Section 117 of the Companies Act 2016 ('CA 2016') on 12 January 2021. Following the approval and confirmation received from Companies Commission of Malaysia ('CCM') on 2 April 2021 that all the requirements of CA 2016 with respect to reduction of share capital have been complied with, the reduction of the issued and paid-up ordinary share capital of RHB Investment Bank has on the same date been effected by way of: (i) cancellation of 20,000,000 ordinary shares in RHB Investment Bank which are held by the Bank resulting in the total number of issued ordinary shares in RHB Investment Bank being reduced from 100,000,000 ordinary shares to 80,000,000 ordinary shares; and (ii) reduction of RHB Investment Bank's share capital from RM1,487,773,000 to RM1,220,000,000 by repaying the surplus capital of the amount of RM267,773,000 to the Bank. (d) On 15 July 2021, RHBIB Nominees (Asing) Sdn Bhd and Utama Gilang Sdn Bhd, an indirect and a direct wholly-owned subsidiary of the Bank respectively, had been dissolved pursuant to Section 459(5) of the Companies Act 2016. (e) RHB Research Institute Singapore Pte Ltd ('RHBRIS'), a wholly-owned subsidiary of the Bank, had on 11 October 2021 held its final general meeting for its dissolution, and the Liquidator’s Statement of Accounts on Winding Up has been lodged with the Accounting and Corporate Regulatory Authority and the Official Receiver to wind up RHBRIS by way of Member’s Voluntary Winding Up pursuant to Section 180(3)(b) of the Insolvency, Restructuring and Dissolution Act 2018 (No. 40 of 2018). RHBRIS has been fully dissolved on 11 January 2022. 50
  51. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A27. Changes in the Composition of the Group (continued) There were no significant changes in the composition of the Group for the financial year ended 31 December 2021 other than the following (continued): (f) On 13 October 2021, RHB Nominees Singapore Pte Ltd and Summit Nominees Pte Ltd, wholly-owned subsidiaries of the Bank, had convened its extraordinary general meeting to approve the Member’s Voluntary Winding Up pursuant to Section 180(3)(b) of the Insolvency, Restructuring and Dissolution Act 2018 (No. 40 of 2018). (g) RHB Asset Management Limited and RHB Capital Hong Kong Limited, indirect wholly-own subsidiaries of the Bank, had been dissolved on 15 October 2021 pursuant to The Companies (Winding Up and Miscellaneous Provisions) Ordinance of Hong Kong, as further disclosed in Note B6(a). (h) The Bank has on 15 November 2021 injected additional capital of LAK39.7 billion (equivalent to RM15.6 million) into its wholly owned subsidiary, RHB Bank Lao Sole Co., Ltd ('RHB Bank Lao'). As a result, the issued share capital of RHB Bank Lao increased from LAK380.9 billion to LAK420.6 billion. (i) The following indirect wholly-owned subsidiaries of the Bank have commenced member's voluntary winding-up pursuant to Section 439(1)(b) of the Companies Act 2016 on 27 December 2021: (i) RHB International Asset Management Sdn Bhd; (ii) RHB Islamic Asset Management Sdn Bhd; and (iii) RHBIM Berhad. 51
  52. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A28. Changes In Contingent Liabilities Since The Last Annual Statements Of Financial Position (a) Commitments and Contingencies In the normal course of business, the Group and the Bank make various commitments and incurs certain contingent liabilities with legal recourse to its customers. Apart from the allowance for commitments and contingencies already made in the interim financial statements, no material losses are anticipated as a result of these transactions. The commitments and contingencies comprise the following: Group As at As at 31 December 31 December 2021 2020 RM'000 RM'000 Contingent liabilities Direct credit substitutes Transaction-related contingent items Short term self-liquidating trade-related contingencies Commitments Lending of banks’ securities or the posting of securities as collateral by banks, including instances where these arise out of repo-style transactions, and commitment to buy-back Islamic securities under Sell and Buy Back Agreement transactions Forward asset purchases, forward deposits, partly paid shares and securities which represent commitments with certain drawdowns Irrevocable commitments to extend credit - Maturity less than one year - Maturity more than one year Any commitments that are unconditionally cancellable at any time by the Bank without prior notice or that effectively provide for automatic cancellation due to deterioration in a borrower's creditworthiness Derivative financial instruments Foreign exchange related contracts^ - Less than one year - One year to less than five years - More than five years Commodity related contracts^ - Less than one year - One year to less than five years - More than five years Equity related contracts^ - Less than one year - One year to less than five years Interest rate related contracts^ - Less than one year - One year to less than five years - More than five years Bank As at As at 31 December 31 December 2021 2020 RM'000 RM'000 1,394,350 3,077,649 977,071 5,449,070 1,219,814 3,202,339 903,594 5,325,747 1,390,928 2,714,070 883,894 4,988,892 1,219,050 2,865,660 895,540 4,980,250 5,424,754 4,915,427 5,424,754 5,223,433 35,530 5,843 35,530 - 10,416,569 24,147,171 8,614,951 22,350,203 7,335,607 15,554,354 7,277,335 12,902,959 15,415,727 55,439,751 16,212,542 52,098,966 12,815,528 41,165,773 13,805,758 39,209,485 46,065,953 3,904,977 354,724 55,476,927 3,397,368 1,141,832 50,314,717 4,009,107 354,724 58,071,384 3,497,906 1,141,832 58,332 244,110 100,051 374,040 181,225 - 58,332 244,110 100,051 374,040 181,225 - 1,140,762 4,286 451,701 - 1,140,762 4,286 458,784 - 6,872,522 31,697,379 6,445,228 96,888,324 8,933,780 20,627,991 9,470,841 100,055,705 9,782,522 33,697,379 8,245,228 107,951,218 12,453,887 22,292,883 11,585,841 110,057,782 157,777,145 157,480,418 154,105,883 154,247,517 ^ These derivatives are revalued on gross position basis and the unrealised gains or losses has been reflected in the income statements and statements of financial position as derivative assets or derivative liabilities. 52
  53. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A28. Changes In Contingent Liabilities Since The Last Annual Statements Of Financial Position (continued) (b) Guarantees Issued by the Group and the Bank Group As at As at 31 December 31 December 2021 2020 RM'000 RM'000 Corporate guarantee issued in favour of the Stock Exchange of Thailand in relation to a derivative warrant programme of a subsidiary - 16 The Group and the Bank has given a continuing guarantee to Labuan Financial Services Authority to meet the liabilities and financial obligations and requirements of its subsidiary, RHB Bank (L) Ltd, arising from its offshore banking business in the Federal Territory of Labuan. The Group and the Bank has also given a guarantee to the Bank of Thailand to provide support to meet any legal liabilities which may be incurred in respect of its operations in Thailand. (c) Contingent Liabilities As at 31 December 2021, the Group has contingent liabilities amounting to approximately RM73 million in respect of litigation. As the cases are still preliminary and the reliable exposure cannot be estimated, no provision is recognised in the financial statements. A29. Capital Commitments Group As at As at 31 December 31 December 2021 2020 RM'000 RM'000 Authorised and contracted for: - Property, plant and equipment - Investment securities 319,850 319,850 53 206,086 13,266 219,352 Bank As at As at 31 December 31 December 2021 2020 RM'000 RM'000 286,744 286,744 182,260 182,260
  54. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A30. Capital Adequacy Ratio BNM Guidelines on capital adequacy requires the Group, the Bank and the banking subsidiaries to maintain an adequate level of capital to withstand any losses which may result from credit and other risks associated with financing operations. The capital adequacy ratio is computed based on the eligible capital in relation to the total risk-weighted assets as determined by BNM. Pursuant to Capital Adequacy Framework (Basel II – Risk Weighted Assets), RHB Islamic Bank will not apply prudential capital floors on Risk Weighted Assets effective from 30 September 2021 upon completion of a three-year Internal Rating Based approach implementation. RHB Bank (Cambodia) Plc ('RHB Bank Cambodia') is subject to National Bank of Cambodia's capital adequacy requirements. (a) The capital adequacy ratios of the Group and the Bank are as follows: Group As at As at 31 December 31 December 2021 2020 RM'000 RM'000 Common Equity Tier I ('CET I')/Tier I Capital Share capital Retained profits Other reserves FVOCI reserves Less: Goodwill Intangible assets (include associated deferred tax liabilities) Deferred tax assets 55% of cumulative gains arising from change in value of FVOCI instruments Investments in subsidiaries Investments in associates and joint venture Other deductions# Total CET I Capital Qualifying non-controlling interests recognised as Tier I Capital Total Tier I Capital Tier II Capital Subordinated obligations meeting all relevant criteria Qualifying capital instruments of a subsidiary issued to third parties+ Surplus eligible provisions over expected losses General provisions^ Total Tier II Capital Total Capital 54 Bank@ As at As at 31 December 31 December 2021 2020 RM'000 RM'000 7,612,612 18,689,157 704,808 406,012 27,412,589 6,994,103 17,339,102 556,644 1,817,650 26,707,499 7,612,612 13,954,209 491,179 394,726 22,452,726 6,994,103 13,660,680 444,776 1,541,980 22,641,539 (2,638,198) (567,938) (425,268) (2,638,198) (533,609) (352,107) (1,714,913) (503,178) (291,577) (1,714,913) (487,937) (247,523) (223,307) (102,425) (12) (11,043) 23,444,398 (999,707) (102,425) (12) (19,504) 22,061,937 (217,099) (4,448,364) (10,691) 15,266,904 (848,089) (4,701,080) (21,261) 14,620,736 170 23,444,568 210 22,062,147 15,266,904 14,620,736 2,249,289 1,749,531 2,249,289 1,749,531 398,771 510,312 292,712 3,451,084 465,001 538,079 179,727 2,932,338 375,828 210,705 2,835,822 401,269 85,599 2,236,399 26,895,652 24,994,485 18,102,726 16,857,135
