Membina AFFINITY
L A P O R A NTA H U N A N
2 0 1 6
Visi KamiRakan niaga terulung untuk Pertumbuhan Kewangan dan Perkhidmatan Inovatif.
Rasional Muka HadapanMencapai AFFINITY bersama para pelanggan,
rakan niaga, kakitangan dan masyarakat
sebagai langkah maju ke hadapan bagi
AFFINBANK. Ia memacu fasa evolusi yang
baharu di mana kami melangkaui cara
konvensional dalam membentuk semula
portfolio sedia ada dan memperkenalkan
kemungkinan baharu.
IsiKandungan
organisasi
02 Maklumat Korporat
03 Struktur Korporat
04 Lembaga Pengarah
05 Profil Lembaga Pengarah
09 Ahli Pengurusan Kanan
10 Profil Ahli Pengurusan Kanan
ringkasan eksekutif
15 Perbincangan & Analisis Pengurusan
25 Diari Korporat
27 Sorotan Kewangan
taDBir urus korPorat
28 Penyata Tadbir Urus Korporat
41 Penyata Pengurusan Risiko &
Kawalan Dalaman
45 Laporan Jawatankuasa Audit Lembaga
Pengarah
lain-lain maklumat
51 Rangkaian Cawangan
56 Notis Mesyuarat Agung Tahunan
Penyata kewangan
57 Penyata Kewangan
Misi KamiUntuk menyediakan penyelesaian dan perkhidmatan kewangan yang inovatif kepada pelanggan-pelanggan bagi menjana keuntungan dan mewujudkan nilai bagi para pemegang saham dan pemegang berkepentingan lain.
Dengan cara ini, kami menyediakan peluang untuk kakitangan menyumbang dan mencapai kecemerlangan; serta menjadi kompetitif dalam menyediakan penyelesaian dan perkhidmatan kepada pelanggan-pelanggan yang dihargai.
Kami menjalankan perniagaan kami secara berintegriti dan profesional sejajar dengan tadbir urus korporat, prinsip-prinsip dan amalan-amalan yang baik.
Maklumat Korporat
lemBaga Pengarah
Pengerusi
yBhg. Jen tan sri Dato’ seri ismail Bin hj. omar (Bersara)(Pengarah Bukan Bebas Bukan Eksekutif)
Pengarah
mr. aubrey li kwok-sing(Pengarah Bukan Bebas Bukan Eksekutif)
en. mohd suffian Bin haji haron(Pengarah Bukan Bebas Bukan Eksekutif)
(Ditugaskan semula berkuatkuasa 1 Jun 2016)
yBhg. tan sri Dato’ seri mohamed Jawhar(Pengarah Bukan Bebas Bukan Eksekutif)
(Ditugaskan semula berkuatkuasa 1 Jun 2016)
yBhg. tan sri mohd ghazali Bin mohd yusoff(Pengarah Bebas Bukan Eksekutif)
en. abd malik Bin a rahman(Pengarah Bebas Bukan Eksekutif)
mr. tang Peng wah(Pengarah Alternatif kepada
Mr. Aubrey Li Kwok-Sing)
yBhg. tan sri Dato’ seri lodin Bin wok kamaruddin(Pengarah Bukan Bebas Bukan Eksekutif)
(Telah melengkapkan tempoh pegangan jawatan pengarah berkuatkuasa 4 Oktober 2016)
Pengarah urusan/ ketua Pegawai eksekutif
en. kamarul ariffin Bin mohd Jamil
setiausaha
nimma safira Binti khalid
alamat BerDaftar
Tingkat 17, Menara AFFIN80, Jalan Raja Chulan50200 Kuala LumpurTel : 03-2055 9000Faks : 03-2026 1415
moDal saham DiBenarkan
Bilangan saham
2,000,000,000
nilai tara
RM1.00
Jumlah
RM2,000,000,000
nama
Affin Bank Berhad (Co. No.: 25046-T)
tarikh DiPerBaDankan
23 Oktober 1975
aktiviti utama
Affin Bank Berhad terlibat terutamanya dalam menjalankan aktiviti perbankan dan perkhidmatan kewangan yang berkaitan. Anak-anak syarikat lain dan syarikat-syarikat bersekutu terlibat terutamanya dalam perkhidmatan pengurusan harta, perkhidmatan penama, pengurusan pemegang amanah dan perkhidmatan pemfaktoran.
moDal DiterBit Dan DiBayar Penuh
Bilangan saham
1,688,769,616
nilai tara
RM1.00
Jumlah
1,688,769,616
Pemegang saham utama
Bilangan
Affin Holdings Berhad
1,688,769,616
JuruauDit luaran
PricewaterhouseCoopers
(AF 1146)
AFFIN BANK BERHAD (25046-T)
2
AFFIN MoneyBrokers Sdn Bhd
AFFIN-ACF Holdings Sdn Bhd
100%
100%
AFFIN Bank Berhad
AFFIN Islamic Bank Berhad
AXA AFFIN Life Insurance Berhad
AXA AFFIN General Insurance Berhad
AFFIN Hwang Investment Bank Berhad
100%
100%
50%
30%
100%
AFFIN Investment Berhad(sebelum ini dikenali sebagai AFFIN Investment Bank Berhad)
100%
51%
36.9%
AFFIN Hwang Nominees(Tempatan) Sdn Bhd
100%
AFFIN Hwang Nominees (Asing) Sdn Bhd
100%
AFFIN Hwang Futures Sdn Bhd100%
AFFIN Nominees (Tempatan) Sdn Bhd100%
AFFIN Nominees (Asing) Sdn Bhd100%
AFFIN Hwang Asset ManagementBerhad
70%
Asian Islamic InvestmentManagement Sdn Bhd
100%
AFFIN Capital Services Berhad(sebelum ini dikenali sebagai AFFIN Fund Management Berhad)
100%
100%PAB Properties Sdn Bhd
100%
100%AFFIN Futures Sdn Bhd 3
100%ABB IT & Services Sdn Bhd 3
100%BSNCB Nominees (Tempatan) Sdn Bhd 3
100%
100%ABB Nominee (Tempatan) Sdn Bhd
100%AFFIN-ACF Nominees (Tempatan) Sdn Bhd 3
100%AFFIN Factors Sdn Bhd 3
100%ABB Nominee (Asing) Sdn Bhd
100%PAB Property Development Sdn Bhd 3
100%BSNC Nominees (Tempatan) Sdn Bhd 3
AFFIN-i Nadayu Sdn Bhd 2
(dimiliki bersama oleh AFFIN Islamic Bank Berhad dan Jurus Positif Sdn Bhd dengan pemilikan 50:50)
16.7%Raeed Holdings Sdn Bhd 5
ABB Trustee Berhad 2
(80% dipegang oleh Pengarah AFFIN Bank Berhad sebagai pemegang amanah)
AFFIN Recoveries Berhad 4
KL South Development Sdn Bhd 2
(dimiliki bersama oleh AFFIN Islamic Bank Berhad dan Albatha Bukit Kiara Holdings Sdn Bhd dengan pemilikan 30:70)
1 Syarikat syarikat bersekutu.2 Diperoleh oleh Affin Investment Bank Berhad pada 25 Januari 2017.3 Di bawah penggulungan sukarela.4 Syarikat tidak aktif tetapi kini memegang aset.5 Sama-sama dimiliki oleh Affin Islamic Bank Berhad, Bank Kerjasama Rakyat Malaysia Berhad, Bank Islam Malaysia Berhad, Bank Muamalat Malaysia Berhad, Maybank Islamic Berhad dan Bank Simpanan Nasional.
LAIN-LAIN
AFFIN HOLDINGS BERHAD
Lembaga Tabung Angkatan Tentera
Boustead Holdings Berhad Bank of East Asia Limited
35.42%
58.48%
20.69% 23.52% 20.37%
Struktur Korporat setakat 31 Disember 2016
LAPORAN TAHUNAN 2016
3
KIRI KE KANAN:
MR. AUBREY LI KwOK-SINg Pengarah Bukan Bebas Bukan Eksekutif
EN. MOHD SUFFIAN BIN HAJI HARON Pengarah Bukan Bebas Bukan Eksekutif (Dilantik semula berkuatkuasa 1 Jun 2016)
YBHg. TAN SRI DATO’ SERI MOHAMED JAwHAR Pengarah Bukan Bebas Bukan Eksekutif (Dilantik semula berkuatkuasa 1 Jun 2016)
KIRI KE KANAN:
YBHg. TAN SRI MOHD gHAzALI BIN MOHD YUSOFF Pengarah Bebas Bukan Eksekutif
EN. ABD MALIK BIN A RAHMAN Pengarah Bebas Bukan Eksekutif
KIRI KE KANAN:
YBHg. JEN. TAN SRI DATO’ SERI ISMAIL BIN HAJI OMAR (BERSARA)Pengerusi / Pengarah Bukan Bebas Bukan Eksekutif
YBHg. TAN SRI DATO’ SERI LODIN BIN wOK KAMARUDDIN Pengarah Bukan Bebas Bukan Eksekutif (Telah melengkapkan tempoh pegangan jawatan pengarah berkuatkuasa 4 Oktober 2016)
Lembaga Pengarah
AFFIN BANK BERHAD (25046-T)
4
YBhg. Jen. Tan Sri DaTo’ Seri iSmail Bin haJi omar (BerSara)Pengerusi / Pengarah Bukan Bebas Bukan Eksekutif
Jen. Tan Sri Dato’ Seri Ismail Bin Haji Omar, berusia 75 tahun, dilantik sebagai Pengarah dan Pengerusi AFFINBANK pada 21 Mei 2002. Beliau juga merupakan Pengerusi Jawatankuasa Semakan Pinjaman dan Perolehan Semula Lembaga Pengarah.
