Page 205 - EXIM_AR2021

ANNUAL REPORT 2021 203

Notes to the fiNaNcial statemeNts

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

Credit quality by class of financial assets (cont’d.)
Credit quality by loans, advances and financing (cont’d.)
For commercial exposures, the Group and the Bank use ten risk grades with rating ‘1’ representing the lowest risk. Meanwhile
for Sovereign exposures, the Group and the Bank use five risk grades with rating ‘aaa’ representing the lowest risk. The
exposure under each of these risk grades is as follows (cont’d.):

Stage 1 Stage 2 Stage 3 Total
RM’000 RM’000 RM’000 RM’000

2020
Commercial customer
Risk Rating 2 274,866 - - 274,866
Risk Rating 3 529,221 87,764 - 616,985
Risk Rating 4 154,336 428,834 - 583,170
Risk Rating 5 193,089 668,280 - 861,369
Risk Rating 6 1,229 315,544 - 316,773
Risk Rating 7 17 236,702 - 236,719
Risk Rating 8 - 67,279 - 67,279
Risk Rating 9 - 2,898 - 2,898
Impaired - - 2,382,477 2,382,477
1,152,758 1,807,301 2,382,477 5,342,536

Sovereign
Risk Rating b- - 2,347 - 2,347
Risk Rating b+ - 19,712 - 19,712
Risk Rating ccc - 339,628 - 339,628
- 361,687 - 361,687
1,152,758 2,168,988 2,382,477 5,704,223

Restructured items

Restructured loans refer to the financial assets that would otherwise be past due or impaired where there is fundamental
revision in the principal terms and conditions of the facility. Restructuring shall be considered when the customer’s business
is still viable and is expected to remain viable after the restructuring. There were impaired loans restructured by the Group
and the Bank during the year of RM4,416,777 (2020: RM109,434,295).
Fair values

(i) Fair value hierarchy
The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been
defined as follows:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Valuation method for which all significant inputs are, or are based on, observable market data.
Level 3 - Valuation method for which significant inputs are not based on observable data.