  55. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A30. Capital Adequacy Ratio (continued) Group As at As at 31 December 31 December 2021 2020 Bank@ As at As at 31 December 31 December 2021 2020 Capital ratios Before proposed dividends: CET I Capital Ratio Tier I Capital Ratio Total Capital Ratio 17.831% 17.831% 20.455% 16.416% 16.416% 18.598% 16.094% 16.094% 19.083% 14.945% 14.945% 17.231% After proposed dividends and DRP: CET I Capital Ratio Tier I Capital Ratio Total Capital Ratio 17.200% 17.201% 19.825% 16.188% 16.188% 18.370% 15.220% 15.220% 18.210% 14.632% 14.632% 16.918% @ The capital adequacy ratios of the Bank consist of capital base and risk-weighted assets derived from the Bank and its wholly-owned offshore banking subsidiary, RHB Bank (L) Ltd. # Pursuant to Basel II Market Risk para 5.19 & 5.20 - Valuation Adjustments, the Capital Adequacy Framework (Basel II RWA) calculation shall account for the ageing, liquidity and holding back adjustments on its trading portfolio. + Qualifying subordinated sukuk that are recognised as Tier II capital instruments held by third parties as prescribed under paragraph 17.6 of the BNM's Guideline on Capital Adequacy Framework (Capital Components) which are issued by a fully consolidated subsidiary of the Bank. ^ Pursuant to BNM's policy document on Financial Reporting and Financial Reporting for Islamic Banking Institutions, general provision refers to loss allowance measured at an amount equal to 12-month and lifetime expected credit losses as defined under MFRS 9 'Financial Instruments' and regulatory reserves, to the extent they are ascribed to non-credit impaired exposures, determined under standardised approach for credit risk. Includes the qualifying regulatory reserves of the Group and the Bank of RM85,609,000 (2020: RM12,200,000) and RM120,542,000 (2020: RMNil) respectively. * The Board of Directors have declared a final single-tier dividend of 25.00 sen per share in respect of the financial year ended 31 December 2021, amounting to RM1,035,730,000, consisting of cash portion of 15.00 sen per share and an electable portion of 10.00 sen per share (as disclosed in Note B6(b)). There is no irrevocable written undertaking from its shareholders, hence, the amount of the proposed final dividend may be reduced either by the average of the preceding 3year take up rates or if less than 3 preceding years, the available average historical take up rates, subject to the amount being not more than 50% of the total electable portion of the dividend, in accordance with the Implementation Guidance on Capital Adequacy Framework (Capital Components) dated 9 December 2020. ** With the implementation of the Proposed DRP in 2020, the amount of dividend to be deducted from the Group and the Bank’s CET I Capital may be reduced by the portion of dividend reinvested by the shareholders. This will correspondingly increase the Group and the Bank capital ratios. 55
  56. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A30. Capital Adequacy Ratio (continued) (b) The capital adequacy ratios of RHB Islamic Bank and RHB Investment Bank are as follows: RHB Islamic Bank As at As at 31 December 31 December 2021 2020 RM'000 RM'000 CET I/Tier I Capital Share capital Retained profits FVOCI reserves 1,673,424 3,716,002 (28,023) 5,361,403 Less: Goodwill Investments in subsidiaries, associates and joint venture Intangible assets (include associated deferred tax liabilities) Deferred tax assets 55% of cumulative gains arising from change in value of FVOCI instruments Other deductions# Total CET I Capital/Tier I Capital Tier II Capital Subordinated sukuk Subordinated obligations meeting all relevant criteria Surplus eligible provisions over expected losses General provisions^ Total Tier II Capital Total Capital 1,673,424 2,896,031 224,848 4,794,303 RHB Investment Bank As at As at 31 December 31 December 2021 2020 RM'000 RM'000 1,220,000 481,289 38,642 1,739,931 1,487,773 331,261 47,839 1,866,873 (2,976) (102,565) (2,767) (78,167) (372,395) (717,155) (30,183) (22,684) (372,395) (720,426) (24,296) (17,985) (918) 5,254,944 (123,666) (2,643) 4,587,060 (21,253) (71) 576,190 (26,311) 705,460 750,000 134,679 52,467 937,146 750,000 137,002 69,026 956,028 200,000 10,428 210,428 200,000 9,921 209,921 6,192,090 5,543,088 786,618 915,381 Capital ratios Before proposed dividends: CET I Capital Ratio Tier I Capital Ratio Total Capital Ratio 17.635% 17.635% 20.780% 14.877% 14.877% 17.977% 29.319% 29.319% 40.027% 36.116% 36.116% 46.862% After proposed dividends: CET I Capital Ratio Tier I Capital Ratio Total Capital Ratio 16.849% 16.849% 19.994% 14.714% 14.714% 17.815% 24.231% 24.231% 34.938% 36.116% 36.116% 46.862% 56
  57. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A30. Capital Adequacy Ratio (continued) # Pursuant to Basel II Market Risk para 5.19 & 5.20 - Valuation Adjustments, the Capital Adequacy Framework (Basel II RWA) calculation shall account for the ageing, liquidity and holding back adjustments on its trading portfolio. ^ Pursuant to BNM's policy document on Financial Reporting and Financial Reporting for Islamic Banking Institutions, general provision refers to loss allowance measured at an amount equal to 12-month and lifetime expected credit losses as defined under MFRS 9 'Financial Instruments' and regulatory reserves, to the extent they are ascribed to non-credit impaired exposures, determined under standardised approach for credit risk. Includes the qualifying regulatory reserves of RHB Islamic Bank and RHB Investment Bank of RM41,763,000 (2020: RM54,526,000) and RM10,400,000 (2020: RM9,903,000) respectively. (c) The breakdown of risk-weighted assets in the various categories of risk-weights are as follows; Group RM'000 Bank@ RM'000 RHB Islamic Bank RM'000 RHB Investment Bank RM'000 31 December 2021 Credit risk Market risk Operational risk Total risk-weighted assets 115,070,774 3,201,115 13,211,976 131,483,865 Group RM'000 83,477,653 2,617,689 8,766,298 94,861,640 Bank@ RM'000 27,011,235 201,515 2,585,628 29,798,378 RHB Islamic Bank RM'000 834,269 162,040 968,930 1,965,239 RHB Investment Bank RM'000 31 December 2020 Credit risk Market risk Operational risk Additional risk-weighted assets due to capital floor^ Total risk-weighted assets 117,398,841 4,314,070 12,677,517 134,390,428 85,311,553 3,783,371 8,734,782 97,829,706 28,355,786 210,344 2,223,938 43,510 30,833,578 793,669 300,706 858,966 1,953,341 @ The capital adequacy ratios of the Bank consist of capital base and risk-weighted assets derived from the Bank and its wholly-owned offshore banking subsidiary, RHB Bank (L) Ltd. ^ Pursuant to Capital Adequacy Framework (Basel II – Risk Weighted Assets), RHB Islamic Bank will not apply prudential capital floors on Risk Weighted Assets effective from 30 September 2021 upon completion of a three-year Internal Rating Based approach implementation. 57
  58. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A30. Capital Adequacy Ratio (continued) The total risk-weighted assets of the Group and Bank are computed based on BNM's Guideline on Risk Weighted Capital Adequacy Framework: Internal Ratings Based Approach for Credit Risk and Standardised Approach for Market Risk and Basic Indicator Approach for Operational Risk (Basel II). The total risk-weighted assets of RHB Islamic Bank are computed based on BNM's Capital Adequacy Framework for Islamic Banks ('CAFIB'): Internal Ratings Based Approach for Credit and Standardised Approach for Market Risk and Basic Indicator Approach for Operational Risk (Basel II). The total risk-weighted assets of RHB Investment Bank are computed based on BNM's Guideline on Risk Weighted Capital Adequacy Framework: Standardised Approach for Credit and Market Risk and Basic Indicator Approach for Operational Risk (Basel II). (d) The capital adequacy ratios of RHB Bank Cambodia are as follows: As at 31 December 2021 RM'000 As at 31 December 2020 RM'000 Before proposed dividends: Solvency ratio 17.685% 18.819% After proposed dividends: Solvency ratio 17.685% 18.819% The Solvency Ratio of RHB Bank Cambodia is the nearest equivalent regulatory compliance ratio in Cambodia computed in accordance with Prakas B7-00-46, B7-04-206 and B7-07-135 issued by the National Bank of Cambodia. This ratio is derived as RHB Bank Cambodia's net worth divided by its risk-weighted assets and off-balance sheet items. The minimum regulatory solvency ratio requirement in Cambodia is 15%. A31. Credit Exposures Arising from Transactions with Connected Parties Group As at As at 31 December 31 December 2021 2020 Outstanding credit exposures with connected parties (RM'000) 13,184,949 15,707,526 Bank As at As at 31 December 31 December 2021 2020 8,690,660 11,155,639 Percentage of outstanding credit exposures with connected parties as proportion of total credit exposures (%) 5.47 6.89 5.82 7.78 Percentage of outstanding credit exposures with connected parties which is impaired or in default (%) 0.04 0.09 - 0.02 The credit exposures above are derived based on BNM's revised Guidelines on Credit Transactions and Exposures with Connected Parties, which are effective on 1 January 2008. 58
