Standard Chartered Saadiq: Interim Financial Statements - 30 September 2021

Transcription

1. Standard Chartered Saadiq Berhad Company Registration No . 200801022118 (823437-K) (Incorporated in Malaysia) Condensed financial statements for the financial period ended 30 September 2021
2. Company Registration No . 200801022118 (823437-K) STANDARD CHARTERED SAADIQ BERHAD (Incorporated in Malaysia) CONDENSED INTERIM FINANCIAL STATEMENTS UNAUDITED STATEMENT OF FINANCIAL POSITION AS AT 30 SEPTEMBER 2021 Note Assets Cash and short term funds Investment securities Financing and advances - investment account placements Financing and advances - others Derivative financial assets Other assets Tax recoverable Property, plant and equipment Deferred tax assets Total assets Liabilities Deposits from customers Investment accounts of customers Deposits and placements of banks and other financial institutions Restricted investment accounts due to designated financial institutions Derivative financial liabilities Other liabilities Provision for credit commitments and contingencies Subordinated sukuk Total liabilities 10 11 11 13 15 16 17 18 19 20 Share capital Reserves Total equity attributable to equity holder of the Bank Total liabilities and equity Commitments and contingencies Total Islamic banking assets 28 30 September 2021 RM'000 31 December 2020 RM'000 3,156,750 288,306 1,207,284 2,959,810 6,132 16,675 25,918 1,893 17,721 7,680,489 1,631,491 1,020,080 1,240,050 3,045,146 43,679 475,311 20,081 1,857 9,181 7,486,876 3,190,305 412,634 696,712 2,193,055 6,627 363,483 12,015 100,000 6,974,831 3,487,534 436,611 414,529 1,756,592 44,374 512,757 1,243 100,000 6,753,640 411,000 294,658 705,658 411,000 322,236 733,236 7,680,489 7,486,876 9,505,392 8,821,336 7,680,489 7,486,876 The Unaudited Condensed Interim Financial Statements should be read in conjunction with the audited financial statements of the Bank for the financial year ended 31 December 2020. Page 1
3. Company Registration No . 200801022118 (823437-K) STANDARD CHARTERED SAADIQ BERHAD (Incorporated in Malaysia) CONDENSED INTERIM FINANCIAL STATEMENTS UNAUDITED STATEMENT OF COMPREHENSIVE INCOME FOR THE 3RD QUARTER AND NINE MONTHS ENDED 30 SEPTEMBER 2021 3rd quarter ended Nine months ended 30 September 30 September 30 September 30 September 2021 2020 2021 2020 Note RM'000 RM'000 RM'000 Income derived from investment of depositors' funds Income derived from investment of investment account funds Income derived from investment of shareholder's funds Allowances for expected credit losses ("ECL") Total distributable income Profit/hibah distributed to depositors Profit/hibah distributed to investment account holders Total net income Other operating expenses (Loss)/profit before taxation Taxation (Loss)/profit for the financial period 21 35,039 49,402 117,822 128,479 22 15,304 21,246 45,450 70,982 4,925 (48,440) 6,828 (12,861) (12,710) (18,743) (29,052) (47,795) 11,557 (36,238) 745,198 2,200,289 11,783 225,297 11,287 (9,609) 72,326 (13,028) (16,349) 42,949 (23,248) 19,701 (4,819) 14,882 21,624 (58,454) 126,442 (36,994) (37,101) 52,347 (75,899) (23,552) 5,556 (17,996) 28,723 (14,857) 213,327 (48,292) (57,391) 107,644 (65,783) 41,861 (10,197) 31,664 (143) (40) (19) 4,356 (11,294) 13 (2,308) (7,144) (130) 14,380 (11,294) 26 (202) (6,925) (9,582) 3,112 7,957 (27,578) 34,776 23 24 25 26 27 Other comprehensive (loss)/income for the financial period, net of income tax Items that may be reclassified subsequently to profit or loss Fair value reserve: Net change in fair value - investment securities measured at fair value through other comprehensive income ("FVOCI") Net amount transferred to profit or loss Net changes in expected credit losses Other comprehensive (loss)/income for the financial period, net of income tax Total comprehensive (loss)/income for the financial period (36,440) The Unaudited Condensed Interim Financial Statements should be read in conjunction with the audited financial statements of the Bank for the financial year ended 31 December 2020. Page 2
4. Company Registration No . 200801022118 (823437-K) STANDARD CHARTERED SAADIQ BERHAD (Incorporated in Malaysia) CONDENSED INTERIM FINANCIAL STATEMENTS UNAUDITED STATEMENT OF CHANGES IN EQUITY FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2021 Attributable to owner of the Bank Distributable Reserves Retained profits RM'000 Non-Distributable Reserves Share capital RM'000 Regulatory Reserve RM'000 Fair value Reserve RM'000 1,622 Fair value reserve - Net changes in fair value - Net amount transferred from profit or loss - Net changes in expected credit losses - - (2,308) (7,144) (130) - (2,308) (7,144) (130) Total other comprehensive expense for the financial period - - (9,582) - (9,582) Loss for the financial period - - Total other comprehensive expense/income for the financial period - - Transfer between reserves - 4,620 411,000 6,242 At 30 September 2021 (9,582) 668 310,364 RM'000 411,000 At 1 January 2021 10,250 Total 733,236 (17,996) (17,996) (17,996) (27,578) (4,620) - 287,748 705,658 The Unaudited Condensed Interim Financial Statements should be read in conjunction with the audited financial statements of the Bank for the financial year ended 31 December 2020. Page 3
