Page 186 - EXIM_AR2021

184 FINANCIAL EXIM BANK MALAYSIA
STATEMENTS

Notes to the fiNaNcial statemeNts

42. financial risk management POlicies (cOnt’D.)

Liquidity risk management (cont’d.)
Risk identification
There are two types of liquidity risk i.e. funding liquidity risk and market liquidity risk. Funding liquidity risk refers to the potential
inability of the Group and the Bank to meet its funding requirements arising from cash flow mismatches at a reasonable cost.
Market liquidity risk refers to the Group’s and the Bank’s potential inability to liquidate positions quickly and in sufficient
volumes, at a reasonable price.

Measurement
Liquidity is measured by the Group’s and the Bank’s ability to efficiently and economically accommodate decrease in deposits/
funding (such as funds obtained from the Government) and other purchased liabilities and to fund increases in assets to ensure
continued growth of the Group and the Bank.

The Group and the Bank maintain large capital base, sufficient liquid assets, diversified funding sources, and regularly
assesses the long-standing relationship with traditional fund providers. These processes are subject to regular reviews to
ensure adequacy and appropriateness.

In addition, the Group’s and the Bank’s liquidity positions are monitored and managed through structural liquidity indicators,
such as loan to purchase funds and offshore revolving funds utilisation rate ratios to maintain an optimal funding mix and
asset composition.

Table below analyses assets and liabilities of the Group’s and the Bank’s according to their contractual maturity:
On Less than 3 to 12 1 to 5 Over 5
Group demand 3 months months years years Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

2021
Assets
Cash and bank balances 49,513 - - - - 49,513
Deposits and placements with banks
and other financial institutions - 3,126,776 - - - 3,126,776
Financial Investment - - 302,787 611,291 193,561 1,107,639
Loans, advances and financing 94 83,491 889,243 1,050,041 1,278,692 3,301,561
Derivative financial instruments - 5,004 - 28,084 47,375 80,463
Other assets 147,847 - - - - 147,847
Total assets 197,454 3,215,271 1,192,030 1,689,416 1,519,628 7,813,799

Liabilities

Borrowings - 499,165 1,304,202 3,542,143 436,185 5,781,695
Derivative financial instruments - - - 999 - 999
Other liabilities 405,591 - - - - 405,591
Total liabilities 405,591 499,165 1,304,202 3,543,142 436,185 6,188,285

Net maturity mismatch (208,137) 2,716,106 (112,172) (1,853,726) 1,083,443 1,625,514