Beliau sebelum ini merupakan Panglima Angkatan Tentera (PAT) Malaysia dari 1995 sehingga persaraan beliau pada 1998, selepas 38 tahun berkhidmat. Beliau adalah lulusan dari Royal Military Academy, Sandhurst, United Kingdom pada 1961 dan seterusnya menghadiri kursus-kursus pembangunan profesional dan pengurusan di beberapa institusi termasuk Land Forces Command and Staff College, Canada; United Nations International Peace Academy, Vienna; National Defence College, India, dan Institut Tadbir Awam Negara (INTAN), Malaysia.
Sepanjang tempoh perkhidmatan beliau di dalam tentera, beliau telah memegang pelbagai jawatan penting seperti Pegawai Pemerintah dan Ketua Staf di semua peringkat dalam Angkatan Tentera. Sebagai PAT, beliau memainkan peranan yang penting dalam Hubungan Kerjasama Pertahanan Malaysia di peringkat Serantau dan Antarabangsa.
Beliau adalah Pengerusi Affin Holdings Berhad dan Affin-ACF Finance Berhad dari tahun 1999 sebelum menyertai AFFINBANK. Beliau kini memegang jawatan sebagai pengarah di Affin Islamic Bank Berhad, ABB Trustee Berhad, EP Engineering Sdn Bhd dan global Medical Alliance Sdn Bhd.
Jen. Tan Sri Dato’ Seri Ismail Bin Haji Omar (Bersara) telah menghadiri kesemua 10 Mesyuarat Lembaga Pengarah yang dijadualkan setiap bulan dan kesemua 14 Mesyuarat Khas Lembaga Pengarah yang diadakan sepanjang tahun kewangan berakhir 31 Disember 2016.
YBhg. Tan Sri DaTo’ Seri loDin Bin Wok kamaruDDinPengarah Bukan Bebas Bukan Eksekutif (Melengkapkan tempoh pegangan jawatan pengarah Bank berkuatkuasa 4 Oktober 2016)
Tan Sri Dato’ Seri Lodin Bin wok Kamaruddin, berusia 67 tahun, telah dilantik semula ke Lembaga Pengarah AFFINBANK pada 4 Oktober 2010. Beliau dilantik sebagai Pengarah Urusan Affin Holdings Berhad pada Februari 1991 dan dilantik semula sebagai Timbalan Pengerusi pada 1 Julai 2008.
Beliau mempunyai pengalaman yang luas dalam menguruskan kumpulan wang simpanan dan dalam menubuhkan, menstruktur semula dan menguruskan pelbagai kepentingan perniagaan seperti perladangan, dagangan, perkhidmatan kewangan, pembangunan hartanah, minyak dan gas, farmaseutikal dan pembinaan kapal.
Tan Sri Dato’ Seri Lodin adalah Ketua Eksekutif Lembaga Tabung Angkatan Tentera (LTAT) dan Timbalan Pengerusi / Pengarah Urusan Kumpulan Boustead Holdings Berhad. Sebelum menyertai LTAT, beliau merupakan Pengurus Besar Perbadanan Kemajuan Bukit Fraser selama 9 tahun.
Beliau juga merupakan Pengerusi Boustead Heavy Industries Corporation Berhad, Boustead Naval Shipyard Sdn Bhd, Pharmaniaga Berhad dan Boustead Petroleum Marketing Sdn Bhd. Beliau juga menganggotai Lembaga Pengarah University of Nottingham di Malaysia, Kumpulan Pemerhati Pemegang Saham Minoriti, Forum FIDE, AFFIN ISLAMIC, Affin Hwang Investment Bank Berhad, AXA Affin Life Insurance Berhad dan Boustead Plantations Berhad.
Tan Sri Dato’ Seri Lodin adalah lulusan ijazah Sarjana Muda Pentadbiran Perniagaan dan Sarjana Pentadbiran Perniagaan dari University of Toledo, Ohio, AS. Antara anugerah-anugerah yang pernah diterima beliau sehingga kini termasuk Chevalier De La Legion D’Honneur dari Kerajaan Perancis, Anugerah Keusahawanan Cemerlang Malaysia, Degree of Laws honoris causa dari University of Nottingham, United Kingdom, Anugerah Alumnus UiTM Tahun 2010 dan The BrandLaureate Most Eminent Brand ICON Leadership Award 2012 oleh Asia Pacific Brands Foundation. Beliau juga merupakan Banker Bertauliah, AICB.
Tan Sri Dato’ Seri Lodin Bin wok Kamaruddin menghadiri kesemua 8 Mesyuarat Lembaga Pengarah yang dijadualkan setiap bulan dan 6 daripada 11 Mesyuarat Khas Lembaga Pengarah yang diadakan dari Januari 2016 sehingga akhir tempoh pegangan jawatan pengarah beliau berkuatkuasa 4 Oktober 2016.
KIRI KE KANAN:
yBhg. Jen. tan sri Dato’ seri ismail Bin haJi omar (Bersara)
yBhg. tan sri Dato’ seri loDin Bin wok kamaruDDin
Profil Lembaga Pengarah
LAPORAN TAHUNAN 2016
5
KIRI KE KANAN:
mr. auBrey li kwok-sing
en. mohD suffian Bin haJi haron
mr. auBreY li kWok-SingPengarah Bukan Bebas Bukan Eksekutif
Mr. Aubrey Li Kwok-Sing, seorang warganegara Hong Kong, berusia 66 tahun, dilantik ke Lembaga Pengarah AFFINBANK pada 17 Mac 2008. Beliau juga merupakan Pengarah di The Bank of East Asia, Limited dan Pengerusi IAM Holdings (Hong Kong) Limited (sebelum ini dikenali sebagai MCL Partners Limited).
Beliau mempunyai pengalaman luas dalam perbankan pelaburan, perbankan dagangan dan pasaran modal. Terkini, beliau menganggotai Lembaga Pengarah di Cafe’ de Coral Holdings Limited, China Everbright International Limited, Kunlun Energy Limited, Kowloon Development Co. Ltd, Pokfulam Development Company Limited dan Tai Ping Carpets International Limited, Aurora Technologies Limited, Dragon Sea Investment Limited, IAM Holdings Limited, Argyle Street Management Limited, Pocket Solution Limited, K H Optical Company Limited, w Haking Enterprise Limited, golden Chance Limited, Silver Park Holdings Limited, MCL-AUTH Limited, MCL Holdings Limited Mix Creation Limited, Power House Investment Holding Limited, Delta Link Limited, good Motive Limited, Keen general Limited, Noble Point Limited, Rich Delta Limited, TienShing Limited dan New Dragon Asia Food Limited.
Mr. Aubrey Li Kwok-Sing telah menghadiri 4 daripada 10 Mesyuarat Lembaga Pengarah yang diadakan setiap bulan dan 5 daripada 14 Mesyuarat Khas Lembaga Pengarah yang diadakan sepanjang tahun kewangan berakhir 31 Disember 2016.
Pengarah Alternatif bagi Mr. Aubrey Li Kwok-Sing iaitu Mr. Tang Peng wah dilantik pada 23 Jun 2014.