5. Company Registration No . 200801022118 (823437-K) STANDARD CHARTERED SAADIQ BERHAD (Incorporated in Malaysia) CONDENSED INTERIM FINANCIAL STATEMENTS UNAUDITED STATEMENT OF CHANGES IN EQUITY FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2021 Attributable to owner of the Bank Distributable Reserves Retained profits RM'000 Non-Distributable Reserve Share capital RM'000 Regulatory Reserve RM'000 At 1 January 2020 411,000 Fair value reserve other comprehensive income) - Net amount transferred from profit or loss - Net changes in fair value - Net changes in credit losses 411,000 Fair value Reserve RM'000 31,622 6,944 271,720 Total RM'000 721,286 - - (11,294) 14,380 26 - (11,294) 14,380 26 Total other comprehensive income for the financial period - - 3,112 - 3,112 Profit for the financial period - - - 31,664 31,664 Total other comprehensive income for the financial period - - 3,112 31,664 34,776 Transfer between reserves - - 30,000 - 10,056 333,384 756,062 At 30 September 2020 411,000 (30,000) 1,622 The Unaudited Condensed Interim Financial Statements should be read in conjunction with the audited financial statements of the Bank for the financial year ended 31 December 2020. Page 4
6. Company Registration No . 200801022118 (823437-K) STANDARD CHARTERED SAADIQ BERHAD (Incorporated in Malaysia) CONDENSED INTERIM FINANCIAL STATEMENTS UNAUDITED STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2021 30 September 30 September 2021 2020 RM'000 RM'000 Restated (Loss)/profit before taxation Adjustment for non-operating items Non-cash items and adjustments before working capital changes Operating profit before working capital changes Changes in working capital Net changes in operating assets Net changes in operating liabilities Income taxes paid Net cash used operating activities Net cash generated from/(used in) investing activities Net cash used in financing activities Net increase in cash and cash equivalents Cash and cash equivalent at beginning of the financial period Cash and cash equivalent at end of the financial period (23,552) 41,861 56,329 32,777 4,749 46,610 529,056 252,192 (5,837) 808,188 721,560 (4,489) 1,525,259 1,631,491 3,156,750 425,602 (148,632) 776,170 (6,766) 667,382 (6,496) (4,511) 656,375 1,488,152 2,144,527 In order to conform with current period presentation, RM3,753 thousand for profit on subordinated sukuk was reclassified from net cash used in operating activities to net cash used in financing activities prior financial period comparatives. The financial results for the current financial period and prior financial period are not affected by these reclassifications. The Unaudited Condensed Interim Financial Statements should be read in conjunction with the audited financial statements of the Bank for the financial year ended 31 December 2020. Page 5
7. Company Registration No . 200801022118 (823437-K) STANDARD CHARTERED SAADIQ BERHAD (Incorporated in Malaysia) REVIEW OF PERFORMANCE The Bank registered a pre-tax loss of RM 23.6 million, a 156.3% decrease as compared to the corresponding period last year. Net income after provisioning for credit losses was lower by RM 55.3 million or 51.4% year on year mainly due to ECL of RM 58.5 million during the current financial period. Total financing and advances decreased by 2.8 % over the period to RM 4.2 million and customer deposits has decreased by 8.5% to RM 3.2 million. The Bank’s Common Equity Tier 1 capital ratio and Total Capital Ratio remained strong at 24.378% and 28.528%, respectively. PROSPECTS The global economy is projected to grow 5.9 % in 2021 and 4.9 % in 2022. Gaps in expected recoveries across economy groups continue to widen, especially between advanced economies and low-income developing countries. Headline inflation is projected to peak in the final months of 2021 but is expected to return to pre-pandemic levels by mid-2022 for most economies. On the domestic front, Malaysia economy is expected to grow by 3.3% in 2021, down from the 4.5% forecast in June 2021 mainly due to prolonged Movement Control Orders. The benchmark interest rate - overnight policy rate is held at 1.75% in September 2021 amid signs of improvement in external demand and continued consumer spending. Year-todate, headline inflation has averaged 2.3%, and is projected to average between 2.0% and 3.0% for 2021. The outlook for Ringgit weakened in September, trading at 4.18 from 4.15 in June, bringing the year-to-date average to around 4.13. Amidst this challenging economic backdrop, the Bank has continued to engage and serve customer needs by creatively leveraging our digital platforms and technology. The investments made in technology platforms has helped the Bank operate seamlessly during the disruptions caused by the pandemic. We will continue to leverage on this digital capability as a broad strategic imperative, in tandem with the global shift towards the “new normal”. In the near term, we remain fully committed to support the government’s economic recovery efforts and provide the requisite assistance to our customers across segments most impacted by the crisis. As the situation remains volatile, the Bank will continue to remain vigilant, proactively monitor new developments and intensely manage the portfolio to mitigate the downside risk. The Group will also look to seize opportunities in various sectors witnessing surge in local and international demand, especially in the Healthcare, Hygiene, Fast Moving Consumer Goods ("FMCG") and Technology industries, where we will continue to play an active role by delivering our network and diversified product capabilities. In addition, we will continuously