Page 195 - EXIM-BANK-AR20

Section 06 Financial Statements
193

42. FINANCIAL RISK MANAGEMENT POLICIES (CONT’D.)
Credit quality by class of financial assets (cont’d.)

Credit quality by loans, advances and financing (cont’d.)
For commercial exposures, the Group and the Bank use ten risk grades with rating ‘1’ representing the lowest risk. Meanwhile
for Sovereign exposures, the Group and the Bank use five risk grades with rating ‘aaa’ representing the lowest risk.
The exposure under each of these risk grades is as follows (cont’d.):
ECL Stage 1 ECL Stage 2 ECL Stage 3 Total
RM’000 RM’000 RM’000 RM’000

2019

Commercial customer
Risk Rating 1 - - - -
Risk Rating 2 534,608 - - 534,608
Risk Rating 3 544,420 14,919 - 559,339
Risk Rating 4 163,040 766,548 - 929,588
Risk Rating 5 734,248 82,147 - 816,395
Risk Rating 6 196,583 163,123 - 359,706
Risk Rating 7 - 571,397 - 571,397
Risk Rating 8 - 32,993 - 32,993
Risk Rating 9 - 1,508 - 1,508
Impaired - - 2,643,617 2,643,617
2,172,899 1,632,635 2,643,617 6,449,151

Sovereign
Risk Rating b+ 2,710 - - 2,710
Risk Rating bb 305,363 - - 305,363
Risk Rating bb+ 21,696 - - 21,696
329,769 - - 329,769
2,502,668 1,632,635 2,643,617 6,778,920

Restructured items

Restructured loans refer to the financial assets that would otherwise be past due or impaired where there is fundamental
revision in the principal terms and conditions of the facility. Restructuring shall be considered when the customer’s business
is still viable and is expected to remain viable after the restructuring. There were impaired loans restructured by the Group and
the Bank during the year of RM109,434,295.48 (2019: RM127,682,059.70).