Page 193 - EXIM-Bank_Annual-Report-2023

Management Discussion and Analysis Ensuring Sustainability Commitment to Lead Upholding Accountability Financial Statements 191

Notes to the fiNaNcial statemeNts

43. FINANCIAL rISk MANAGEMENT PoLICIES (cont’d)
Asset liability management (cont’d)

Analysis of net interest income (“NII”) and net profit income (“NPI”) sensitivity
The table below shows the Bank’s NII and NPI sensitivity based on possible parallel shift in interest rate:

NII NPI
2023 2022 2023 2022
Impact Impact Impact Impact
on profit on profit on profit on profit
and loss and loss and loss and loss
Increase/ Increase/ Increase/ Increase/
(decrease) (decrease) (decrease) (decrease)
rM’000 rM’000 rM’000 rM’000
Interest/Profit rate - parallel shift

+ 50 basis points 159 437 215 367
- 50 basis points (159) (437) (215) (367)

Impact to revaluation reserve is assessed by applying up and down 50 basis points rate shock to the yield curve to model on
mark-to-market for financial investments at FVOCI portfolio:

2023 2022
Impact Impact
on oCI on oCI
Increase/ Increase/
(decrease) (decrease)
rM’000 rM’000
+ 50 basis points (45) (50)
- 50 basis points 45 50

Liquidity risk management
Approach and risk strategy
The inability to create liquidity would cause serious repercussion to the Group and the Bank in terms of its reputation and
even its continued existence. In view of this, the Group and the Bank pay particular attention to liquidity risk management
approach and strategy.

The objective of liquidity risk management is to ensure the availability of sufficient liquidity to honour all financial obligations
and able to meet any stressful events. The Group’s and the Bank’s liquidity risk management strategies involve:
• Establish appropriate policies to oversee the management of liquidity risk of the Group and the Bank;
• Establish prudent liquidity risk limits to ensure the Group and the Bank maintain a safe level of asset liquidity; and
• Develop contingency funding plans to manage the Group’s and the Bank’s funding requirement during liquidity crisis.