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Section 06 Financial Statements
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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

2020
Assets
Cash and bank balances 122,399 - - - - 122,399
Deposits and placements with banks
and other financial institutions - 3,205,749 148,201 10,149 - 3,364,099
Financial Investment - - 49,459 1,116,092 - 1,165,551
Loans, advances and financing - 189,598 932,205 1,112,235 1,445,045 3,679,083
Derivative financial instruments 141,749 - - - - 141,749
Other assets 163,334 - - - - 163,334

Total assets 427,482 3,395,347 1,129,865 2,238,476 1,445,045 8,636,215
Liabilities
Borrowings - 748,027 2,064,109 3,322,895 456,251 6,591,282
Derivative financial instruments - - - - - -
Other liabilities 442,800 - - - - 442,800
Total liabilities 442,800 748,027 2,064,109 3,322,895 456,251 7,034,082

Net maturity mismatch (15,317) 2,647,320 (934,244) (1,084,419) 988,794 1,602,134