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Section 06 Financial Statements
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44. ISLAMIC BUSINESS FUNDS (CONT’D.)
Notes to the financial statements for Islamic business fund and Takaful fund for the financial year ended 31 December
2020 (cont’d.)

(d) Islamic financing (cont’d.)
(ix) Overlays and adjustments for expected credit losses amid COVID-19 environment

As the current MFRS 9 models are not expected to generate levels of expected credit losses (“ECL”) with sufficient
reliability in view of the unprecedented and ongoing COVID-19 pandemic, overlays and post-model adjustments have
been applied to determine a sufficient overall level of ECLs for the year ended and as at 31 December 2020.

The overlays involved significant level of judgement and reflect the management’s views of possible severities of the
pandemic and paths of recovery in the forward looking assessment for ECL estimation purposes.

The adjusted downside scenario assumes a continuous restrictive economic environment due to COVID-19, the
impact of these adjustments were estimated at portfolio level and the Bank for financing as at 31 December
2020 amounted to RM246,341,000. Total additional overlays for ECL maintained by the Group and the Bank as at
31 December 2020 are RM7,740,954 (2019: Nil).
ECL (inclusive of overlays) analysed by geographical area are as follows:

Group and Bank
Outstanding Modelled Management Total
Amount ECL Overlay ECL
2020 2020 2020 2020
RM’000 RM’000 RM’000 RM’000

Africa 45,305 916 2,500 3,416
East Asia 28,328 355 479 834
Malaysia 149,174 18,041 6,466 24,507
Oceania 829 181 339 520
South Asia 22,705 7,134 - 7,134
246,341 26,627 9,784 36,411

ECL (inclusive of overalys) analysed by industry are as follows:
Group and Bank
Outstanding Modelled Management Total
Amount ECL Overlay ECL
2020 2020 2020 2020
RM’000 RM’000 RM’000 RM’000
Construction 62,580 1,196 2,869 4,065
Manufacturing 84,347 21,659 73 21,732
Primary agriculture 13,132 1,227 91 1,318
Wholesale and retail trade, and restaurants
and hotels 86,282 2,545 6,751 9,296
246,341 26,627 9,784 36,411