Page 184 - EXIM-BANK-AR20

182 EXIM BANK MALAYSIA
Annual Report 2020

NOTES TO THE FINANCIAL STATEMENTS

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

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

2019
Credit exposure for on-balance sheet assets:
Cash and bank balances 62,593 - 62,593
Deposits and placements with banks and other financial institutions 3,047,168 - 3,047,168
Financial investments 1,204,442 - 1,204,442
Loans, advances and financing 4,768,642 3,012,318 1,756,324
Insurance receivables 89 - 89

Net derivative financial instruments 42,687 - 42,687
Other assets excluding tax prepayment 278,113 - 278,113
9,403,734 3,012,318 6,391,416
Credit exposure for off-balance sheet assets:
Banking operations commitments 1,806,386 - 1,806,386
Insurance operations commitments
Short term 739,232 - 739,232
Medium/Long term 483,275 - 483,275
3,028,893 - 3,028,893
12,432,627 3,012,318 9,420,309

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.