help clients to meet their sustainability aspirations, and committed to sustainable economic growth and development in the region as we embark our Chapter 3 journey this year of which align with BNM’s initiative to accelerate the execution of Value based Intermediation ("VBI") and Climate Change activities in Malaysia. Our Retail Banking business will continue to focus on Affluent and Emerging Affluent segments through our superior Wealth Management product suite and focus to onboard Bumi acquisition to start banking with our bank, while continuing to support the growth of SMEs via our award-winning Business Banking solutions. As the pace of digital adoption has intensified, we will continue to invest in our digital transformation to drive efficiencies and enhance client experience With respect to our Corporate, Commercial & Institutional Banking segment, we will continue to leverage our unique network to accelerate growth in our Transaction Banking and Financial Markets flow business, build scale with new bank clients in high growth sectors and deepen existing relationships with world class corporate finance and capital market capabilities. We will also accelerate our investment in digital capabilities to further enhance our Corporate, Commercial & Institutional client journeys. Beside the above, we will continue to focus on our Halal360 proposition of which to support SMEs, Corporate and Commercial Banking clients to export their products outside Malaysia via our Halal corridors initiative and bring foreign Direct Investment to Malaysia via various initiatives with government agencies. For the longer term, we remain optimistic on the fundamentals, inherent strength and resilience of the diversified Malaysian economy. It is important to stay on course on our core franchise strategy while navigating through the turbulent times. We would continue to do so whilst managing the resultant downside risk emanating from largely uncontrollable macro-economic headwinds. Page 6
8. Company Registration No . 200801022118 (823437-K) STANDARD CHARTERED SAADIQ BERHAD (Incorporated in Malaysia) Notes to the financial statements for the financial period ended 30 September 2021 1. Basis of preparation of the financial statements The unaudited condensed interim financial statements for the financial period ended 30 September 2021 have been prepared in accordance with Malaysian Financial Reporting Standards ("MFRS") 134, Interim Financial Reporting . The accounting policies and methods of computation in the unaudited condensed interim financial statements are consistent with those adopted in the last audited financial statements, except for the adoption of the following MFRSs, Interpretation and Amendments to MFRSs during the current financial period: MFRSs and amendments effective for annual periods beginning on or after 1 January 2021 i) Amendments to MFRS 9, Interest Rate Benchmark Reform - Phase 2 MFRS 139, MFRS 7, MFRS 4 and MFRS 16 MFRSs and amendments effective for annual periods beginning on or after 1 April 2021 i) Amendments to MFRS 16 Leases - Covid-19-Related Rent Concessions beyond 30 June 2021 MFRSs and amendments effective for annual periods beginning on or after 1 January 2022 i) Amendments to MFRS 1, Annual Improvements to MFRS Standards 2018 - 2020 MFRS 9 and MFRS 141 ii) Amendments to MFRS 3 Business Combinations - Reference to the Conceptual Framework iii) Amendments to MFRS 116 Property, Plant and Equipment - Proceeds before Intended Use iv) Amendments to MFRS 137 Provisions, Contingent Liabilities and Contingent Assets - Onerous Contracts - Cost of Fulfilling a Contract MFRSs and amendments effective for annual periods beginning on or after 1 January 2023 i) MFRS 17 Insurance Contracts ii) Amendments to MFRS 17 Insurance Contracts iii) Amendments to MFRS 101 Presentation of Financial Statements - Classification of Liabilities as Current or Non-current iv) Amendments to MFRS 101 Presentation of Financial Statements - Disclosure of Accounting Policies v) Amendments to MFRS 108 Accounting Policies, Changes in Accounting Estimates and Errors Definition of Accounting Estimates vi) Amendments to MFRS 112 Deferred Tax related to Assets and Liabilities arising from a Single Transaction MFRSs and amendments effective for annual periods beginning on or after a date yet to be confirmed. i) Amendments to MFRS 10 Consolidated Financial Statements and Investments in Associates and Joint Ventures - Sale or Contribution of Assets between an Investor and its and MFRS 128 Associate or Joint Venture Other than MFRS 17 and amendments to MFRS 141 which is not applicable to the Bank, the Bank plan to apply the abovementioned accounting standards, interpretations and amendments that is effective for annual periods beginning on or after 1 January 2021. The initial application of the accounting standards, interpretations or amendments are not expected to have any material financial impacts to the current financial period or prior financial period financial statements of the Bank. The unaudited interim financial statements should be read in conjunction with the audited financial statements for the financial year ended 31 December 2020. The explanatory notes attached in the unaudited condensed interim financial statements provide an explanation of events and transactions that are significant for an understanding of the changes in the financial position and performance of the Bank since the financial year ended 31 December 2020. Page 7