Mr. Tang Peng wah menghadiri 5 daripada 10 Mesyuarat Lembaga Pengarah yang dijadualkan setiap bulan dan 8 daripada 14 Mesyuarat Khas Lembaga Pengarah yang diadakan sepanjang tahun kewangan berakhir 31 Disember 2016.
en. mohD Suffian Bin haJi haronPengarah Bukan Bebas Bukan Eksekutif
En. Mohd Suffian Bin Haji Haron, warganegara Malaysia, berusia 71 tahun, dilantik ke dalam Lembaga Pengarah AFFINBANK pada 15 Ogos 2009 dan seterusnya dilantik semula sebagai Pengarah Bukan Bebas Bukan Eksekutif berkuatkuasa 1 Jun 2016. Terkini, beliau merupakan ahli Jawatankuasa Penamaan dan Imbuhan Lembaga Pengarah bagi AFFINBANK dan AFFIN ISLAMIC, Jawatankuasa Semakan Pinjaman dan Perolehan Semula Lembaga Pengarah, Jawatankuasa Pengurusan Risiko Lembaga Pengarah dan Jawatankuasa Transformasi Pengawasan Lembaga Pengarah bagi AFFINBANK.
Beliau merupakan lulusan Universiti Malaya (1970) dengan ijazah Sarjana Muda Ekonomi selain memegang ijazah Sarjana Pentadbiran Perniagaan dari University of Oregon (AS) pada 1976.
Beliau memulakan kerjaya sebagai Pegawai Tadbir dan Diplomatik di Jabatan Perdana Menteri dan Kementerian Perusahaan Awam. Ketika berkhidmat di Jabatan Perdana Menteri, beliau juga ditugaskan sebagai Penolong Penasihat Khas Ekonomi bagi Kerajaan. Beliau pernah menganggotai Lembaga Pengarah Perbadanan Kemajuan Bukit Fraser, Perbadanan Kemajuan Negeri bagi Perak, Pahang dan Terengganu serta Bank Pembangunan Malaysia Berhad, Kompleks Kewangan Malaysia Berhad, HICOM dan Majlis Amanah Rakyat (MARA). Selepas berkhidmat selama 13 tahun, beliau meninggalkan Perkhidmatan Kerajaan dan menyertai sebuah gLC yang terlibat dalam perniagaan antarabangsa, dan seterusnya memulakan perniagaan sendiri dan menjadi Pengarah Urusan Syarikat Pembrokeran Insurans. Beliau juga pernah terlibat dalam industri keselamatan dan pengurusan aset. Beliau turut pernah menjadi Pengarah di Hitachi Sales (Malaysia) Sdn Bhd, Meiden Electric Engineering Sdn Bhd, Far East Computers (India) dan Affin Discount Berhad. Beliau juga mempunyai pengalaman meluas dalam dagangan umum, penjanaan dan transmisi kuasa, penyelenggaraan pesawat udara serta sektor perkhidmatan minyak dan gas.
Terkini, beliau merupakan ahli Lembaga Pengarah AFFIN ISLAMIC, ABB Trustee Berhad, L.K & Associates Sdn Bhd dan Pharmaniaga Berhad.
En. Mohd Suffian Bin Haji Haron telah menghadiri kesemua 10 Mesyuarat Lembaga Pengarah yang dijadualkan setiap bulan dan kesemua 14 Mesyuarat Khas Lembaga Pengarah yang diadakan sepanjang tahun kewangan berakhir 31 Disember 2016.
Profil Lembaga Pengarah
AFFIN BANK BERHAD (25046-T)
6
yBhg. tan sri Dato’ seri mohameD Jawhar
YBhg. Tan Sri DaTo’ Seri mohameD JaWharPengarah Bukan Bebas Bukan Eksekutif
Tan Sri Dato’ Seri Mohamed Jawhar, warganegara Malaysia, berusia 72 tahun, dilantik ke Lembaga Pengarah AFFINBANK pada 1 November 2011 dan seterusnya dilantik semula menjadi Pengarah Bukan Bebas Bukan Eksekutif berkuatkuasa 1 Jun 2016. Beliau kini merupakan ahli Jawatankuasa Penamaan dan Imbuhan Lembaga Pengarah bagi AFFINBANK dan AFFIN ISLAMIC, Jawatankuasa Audit Lembaga Pengarah, Jawatankuasa Pengurusan Risiko Lembaga Pengarah, dan Jawatankuasa Transformasi Pengawasan Lembaga Pengarah bagi AFFINBANK.
Jawatan-jawatan lain beliau termasuk: Pengarah Bukan Bebas Bukan Eksekutif, AFFIN ISLAMIC; Pengerusi Bukan Eksekutif, New Straits Times Press (Malaysia) Berhad; Ahli Suruhanjaya Sekuriti Malaysia; Ahli, Panel Semakan Operasi, Suruhanjaya Pencegahan Rasuah Malaysia; Felo Kehormat, Institut Hubungan Asing dan Diplomasi (IDFR); Felo Kehormat, Institut Pertahanan dan Keselamatan Malaysia (MiDAS); Felo, Institut Keselamatan Awam Malaysia (IPSOM), Kementerian Hal Ehwal Dalam Negeri; Ahli Lembaga Pengarah, Institut Pengajian Islam Lanjutan (IAIS); dan Ahli, Lembaga Penasihat Laureate, INTI International University and Colleges. Beliau juga merupakan Pakar dan Individu Terkemuka dari Malaysia untuk ASEAN Regional Forum (ARF).
Beliau juga pernah menjadi Pengerusi Bersama, Network of East Asia Think-Tanks (NEAT) 2005-2006; Pengerusi, Malaysian National Committee, Pacific Economic Cooperation Council (PECC) 2006-2010; dan Pengerusi Bersama, Council for Security Cooperation in the Asia Pacific (CSCAP) 2007-2009.
Beliau telah berkhidmat dengan Kerajaan lebih 20 tahun sebelum menyertai Institut Kajian Strategik & Antarabangsa (ISIS) Malaysia sebagai Timbalan Ketua Pengarah pada 1990. Beliau dilantik sebagai Ketua Pengarah pada Mac 1997 dan seterusnya dilantik sebagai Pengerusi dan Ketua Pegawai Eksekutif pada 2006. Beliau dilantik sebagai Pengerusi ISIS Malaysia pada 9 Januari 2010 dan melepaskan jawatan tersebut pada 8 Januari 2015.
Semasa berkhidmat dengan Kerajaan, jawatan beliau termasuk sebagai Ketua Pengarah, Jabatan Perpaduan Negara; Setiausaha Rendah, Kementerian Hal Ehwal Dalam Negeri; Pengarah (Analisis) Bahagian Penyelidikan, Jabatan Perdana Menteri; dan Penolong Setiausaha Utama, Majlis Keselamatan Negara. Beliau juga pernah berkhidmat sebagai Kaunselor di Kedutaan Malaysia di Indonesia dan Thailand.
Terkini, beliau memegang jawatan pengarah di AFFIN ISLAMIC, Sistem Televisyen Malaysia Berhad, Ekuiti Nasional Berhad dan Suruhanjaya Sekuriti.
Tan Sri Dato’ Seri Mohamed Jawhar menghadiri kesemua 10 Mesyuarat Lembaga Pengarah yang dijadualkan setiap bulan dan 13 daripada 14 Mesyuarat Khas Lembaga Pengarah yang diadakan sepanjang tahun kewangan berakhir 31 Disember 2016.
Profil Lembaga Pengarah
LAPORAN TAHUNAN 2016
7
YBhg. Tan Sri mohD ghazali Bin mohD YuSoffPengarah Bebas Bukan Eksekutif
Tan Sri Mohd ghazali Bin Mohd Yusoff, warganegara Malaysia, berusia 70 tahun, dilantik ke Lembaga Pengarah AFFINBANK pada 20 Jun 2014. Terkini, beliau merupakan Pengerusi Jawatankuasa Audit Lembaga Pengarah dan ahli Jawatankuasa Penamaan dan Imbuhan Lembaga Pengarah serta Jawatankuasa Pengurusan Risiko Lembaga Pengarah.
Beliau memegang ijazah Sarjana Muda Utter Bar dari Middle Temple, Inns-of-Court, London. Beliau menyertai Perkhidmatan Kehakiman dan Perundangan Malaysia pada 1974. Jawatan kanan yang pernah dipegang beliau termasuk sebagai Timbalan Pendakwa Raya Umum, Penasihat Perundangan Negeri, Pendaftar Syarikat dan Ketua Pendaftar Mahkamah Agung dan Peguam Cara Negara.
Beliau menjadi Hakim Mahkamah Tinggi, Mahkamah Rayuan dan seterusnya Mahkamah Persekutuan. Beliau bersara pada Januari 2012.
Tan Sri Mohd ghazali Bin Mohd Yusoff menghadiri kesemua 10 Mesyuarat Lembaga Pengarah yang dijadualkan setiap bulan dan kesemua 14 Mesyuarat Khas Lembaga Pengarah yang diadakan sepanjang tahun kewangan berakhir 31 Disember 2016.
en. aBD malik Bin a rahmanPengarah Bebas Bukan Eksekutif
En. Abd Malik Bin A Rahman, warganegara Malaysia, berusia 68 tahun, dilantik ke dalam Lembaga Pengarah AFFINBANK pada 3 Mac 2015. Terkini, beliau merupakan Pengerusi Jawatankuasa Penamaan dan Imbuhan Lembaga Pengarah, Jawatankuasa Pengurusan Risiko Lembaga Pengarah dan Jawatankuasa Transformasi Pengawasan Lembaga Pengarah.