  59. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A32. Operations of Islamic Banking (a) Statement of Financial Position as at 31 December 2021 Note ASSETS Cash and short-term funds Deposits and placements with banks and other financial institutions Financial assets at FVTPL Financial assets at FVOCI Financial investments at amortised cost Financing and advances Other assets Derivative assets Statutory deposits Deferred tax assets Right of use assets Property, plant and equipment Intangible assets Total assets Group As at As at 31 December 31 December 2021 2020 RM'000 RM'000 Bank As at As at 31 December 31 December 2021 2020 RM'000 RM'000 8,061,955 2,259,802 - - 2,326,510 52,093 5,587,524 5,235,191 75,232,072 555,940 9,175 20,000 110,860 2,528 3,452 3,528 97,200,828 2,410,219 107,678 6,409,937 4,577,078 67,675,470 417,837 6,573 12,000 6,794 4,750 3,944 3,133 83,895,215 970,383 144,803 1,115,186 996,810 96,937 1,093,747 71,661,203 60,830,175 - - 4,539,457 581,291 8,287 214,046 44,104 753,585 93,685 2,548 754,573 78,652,779 2,879,907 12,182 526,778 193,402 3,023,760 52,548 4,840 754,514 68,278,106 1,048,047 1,048,047 1,032,244 1,032,244 Islamic Banking Funds 18,548,049 15,617,109 67,139 61,503 Total liabilities and Islamic Banking Funds 97,200,828 83,895,215 1,115,186 1,093,747 Commitments and contingencies 19,633,698 18,555,062 1,032,116 36,157 LIABILITIES Deposits from customers Deposits and placements of banks and other financial institutions Investment accounts Bills and acceptances payable Other liabilities Derivative liabilities Recourse obligation on financing sold to Cagamas Provision for taxation and zakat Lease liabilities Subordinated obligations Total liabilities A22 59
  60. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A32. Operations of Islamic Banking (continued) (b) Income Statement for the Financial Year Ended 31 December 2021 4th Quarter Ended 31 December 31 December 2021 2020 RM'000 RM'000 Group Income derived from investment of depositors' funds Income derived from investment account funds Income derived from investment of shareholders' funds Net modification loss Allowance for credit losses Total distributable income Income attributable to depositors Profit distributed to investment account holders Personnel expenses Other overheads and expenditures Profit before taxation and zakat Taxation and zakat Net profit for the financial period/year Twelve Months Ended 31 December 31 December 2021 2020 RM'000 RM'000 759,340 721,246 2,936,041 2,789,835 94,851 85,895 357,697 364,011 45,268 (24,432) 25,123 900,150 (356,727) (7,559) 535,864 (13,328) (125,974) 396,562 (63,993) 332,569 20,841 (26,445) (104,078) 697,459 (359,633) 337,826 (8,539) (118,219) 211,068 (38,069) 172,999 250,077 (118,521) (146,601) 3,278,693 (1,426,365) (22,359) 1,829,969 (33,739) (414,228) 1,382,002 (241,027) 1,140,975 179,567 (259,233) (237,643) 2,836,537 (1,667,761) 1,168,776 (30,607) (389,533) 748,636 (110,180) 638,456 Statement of Comprehensive Income for the Financial Year Ended 31 December 2021 4th Quarter Ended 31 December 31 December 2021 2020 RM'000 RM'000 Group Net profit for the financial period/year Other comprehensive income/(loss) in respect Items that will be reclassified subsequently to profit or loss (a) Debt instruments measured at FVOCI - Unrealised net (loss)/gain on revaluation - Net transfer to income statement on disposal - Changes in expected credit losses Income tax relating to components of other comprehensive loss/(income) Other comprehensive (loss)/income, net of tax, for the financial period/year Total comprehensive income for the financial period/year 60 Twelve Months Ended 31 December 31 December 2021 2020 RM'000 RM'000 332,569 172,999 (41,883) 262 (51,219) (4,775) (171) (241,011) (91,714) 336 181,011 (39,942) (394) 10,052 13,440 79,854 (33,856) (31,569) (42,725) (252,535) 106,819 301,000 130,274 888,440 745,275 1,140,975 638,456
  61. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A32. Operations of Islamic Banking (continued) (b) Income Statement for the Financial Year Ended 31 December 2021 4th Quarter Ended 31 December 31 December 2021 2020 RM'000 RM'000 Bank Income derived from investment of depositors' funds Income derived from investment of shareholders' funds Allowance for credit losses Total distributable income Income attributable to depositors Personnel expenses Other overheads and expenditures Profit before taxation Taxation Net profit for the financial period/year Twelve Months Ended 31 December 31 December 2021 2020 RM'000 RM'000 2,698 2,718 10,815 12,981 (528) 2,170 (1,331) 839 839 839 401 6,920 10,039 (1,316) 8,723 (7) 8,716 8,716 15 (722) 10,108 (5,380) 4,728 4,728 4,728 479 (2,667) 10,793 (9,188) 1,605 (997) (22) 586 586 Statement of Comprehensive Income for the Financial Year Ended 31 December 2021 4th Quarter Ended 31 December 31 December 2021 2020 RM'000 RM'000 Twelve Months Ended 31 December 31 December 2021 2020 RM'000 RM'000 Bank Net profit for the financial period/year 839 8,716 4,728 586 Total comprehensive income for the financial period/year 839 8,716 4,728 586 61
  62. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A32. Operations of Islamic Banking (continued) (d) Financing and Advances Group As at As at 31 December 31 December 2021 2020 RM'000 RM'000 Bank As at As at 31 December 31 December 2021 2020 RM'000 RM'000 At amortised cost Cashline Term financing - Housing financing - Syndicated term financing - Hire purchase receivables - Other term financing Bills receivables Trust receipts Claims on customers under acceptance credits Share margin financing Staff financing Credit/charge card receivables Revolving financing Gross financing and advances Less: Allowance for credit losses Net financing and advances 1,020,558 (i) Movements in impaired financing and advances Balance as at the beginning of the financial year Transfer to 12-month ECL (Stage 1) Transfer to lifetime ECL not credit impaired (Stage 2) Transfer to lifetime ECL credit impaired (Stage 3) Purchases and origination Derecognition Amount written off Modification of contractual cash flow Other movements Balance as at the end of the financial year 62 856,366 - - 24,537,246 3,257,874 9,163,396 33,803,255 382,513 40,694 1,017,087 1,752 13,180 271,518 2,337,239 75,846,312 (614,240) 75,232,072 21,169,443 3,067,225 8,598,499 30,582,237 386,964 37,079 764,298 2,546 10,941 273,966 2,464,088 68,213,652 (538,182) 67,675,470 435,207 (15,496) 466,169 (15,918) - - (53,767) (42,625) - - 157,405 31,079 (72,445) (101,293) (12) 8,811 389,489 176,565 26,127 (104,208) (70,664) (239) 435,207 3,689 3,689 - 978,132 978,132 (7,749) 970,383 1,003,732 1,003,732 (6,922) 996,810
  63. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A32. Operations of Islamic Banking (continued) (d) Financing and Advances (continued) (ii) Movement in allowance for credit losses 12-month ECL (Stage 1) RM’000 Group 31 December 2021 Balance as at the beginning of the financial year Changes due to financial assets recognised in the opening balance that have been: - Transferred to 12-month ECL (Stage 1) - Transferred to lifetime ECL not credit impaired (Stage 2) - Transferred to lifetime ECL credit impaired (Stage 3) Changes in credit risk Purchases and origination Bad debts written off Changes to model methodologies Derecognition Exchange differences Other movements Balance as at the end of the financial year Lifetime ECL Lifetime ECL not credit credit impaired impaired (Stage 2) (Stage 3) RM’000 RM’000 179,605 Total RM’000 163,558 195,019 538,182 43,835 (38,816) (5,019) - (11,059) 29,202 (18,143) - (645) 32,131 (5,733) (15,347) 6,378 (16,784) - (25,566) 16,667 (4,952) (7,269) 105 174,674 88,658 5,372 (8,592) (12,504) 252,606 95,463 6,106 (61,989) 55 (24,307) 8,811 186,960 158,555 28,145 (61,989) (13,489) (44,080) 105 8,811 614,240 71,816 99,609 173,882 345,307 29,383 (24,092) (5,291) - (8,766) 21,718 (12,952) - (266) 20,351 (3,841) (6,215) 4,107 (14,136) - 56,898 23,374 (8,882) 1 163,558 98,014 9,502 (5,891) 195,019 85,435 5,728 (41,550) (29,754) 179,605 31 December 2020 Balance as at the beginning of the financial year Changes due to financial assets recognised in the opening balance that have been: - Transferred to 12-month ECL (Stage 1) - Transferred to lifetime ECL not credit impaired (Stage 2) - Transferred to lifetime ECL credit impaired (Stage 3) Changes in credit risk Purchases and origination Bad debts written off Derecognition Exchange differences Balance as at the end of the financial year 63 240,347 38,604 (41,550) (44,527) 1 538,182
  64. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A32. Operations of Islamic Banking (continued) (d) Financing and Advances (continued) (ii) Movement in allowance for credit losses (continued) 12-month ECL (Stage 1) RM’000 Bank 31 December 2021 Balance as at the beginning of the financial year Changes in credit risk Exchange differences Balance as at the end of the financial year Lifetime ECL Lifetime ECL not credit credit impaired impaired (Stage 2) (Stage 3) RM’000 RM’000 Total RM’000 6,922 (3,062) 105 3,965 - 3,784 3,784 6,922 722 105 7,749 4,254 2,667 1 6,922 - - 4,254 2,667 1 6,922 31 December 2020 Balance as at the beginning of the financial year Changes in credit risk Exchange differences Balance as at the end of the financial year 64