9. Company Registration No . 200801022118 (823437-K) STANDARD CHARTERED SAADIQ BERHAD (Incorporated in Malaysia) Notes to the financial statements for the financial period ended 30 September 2021 (continued) 2. Auditors' report on preceding annual financial statements The auditors' report on the financial statements for the financial year ended 31 December 2020 was not qualified. 3. Seasonal or cyclical factors The business operations of the Bank have not been affected by any material seasonal or cyclical factors. 4. Unusual items due to their nature, size or incidence There were no unusual items affecting the assets, liabilities, equity, net income or cash flows of the Bank in the third quarter and nine months ended 30 September 2021. 5. Changes in accounting estimates There were no material changes in estimates of amounts reported that have a material effect on the unaudited condensed interim financial statements in the second quarter and financial period ended 30 September 2021, other than uncertainties on the timing and pace of economic recovery, management judgemental overlay on ECL has been put in place to supplement MFRS 9 models' expected credit losses. 6. Issuances, cancellations, repurchases, resale and repayments of securities portfolio As part of Standard Chartered PLC corporate reorganisation to form an ASEAN hub under Standard Chartered Bank Singapore Limited (“SCBSL”), control over Standard Chartered Bank Malaysia Berhad and its subsidiaries were transferred from Standard Chartered Holdings (Asia Pacific) B.V. to SCBSL effective 1 September 2021. Official transfer of Ordinary shares and Preference shares certificate were completed on 15 October 2021. 7. Dividend No dividend has been proposed for the third quarter and the financial period ended 30 September 2021. 8. Subsequent events There were no material events subsequent to the statement of financial position date that require disclosure or adjustments to the unaudited condensed interim financial statements. 9. Changes in the composition of the Bank There were no changes in the composition of the Bank during the financial period ended 30 September 2021. Page 8
10. Company Registration No . 200801022118 (823437-K) STANDARD CHARTERED SAADIQ BERHAD (Incorporated in Malaysia) 10. Investment securities 30 September 31 December 2021 2020 RM'000 RM'000 Investment securities measured at FVOCI - debt instruments i) 288,306 1,020,080 By type 30 September 31 December 2021 2020 RM'000 RM'000 Investment securities measured at FVOCI - debt instruments Malaysian Government Investment Issues 288,306 288,306 1,020,080 1,020,080 The carrying amount of debt securities measured at FVOCI are its fair value. Accordingly, the recognition of impairment loss does not affect the carrying amount of those assets, but is reflected as a debit to profit or loss or retained profit and a credit to other comprehensive income. Included in the investment securities at FVOCI are Malaysian Government Investment Issues which have been recognised as part of the Statutory Reserve Account ("SRA") balance amounting to RM50.0 million (2020: RM50.0 million) as disclosed in Note 14. ii) Movement of allowances for expected credit losses 30 September 31 December 2021 2020 RM'000 RM'000 Balance as at 1 January Net remeasurement of losses allowances At end of financial period/year 249 (130) 119 198 51 249 Page 9
11. Company Registration No . 200801022118 (823437-K) STANDARD CHARTERED SAADIQ BERHAD (Incorporated in Malaysia) 11. Financing and advances (i) By type and by contract As at 30 September 2021 At amortised cost Term financing - House financing - Hire purchase receivables - Lease receivables - Other term financing Bills receivable Trust receipts Staff financing Revolving credit Bai'^ Ijarah # RM'000 RM'000 270,369 13,961 327,126 8,187 619,643 Less: Unearned income Gross financing and advances Less: Allowances for credit losses on financing and advances:- 12-month ECL (Stage 1) - Lifetime ECL non-credit-impaired (Stage 2) - Lifetime ECL credit-impaired (Stage 3) Total net financing and advances Less: Financing and advances funded by investment account placements * Total net financing and advances - others 3,212 3,212 Ijarah Thumma AlBai # RM'000 Murabahah Commodity Murabahah Musyarakah Mutanaqisah Others RM'000 RM'000 RM'000 RM'000 2,281 2,281 19,342 55,915 75,257 1,292,613 100,559 5,221 40,942 1,439,335 1,845,802 450,708 2,296,510 181,084 24 181,108 Total financing and advances RM'000 2,116,171 2,281 3,212 1,938,366 447,027 64,102 5,245 40,942 4,617,346 (307,952) 4,309,394 (6,555) (18,586) (117,159) 4,167,094 (1,207,284) 2,959,810 ^ Bai' comprises of Bai-Bithaman Ajil, Bai Al-Inah and Bai-Al-Dayn. # Under this mode of financing, the Bank acquires the assets against customers' purchase undertaking to purchase the assets on maturity of the financing. The assets will be leased to the customer during financing tenure prior to the acquisition of asset by the customer. * Financing and advances funded by investment account placements are exposures to Restricted Profit Sharing Investment Accounts ("RPSIA"), as part of an arrangement between the Bank and Standard Chartered Bank Malaysia Berhad. Standard Chartered Bank Malaysia Berhad is exposed to risks and rewards on RPSIA financing and will account for all the expected credit losses for financing arising thereon. Page 10