En. Malik adalah Pengarah Bebas Bukan Eksekutif di AFFIN Holdings Berhad, Boustead Heavy Industries Corporation Berhad, CYL Corporation Berhad, Lee Swee Kiat group Berhad dan Innity Corporation Berhad serta Pengarah di beberapa syarikat sendirian berhad termasuk Boustead Penang Shipyard Sdn Bhd, world Courier (M) Sdn Bhd, gyrodata Services Sdn Bhd, Modifin Malaysia Sdn Bhd, HTC Malaysia Sdn Bhd, Hilti (M) Sdn Bhd, Lionex (M) Sdn Bhd, BHIC Shipbuilding & Engineering Sdn Bhd. Beliau juga merupakan Pengarah di anak-anak syarikat AFFIN Holdings Berhad iaitu AFFIN Hwang Investment Bank Berhad dan AFFIN Hwang Asset Management Berhad.
Beliau adalah ahli Akauntan Bertauliah di Malaysian Institute of Accountants, ahli Malaysian Institute of Certified Public Accountants, ahli Certified Financial Planners (AS), ahli Chartered Management Institute (UK), ahli Malaysian Institute of Management dan Felo Association of Chartered Certified Accountants (UK).
En. Malik pernah memegang pelbagai jawatan pengurusan kanan di Peat Marwick Mitchell & Company (kini dikenali sebagai KPMg), Esso group of Companies, Colgate-Palmolive (M) Sdn Bhd, Amway (Malaysia) Sdn Bhd, Fima Metal Box Berhad dan guinness Anchor Berhad. Beliau pernah menjadi Pengurus Besar, Khidmat Korporat di Kelang Multi Terminal Sdn Bhd (kini dikenali sebagai westports Malaysia Sdn Bhd) dari 1994 hingga 2003.
En. Abd Malik Bin A Rahman menghadiri kesemua 10 Mesyuarat Lembaga Pengarah yang dijadualkan setiap bulan dan kesemua 14 Mesyuarat Khas Lembaga Pengarah yang diadakan sepanjang tahun kewangan berakhir 31 Disember 2016.
KIRI KE KANAN:
yBhg. tan sri mohD ghazali Bin mohD yusoff
en. aBD malik Bin a rahman
Profil Lembaga Pengarah
AFFIN BANK BERHAD (25046-T)
8
Ahli Pengurusan Kanan
11. PN. KHATIMAH BINTI MAHADI Ketua Audit Dalaman Kumpulan
12. PN. NOR ROzITA BINTI NORDIN Ketua Pegawai Sumber Manusia
13. PN. NIMMA SAFIRA BINTI DATO’ KHALID
Ketua Pegawai Perundangan dan Setiausaha Syarikat
14. EN. SHARIFFUDIN BIN MOHAMAD Pengarah Eksekutif, Operasi dan
Perkhidmatan Strategik (Bersara berkuatkuasa 31.10.2016)
15. EN. AMIRUDIN BIN ABDUL HALIM Pengarah Eksekutif, Perbankan Perniagaan (Bersara berkuatkuasa 1.8.2016)
01. EN. KAMARUL ARIFFIN BIN MOHD JAMIL
Ketua Pegawai Eksekutif Kumpulan, Affin Holdings Berhad
Pengarah Urusan / Ketua Pegawai Eksekutif, Affin Bank Berhad
02. EN. NAzLEE BIN KHALIFAH Ketua Pegawai Eksekutif,
Affin Islamic Bank Berhad
03. EN. zULKANAIN BIN KASSIM Ketua Pegawai Operasi (Dilantik berkuatkuasa 1.10.2016)
04. EN. MOHAMMED NIzAR BIN FAISAL Pengarah, Korporat & Perniagaan
Sektor Awam (Dilantik berkuatkuasa 1.10.2016)
05. MR. LIM KEE YEONg Pengarah, Bahagian PKS & Perniagaan
Komersil (Dilantik berkuatkuasa 1.9.2016)
06. EN. IDRIS BIN ABD HAMID Pengarah, Perbankan Pengguna
07. MR. TAN KOK TOON Pengarah, Perbendaharaan Kumpulan
08. MR. RAMANATHAN RAJOO Ketua Pegawai Kewangan
09. MR. wONg KOK LEONg Ketua Pegawai Risiko Kumpulan
10. PN. NORHAzLIzAwATI BINTI MOHD RAzALI
Ketua Pegawai Kredit Kumpulan
01
06
11
04
09
14
02
07
12
03
08
13
05
10
15
LAPORAN TAHUNAN 2016
9
en. kamarul ariffin Bin mohD JamilKetua Pegawai Eksekutif Kumpulan, Affin Holdings BerhadPengarah Urusan / Ketua Pegawai Eksekutif, Affin Bank Berhad
En. Kamarul Ariffin Bin Mohd Jamil dilantik sebagai Pengarah Urusan/Ketua Pegawai Eksekutif Affin Bank Berhad pada April 2015 dan juga merupakan Ketua Pegawai Eksekutif AFFIN Holdings Berhad.
Kamarul menyertai Affin Bank Berhad pada 2003 selaku Ketua, Bahagian Strategi Korporat. Pada 2005, Kamarul dilantik sebagai Ketua, Bahagian Perbankan Islam. Dengan penubuhan Affin Islamic Bank, Kamarul dilantik sebagai Ketua Pegawai Eksekutifnya pada 2006.
Sebelum menyertai AFFINBANK, Kamarul pernah memegang pelbagai jawatan di Pengurusan Danaharta Nasional Berhad, Trenergy Malaysia Berhad dan Shell Malaysia Trading Sdn Bhd termasuk dalam pembangunan perniagaan dan perancangan strategik.
Kamarul mempunyai ijazah Sarjana Muda Kesenian dalam bidang Ekonomi dari Cambridge University.
en. nazlee Bin khalifahKetua Pegawai Eksekutif, Affin Islamic Bank Berhad
En. Nazlee bin Khalifah, warganegara Malaysia berusia 49 tahun, dilantik sebagai Ketua Pegawai Eksekutif Affin Islamic Bank Berhad pada Jun 2015.
En. Nazlee memulakan kerjaya dalam industri perbankan bersama Maybank selama 17 tahun dalam pelbagai kapasiti terutamanya dalam pengurusan strategik. Nazlee menyertai Affin Bank Berhad sebagai Ketua, Strategi & Sokongan Perniagaan, Bahagian Perbankan Perniagaan pada Februari 2009. Pada April 2011, Nazlee dilantik sebagai Ketua Strategi Korporat.
En. Nazlee memegang ijazah Sarjana Muda dalam Pentadbiran Perniagaan, dengan pengkhususan dalam Perakaunan & Kewangan dari Simon Fraser University, Kanada.
Terkini, En. Nazlee adalah Pengarah gantian kepada En. Kamarul Ariffin Bin Mohd Jamil bagi IAP Integrated Sdn Bhd dan Raeed Holdings Sdn Bhd serta merupakan Bendahari Kehormat bagi Persatuan Institusi-institusi Perbankan Islam Malaysia (AIBIM). Beliau dilantik ke dalam Charter governing Panel, Chartered Institute of Islamic Finance (CIIF) pada 2016.
en. zulkanain Bin kaSSimKetua Pegawai Operasi (Dilantik berkuatkuasa 1.10.2016)
En. zulkanain Bin Kassim menyertai AFFINBANK pada 1 Oktober 2016 sebagai Ketua Pegawai Eksekutif. Beliau bertanggungjawab merancang, mengatur dan mengawal semua aktiviti operasi Bank termasuk Perkhidmatan IT, Operasi Perbankan, serta Pentadbiran dan Dokumentasi Pinjaman. Sebelum menyertai AFFINBANK, En. zulkanain pernah memegang jawatan sebagai Pengarah Urusan Kumpulan MEPS.
En. zulkanain memegang ijazah Sarjana Muda Sains (Kepujian) dalam Sains Komputer dari Universiti Teknologi Malaysia, dan merupakan penerima Anugerah Kepimpinan – Individu oleh CEPI Asia bagi usaha pemodenan infrastruktur pembayaran Malaysia.
En. zulkanain mempunyai lebih 25 tahun pengalaman dalam industri perkhidmatan kewangan, terutamanya dalam Teknologi Maklumat, Operasi Perbankan, Penyelesaian Pelanggan, dan Pembayaran.
