Page 183 - EXIM-BANK-AR20

Section 06 Financial Statements
181

42. FINANCIAL RISK MANAGEMENT POLICIES (CONT’D.)
Credit risk management (cont’d.)

Impairment of financial assets
The Group and the Bank individually assesses its financial assets for any objective evidence of impairment as a result of one or
more loss events that occurred after the initial recognition. In determining that there is objective evidence of an impaired loss,
the Group and the Bank adopted a systematic mechanism for a prompt trigger of impairment test whereby the triggers are
based on obligatory and judgmental event triggers.
When there is objective evidence of impairment of the financial assets, the classification of these assets as impaired shall be
endorsed and approved by Management Committee (“MC”). Impairment losses are recorded as charges to the statement of
profit and loss. The carrying amount of impaired loans, advances and financing on the statement of financial position is reduced
through the use of impairment allowance account. Losses expected from future events are not recognised.
Credit risk exposure

Maximum exposure to credit risk without taking into account of any collateral and other credit enhancements:
Maximum
exposure to Collateral Net
Group and Bank credit risk value exposures
RM’000 RM’000 RM’000

2020
Credit exposure for on-balance sheet assets:
Cash and bank balances 122,399 - 122,399
Deposits and placements with banks and other financial institutions 3,364,099 - 3,364,099
Financial investments 1,165,551 - 1,165,551
Loans, advances and financing 3,679,083 2,560,461 1,118,622
Insurance receivables 588 - 588
Net derivative financial instruments 141,749 - 141,749
Other assets excluding tax prepayment 80,718 - 80,718

8,554,187 2,560,461 5,993,726

Credit exposure for off-balance sheet assets:
Banking operations commitments 2,275,832 - 2,275,832
Insurance operations commitments
Short term 454,725 - 454,725
Medium/Long term 366,635 - 366,635
3,097,192 - 3,097,192

11,651,379 2,560,461 9,090,918