Page 209 - EXIM-Bank_Annual-Report-2022

A VISION COMMITMENT EMPOWERING ENSURING ENHANCING FINANCIAL
TO SERVE TO LEAD GROWTH SUSTAINABILITY GOVERNANCE STATEMENTS 207

Notes to the fiNaNcial statemeNts

44. FINaNCIaL RISk MaNaGEMENT POLICIES (cont’d.)
Credit quality by class of financial assets (cont’d.)

Credit quality of 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
2021
Commercial customer
Risk Rating 3 315,047 - - 315,047
Risk Rating 4 134,375 15,249 - 149,624
Risk Rating 5 570,293 21,780 - 1,492,073
Risk Rating 6 6,451 434,823 - 441,274
Risk Rating 7 603 280,192 - 280,795
Risk Rating 8 - 152,637 - 152,637
Risk Rating 9 - 2,188 - 2,188
Impaired - - 2,096,575 2,096,575

1,026,769 1,806,869 2,096,575 4,930,213

Sovereign
Risk Rating b- - 2,109 - 2,109
Risk Rating b+ - 18,590 - 18,590
Risk Rating ccc - 317,955 - 317,955
- 338,654 - 338,654

1,026,769 2,145,523 2,096,575 5,268,867

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 RM28,387,995 (2021: RM4,416,777).
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.