KIRI KE KANAN:
en. kamarul ariffin Bin mohD Jamil
en. nazlee Bin khalifah
en. zulkanain Bin kassim
Profil Ahli Pengurusan Kanan
AFFIN BANK BERHAD (25046-T)
10
en. mohammeD nizar Bin faiSalPengarah, Korporat & Perniagaan Sektor Awam (Dilantik berkuatkuasa 1.10.2016)
En. Mohammed Nizar Bin Faisal menyertai Affin Bank Berhad pada 1 Oktober 2016 sebagai Pengarah, Perniagaan Korporat & Sektor Awam. Beliau bertanggungjawab membangun dan melaksanakan strategi-strategi bagi memacu pertumbuhan Perniagaan Korporat & Sektor Awam bagi Kumpulan Affin Bank, termasuk antara lainnya, memacu perolehan dan pertumbuhan, merapatkan hubungan perniagaan dengan semua pemegang berkepentingan yang terlibat, melaksanakan strategi-strategi yang sejajar dengan produk-produk, pelanggan dan pasaran baharu, menggunakan alat-alat amalan terbaik bagi mempertingkatkan model sedia ada, memastikan urus tadbir korporat dan amalan-amalan yang baik serta membina usul borong yang mampan dan kohesif dalam Affin Bank Berhad.
En. Nizar memegang ijazah Sarjana Muda Kesenian (Kepujian) dalam Pemasaran dari Middlesex University, United Kingdom. En. Nizar mempunyai pengalaman lebih 19 tahun dalam industri perkhidmatan kewangan, terutamanya dalam Perbankan Borong dan Perbankan Sektor Awam. Kerjaya beliau sejak 17 tahun lepas banyak tertumpu kepada bank-bank asing di Malaysia di bawah Liputan Pelanggan bagi kedua-dua Sektor Awam dan nama-nama Besar Korporat Tempatan yang beroperasi di Malaysia. Sebagai sebahagian daripada usul borong, En. Nizar pernah terlibat dalam pelbagai urusniaga berkaitan Polisi Kredit, Perbankan Korporat, Pasaran Modal Hutang, Pasaran Modal dan Khidmat Nasihat, Pembiayaan ECA dan Projek, Perbankan Islam dan Perbankan Perniagaan.
mr. lim kee YeongPengarah, Bahagian PKS & Perniagaan Komersil(Dilantik berkuatkuasa 1.9.2016)
Mr. Lim Kee Yeong menyertai Affin Bank Berhad pada 1 September 2016 dan bertanggungjawab membangun dan melaksanakan strategi-strategi bagi memacu pertumbuhan Perniagaan Komersil dan Perusahaan Kecil & Sederhana (PKS) bagi Bank.
Mr. Lim mempunyai pengalaman lebih 23 tahun dalam perbankan dan kewangan, terutamanya dalam perniagaan Komersil & PKS di bank-bank tempatan dan asing. Sebelum menyertai Affin Bank, beliau merupakan Naib Presiden Perbankan Komersil & PKS dan ahli Lembaga Pengarah dalam sebuah syarikat Pegangan Kewangan yang berpangkalan di Singapura, yang terlibat dalam perkhidmatan kewangan dan pelaburan di rantau ASEAN.
Mr. Lim juga pernah berkhidmat sebagai Naib Presiden Kanan bagi Perniagaan PKS di sebuah bank tempatan, di mana beliau telah memainkan peranan penting dalam pertumbuhan mengagumkan bagi Perniagaan PKS bank tersebut, yang membawa kepada beberapa penganugerahan di dalam dan luar negara.
Mr. Lim memegang ijazah Sarjana dan Sarjana Muda dalam Pentadbiran Perniagaan dari wichita State University, Kansas, AS.
en. iDriS Bin aBD hamiDPengarah, Perbankan Pengguna
En. Idris Bin Abd Hamid merupakan Pengarah, Perbankan Pengguna, iaitu jawatan yang dipegang beliau sejak Mei 2009.
En. Idris memulakan kerjaya beliau bersama Malayan Finance Corporation (MFC) pada 1978 dan kemudian melanjutkan kerjaya di Arab-Malaysian Finance Corporation selama 10 tahun dalam pelbagai jawatan – yang terakhir sebagai Ketua Perbankan Runcit.
Pada 1994, beliau menyertai AFFINBANK sebagai Pengurus Besar dan seterusnya sebagai Ketua Pegawai Eksekutif Affin Finance Berhad. Beliau dilantik sebagai Timbalan Ketua Pegawai Eksekutif Affin-ACF Finance Berhad dari tahun 2000 hingga 2005.
En. Idris mempunyai pengalaman lebih 30 tahun dalam industri perbankan meliputi perniagaan perbankan Pengguna dan Korporat.
En. Idris memperoleh ijazah Sarjana dalam Pentadbiran Perniagaan dari University of Northern Colorado pada 1984 dan ijazah Sarjana Muda Sains (Kewangan) dari University of Southern Illinois pada 1982.
KIRI KE KANAN:
en. mohammeD nizar Bin faisal
mr. lim kee yeong
en. iDris Bin aBD hamiD
Profil Ahli Pengurusan Kanan
LAPORAN TAHUNAN 2016
11
Profil Ahli Pengurusan Kanan
mr. Tan kok ToonPengarah, Perbendaharaan Kumpulan
Mr. Tan Kok Toon menyertai Affin Bank Berhad sebagai Ketua Perbendaharaan pada Oktober 2004 dan bertanggungjawab menguruskan semua aspek-aspek Bahagian Perbendaharaan Kumpulan Perbankan. Terkini beliau merupakan Setiausaha Kehormat Persatuan Pasaran Kewangan Malaysia (Association Cambiste Internationale) dan Pengerusi bagi Jawatankuasa Seminar dan Pendidikan.
Sebelum menyertai AFFINBANK, Mr. Tan pernah berkhidmat di sebuah bank utama di Malaysia. Mr. Tan mempunyai pengalaman lebih 20 tahun dalam perbankan terutamanya dalam Operasi Perbendaharaan. Beliau pernah berkhidmat sebagai Pengurus Perbendaharaan di Cawangan New York, serta menjadi Penasihat Perniagaan Perbendaharaan bagi memulihkan satu projek perniagaan di Filipina.
Mr. Tan memperoleh ijazah Sarjana Muda Sains (Kepujian) dalam Matematik dari Universiti Malaya (UM) pada 1987.
mr. ramanaThan raJooKetua Pegawai Kewangan
Mr. Ramanathan Rajoo memulakan kerjaya beliau pada 1988 sebagai pelatih audit di Coopers & Lybrand dan seterusnya memegang jawatan sebagai Audit Kanan sebelum menyertai Affin Bank pada 1991 sebagai Eksekutif di Bahagian Kewangan. Mr. Rama dilantik sebagai Ketua Pegawai Kewangan Kumpulan Affin Bank pada 2014.
Dengan pengalaman meluas selama 26 tahun merangkumi bidang-bidang pengauditan, perakaunan kewangan, pengurusan kewangan, pengurusan modal, pelaporan kawal selia dan perolehan semula, Mr. Rama berkhidmat sebagai Rakan Perniagaan strategik kepada Ketua Pegawai Eksekutif dan Pengurusan Kanan bagi mencapai objektif keseluruhan organisasi. Terkini, beliau mempengerusikan beberapa jawatankuasa di dalam Bank dan menjadi ahli penting dalam beberapa jawatankuasa lain.
Beliau merupakan ahli CPA Australia serta Institut Akauntan Malaysia. Beliau memegang kelayakan Profesional Kredit bertauliah dari Asian Institute of Chartered Bankers. Beliau juga memegang ijazah Perakaunan dari Universiti Malaya dan ijazah Sarjana dalam Pentadbiran Perniagaan dari Universiti Putra Malaysia.
mr. Wong kok leongKetua Pegawai Risiko Kumpulan
Mr. wong Kok Leong menyertai Kumpulan Affin pada tahun 2000 sebagai Ketua, Pengurusan Risiko di Affin Investment Bank. Sebelum perlantikan beliau sebagai Ketua Pegawai Risiko Kumpulan pada 1 Ogos 2015, beliau memegang jawatan sebagai Ketua Pegawai Kredit Kumpulan dan Ketua, Risiko Pasaran Kumpulan.
Kerjaya terdahulu beliau termasuk di firma guaman, badan kawal selia dan bursa saham. Mr. wong memegang ijazah Sarjana Perundangan dari Cambridge University, UK; ijazah Sarjana Muda Perundangan dari Buckingham University, UK; dan ijazah Sarjana Muda Ekonomi (Perakaunan) dari Monash University, Australia. Beliau merupakan seorang Felo di CPA Australia dan Financial Services Institute of Australasia (FINSIA).