12. Company Registration No . 200801022118 (823437-K) STANDARD CHARTERED SAADIQ BERHAD (Incorporated in Malaysia) 11. Financing and advances (continued) (i) By type and by contract (continued) As at 31 December 2020 Term financing - House financing - Hire purchase receivables - Lease receivables - Other term financing Bills receivable Trust receipts Staff financing Revolving credit Bai'^ Ijarah # RM'000 RM'000 296,150 16,588 173,317 486,055 Less: Unearned income Gross financing and advances Less: Allowances for credit losses on financing and advances:- 12-month ECL (Stage 1) - Lifetime ECL non-credit-impaired (Stage 2) - Lifetime ECL credit-impaired (Stage 3) Total net financing and advances Less: Financing and advances funded by investment account placements * Total net financing and advances - others 10,030 10,030 Ijarah Thumma AlBai # RM'000 Murabahah Commodity Murabahah Musyarakah Mutanaqisah Others RM'000 RM'000 RM'000 RM'000 4,445 4,445 93,617 19,626 113,243 1,409,462 77,837 6,811 63,065 1,557,175 1,913,343 552,893 2,466,236 126,455 29 126,484 Total financing and advances RM'000 2,209,493 4,445 10,030 2,105,398 344,771 19,626 6,840 63,065 4,763,668 (376,230) 4,387,438 (27,437) (15,675) (59,130) 4,285,196 (1,240,050) 3,045,146 ^ Bai' comprises of Bai-Bithaman Ajil, Bai Al-Inah and Bai-Al-Dayn. # Under this mode of financing, the Bank acquires the assets against customers' purchase undertaking to purchase the assets on maturity of the financing. The assets will be leased to the customer during financing tenure prior to the acquisition of asset by the customer. * Financing and advances funded by investment account placements are exposures to Restricted Profit Sharing Investment Accounts ("RPSIA"), as part of an arrangement between the Bank and Standard Chartered Bank Malaysia Berhad. Standard Chartered Bank Malaysia Berhad is exposed to risks and rewards on RPSIA financing and will account for all the expected credit losses for financing arising thereon. Page 11
13. Company Registration No . 200801022118 (823437-K) STANDARD CHARTERED SAADIQ BERHAD (Incorporated in Malaysia) 11. Financing and advances (continued) (ii) By type of customer 30 September 31 December 2021 2020 RM'000 RM'000 Domestic non-bank financial institutions Domestic business enterprises Small medium enterprises Others Individuals Other domestic entities Foreign entities (iii) 1,489,390 752,658 736,732 1,848,187 10,888 960,929 4,309,394 30,000 1,479,135 847,207 631,928 1,932,067 8,506 937,730 4,387,438 By profit rate sensitivity 30 September 31 December 2021 2020 RM'000 RM'000 Fixed rate Housing financing Hire purchase receivables Other fixed rate financing Variable rate Base financing rate plus/ Base rate plus Cost plus Other variable rates (iv) 171 2,281 722,538 201 5,188 585,752 734,270 958,215 1,891,919 4,309,394 658,815 1,025,838 2,111,644 4,387,438 By sector 30 September 31 December 2021 2020 RM'000 RM'000 Agriculture Mining and quarrying Manufacturing Electricity, gas and water Construction Real estate Wholesale & retail trade and restaurants & hotels Transportation, storage and communication Finance, takaful and business services Household Others 2,182 1,367 623,389 769 181,653 178,348 246,917 33,453 228,039 2,178,322 634,955 4,309,394 36,857 1,581 542,187 807 148,071 210,854 283,186 29,487 212,051 2,281,328 641,029 4,387,438 Page 12
14. Company Registration No . 200801022118 (823437-K) STANDARD CHARTERED SAADIQ BERHAD (Incorporated in Malaysia) 11. Financing and advances (continued) (v) By purpose 30 September 31 December 2021 2020 RM'000 RM'000 Purchase of property - Residential - Non-residential Fixed assets excluding land and building Personal use Working capital Others (vi) 1,963,527 559,723 2,281 50,040 1,681,794 52,029 4,309,394 2,058,854 618,087 3,495 67,427 1,630,288 9,287 4,387,438 By maturity structure 30 September 31 December 2021 2020 RM'000 RM'000 Maturing within one year One year to three years Three years to five years Over five years (vii) 641,637 602,265 359,538 2,705,954 4,309,394 583,226 598,360 421,364 2,784,488 4,387,438 By geographical distribution 30 September 31 December 2021 2020 RM'000 RM'000 Within Malaysia Outside Malaysia 3,678,599 630,795 4,309,394 3,777,489 609,949 4,387,438 (viii) Analysis of foreign currency exposure 30 September 31 December 2021 2020 RM'000 RM'000 USD Other foreign currencies 513,341 8,187 335,635 3,474 12. Impaired financing and advances (i) Movements in impaired financing and advances 30 September 31 December 2021 2020 RM'000 RM'000 At 1 January Classified as non-performing during the financial period/year Reclassified as performing during the financial period/year Amount recovered during the financial period/year Amount written off during the financial period/year At end of financial period/year Impairment allowances Net impaired financing and advances 147,034 373,526 (169,803) (15,979) (10,783) 323,995 (109,395) 214,600 73,018 163,479 (58,922) (12,693) (17,848) 147,034 (48,306) 98,728 Page 13
