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EXIM BANK MALAYSIA ANNUAL REPORT 2024

3 MANAGEMENT DISCUSSION & ANALYSIS 23

TRADE CREDIT TAKAFUL/INSURANCE FACILITIES The Bank also offers specific takaful facilities to provide
medium- to long-term Shariah-compliant coverage to
The Bank offers Islamic takaful facilities for short-term trade Malaysian contractors and manufacturers undertaking
credit insurance and medium- to long-term trade credit. one-off contracts for export of capital goods, turnkey projects,
construction works, or rendering services abroad against
commercial, economic, and political risks and losses occurring
1 Short-term trade credit takaful/insurance facilities outside Malaysia due to events that are beyond the control of
the contractor, manufacturer or its buyer.
Short-term trade credit takaful covers export, domestic, and
import trade transactions with a policy term of less than one
year. The facilities provide “umbrella” cover for exporters/ As at 31 December 2024, Bank’s total exposure under
importers who make regular exports to overseas importers both short-term and medium- to long-term trade credit
and imports to domestic buyers on credit for up to 180 days. takaful/insurance facilities amounted to RM285.66
The facilities also provide cover for exports directly from million (FY2023: RM649.16 million).
third country suppliers to their destination overseas, without
passing through Malaysia. As part of the type of takaful
facilities available to cover short-term commercial credit risk,
the Bank also provides Shariah-compliant bankers trade credit TREASURY SOLUTIONS
takaful facilities to protect financial institutions against the
risk of non-payment by exporters arising from the default by EXIM Bank offers a comprehensive range of Islamic and
their customers overseas. conventional treasury solutions, including hedging instrument
and wholesale deposit taking.
As well, the Bank provides Bank Letter of Credit takaful policies
covering Malaysian banks against the risk of non-payment of
irrevocable letters of credit issued by overseas banks in respect 1 Hedging instrument
of Malaysian exports.
The Bank also offers forward foreign exchange facilities that
2 Medium- to long-term trade credit takaful/insurance allow customers to hedge against adverse exchange rate
facilities fluctuations in their normal business operations, helping them
maintain stable earnings. This facility is available to customers
Medium- to long-term trade credit takaful that has a policy who have existing banking facilities with the Bank and have
term of more than one year is offered by the Bank to enable foreign exchange requirements.
Malaysian companies to venture into new and unfamiliar
markets. The Bank provides specific takaful policies to cover
the export of capital goods or services with lengthy 2 Wholesale deposit taking
manufacturing and/or payment periods and high contract
values. Introduced in 2024, the Bank offers both Islamic and
Overseas investment takaful is provided to protect overseas conventional deposit products: Commodity Murabahah
investments against certain political risks, such as losses Deposit-i (CMD-i) for Islamic deposits and Money Market
arising from restrictions on the conversion or transfer of Deposit (MMD) for conventional deposits. The rate of return is
local currency, expropriation, wars and civil disturbances and calculated using a simple profit rate formula, with the principal
breaches of contract by counterparties. and profit for CMD-i agreed upon and disclosed to customers
upfront. These deposit instruments provide customers with
competitive returns, capital preservation, and flexible tenures,
supporting effective liquidity and cash flow management.