Page 204 - EXIM-Bank_Annual-Report-2023

EXIM BANk MALAySIA
202 A Vision to Serve Empowering Growth Management Discussion and Analysis
ANNUAL REPORT 2023
Notes to the fiNaNcial statemeNts

43. FINANCIAL rISk MANAGEMENT PoLICIES (cont’d)
Credit risk exposure (cont’d)

Collateral and credit enhancement
Collateral represents the asset pledged by a customer and/or a third party on behalf of the customer, in whole or in part,
to secure a credit exposure and/or potential credit exposure with the Group and the Bank, and subject to seizure in the event
of default. Collateral provides the Group and the Bank with a secondary source of repayment, i.e. a source of fund to help
recover its investment should the customer be unable to repay the facility obtained from the Group and the Bank.

The Group and the Bank shall consider accepting the collateral based on its marketability, measurability, stability, transferability,
speed in realising the collateral value, enforceability and free from encumbrances. The collateral types and amounts held by
the Group and the Bank are as follows:

2023 2022
rM’000 rM’000
Collateral type

Secured by cash 119,290 79,262
Secured by property 1,481,218 1,339,499
Secured by machinery 1,023,583 1,412,531
2,624,091 2,831,292

The financial assets that are credit impaired and related collateral held in order to mitigate potential losses are shown below:

Gross Net Fair value
carrying carrying of collateral
amount ECL amount held
rM’000 rM’000 rM’000 rM’000

2023
Credit impaired financial assets

Loans, advances and financing 2,054,175 1,466,732 587,443 1,300,973
Financial investments at FVOCI 100,000 100,000 - -
Total credit impaired financial assets 2,154,175 1,566,732 587,443 1,300,973

Gross Net Fair value
carrying carrying of collateral
amount ECL amount held
rM’000 rM’000 rM’000 rM’000
2022
Credit impaired financial assets

Loans, advances and financing 2,024,493 1,466,033 558,460 1,312,533
Financial investments at FVOCI 100,000 100,000 - -
Total credit impaired financial assets 2,124,493 1,566,033 558,460 1,312,533

Collateral and other credit enhancements
The main types of collateral or other credit enhancements held by the Group and the Bank to mitigate credit risk are fixed
deposits, financial investments, commercial and residential properties and machineries.