  65. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 A32. Operations of Islamic Banking (continued) Group As at As at 31 December 31 December 2021 2020 RM'000 RM'000 Bank As at As at 31 December 31 December 2021 2020 RM'000 RM'000 (e) Other Assets Prepayments Deposits Other receivables 29,816 1,088 525,036 555,940 27,588 1,535 388,714 417,837 144,803 144,803 96,937 96,937 Group As at As at 31 December 31 December 2021 2020 RM'000 RM'000 (f) Deposits from Customers Saving Deposits - Qard Demand Deposits - Qard - Commodity Murabahah Term Deposits - Commodity Murabahah Specific Investment Account - Commodity Murabahah General Investment Account - Mudharabah 2,574,440 2,094,100 6,183,489 3,134,399 5,981,871 1,464,521 50,129,731 42,962,476 9,638,797 8,289,588 347 71,661,203 37,619 60,830,175 8,126 129,683 6,719 34,201 35,317 214,046 7,959 141,946 5,306 13,722 357,845 526,778 (g) Other Liabilities Sundry creditors Contract liability Short term employee benefits Accrual for operational expenses Other accruals and payables 65
  66. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 B1. Review of Group Results (a) Current Financial Year vs Previous Financial Year The Group reported a net profit of RM2,618.4 million for the financial year ended 31 December 2021, 28.8% higher from RM2,032.5 million recorded a year ago. This was mainly due to higher net fund based income, lower allowances for credit losses and lower net modification loss, partly offset by lower non-fund based income and higher operating expenses. Net fund based income improved to RM5,874.7 million, driven by proactive funding cost management, which dropped 24.1% year-on-year supported by CASA growth of 4.5%. Non-fund based income declined by 7.6% to RM2,158.8 million from a year ago driven by lower net trading and investment income, brokerage income and lower net gain on foreign exchange and derivative, partly offset by higher commercial banking, capital market and wealth management fee income and higher insurance underwriting surplus. Operating expenses increased by 4.0% from a year ago at RM3,522.4 million. With positive JAWS, cost-to-income ratio improved to 45.2% compared with 47.1% a year ago. Allowance credit losses was at RM737.2 million, 35.6% lower than previous year. Credit charge ratio was at 0.29% compared to 0.58% last year. Total assets of the Group increased by 6.8% from December 2020 to RM289.5 billion as at 31 December 2021. Net assets per share was at RM6.76, with shareholders' equity at RM28.0 billion as at 31 December 2021. The Group’s gross loans and financing grew by 6.7% year-on-year to RM198.5 billion, mainly supported by growth in mortgage, corporate, SME and Singapore. Domestic loans and financing grew 4.8% year-on-year. Customer deposits increased by 7.5% year-on-year to RM218.7 billion, predominantly attributed to CASA growth of 4.5%, and fixed and money market time deposits of 9.0%. CASA composition stood at 30.0% as at 31 December 2021. Gross impaired loans was at RM3.0 billion as at 31 December 2021, with gross impaired loans ratio of 1.49% compared with RM3.2 billion and 1.71% at 31 December 2020. Loan loss coverage ratio for the Group, excluding regulatory reserves, remained strong at 122.4% as at end-December 2021. 66
  67. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 B1. Review of Group Results (b) Performance by Operating Segment (i) GCB GCB reported a pre-tax profit of RM1,630.4 million for the year, 63.6% higher than previous year. This was mainly attributed to lower allowances for credit losses and higher net fund based income and non-fund based income, partially offset by higher operating expenses. Gross loans and financing was at RM124.2 billion, 6.1% higher year-on-year, primarily driven by growth in mortgages, SME and auto financing. Total deposits increased by 9.9% year-on-year to RM100.9 billion as at 31 December 2021, contributed by growth in fixed deposits and CASA. (ii) GWB GWB posted a pre-tax profit of RM1,999.2 million, 2.1% higher from previous year. This is on the back of higher net fund based income and higher fee income, partially offset by lower net trading and investment income, higher expected credit losses and higher operating expenses. Gross loans and financing increased by 1.6% year-on-year to RM50.3 billion. Total deposits increased by 3.4% to RM93.0 billion mainly due to increase in money market time deposits, partly offset by decline in current account. (iii) Group International Business Group International Business recorded a pre-tax profit of RM109.3 million, as compared to RM9.8 million recorded last year. RHB Bank Singapore recorded a pre-tax profit of SGD14.9 million as compared to SGD4.6 million in the previous year. This was mainly due to higher net fund based income and non-fund based income, and lower expected credit losses, partially offset by higher operating expenses. Singapore loans and advances increased by 23.0% year-on-year to SGD6.3 billion, while deposits increased by 15.0% to SGD6.7 billion. RHB Bank Cambodia recorded a pre-tax profit of USD19.1 million, as compared to USD2.7 million in the previous year. This was mainly due to higher net fund based income and expected credit losses written back, partially offset by lower non-fund based income and higher operating expenses. Cambodia loans and advances increased by 16.1% year-on-year to USD679.2 million, while deposits decreased by 3.9% to USD571.3 million. (iv) Insurance RHB Insurance Berhad registered a pre-tax profit of RM121.0 million, 21.0% lower than previous year. This is attributed to a decline in net investment income, partially offset by higher underwriting surplus and lower operating expenses. 67
  68. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 B2. Current Quarter vs Previous Quarter Net profit of the Group decreased by 0.7% to RM631.2 million from RM635.6 million recorded in the preceding quarter ended 30 September 2021. This was primarily due to lower non-fund based income and higher operating expenses, partly offset by lower allowances for credit losses, lower net modification loss and higher net fund based income. B3. Prospects for Financial Year 2022 The global economy is on its path to recovery, supported by the positive momentum in economic activities worldwide and the gradual reopening of international borders. Domestically, Malaysia’s GDP is expected to grow by 5.5% in 2022. However, the emergence of new COVID-19 variants still poses downside risks. For the banking sector, the demand for credit is expected to improve in tandem with improving economic growth prospect. Interest rate is also expected to gradually normalise with potential increase in OPR in 2022. Overall, the sector is projected to remain resilient supported by strong capital and liquidity levels as well as adequate impairment provisions made in the last two years. Notwithstanding the expectation of economic recovery, RHB Group will remain prudent and continue to monitor market development closely. In response to the demands brought about by the pandemic including changing customer behaviors and preferences, we decided to reassess, reprioritise and accelerate certain initiatives which are reflected in our newly embarked 5-year (2022-2026) strategy, Together We Progress (TWP26). The focus of TWP26 will be on driving quality growth by embedding continuous emphasis on digitalisation, sustainability and building a future-ready workforce. B4. Variance of Actual Profit from Forecast Profit and Profit Guarantee There were no profit forecast or profit guarantee issued by the Group and the Bank. 68
  69. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 B5. Taxation and Zakat 4th Quarter Ended 31 December 31 December 2021 2020 RM'000 RM'000 Group Income tax based on profit for the financial period - Malaysian income tax - Overseas tax Deferred tax Under/(Over) provision in respect of prior financial years Tax expense Zakat Twelve Months Ended 31 December 31 December 2021 2020 RM'000 RM'000 317,651 4,822 (34,086) 288,387 240,835 (4,078) (100,277) 136,480 929,989 27,380 (59,583) 897,786 808,475 4,949 (175,190) 638,234 1,409 289,796 (2,069) 134,411 1,967 899,753 (2,413) 635,821 1,500 291,296 455 134,866 5,868 905,621 4,091 639,912 The effective tax rate of the Group for the fourth quarter and financial year ended 31 December 2021 was higher than the statutory tax rate mainly due to non-deductibility of certain expenses for tax purposes. 4th Quarter Ended 31 December 31 December 2021 2020 RM'000 RM'000 Bank Income tax based on profit for the financial period - Malaysian income tax - Overseas tax Deferred tax (Over)/Under provision in respect of prior financial years Twelve Months Ended 31 December 31 December 2021 2020 RM'000 RM'000 118,453 305 (11,695) 107,063 123,584 2,275 (73,940) 51,919 585,077 2,464 (22,544) 564,997 538,900 3,057 (110,048) 431,909 535 107,598 1,584 53,503 (1,217) 563,780 1,584 433,493 The effective tax rate of the Bank for the fourth quarter and financial year ended 31 December 2021 was lower than the statutory tax rate mainly due to certain income not subject to tax. 69