15. Company Registration No . 200801022118 (823437-K) STANDARD CHARTERED SAADIQ BERHAD (Incorporated in Malaysia) 12. Impaired financing and advances (continued) (ii) Movements in allowances for credit losses for financing and advances 30 September 2021 Lifetime ECL Lifetime ECL non creditcredit12-month ECL impaired impaired (Stage 1) (Stage 2) (Stage 3) RM'000 RM'000 RM'000 Balance at 1 January Transfer to 12-month ECL Transfer to lifetime ECL non-credit-impaired Transfer to lifetime ECL credit-impaired Net remeasurement of losses allowances Write-offs Unwinding of discount Suspended profit Foreign exchange and other movements At end of financial period/year * 27,437 37,053 (3,163) (310) (54,485) 23 6,555 15,675 (16,175) 5,203 (11,077) 24,881 79 18,586 59,130 (20,878) (2,040) 11,387 83,554 (13,823) (2,801) 2,629 1 117,159 Total RM'000 102,242 53,950 (13,823) ^ (2,801) 2,629 103 ^ 142,300 31 December 2020 Lifetime ECL Lifetime ECL non creditcredit12-month ECL impaired impaired (Stage 1) (Stage 2) (Stage 3) RM'000 RM'000 RM'000 2,427 4,870 (1,502) (9) 21,723 (72) 27,437 6,343 (4,634) 2,910 (7,280) 18,415 (79) 15,675 45,574 (236) (1,408) 7,289 21,335 (11,147) (2,131) (146) 59,130 Total RM'000 54,344 61,473 (11,147) (2,131) (146) (151) 102,242 * Included in net remeasurement allowances is a transfer to SCBMB under PSIA arrangement amounting to RM80.9 million (2020: RM6.8 million). Page 14
16. Company Registration No . 200801022118 (823437-K) STANDARD CHARTERED SAADIQ BERHAD (Incorporated in Malaysia) 12. Impaired financing and advances (continued) (iii) Impaired financing and advances by sector 30 September 31 December 2021 2020 RM'000 RM'000 Mining and quarrying Manufacturing Construction Real estate Wholesale & retail trade and restaurants & hotels Transportation, storage and communication Finance, takaful and business services Household Others 171,069 28,741 542 33,716 3,820 22,723 55,699 7,685 323,995 121 14,950 14,847 12,262 26,893 1,171 22,303 46,678 7,809 147,034 (iv) Impaired financing and advances by purpose 30 September 31 December 2021 2020 RM'000 RM'000 Purchase of property - Residential - Non-residential Fixed assets excluding land and building Personal use Working capital 92,128 27,917 64,211 12 3,818 228,037 323,995 91,946 26,716 65,230 94 2,835 52,159 147,034 (v) Impaired financing and advances by geographical distribution 30 September 31 December 2021 2020 RM'000 RM'000 Within Malaysia 323,995 147,034 13. Other assets 30 September 31 December 2021 2020 RM'000 RM'000 Income receivable Other receivables, deposits and prepayments 5,187 11,488 16,675 11,294 464,017 475,311 14. Statutory deposits with Bank Negara Malaysia The non-profit bearing statutory deposits maintained with Bank Negara Malaysia are in compliance with Section 26(2)(c) of the Central Bank of Malaysia Act, 2009 to satisfy the Statutory Reserve Requirement (“SRR”); the amounts of which are determined at set percentages of total eligible liabilities. Effective 16 May 2020, all banking institutions may recognise holdings of Malaysia Government Securities ("MGS") and Malaysia Government Investment Issues ("MGII") as part of their SRR compliance. Included in the investment securities at FVOCI are Malaysian Government Investment Issues as disclosed in Note 10 which have been recognised as part of SRA balance amounting to RM50.0 million (2020: RM50.0 million). Page 15
17. Company Registration No . 200801022118 (823437-K) STANDARD CHARTERED SAADIQ BERHAD (Incorporated in Malaysia) 15. Deposits from customers (i) By type of deposits 30 September 31 December 2021 2020 RM'000 RM'000 Demand deposits - Qard - Commodity Murabahah * 1,398,006 983,226 414,780 1,639,124 1,302,859 336,265 Saving deposits - Qard - Commodity Murabahah * 1,146,334 58,097 1,088,237 621,870 56,387 565,483 Term deposits - Commodity Murabahah * - Mudharabah 645,965 1,226,540 630,507 1,213,590 15,458 12,950 3,190,305 3,487,534 * Balances under Commodity Murabahah arrangement may contain incidental Qard elements due to timing differences between the deposit placement renewal and the execution of Commodity Murabahah. The maturity structure of the term deposits is as follows:30 September 31 December 2021 2020 RM'000 RM'000 Due within six months Six months to one year More than one year 472,329 168,889 4,747 645,965 926,490 298,983 1,067 1,226,540 (ii) By type of customers 30 September 31 December 2021 2020 RM'000 RM'000 Government and statutory bodies Business enterprises Individuals Foreign entities/individuals Others 173 904,420 1,806,812 285,445 193,455 3,190,305 68 817,628 1,451,582 268,112 950,144 3,487,534 Page 16
18. Company Registration No . 200801022118 (823437-K) STANDARD CHARTERED SAADIQ BERHAD (Incorporated in Malaysia) 16. Investment accounts of customers 30 September 31 December 2021 2020 RM'000 RM'000 Unrestricted investment accounts Without maturity Mudharabah 412,634 436,611 17. Deposits and placements of banks and other financial institutions 30 September 31 December 2020 2021 RM'000 RM'000 Qard Licensed banks Commodity Murabahah Other financial institutions 191,048 167,210 505,664 696,712 247,319 414,529 18. Restricted investment accounts due to designated financial institutions Restricted investment accounts Mudharabah 2,193,055 1,756,592 By type of counterparties Licensed banks 2,193,055 1,756,592 Mudharabah deposit placement of licensed bank is a placement under the PSIA arrangement by the Bank's immediate holding company. 19. Other liabilities 30 September 31 December 2020 2021 RM'000 RM'000 Income payable Other payables and accruals Deferred income Lease liabilities 3,870 353,665 4,600 1,348 363,483 2,062 501,956 6,879 1,860 512,757 20. Provision for credit commitments and contingencies 30 September 31 December 2020 2021 RM'000 RM'000 Financing commitments and financial guarantee contracts Balance as at 1 January Net remeasurement of losses allowances Foreign exchange and other movements At end of financial period/year 1,243 11,102 (330) 12,015 216 1,028 (1) 1,243 Page 17