Beliau turut memegang pensijilan profesional dalam pengurusan risiko, pengurusan projek, perancangan kewangan, latihan, kejurulatihan dan pementoran.
Mr. wong adalah ahli Jawatankuasa Peperiksaan, Asian Institute of Chartered Bankers.
KIRI KE KANAN:
mr. tan kok toon
mr. ramanathan raJoo
mr. wong kok leong
AFFIN BANK BERHAD (25046-T)
12
Profil Ahli Pengurusan Kanan
Pn. norhazlizaWaTi BinTi mohD razaliKetua Pegawai Kredit Kumpulan
Pn. Norhazlizawati Binti Mohd Razali menyertai Affin Bank Berhad sebagai Ketua Pegawai Kredit Kumpulan pada 1 Ogos 2015.
Pn. Norhazlizawati mempunyai lebih 24 tahun pengalaman dalam perbankan, terutamanya dalam pengurusan risiko kredit dan peminjaman perniagaan. Beliau telah menjadi ahli pengurusan kanan selama beberapa tahun dan memegang jawatan utama dalam perniagaan, pengurusan risiko dan risiko kredit. Bidang kepakaran beliau adalah dalam Pengurusan Kredit dan Risiko, Peminjaman Runcit, PKS, dan Komersil, Pengurusan Perhubungan dan Pengurusan Projek.
Pn. Norhazlizawati memegang ijazah Sarjana Muda Kesenian (Kepujian) dalam Pengajian Perniagaan dengan pengkhususan dalam Perakaunan dan Statistik dari Leeds Metropolitan University, United Kingdom. Beliau juga memegang kelayakan Profesional Kredit Bertauliah (Perniagaan) dari Asian Institute of Chartered Bankers.
Pn. khaTimah BinTi mahaDiKetua Audit Dalaman Kumpulan
Pn. Khatimah Binti Mahadi menyertai Affin Bank Berhad sebagai Ketua Audit Dalaman pada 2004 dan seterusnya dilantik sebagai Ketua Audit Dalaman Kumpulan pada April 2007. Sebelum menyertai Kumpulan Affin Banking, beliau pernah berkhidmat sebagai Ketua Audit Dalaman Negara & Pengarah Pematuhan di Citibank Malaysia.
Beliau mempunyai lebih 30 tahun pengalaman dalam perbankan terutamanya dalam Pengauditan, Pematuhan, Penyiasatan, Pengurusan Projek dan Jaminan Kualiti. Beliau juga merupakan jurulatih bagi Pematuhan & Kawalan.
Beliau memperoleh latihan kepimpinan dari Harvard University, Boston & Disney Institute, Los Angeles dan merupakan Felo Bersekutu di Institute of Bankers Malaysia.
Pn. Khatimah memperoleh Diploma Perakaunan dari UiTM pada 1978 dan merupakan salah seorang daripada 45 Jurubank Bertauliah di Malaysia.
Pn. nor roziTa BinTi norDinKetua Pegawai Sumber Manusia
Pn. Nor Rozita Binti Nordin dilantik sebagai Ketua Pegawai Sumber Manusia Affin Bank Berhad pada Mei 2011. Sebelum menyertai AFFINBANK, Pn. Rozita merupakan Naib Presiden Eksekutif dan Ketua Sumber Manusia Kumpulan di sebuah kumpulan perbankan tempatan.
Pn. Rozita mempunyai lebih 30 tahun pengalaman dalam Pembangunan Sumber Manusia dan Strategi Perhubungan Pelanggan dalam pelbagai industri termasuk perbankan, minyak dan gas, pengilangan, runcit, dan perkhidmatan perkongsian. Pn. Rozita memegang peranan strategik dan operasi di dalam dan luar negara.
Pn. Rozita memperoleh ijazah Sarjana Sains dari Southern Illinois University pada 1984, serta ijazah Sarjana Muda Sains dalam Pendidikan dan Sarjana Muda Kesenian dalam Linguistik, kedua-duanya pada 1982.
KIRI KE KANAN:
Pn. norhazlizawati Binti mohD razali
Pn. khatimah Binti mahaDi
Pn. nor rozita Binti norDin
LAPORAN TAHUNAN 2016
13
KIRI KE KANAN:
Pn. nimma safira Binti Dato’ khaliD
en. shariffuDin Bin mohamaD
en. amiruDin Bin aBDul halim
Pn. nimma Safira BinTi DaTo’ khaliDKetua Pegawai Perundangan dan Setiausaha Syarikat
Pn. Nimma Safira Binti Khalid merupakan Ketua Pegawai Perundangan & Setiausaha Syarikat Affin Bank Berhad. Pn. Nimma menyertai AFFINBANK pada tahun 2001 sebagai Pengurus, Perundangan & Kesetiausahaan. Beliau kemudian ditugaskan di pejabat Presiden/Ketua Pegawai Eksekutif sebagai Penolong Eksekutif dari 2003 hingga 2005.
Pn. Nimma memulakan kerjaya beliau sebagai Peguam Bela & Peguam Cara Mahkamah Tinggi Malaya pada 1994. Beliau kemudian berpindah dan berkhidmat sebagai Pegawai Perundangan/Setiausaha Syarikat bagi sebuah bank komersil dari 1995 hingga 2000. Pn. Nimma memegang ijazah Sarjana Muda Perundangan yang diperoleh pada 1992 dan Sarjana Muda Perundangan (Syariah) yang diperoleh pada 1993, kedua-duanya dari Universiti Islam Antarabangsa Malaysia.
en. ShariffuDin Bin mohamaDPengarah Eksekutif, Operasi dan Perkhidmatan Strategik (Bersara berkuatkuasa 31.10.2016)
En. Shariffudin Bin Mohamad menyertai Affin Bank Berhad pada 2007 sebagai Pengarah Operasi dan dilantik sebagai Pengarah Eksekutif, Operasi pada 2009.
En. Shariffudin mempunyai pengalaman lebih 25 tahun dalam perbankan di dalam dan luar negara. Pengalaman langsung beliau merangkumi Operasi Cawangan, Kewangan Dagangan, Perbankan Korporat, Pengurusan Perhubungan Korporat, Operasi Kredit, Pengurusan Tunai dan Perkhidmatan Sekuriti. Jawatan terakhir beliau adalah sebagai Ketua, Perkhidmatan Pengurusan Projek (Teknologi & Operasi) di sebuah bank asing utama dan anak syarikat tempatannya.
En. Shariffudin memperoleh ijazah Sarjana dalam Pentadbiran Perniagaan dari Southern Illinois University pada 1981, dan ijazah Sarjana Muda Sains dalam Kewangan pada 1980.
En. Shariffudin bersara sebagai Pengarah Eksekutif, Operasi dan Perkhidmatan Strategik berkuatkuasa 31 Oktober 2016.
en. amiruDin Bin aBDul halimPengarah Eksekutif, Perbankan (Bersara berkuatkuasa 1.8.2016)
En. Amirudin Bin Abdul Halim menyertai Affin Bank Berhad sebagai Pengarah, Perbankan Perniagaan pada Julai 2009 dan dilantik sebagai Pengarah Eksekutif, Perbankan pada 2014.
Sebelum menyertai AFFINBANK, En. Amirudin berkhidmat di sebuah bank tempatan utama selama lebih 21 tahun di mana beliau memperoleh pengalaman perbankan yang meluas menerusi Operasi Cawangan, Kawalan Kredit, Perbankan Perniagaan, Pemasaran Runcit, Perbankan Pengguna dan Perkhidmatan Korporat.
Beliau pernah memegang beberapa jawatan strategik kanan termasuk Timbalan Ketua Bahagian Perbankan Perniagaan, Ketua gadai Janji dan Pembiayaan Automobil, serta Timbalan Ketua Pegawai Eksekutif bagi sebuah bank tempatan utama.
En. Amirudin memperoleh ijazah Sarjana Muda Kesenian dalam Kewangan dari St. Louis University pada 1986.
En. Amirudin bersara sebagai Pengarah Eksekutif, Perbankan berkuatkuasa 1 Ogos 2016.