  70. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 B6. Status of Corporate Proposals (a) Proposed cessation of business operations of subsidiaries in Hong Kong RHB Hong Kong Limited ('RHB Hong Kong') and its subsidiaries (collectively, 'RHB Hong Kong Group'), had on 4 December 2019 decided that they will commence to cease their business operations ('Proposed Cessation'). RHB Hong Kong is a wholly-owned subsidiary of RHB Investment Bank, which in turn is wholly-owned by the Bank. Pursuant to the Proposed Cessation, RHB Hong Kong Group will gradually discontinue offering financial services to its existing and potential clients. RHB Investment Bank, being the shareholder of RHB Hong Kong Group will provide the requisite support to ensure an orderly winding down of their business operations. The increasingly challenging operating broking environment in Hong Kong has resulted in losses being recorded for RHB Hong Kong Group. As a result, it is no longer viable for RHB Hong Kong Group to continue its business operations. The Proposed Cessation would allow RHB Investment Bank to refocus efforts and resources in driving long-term growth in other ASEAN markets in line with the larger RHB Banking Group's strategy. As part of RHB Hong Kong Group, RHB Finance Hong Kong Limited, RHB Asset Management Limited, RHB Capital Hong Kong Limited and RHB Wealth Management Hong Kong Limited, have been dissolved as disclosed in Notes A27(b), A27(g) and A26(a). (b) Proposed establishment of a Dividend Reinvestment Plan On 17 December 2020, the Bank announced that as part of its capital management plan and to enhance the Bank's shareholders' value, the Bank has proposed to undertake a dividend reinvestment plan that provides the shareholders with the option to elect to reinvest their cash dividend declared by the Bank into new ordinary shares in the Bank ('RHB Bank Shares'), hereinafter referred to as Dividend Reinvestment Plan ('DRP'). Approval from shareholders for the DRP and the issuance of new shares arising from the DRP was obtained at the Annual General Meeting held on 25 May 2021. The DRP further provides that whenever a cash dividend (either an interim, final, special or other dividend) is proposed, the Board may, in its absolute discretion, determine that the DRP to be applied to the whole or a portion of the cash dividend and where applicable, any remaining portion of the dividend will be paid in cash. On 26 January 2022, the Board of Directors of the Bank ('Board') had proposed a single-tier final dividend of 25.00 sen per share in respect of the financial year ended 31 December 2021 ('Final Dividend'), consisting of cash portion of 15.00 sen per share and an electable portion of 10.00 sen per share. The Board has determined that the existing DRP as mentioned above shall apply to the electable portion of the said Final Dividend. (c) Memorandum of understanding ('MOU') with Axiata Group Berhad ('Axiata Group') On 2 June 2021, the Bank entered into a MOU with Axiata Group to jointly explore potential collaboration opportunities including to jointly apply to BNM for a digital banking license. The proposed Axiata entity selected to collaborate with the Bank for the joint application for the digital bank license is Boost Holdings Sdn Bhd ('Boost Holdings'). The Board of Directors of the Bank and Boost Holdings have entered into a heads of agreement ('HOA') setting out the terms of the proposed application to BNM for a digital banking license. The Bank and Boost Holdings will collectively be the 'Parties' and individually, the 'Party'. The key salient terms of the HOA are as follows: (i) Identity of the digital bank The Parties will as soon as reasonably practicable following the date of this HOA, discuss in good faith and agree whether the digital bank will be a new company which will be incorporated for the purposes of the application or will be an existing entity named as Axiata Digital Capital Sdn Bhd ('Aspirasi'). 70
  71. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 B6. Status of Corporate Proposals (continued) (c) Memorandum of understanding ('MOU') with Axiata Group Berhad ('Axiata Group') (continued) The Board of Directors of the Bank and Boost Holdings have entered into a heads of agreement ('HOA') setting out the terms of the proposed application to BNM for a digital banking license. The Bank and Boost Holdings will collectively be the 'Parties' and individually, the 'Party'. The key salient terms of the HOA are as follows (continued): (i) Identity of the digital bank (continued) If regulatory requirements and/or directions require so, the Parties agree to discuss in good faith and identify an alternative entity which fulfils any such relevant requirements and/or directions as soon as practicable. (ii) Submission of the application of the digital bank license The Parties shall use all reasonable and commercial endeavours to submit the application to BNM for the digital bank on or before 30 June 2021 ('Submission Date'). (iii) Capital requirements of the digital bank The Parties agree that the minimum initial issued share capital of the digital bank as required by BNM under applicable laws shall be RM100 million unimpaired by losses or any other amount as is required by BNM pursuant to any applicable laws. (iv) Contribution of assets into the digital bank The Parties agree that as soon as possible after the date of this HOA but prior to the Submission Date, to agree in writing, the multiples which will be applied in arriving at a valuation of the business of Aspirasi, either as the applicant of the digital bank license or the assets of Aspirasi to be injected into the digital bank. The Parties agree that as soon as possible after the date of this HOA but prior to the Submission Date, to identify other assets that can be injected into the digital bank and the valuation of such assets. The Parties agree that any additional assets to be injected into the digital bank shall as soon as possible after the date of this HOA but prior to the Submission Date be clearly identified and subject to due diligence and thereafter mutually agree in writing the multiplies which will be applied in arriving at the valuation of the additional assets. (v) Shareholding structure of the digital bank Boost Holdings shall hold 60% of the equity share capital of the digital bank, with the Bank holding the remaining 40% of the equity share capital, subject to BNM's approval. (vi) Other transaction documents The Parties shall, as soon as reasonably practicable following the date of the HOA but before the Submission Date: • agree the details of the number of shares they will each subscribe for and the subscription price per share ('Subscription Agreement'); and • confirm the agreed terms or form of the shareholders' agreement which will govern the relationship between the Parties as regards the digital bank ('Shareholders' Agreement'). The agreed form of the Subscription Agreement and the Shareholders' Agreement shall be executed on a date to be agreed between the Parties, being a date as soon as reasonably practicable following BNM's approval of the application for the digital bank license. 71
  72. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 B6. Status of Corporate Proposals (continued) (c) Memorandum of understanding ('MOU') with Axiata Group Berhad ('Axiata Group') (continued) The Board of Directors of the Bank and Boost Holdings have entered into a heads of agreement ('HOA') setting out the terms of the proposed application to BNM for a digital banking license. The Bank and Boost Holdings will collectively be the 'Parties' and individually, the 'Party'. The key salient terms of the HOA are as follows (continued): (vii) Target segment of the digital bank The Parties agree that the digital bank shall focus on the segments of the market who are underserved, unserved and/or unbanked primarily within Malaysia. (viii) Termination The HOA may be terminated in the following circumstances: (a) the digital bank application has been notified by BNM as unsuccessful; (b) BNM has notified Parties that the digital bank application will not be processed without material changes which will negatively impact on the commercially agreed arrangement of the Parties in relation to the digital bank; (c) BNM, during its initial consultation stages recommends Parties to materially change their intended commercial arrangements in respect of the digital bank whereby such recommendations are not able to be resolved between Parties; (d) BNM imposes conditions on the grant of the digital bank licence which the Parties are unable to comply with or which would materially and negatively impact on the commercially agreed scope of the joint-venture or either Parties; (e) where the due diligence performed on assets (which includes Aspirasi) that is to be injected into the digital bank reveals that there are material issues or material gap in information which cannot be resolved which will result in a negative impact to the Parties; (f) where subsequent due diligence performed on agreed assets (which includes Aspirasi) after submission but prior to operationalisation reveals that there are fraud or material breaches of any applicable laws which would result in material reputational damage to the Parties which the Parties cannot resolve; (g) the valuation methodology (valuation multiples or range) of Aspirasi or any identified assets to be injected to the digital bank cannot be agreed upon in good faith by the Parties; and (h) the non-terminating Party fails to rectify a breach within thirty (30) days upon notice. Further, the HOA will be terminated upon execution of the Subscription Agreement and Shareholders Agreement and any other transaction documents to be entered into between the Parties required for the formation for the digital bank. (ix) Exclusivity The Parties agree that it shall not, and shall procure that no member of its group and/or any of its or any other member of its group's employees and agents, shall make any discussions or negotiations with any other person on matters covered under this HOA until BNM notifies the Parties that the application for the digital bank license has been unsuccessful. The rationale of the HOA is to set out the terms of the joint application to BNM for the digital banking license and the conduct, funding and formation of the digital bank. The joint application for the digital bank license by Boost Holdings and the Bank was submitted to BNM on 30 June 2021. 72