19. Company Registration No . 200801022118 (823437-K) STANDARD CHARTERED SAADIQ BERHAD (Incorporated in Malaysia) 21. Income derived from investment of depositors' funds 3rd quarter ended Nine months ended 30 September 30 September 30 September 30 September 2021 2020 2021 2020 RM'000 RM'000 RM'000 RM'000 Income derived from investment of:(i) Term deposits (ii) Other deposits 11,628 23,411 35,039 21,684 27,718 49,402 48,898 68,924 117,822 54,442 74,037 128,479 (i) Income derived from investment of term deposits 3rd quarter ended Nine months ended 30 September 30 September 30 September 30 September 2021 2020 2021 2020 RM'000 RM'000 RM'000 RM'000 Finance income and hibah Financing and advances Investment securities Money at call and deposits with financial institutions Total finance income and hibah Other operating income Gain from sale of investment securities measured at FVOCI Fees and commission income Fees and commission expense 9,636 745 9,725 2,634 29,948 4,282 29,937 7,923 926 11,307 1,689 14,048 5,345 39,575 4,761 42,621 3,296 7,134 (1,107) 9,323 11,924 (103) 11,821 48,898 54,442 (205) 1,562 (1,036) 321 11,628 7,689 (53) 7,636 21,684 (ii) Income derived from investment of other deposits 3rd quarter ended Nine months ended 30 September 30 September 30 September 30 September 2021 2020 2021 2020 RM'000 RM'000 RM'000 RM'000 Finance income and hibah Financing and advances Investment securities Money at call and deposits with financial institutions Total finance income and hibah Other operating income Gain from sale of investment securities measured at FVOCI Fees and commission income Fees and commission expense 17,409 1,717 12,133 3,296 42,213 6,036 40,713 10,775 2,139 21,265 2,131 17,560 7,535 55,784 6,474 57,962 370 3,250 (1,474) 2,146 23,411 10,227 (69) 10,158 27,718 4,646 10,054 (1,560) 13,140 68,924 16,215 (140) 16,075 74,037 Page 18
20. Company Registration No . 200801022118 (823437-K) STANDARD CHARTERED SAADIQ BERHAD (Incorporated in Malaysia) 22. Income derived from investment of investment account funds 3rd quarter ended Nine months ended 30 September 30 September 30 September 30 September 2021 2020 2021 2020 RM'000 RM'000 RM'000 RM'000 Finance income and hibah Financing and advances Money at call and deposits with financial institutions 10,890 18,108 34,510 58,851 4,414 15,304 3,138 21,246 10,940 45,450 12,131 70,982 23. Income derived from investment of shareholder's funds 3rd quarter ended Nine months ended 30 September 30 September 30 September 30 September 2021 2020 2021 2020 RM'000 RM'000 RM'000 RM'000 Finance income and hibah Financing and advances Investment securities Money at call and deposits with financial institutions Total finance income and hibah Other operating income Gain from sale of investment securities measured at FVOCI Fees and commission income Fees and commission expense 4,143 309 5,035 1,365 13,244 1,894 15,794 4,180 384 4,836 877 7,277 2,364 17,502 2,512 22,486 (111) 657 (457) 89 4,925 4,037 (27) 4,010 11,287 1,458 3,153 (489) 4,122 21,624 6,291 (54) 6,237 28,723 24. Allowances for expected credit losses 3rd quarter ended Nine months ended 30 September 30 September 30 September 30 September 2021 2020 2021 2020 RM'000 RM'000 RM'000 RM'000 Allowances for expected credit losses for financial assets - Financing and advances - Credit commitments and contingencies - Financial assets held at FVOCI investment securities Amount recovered from impaired financing and advances 50,196 50,482 (267) (19) (1,756) 48,440 11,633 13,410 (1,790) 13 (2,024) 9,609 64,922 53,950 11,102 (130) (6,468) 58,454 21,287 21,218 43 26 (6,430) 14,857 Page 19
21. Company Registration No . 200801022118 (823437-K) STANDARD CHARTERED SAADIQ BERHAD (Incorporated in Malaysia) 25. Profit/hibah distributed to depositors 3rd quarter ended Nine months ended 30 September 30 September 30 September 30 September 2021 2020 2021 2020 RM'000 RM'000 RM'000 RM'000 Deposits from customers - Mudharabah fund - Non-Mudharabah fund Deposits and placements of banks and other financial institutions - Non-Mudharabah fund 94 9,855 94 10,927 287 30,208 275 42,002 2,912 12,861 2,007 13,028 6,499 36,994 6,015 48,292 26. Profit/hibah distributed to investment account holders 3rd quarter ended Nine months ended 30 September 30 September 30 September 30 September 2021 2020 2021 2020 RM'000 RM'000 RM'000 RM'000 Investment accounts of customers Investment accounts due to designated financial institutions 2,577 3,107 7,643 11,045 10,133 12,710 13,242 16,349 29,458 37,101 46,346 57,391 27. Other operating expenses 3rd quarter ended Nine months ended 30 September 30 September 30 September 30 September 2021 2020 2021 2020 RM'000 RM'000 RM'000 RM'000 Personnel costs - Salaries, bonus, wages and allowances - Pension fund contributions - Other staff related cost Establishment costs - Depreciation of property, plant and equipment - Depreciation of right-of-use assets - Rental - Information technology expenses - Utilities and maintenance Marketing expenses - Advertisement and publicity - Others Administration and general expenses - Communication expenses - Group administration fees and business support expenses - Management fee - Others Total other operating expenses 2,083 328 155 2,566 2,047 296 185 2,528 6,350 982 769 8,101 6,263 896 1,062 8,221 35 233 3 15 337 623 20 187 15 128 292 642 81 701 3 80 1,012 1,877 67 644 55 147 1,101 2,014 249 33 282 93 6 99 359 110 469 342 193 535 26 37 76 92 7,633 17,667 255 25,581 29,052 5,346 14,007 589 19,979 23,248 15,458 48,431 1,487 65,452 75,899 9,032 43,531 2,358 55,013 65,783 Page 20