Profil Ahli Pengurusan Kanan
AFFIN BANK BERHAD (25046-T)
14
Perbincangan & Analisis Pengurusan
“AFFINBANK (AFFIN ATAU BANK) TELAH MEMULAKAN PROgRAM TRANSFORMASI AFFINITY (ATP) PADA 2016 DENgAN TUMPUAN KE ATAS SEgMEN PELANggAN, SALURAN-SALURAN PENYAMPAIAN, PRODUK-PRODUK & PENYELESAIAN, OPERASI, TEKNOLOgI, wARgA KERJA, RISIKO & PEMATUHAN SERTA PENgURUSAN PRESTASI. AFFINITY SETAKAT INI MERUPAKAN PROgRAM TRANSFORMASI BANK YANg PALINg KOMPREHENSIF DALAM MEMPERTINgKATKAN NISBAH KOS BERBANDINg PENDAPATAN, PULANgAN EKUITI, KEUNTUNgAN OPERASI, YURAN BERBANDINg JUMLAH PENDAPATAN DAN PENgALAMAN PELANggAN.”
LAPORAN TAHUNAN 2016
15
tinJauan 2016
Tahun 2016 dipenuhi pelbagai cabaran ekoran beberapa perkembangan ekonomi makro dunia di luar jangkaan seperti keputusan Britain untuk meninggalkan Kesatuan Eropah (Brexit) dan pilihan raya presiden Amerika Syarikat. Perkembangan ini menyebabkan ketidaktentuan dalam harga matawang dan komoditi, yang membawa kepada ketidaktentuan sentimen pasaran dan kelembapan pertumbuhan ekonomi Malaysia.
Berikutan langkah awal telah diambil untuk mengurangkan harga deposit yang tinggi dan pemindahan aset kepada pinjaman dengan hasil yang lebih baik dalam segmen pengguna seperti gadai janji, kad kredit dan pembiayaan amanah saham serta segmen perusahaan kecil dan sederhana (SME); AFFINBANK berada pada kedudukan yang baik untuk mengekalkan pendapatannya pada 2016.
Keuntungan sebelum zakat & cukai (PBzT) meningkat 30.7% kepada RM602.8 juta berbanding RM461.2 juta yang dicatatkan pada 2015. Pinjaman, pendahuluan dan pembiayaan kasar dicatatkan pada RM43.1 bilion dan deposit daripada pelanggan dicatatkan pada RM47.6 bilion.
Perbankan Perniagaan yang kini distruktur semula sebagai dua bahagian baharu iaitu Sektor Korporat dan Perniagaan Sektor Awam (CPSBD) serta Bahagian Perusahaan Kecil dan Sederhana (PKS) dan Perniagaan Komersil (SMECBD), terus menjadi penyumbang utama kepada perolehan Bank, diikuti Perbendaharaan dan Perbankan Pengguna. Bank akan terus mengembangkan aset-aset Perbankan Pengguna bagi mencapai nisbah sumbangan yang seimbang iaitu 50:50 di antara gabungan CPSBD dan SMECBD, dan Perbankan Pengguna.
Pulangan Ekuiti (ROE) meningkat dari 6.79% kepada 8.45%; manakala Nisbah Pinjaman Terjejas Kasar dicatat lebih rendah pada 1.60% berbanding 1.80% pada 2015 walaupun jumlah aset bertumbuh 0.5% kepada RM60.2 bilion. Ini menunjukkan bahawa pertumbuhan pembiayaan baharu bagi tahun kewangan di bawah tinjauan dipacu oleh taja jamin yang berhemah dan peruntukan yang lebih rendah bagi pinjaman terjejas yang membawa kepada peningkatan kualiti aset.
Perbincangan & Analisis Pengurusan
Jumlah Aset
2015 RM59.8 bilion
2016 RM60.2 bilion
+0.7%
Pinjaman, Pendahuluan &Pembiayaan Bersih
2015 RM42.1 bilion
2016 RM42.7 bilion
+1.4%
Ekuiti PemegangSaham
2015 RM5.5 bilion
2016 RM5.8 bilion
+5.5%
KeuntunganSesaham (EPS)
2015 20.5 sen
2016 27.5 sen
+34.1%
Sebagai sebahagian daripada pengurusan modal yang proaktif, Bank telah berjaya meletakkan terbitan sulung bagi hutang subordinatnya berjumlah RM1 bilion yang telah melebihi langganan sebanyak 1.6 kali. Ini merupakan sebahagian daripada terbitan MTN Subordinat (Nota Jangka Sederhana) dan/atau program MTN Senior dengan had gabungan sehingga RM6.0 bilion dalam nilai nominal.
Pendapatan Sesaham (EPS) menyaksikan peningkatan nilai sebanyak 34.1% daripada 20.5 sen pada tahun sebelumnya kepada 27.5 sen pada 2016.
Semasa tahun di bawah tinjauan, AFFINBANK juga telah menerima Anugerah JomPay dengan pemerolehan pengebil tertinggi dalam Kumpulan B mengatasi semua bank-bank tempatan dan asing dalam kategori tersebut. Ini menandakan ukuran kejayaan dalam memacu budaya pembayaran atas talian di kalangan pelanggan kami.
sorotan utama 2016
Tumpuan utama pada 2016 adalah ke atas pelaksanaan dan kemajuan Program Transformasi AFFINITY (ATP). Bagi mencipta impak dan hasil yang sewajarnya dengan kesinambungan jangka panjang, pelan ini menyasarkan perubahan-perubahan besar dan mendalam yang meliputi pandangan hujung-ke-hujung perniagaan, selain menyasarkan untuk menggandakan pendapatan operasi AFFINBANK pada tahun 2020.
KEUNTUNgAN SEBELUM zAKAT DAN CUKAI
+30.7%2015 : RM461.2 JUTA
2016 : rm602.8 JUTA
AFFIN BANK BERHAD (25046-T)
16
Perbincangan & Analisis Pengurusan
Objektif fasa 1 AFFINITY telah dicapai semasa tahun di bawah tinjauan, yang tertumpu ke atas pelan biru bagi model operasi sasaran baharu yang terdiri daripada Lapan Tonggak – Segmen Pelanggan Sasaran, Saluran Penyampaian, Produk-produk & Penyelesaian, Operasi, Teknologi, warga Kerja & Organisasi, Pengurusan Prestasi dan Tadbir Urus Risiko & Pematuhan.
Sepanjang Fasa 1, perkara-perkara berikut telah dilaksanakan:
• Jelajahjalanan/taklimatATPtelahdiadakandisemuawilayah bagi berkongsi maklumat mengenai Program ini. Surat berita AFFINITY dan Intranet kami telah menerbitkan butiran mengenai program transformasi ini sejak Januari 2016.
• KempenDreamBankpekerjajugadilaksanakanuntukmendapatkan input dan idea daripada kakitangan mengenai transformasi Bank.
• PasukanPerancangtelahmenjalankanpenyelidikandan analisis mengenai isu-isu perniagaan yang melibatkan semua Bahagian dan menghasilkan satu set komprehensif rangkuman isu-isu, cabaran-cabaran dan keperluan-keperluan yang perlu ditangani dalam ATP.
• PasukanPerancangkemudianmewujudkanbeberapamodel transformasi untuk AFFINBANK “masa hadapan” dan mengenalpasti kebolehan-kebolehan yang diperlukan bagi menggerakkan model-model tersebut.
• Padadasartransformasiiniadalahsemakankeataspenyata misi dan visi terkini, termasuk nilai-nilai teras.
Kami sekarang sedang beralih ke Fasa 2 yang tertumpu kepada ‘rekacipta butiran & kemenangan pantas’. Keseluruhan program ini dijangka siap pada 2019.
Bergerak maju ke arah pencapaian baharu dalam penyampaian dan perluasan perkhidmatan, AFFINBANK telah mencatat beberapa peristiwa penting menerusi kerjasamanya dengan The Islamic Corporation for the Development of the Private Sector (ICD) dan Asian Business School (ABS).
Jumlah Aset
2015 RM59.8 bilion
2016 RM60.2 bilion
+0.7%
Pinjaman, Pendahuluan &Pembiayaan Bersih
2015 RM42.1 bilion
2016 RM42.7 bilion
+1.4%
Ekuiti PemegangSaham
2015 RM5.5 bilion
2016 RM5.8 bilion
+5.5%
KeuntunganSesaham (EPS)
2015 20.5 sen
2016 27.5 sen
+34.1%
fasa 1PROGRAM ANALISIS & PERANCANGAN
fasa 2REKACIPTA BUTIRAN & PELAKSANAAN KEMENANGAN PANTAS
fasa 3PEMBINAAN KEUPAYAAN & PELAKSANAAN
Objektif Fasa
•MewujudkanasasyangteguhuntukProgram ini berdasarkan analisis yang diperlukan serta pengesahan sasaran dan parameter yang dikehendaki.
•Menciptasatupelankomprehensifuntuk Program ini termasuk tadbir urus, sumber-sumber dan jadual.
•Butirankeupayaanyangdikenalpasti dan perubahan keupayaan bagi tahap yang diperlukan untuk pembinaan.