  73. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 B6. Status of Corporate Proposals (continued) (d) Proposed disposal of PT RHB Asset Management Indonesia ('RHBAMI') PT RHB Sekuritas Indonesia ('RHB Sekuritas'), a wholly-owned subsidiary of RHB Investment Bank which in turn is a wholly-owned subsidiary of the Bank, had on 23 July 2021, entered into a conditional share purchase agreement ('CSPA') with Allianz Global Investors Asia Pacific Limited ('AllianzGI') and PT Asuransi Allianz Life Indonesia ('Allianz Life Indonesia') to dispose its entire 99.62% equity interest in RHBAMI ('Proposed Disposal') for a consideration of approximately EUR7.47 million (or approximately RM37.25 million). The Proposed Disposal will entail the disposal by RHB Sekuritas of its entire 98.62% equity interest and 1.00% equity interest in RHBAMI to AllianzGI and Allianz Life Indonesia respectively. The Proposed Disposal is conditional upon inter-alia, the approval of the Financial Services Authority of Indonesia or Otoritas Jasa Keuangan ('OJK') for the fit and proper test of AllianzGI as the new controlling shareholder of RHBAMI and the candidate for new member(s) of Board of Commissioners of RHBAMI as proposed by AllianzGI. The last date to fulfil all the conditions precedent for the Proposed Disposal is 8-months from the date of the CSPA which can be mutually extended. The Proposed Disposal is not subject to the approval of the shareholders of the Bank or any relevant regulatory authority in Malaysia. The approval of OJK for AllianzGI as the new controlling shareholder of RHBAMI was obtained on 6 January 2022 and the approval of OJK for the new Board of Commissioners of RHBAMI as proposed by AllianzGI were obtained on 29 December 2021 and 27 December 2021. The Proposed Disposal was completed on 31 January 2022 and RHBAMI has since then ceased to be an indirect subsidiary of the Bank. (e) Proposed establishment of share grant scheme ('Proposed SG') The Bank had on 15 December 2021 announced that it proposed to establish and implement a share grant scheme of up to 2% of the total number of issued shares of the Bank (excluding treasury shares, if any) at any point in time during the duration the Proposed SGS for employees and Executive Directors of the Bank and its subsidiaries (excluding subsidiaries which are dormant) who fulfil the eligibility criteria ('Eligible Employees'). The Proposed SGS is intended to motivate employees, attract talents and retain key employees through the grant of the ordinary shares in the Bank ('RHB Bank Share(s)') to be vested in selected Eligible Employees ('Selected Employees') for the attainment of identified performance objectives. The Proposed SGS is to be administered by the Board Nominating and Remuneration Committee ('BNRC') comprising such persons as may be appointed by the Board from time to time. The BNRC will have the discretion in administering the Proposed SGS following the by-laws governing the Proposed SGS ('By-Laws'). In implementing the Proposed SGS, the Company will make an offer in writing to the Selected Employees ('Offer') and at the BNRC’s discretion, decide that the vesting of any RHB Bank Shares under the Proposed SGS for those Selected Employees who have accepted the Offer ('Grant') ('Grantee(s)') be satisfied by any of the following methods: (i) allotment and issuance of new RHB Bank Shares by the Bank to the Grantees; (ii) acquisition of existing RHB Bank Shares from the Main Market of Bursa Malaysia Securities Berhad ('Bursa Securities'), followed by the transfer of such RHB Bank Shares to the Grantees; (iii) transfer of RHB Bank Shares held in treasury to the Grantees; (iv) cash payment in lieu of (i), (ii) or (iii) above; (v) any other methods as may be permitted by the Companies Act, 2016; or (vi) any combination of any of the above. 73
  74. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 B6. Status of Corporate Proposals (continued) (e) Proposed establishment of share grant scheme ('Proposed SG') (continued) The Proposed SGS shall be in force for a period of nine years commencing from the effective date of implementation of the Proposed SGS, being the date of full compliance with all relevant provisions of the Main Market Listing Requirements of Bursa Securities in relation to the Proposed SGS, more particularly set out in the By-Laws. The new RHB Bank Shares to be allotted and issued pursuant to the Grantees pursuant to the Proposed SGS will be subject to the provisions of the Constitution of the Bank and shall, upon allotment and issuance, rank equally in all respects with the existing RHB Bank Shares. The Proposed SGS is subject to approvals being obtained from the following: (i) Bursa Securities, for the listing and quotation of the new RHB Bank Shares to be issued pursuant to the Proposed SGS on the Main Market of Bursa Securities, of which application has been made on 11 February 2022 and Bursa Securities had vide its letter dated 17 February 2022 approved the listing of such new RHB Bank Shares representing up to 2% of the total number of issued shares of the Bank to be issued pursuant to the Proposed SGS; (ii) Bursa Malaysia Depository Sdn Bhd for the transfer of treasury shares and/or the existing RHB Bank Shares to the Grantees pursuant to the Proposed SGS at any point in time during the duration of the Proposed SGS, if required; (iii) BNM for the increase in the issued shares of the Bank, of which approval was obtained on 4 October 2016; (iv) shareholders of the Bank at an extraordinary general meeting (‘EGM’) to be convened; and (v) any other relevant authorities/parties, if required. The Proposed SGS is not conditional or inter-conditional upon any other corporate exercise/scheme by the Bank. Barring any unforeseen circumstances and subject to all relevant approvals being obtained, the Bank expects to implement the Proposed SGS by the second quarter of 2022. 74
  75. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 B7. Deposits from Customers and Placements of Banks and Other Financial Institutions, Borrowings, Senior Debt Securities and Subordinated Obligations (a) Deposits from customers and placements of banks and other financial institutions Group As at As at 31 December 31 December 2021 2020 RM'000 RM'000 Deposits from customers One year or less More than one year Deposits and placements of banks and other financial institutions Maturing within one year One year to three years Three years to five years Over five years Bank As at As at 31 December 31 December 2021 2020 RM'000 RM'000 216,649,385 2,083,200 218,732,585 201,304,081 2,166,702 203,470,783 136,601,996 950,580 137,552,576 133,527,691 783,283 134,310,974 18,780,203 1,858,196 1,362,647 1,405,781 23,406,827 19,126,009 417,425 270,001 1,221,751 21,035,186 21,266,823 1,732,750 1,281,367 1,388,659 25,669,599 22,820,715 381,011 207,987 1,200,898 24,610,611 (b) Borrowings Group As at As at 31 December 31 December 2021 2020 RM'000 RM'000 Secured Term loans: Cambodian Riel Unsecured Term loans: United States Dollar Promissory note: Indonesia Rupiah Thai Baht Scheduled repayment of borrowings: Within one year 75 Bank As at As at 31 December 31 December 2021 2020 RM'000 RM'000 11,001 137,750 - - - 201,101 - 201,101 14,619 101,760 127,380 150,665 145,114 634,630 - 201,101 127,380 634,630 - 201,101
  76. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 B7. Deposits from Customers and Placements of Banks and Other Financial Institutions, Borrowings, Senior Debt Securities and Subordinated Obligations (continued) (c) Senior debt securities Group and Bank As at As at 31 December 31 December 2021 2020 RM'000 RM'000 USD500 million 2.503% senior debt securities due in 2021 USD300 million 3.766% senior debt securities due in 2024 RM300 million 2.85% senior Sukuk Murabahah due in 2025 USD500 million 1.658% senior debt securities due in 2026 1,265,758 301,587 2,079,024 3,646,369 2,021,872 1,221,568 301,710 3,545,150 (d) Subordinated obligations Group As at As at 31 December 31 December 2021 2020 RM'000 RM'000 4.88% RM250 million Tier II Subordinated Sukuk Murabahah 2017/2027 4.82% RM750 million Tier II Subordinated Notes 2017/2027 4.90% RM200 million Tier II Subordinated Notes 2017/2027 4.32% RM500 million Tier II Subordinated Sukuk Murabahah 2019/2029 3.35% RM500 million Tier II Subordinated Notes 2020/2030 3.13% RM500 million Tier II Subordinated Notes 2020/2030 3.65% RM500 million Tier II Subordinated Notes 2021/2031 Bank As at As at 31 December 31 December 2021 2020 RM'000 RM'000 252,206 252,206 - - 759,287 759,029 759,287 759,029 202,175 202,148 - - 502,367 502,308 - - 501,366 501,280 501,366 501,280 501,463 501,758 501,463 501,758 503,018 3,221,882 2,718,729 503,018 2,265,134 1,762,067 The subordinated obligations comprise unsecured liabilities of the Bank and its investment and islamic bank subsidiaries and are subordinated to the senior indebtedness in accordance with their respective terms and conditions of issuance and qualify as Tier II capital (as disclosed in Note A30) for the purpose of determining the capital adequacy ratios of the Bank and the respective subsidiaries. 76
  77. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 B8. Derivative Financial Instruments Details of derivative financial instruments outstanding are as follows: (a) Derivative financial instruments measured at their fair values together with their corresponding contract/notional amounts Group By type Trading Derivatives: Foreign exchange related contracts - Forwards/swaps - Options - Cross-currency interest rate swaps As at 31 December 2021 Contract/ Fair Value Notional Amount Assets Liabilities RM'000 RM'000 RM'000 As at 31 December 2020 Contract/ Fair Value Notional Amount Assets Liabilities RM'000 RM'000 RM'000 44,563,855 280,615 5,481,184 50,325,654 155,571 5,491 154,693 315,755 313,681 29 116,643 430,353 55,252,294 635,544 4,128,289 60,016,127 709,273 5,358 275,156 989,787 789,622 2,047 211,792 1,003,461 Interest rate related contracts - Swaps 36,459,614 302,842 279,070 30,993,176 632,982 617,341 Commodity related contracts - Options 402,493 22,325 22,329 555,265 12,189 12,189 1,145,048 1,127 1,112 451,701 17,280 17,426 93,017 911 373 200,537 895 - 284,760 - 21,549 456,101 - 71,703 8,555,515 75,655 133,140 8,039,436 346 312,675 97,266,101 718,615 887,926 100,712,343 1,653,479 2,034,795 Equity related contracts - Options Futures related contracts Structured warrants Fair Value Hedging Derivatives: Interest rate related contracts - Swaps Total 77