22. Company Registration No . 200801022118 (823437-K) STANDARD CHARTERED SAADIQ BERHAD (Incorporated in Malaysia) 28. Commitments and contingencies 2008 2006 In the normal course of business, the Bank makes various commitments and incurs certain contingent liabilities with legal recourse to its customers. No material losses are anticipated as a result of these transactions. The commitments and contingencies are as follows:As at 30 September 2021 Credit Risk Principal equivalent weighted amount amount amount ** RM'000 RM'000 RM'000 Direct credit substitutes Transaction-related contingent items Short-term self liquidating trade-related contingencies Irrevocable commitments to extend credit:- maturity not exceeding one year - maturity exceeding one year Foreign exchange related contracts:- less than one year Profit rate related contracts:- less than one year - one year to less than five years As at 31 December 2020 Credit Risk Principal equivalent weighted amount amount ** amount ** RM'000 RM'000 RM'000 68,090 273,031 84,261 68,090 250,703 84,261 77,221 68,138 19,605 47,795 270,178 45,904 47,795 196,179 45,904 67,498 24,619 16,062 4,720,678 778,707 291,772 75,843 138,410 27,918 4,045,787 393,380 143,440 2,742 111,242 1,884 1,285,187 23,271 12,212 1,781,070 56,728 18,783 810,373 1,485,065 9,505,392 8,150 8,420 810,510 7,775 2,060 353,339 2,237,222 8,821,336 43,337 536,125 22,774 262,862 Included in direct credit substitutes and transaction-related contingent items are the deals or contracts entered under Kafalah concept amounting to RM 341.1 million (2020: RM318.0 million). All deals and contracts in short-term self liquidating trade-related contingencies are entered under Wakalah concept amounting to RM 84.3 million (2020: RM45.9 million). ** Excluded from the credit equivalent and risk weighted amounts of the Bank are RM 197.6 million (2020: RM118.7 million) and RM 75.5 million (2020: RM43.1 million) respectively relating to exposures funded by PSIA placements from SCBMB as provided by BNM's policy document on Investment Account. The related credit risk and exposure of facilities funded by the Specific Investment Account are allowed to be transferred to SCBMB as the fund provider. Page 21
23. Company Registration No . 200801022118 (823437-K) STANDARD CHARTERED SAADIQ BERHAD (Incorporated in Malaysia) 29. Fair values of financial assets and liabilities Methods and assumptions Fair value hierarchy The valuation hierarchy, and the types of instruments classified into each level within that hierarchy, is set out below: Level 1 Level 2 Level 3 Fair value determined using Unadjusted quoted prices in Valuation models with directly Valuation models using an active market for identical or indirectly market observable significant non-market assets and liabilities. inputs. observable inputs. Type of financial assets Actively traded government and agency securities. Type of financial liabilities - Corporate and other government bonds and financing and advances. Over-the-counter (OTC) derivatives. OTC derivatives. Structured deposits. Level 1 RM'000 30 September 2021 Assets Investment securities at FVOCI - Malaysian Government Investment Issues Derivative financial instruments Liabilities Derivative financial instruments Liabilities Derivative financial instruments - Level 2 RM'000 Level 3 RM'000 Total RM'000 - 288,306 6,132 294,438 - 288,306 6,132 294,438 - 6,627 6,627 - 6,627 6,627 Level 1 RM'000 31 December 2020 Assets Investment securities at FVOCI - Malaysian Government Investment Issues Derivative financial instruments - Level 2 RM'000 Level 3 RM'000 Total RM'000 - 1,020,080 43,679 1,063,759 - 1,020,080 43,679 1,063,759 - 44,374 44,374 - 44,374 44,374 There were no transfers between Level 1 and Level 2 during the period ended 30 September 2021. Page 22
24. Company Registration No . 200801022118 (823437-K) STANDARD CHARTERED SAADIQ BERHAD (Incorporated in Malaysia) 30 Capital adequacy The capital adequacy ratios of the Bank are analysed as follows:30 September 31 December 2021 2020 RM'000 RM'000 Tier 1 Capital Paid-up ordinary share capital Other reserves Less: Deferred tax assets Unrealised gains on investment securities Common Equity Tier ("CET") 1 and Eligible Tier 1 capital Tier 2 Capital Subordinated sukuk General allowances under standardised approach* Surplus of total eligible allowances over total Expected Losses under AIRB approach Eligible Tier 2 capital Total Capital Base 411,000 287,748 (17,837) 301 681,212 411,000 310,364 (10,961) 4,613 715,016 100,000 1,667 100,000 2,997 14,306 115,973 3,706 106,703 797,185 821,719 Breakdown of risk-weighted assets in the various categories of risk-weights are as follows:30 September 31 December 2021 2020 RM'000 RM'000 Total risk-weighted assets:- credit risk - market risk - operational risk CET 1 capital ratio Tier 1 capital ratio Total capital ratio 2,496,079 2,387 295,943 2,794,409 24.378% 24.378% 28.528% 2,589,717 296,182 2,885,899 24.776% 24.776% 28.474% * General provisions refer to stage 1 and stage 2 ECL allowances as defined under MFRS 9, Financial Instruments, to the extent they are ascribed to non-credit-impaired exposures, determined under the standardised approach for credit risk. Page 23