  78. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 B8. Derivative Financial Instruments (continued) Details of derivative financial instruments outstanding are as follows: (continued) (a) Derivative financial instruments measured at their fair values together with their corresponding contract/notional amounts (continued) Bank By type Trading Derivatives: Foreign exchange related contracts - Forwards/swaps - Options - Cross-currency interest rate swaps As at 31 December 2021 Contract/ Fair Value Notional Amount Assets Liabilities RM'000 RM'000 RM'000 As at 31 December 2020 Contract/ Fair Value Notional Amount Assets Liabilities RM'000 RM'000 RM'000 48,437,748 280,615 5,960,185 54,678,548 183,224 5,491 154,693 343,408 328,558 29 116,829 445,416 57,484,810 635,544 4,590,768 62,711,122 726,266 5,358 275,156 1,006,780 805,366 2,047 212,086 1,019,499 Interest rate related contracts - Swaps 46,969,614 413,315 389,543 42,093,175 754,318 735,456 Commodity related contracts - Options 402,493 22,325 22,329 555,265 12,189 12,189 Equity related contracts - Options 1,145,048 1,127 1,112 458,784 17,280 17,426 Fair Value Hedging Derivatives: Interest rate related contracts - Swaps 4,755,515 18,661 79,661 4,239,436 - 194,572 107,951,218 798,836 938,061 110,057,782 1,790,567 1,979,142 Total 78
  79. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 B8. Derivative Financial Instruments (continued) Details of derivative financial instruments outstanding are as follows: (continued) (a) Derivative financial instruments measured at their fair values together with their corresponding contract/notional amounts (continued) Group As at 31 December 2021 Contract/ Fair Value Notional Amount Assets Liabilities RM'000 RM'000 RM'000 As at 31 December 2020 Contract/ Fair Value Notional Amount Assets Liabilities RM'000 RM'000 RM'000 By remaining period to maturity/next re-pricing date Trading Derivatives: Foreign exchange related contracts - Less than one year - One year to three years - More than three years Interest rate related contracts - Less than one year - One year to three years - More than three years Commodity related contracts - Less than one year - One year to three years - More than three years Equity related contracts - Less than one year - One year to three years Futures related contracts - Less than one year Structured warrants - Less than one year Fair Value Hedging Derivatives: Interest rate related contracts - Less than one year - One year to three years - More than three years Total 46,065,953 1,985,490 2,274,211 50,325,654 213,324 45,345 57,086 315,755 326,624 55,433 48,296 430,353 55,476,927 2,249,295 2,289,905 60,016,127 750,346 116,978 122,463 989,787 805,183 95,624 102,654 1,003,461 6,376,200 14,402,212 15,681,202 36,459,614 6,206 64,068 232,568 302,842 19,129 61,939 198,002 279,070 8,515,850 7,793,323 14,684,003 30,993,176 36,905 51,842 544,235 632,982 49,469 62,671 505,201 617,341 58,332 15,083 329,078 402,493 148 12 22,165 22,325 148 12 22,169 22,329 374,040 73,466 107,759 555,265 12,189 12,189 12,189 12,189 1,140,762 4,286 1,145,048 1,127 1,127 1,112 1,112 451,701 451,701 17,280 17,280 17,426 17,426 93,017 93,017 911 911 373 373 200,537 200,537 895 895 - 284,760 284,760 - 21,549 21,549 456,101 456,101 - 71,703 71,703 496,322 2,753,083 5,306,110 8,555,515 413 355 74,887 75,655 140 63,725 69,275 133,140 417,930 606,456 7,015,050 8,039,436 346 346 5,252 29,337 278,086 312,675 97,266,101 718,615 887,926 100,712,343 1,653,479 2,034,795 79
  80. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 B8. Derivative Financial Instruments (continued) Details of derivative financial instruments outstanding are as follows: (continued) (a) Derivative financial instruments measured at their fair values together with their corresponding contract/notional amounts (continued) Bank As at 31 December 2021 Contract/ Fair Value Notional Amount Assets Liabilities RM'000 RM'000 RM'000 As at 31 December 2020 Contract/ Fair Value Notional Amount Assets Liabilities RM'000 RM'000 RM'000 By remaining period to maturity/next re-pricing date Trading Derivatives: Foreign exchange related contracts - Less than one year - One year to three years - More than three years Interest rate related contracts - Less than one year - One year to three years - More than three years Commodity related contracts - Less than one year - One year to three years - More than three years Equity related contracts - Less than one year - One year to three years Fair Value Hedging Derivatives: Interest rate related contracts - Less than one year - One year to three years - More than three years Total 50,314,717 2,089,620 2,274,211 54,678,548 240,977 45,345 57,086 343,408 341,501 55,433 48,482 445,416 58,071,384 2,349,833 2,289,905 62,711,122 767,339 116,978 122,463 1,006,780 820,928 95,624 102,947 1,019,499 9,286,200 16,402,212 21,281,202 46,969,614 6,206 95,094 312,015 413,315 19,129 92,965 277,449 389,543 12,035,957 8,773,216 21,284,002 42,093,175 36,903 78,888 638,527 754,318 49,473 89,397 596,586 735,456 58,332 15,083 329,078 402,493 148 12 22,165 22,325 148 12 22,169 22,329 374,040 73,466 107,759 555,265 12,189 12,189 12,189 12,189 1,140,762 4,286 1,145,048 1,127 1,127 1,112 1,112 458,784 458,784 17,280 17,280 17,426 17,426 496,322 1,753,084 2,506,109 4,755,515 413 355 17,893 18,661 140 32,699 46,822 79,661 417,930 106,456 3,715,050 4,239,436 - 5,252 2,611 186,709 194,572 107,951,218 798,836 938,061 110,057,782 1,790,567 1,979,142 80
  81. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 B8. Derivative Financial Instruments (continued) (b) Related accounting policies Derivative financial instruments and hedge accounting Derivatives are initially recognised at fair value on the date on which derivative contracts are entered into and are subsequently remeasured at their fair values. All derivatives are carried as assets when fair values are positive and as liabilities when fair values are negative. The method of recognising the resulting fair value gain or loss depends on whether the derivative is designated and qualifies as a hedging instrument, and if so, the nature of the item being hedged. The Group and the Bank designate certain derivatives as either: (1) hedges of the fair value of recognised assets or liabilities or firm commitments (fair value hedge); or (2) net investment hedge. Hedge accounting is used for derivatives designated in this way provided certain criteria are met. (i) Fair value hedge Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the income statements, together with any changes in the fair value of the hedged assets or liabilities that are attributable to the hedged risk. The Group and the Bank apply fair value hedge accounting for hedging fixed interest risk on loans, advances and financing and financial assets at FVOCI. The gain or loss relating to the effective portion of interest rate swaps hedging fixed rate loans, advances and financing is recognised in income statements within other operating income. The gain or loss relating to the ineffective portion is recognised in income statements within net gain or loss on fair value hedges. For fair value hedge of financial assets designated as FVOCI, any changes in fair value of the hedged financial assets FVOCI are recycled from FVOCI reserves to income statements, while the changes in fair value of the derivatives that is related to the effective portion of the hedge is recognised in income statements within other operating income. The ineffective portion of the aforesaid hedging derivatives is recognised in income statements within net gain or loss on fair value changes of derivatives. For financial instruments measured at amortised cost, if the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedged item for which the effective interest method is used is amortised to the income statements over the period to maturity and recorded as other operating income. Effective interest rate amortisation may begin as soon as an adjustment exists and no later than when the hedged item ceases to be adjusted for changes in its fair value attributable to the risk being hedged. If the hedged item is derecognised, the unamortised fair value adjustment is recognised immediately in the income statements. (ii) Net investment hedge Net investment hedge is a hedge against the exposure to exchange rate fluctuations on the net assets of the Group's foreign operations/subsidiaries. Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised directly in the foreign currency translation reserve in equity via other comprehensive income while any gain or loss relating to the ineffective portion is recognised directly in the income statements. On disposal of the foreign operations/subsidiaries, the cumulative value of any such gains or losses recognised in equity is transferred to the income statements. (iii) Derivatives that do not qualify for hedge accounting Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative instrument that does not qualify for hedge accounting are recognised immediately in the income statements. 81
  82. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 B9. Fair Value of Financial Instruments The Group and the Bank analyses its financial instruments measured at fair value into three categories as described below: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Valuations derived from valuation techniques in which significant inputs are not based on observable market data. The table below analyses financial instruments carried at fair value analysed by level within the fair value hierarchy: Group Level 1 RM’000 Level 2 RM’000 Level 3 RM’000 Total RM’000 31 December 2021 Financial assets Financial assets at FVTPL: - Money market instruments - Quoted securities - Unquoted securities 233,908 233,908 - 1,903,186 630,633 1,272,553 641,145 641,145 2,778,239 630,633 233,908 1,913,698 Financial assets at FVOCI: - Money market instruments - Quoted securities - Unquoted securities 2,218 2,218 - 40,379,822 17,021,274 23,358,548 758,833 758,833 41,140,873 17,021,274 2,218 24,117,381 236,126 718,615 43,001,623 1,399,978 718,615 44,637,727 21,549 866,377 - 887,926 Financial assets Financial assets at FVTPL: - Money market instruments - Quoted securities - Unquoted securities 518,459 518,459 - 3,396,562 2,238,908 1,157,654 547,085 547,085 4,462,106 2,238,908 518,459 1,704,739 Financial assets at FVOCI: - Money market instruments - Quoted securities - Unquoted securities 1,922 1,922 - 42,147,509 15,287,958 26,859,551 753,828 753,828 42,903,259 15,287,958 1,922 27,613,379 520,381 1,653,479 47,197,550 1,300,913 1,653,479 49,018,844 71,703 1,963,092 - 2,034,795 Derivative assets Financial liabilities Derivative liabilities 31 December 2020 Derivative assets Financial liabilities Derivative liabilities 82
  83. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 B9. Fair Value of Financial Instruments (continued) The table below analyses financial instruments carried at fair value analysed by level within the fair value hierarchy (continued): Bank Level 1 RM’000 Level 2 RM’000 Level 3 RM’000 Total RM’000 31 December 2021 Financial assets Financial assets at FVTPL: - Money market instruments - Quoted securities - Unquoted securities 2,351 2,351 - 823,577 578,540 245,037 14,482 14,482 840,410 578,540 2,351 259,519 Financial assets at FVOCI: - Money market instruments - Unquoted securities - 34,233,732 14,867,332 19,366,400 721,769 721,769 34,955,501 14,867,332 20,088,169 2,351 798,836 35,856,145 736,251 798,836 36,594,747 - 938,061 - 938,061 Financial assets Financial assets at FVTPL: - Money market instruments - Quoted securities - Unquoted securities 6,882 6,882 - 2,264,762 2,131,230 133,532 13,657 13,657 2,285,301 2,131,230 6,882 147,189 Financial assets at FVOCI: - Money market instruments - Unquoted securities - 35,157,038 12,885,005 22,272,033 712,602 712,602 35,869,640 12,885,005 22,984,635 6,882 1,790,567 39,212,367 726,259 1,790,567 39,945,508 - 1,979,142 - 1,979,142 Derivative assets Financial liabilities Derivative liabilities 31 December 2020 Derivative assets Financial liabilities Derivative liabilities There were no transfers between Level 1 and 2 during the financial year. 83
  84. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 B9. Fair Value of Financial Instruments (continued) (i) Valuation techniques Financial instruments are classified as Level 1 if their value is observable in an active market. Such instruments are valued by reference to unadjusted quoted prices for identical assets or liabilities in active markets where the quoted prices is readily available, and the price represents actual and regularly occurring market transactions. An active market is one in which transactions occur with sufficient volume and frequency to provide pricing information on an on-going basis. These would include quoted securities and unit trusts. Where fair value is determined using unquoted market prices in less active markets or quoted prices for similar assets and liabilities, such instruments are generally classified as Level 2. In cases where quoted prices are generally not available, the Group and the Bank then determine fair value based upon valuation techniques that use market parameters including but not limited to yield curves, volatilities and foreign exchange rates as inputs. The majority of valuation techniques employ only observable market data. These would include certain bonds, government bonds, corporate debt securities and derivatives. Financial instruments are classified as Level 3 if their valuation incorporates significant inputs that are not based on observable market data (unobservable inputs). This category includes unquoted shares held for socio-economic reasons, unquoted private equity funds, non-transferable and non-tradable perpetual notes/sukuk, impaired securities and unquoted corporate loan stocks. Fair values for shares held for socio-economic reasons are based on the net tangible assets of the affected companies. Fair values for unquoted private equity funds are based on enterprise valuation method where the main input include earnings before interest, taxes, depreciation and amortisation (‘EBITDA’), comparable companies earning multiple and marketable discount. For unquoted corporate loan stocks, discounted cash flow analysis has been performed to determine the recoverability of the instruments. (ii) Reconciliation of fair value movements in Level 3 The following represents the changes in Level 3 instruments for the Group and the Bank: Group As at As at 31 December 31 December 2021 2020 RM’000 RM’000 Bank As at As at 31 December 31 December 2021 2020 RM’000 RM’000 Financial assets at FVTPL Balance as at the beginning of the financial year Total net gain recognised in income statements Purchases Settlement/distribution Exchange differences Balance as at the end of the financial year 547,085 65,563 35,000 (25,674) 19,171 641,145 505,596 56,815 7,567 (12,249) (10,644) 547,085 13,657 825 14,482 12,879 778 13,657 753,828 13,864 (8,850) (9) 758,833 694,400 60,340 (898) (14) 753,828 712,602 12,148 (2,981) 721,769 655,331 58,169 (898) 712,602 Financial assets at FVOCI Balance as at the beginning of the financial year Total net gain recognised in other comprehensive income Settlement/disposal Exchange differences Balance as at the end of the financial year 84
  85. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 B10. Significant Event During the Financial Year Disposal of RHB International Trust (L) Ltd ('RHBIT') RHB Bank (L) Ltd (‘RHBBL’) had on 11 March 2021 completed the disposal of its entire equity interest in RHBIT to Pacific Trustees Berhad for a cash consideration of USD173,490 (equivalent to RM713,000). The cash flow and net assets of RHBIT on disposal date are as follows: RM'000 Cash and short term fund Statutory deposits Other assets Other liabilities Amount due to other related companies Provision for taxation Translation reserves Total net liabilities derecognised Gain on disposal of a subsidiary Sales consideration Less: Contingent consideration Cash inflow on disposal of a subsidiary 337 102 19 (191) (6) (97) (203) (39) 752 713 (219) 494 The financial results of the Disposal in the period between the beginning of the financial period to the date of disposal is not significant to the Group. B11. Dividends (a) The Directors have proposed a final single-tier dividend of 25.00 sen per share, amounting to RM1,035,730,000 in respect of the financial year ended 31 December 2021. (i) Amount per share: Single-tier final dividend of 25.00 sen per share, consisting of cash portion of 15.00 sen per share to be paid in cash and an electable portion of 10.00 sen per share (ii) Entitlement date: To be determined and announced later (iii) Payment date: To be determined and announced later Subject to the relevant regulatory approvals being obtained, the Board of Directors, in its absolute discretion, recommends that the shareholders’ of the Bank be given an option to elect to reinvest the electable portion of the proposed single-tier final dividend into new ordinary shares in the Bank in accordance with the approved DRP as disclosed in Note B6(b). (b) Total dividend per share for the current financial year: (i) Single-tier interim dividend of 15.00 sen per share, consisting of cash portion of 5.00 sen per share to be paid in cash and an electable portion of 10.00 sen per share; and (ii) Proposed single-tier final dividend of 25.00 sen per share, consisting of cash portion of 15.00 sen per share to be paid in cash and an electable portion of 10.00 sen per share. (c) Total dividend paid for the previous financial year ended 31 December 2020: (i) Single-tier interim dividend of 10.00 sen per share; and (ii) Single-tier final dividend of 7.65 sen per share, consisting of electable portion of 7.65 sen per share. 85
  86. RHB BANK BERHAD Registration No . 196501000373 (6171-M) NOTES TO AUDITED INTERIM FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 B12. Earnings per Share 4th Quarter Ended 31 December 31 December 2021 2020 Profit attributable to equity holders of the Bank (RM'000) - Continuing operations - Discontinued operation Weighted average number of ordinary shares in issue ('000) Earnings per share (sen) - Continuing operations - Discontinued operation Twelve Months Ended 31 December 31 December 2021 2020 631,165 631,165 438,631 438,631 2,618,388 2,618,388 1,997,869 34,661 2,032,530 4,114,554 4,010,045 4,049,968 4,010,045 15.3 15.3 10.9 10.9 64.7 64.7 49.8 0.9 50.7 There were no dilutive potential ordinary shares outstanding as at 31 December 2021. As a result, the diluted earnings per share equal to the basic earnings per share for the financial year ended 31 December 2021. BY ORDER OF THE BOARD AZMAN SHAH MD YAMAN (License No. LS0006901) Company Secretary 28 February 2022 86