•Melaksanakanpembinaankeupayaan dan perancangan pelaksanaan.
•Membina,MengujidanMelaksanakan keupayaan yang dirancang. Pembinaan keupayaan akan dimulakan berdasarkan jadual keutamaan yang telah disediakan.
•Menjejakdanmemantaukemajuan dan pencapaian secara berterusan.
•Menciptadanmelaksanakanpelanrealisasi manfaat.
Durasi Anggaran Januari hingga Jun 2016 Jun 2016 hingga Jun 2019
Program transformasi affinity
LAPORAN TAHUNAN 2016
17
Kerjasama kami dengan ICD adalah sejajar dengan Dasar Priority Islamic AFFINBANK. Priority Islamic adalah satu langkah strategik bagi meningkatkan portfolio pembiayaan Islam kami kepada 40% pada tahun 2020. Hasil pelaksanaan strategi ini menyaksikan kenaikan 14.6% dalam pendapatan daripada perbankan Islam bagi 2016, dengan portfolio pembiayaan Islam bertumbuh 29.1%.
Selain itu, kami merupakan bank pertama yang bekerjasama dengan ABS dalam memperkenalkan Program Kesedaran Budaya Etika, Risiko dan Pematuhan. Objektif program ini adalah untuk memperkasakan kakitangan dalam mengasah kemahiran pembuatan keputusan yang beretika, kritikal dan berasaskan pulangan risiko serta untuk menyelaraskan tatalaku teras bagi menerapkan budaya etika, risiko dan pematuhan yang kukuh dan sihat ke dalam aktiviti-aktiviti dan proses-proses harian perniagaan.
Bank juga telah melaksanakan Sistem Pengurusan Aset & Liabiliti (ALMS) bersepadu yang baharu pada Mei 2016 yang membolehkan Kumpulan AFFINBANK menguruskan risiko kadar faedah, risiko kadar keuntungan, risiko kecairan, modal dan pendedahan kepada risiko besar dengan lebih baik.
Sebagai sebahagian daripada usaha kami untuk meningkatkan pengalaman pelanggan, dan untuk meluaskan jangkauan kami serta mencipta lebih penjimatan kos, kami telah memulakan program digitalisasi pada 2016.
Kami berhasrat untuk melaksanakan program ini sebagai satu strategi canggih bagi menjamin masa hadapan kami di dalam persekitaran yang semakin bergantung kepada digitalisasi. Lebih 50% daripada populasi di Malaysia mempunyai akses kepada internet dan melakukan urusniaga atas talian. Ini mencipta permintaan yang lebih tinggi untuk urusniaga yang menjimatkan kos dan masa, mudah dan menarik untuk segmen milenial yang lebih muda.
tanggungJawaB sosial korPorat
walaupun tanggungjawab utama kami kepada pemegang berkepentingan adalah untuk mencipta kestabilan dalam perniagaan kami dan persekitaran sosial, Bank turut memastikan bahawa dasar-dasar, produk-produk dan
perkhidmatan, prestasi dan tatacaranya memberi impak positif ke atas kesejahteraan kewangan, kemasyarakatan dan persekitaran pemegang berkepentingan kami. Kami melaksanakan perkara ini menerusi tumpuan ke atas empat tonggak iaitu Tempat Kerja, Pasaran, Komuniti dan Persekitaran.
Dengan penerapan gaya hidup sihat dan semangat keprihatinan di kalangan kakitangan, AFFINBANK memberi peluang untuk kakitangan melibatkan diri dalam aktiviti sukan selain mendorong mereka untuk mengambil bahagian dalam acara-acara kemasyarakatan tahunan seperti larian Bursa Bull Charge dan kempen-kempen derma darah.
Untuk tahun ke-13 berturut-turut, Bank terus memberi Anugerah Kecemerlangan Pendidikan kepada anak-anak kakitangan yang mencapai keputusan cemerlang dalam Sijil Pelajaran Malaysia (SPM).
Bagi mempertingkatkan profilnya sebagai warga korporat yang dinamik dan bertanggungjawab di dalam masyarakat, AFFINBANK telah menaja acara Harian Metro Mountain Bike Grand Prix 2016 dan Warriors Challenge 2016 anjuran Persatuan Veteran Angkatan Tentera Malaysia. Sokongan untuk Angkatan Tentera Malaysia diteruskan sempena sambutan Hari Raya dengan sumbangan pakej barangan bernilai RM100,000 kepada Tabung Amal Angkatan Tentera Malaysia.
AFFINBANK menceriakan musim perayaan dengan lawatan ke rumah warga tua sempena Tahun Baru Cina selain menjemput 160 anak-anak yatim menghadiri Majlis Berbuka Puasa Bersama Anak Yatim anjurannya. Bank juga telah menaja Program Tutor Suplemen Utusan Melayu, yang menyediakan bahan-bahan pembelajaran alternatif untuk para pelajar dan guru-guru.
Dengan objektif melindungi alam sekitar, AFFINBANK telah bekerjasama dengan Universiti Sains Pengurusan (MSU) dalam menganjurkan “Eco Marine Youth Expedition 2016” di Pulau Redang, Kuala Terengganu di mana aktiviti-aktiviti hijau dijalankan selama tiga hari merangkumi penanaman pokok dan terumbu karang serta pemuliharaan penyu.
Perbincangan & Analisis Pengurusan
AFFIN BANK BERHAD (25046-T)
18
objektif 2016
Salah satu daripada kandungan yang penting dalam transformasi Perbankan Pengguna pada 2016 merupakan penyelarasan tumpuan cawangan kepada deposit dan pada masa yang sama menyemai budaya khidmat pelanggan dan pematuhan yang kukuh. Hasilnya, deposit kami bertumbuh dan kami telah melancarkan beberapa kempen seperti AFFINBANK Double Reward, Raya Merdeka Bonanza, Kempen CNY FD dan kempen Istimewa CNY FD Combo bagi menyokong inisiatif ini.
Bahagian ini juga telah melaksanakan peralihan secara beransur-ansur ke arah produk-produk Islam sejajar dengan aspirasi Priority Islamic Bank. Komposisi jualan gadai Janji Islam bertumbuh dari 68% kepada 83% manakala komposisi jualan Sewa Beli-i bertumbuh dari 27% kepada 33%. Sementara itu, transformasi Perniagaan Kad akan memperkenalkan Kad Kredit Islam pertama AFFINBANK pada 2017 yang akan melonjakkan Perniagaan Kad ke dalam arena pasaran baharu dan melengkapkan rangkaian tawaran kad kredit sedia ada kami.
Bagi menyokong tumpuan Bank ke atas golongan milenial, strategi digitalisasi dimulakan semasa tahun di bawah tinjauan dengan pelancaran AFFINITY, yang tertumpu kepada pengubahsuaian titik sentuhan hadapan-hujung dan penjuruteraan semula perusahaan digital. AFFINITY bermatlamat mengubah perniagaan pengguna agar tertumpu kepada pelanggan dengan inovasi digital sebagai terasnya, dengan keutamaan ke atas perbankan pengguna dan diperluaskan kepada aspek-aspek perniagaan lain yang akan mencipta usul digital yang lancar dan mudah digunakan di kesemua titik sentuhan pelanggan.
BAHAgIAN PERBANKAN PENggUNA AFFINBANK TELAH MELAKSANAKAN TRANSFORMASI PERBANKAN PENggUNA PADA PENgHUJUNg 2015 BAgI MENgUKUHKAN BUDAYA JUALAN KAMI MENERUSI PENgKHUSUSAN PRODUK. PERUBAHAN PEMACU JUALAN IAITU DARIPADA CAwANgAN KEPADA PAKAR PRODUK TELAH MEMBAwA HASIL DI MANA PERNIAgAAN gADAI JANJI DAN PERNIAgAAN ASNB MASINg-MASINg BERTUMBUH 13% DAN 152% TAHUN KE TAHUN PADA 2016. PERUBAHAN INI TELAH MEMBOLEHKAN CAwANgAN-CAwANgAN MENUMPUKAN PERHATIAN KE ATAS DEPOSIT YANg MENgHASILKAN PERTUMBUHAN DEPOSIT SEBANYAK 6% TAHUN KE TAHUN.
PerBankan Pengguna
AFFINBANK beraspirasi untuk menjadi bank digital terulung di Malaysia. Enam agenda dalam transformasi digital ini adalah:
1. Mobile-1st Untuk mengutamakan pembangunan bertumpukan
mudah alih untuk semua produk dan perkhidmatan.
2. Saluran-omni
Untuk menyediakan pengalaman pelanggan yang konsisten bagi kesemua saluran iaitu start digital end traditional (SDET) atau start traditional end digital (STED).
3. Inovasi Untuk meneroka teknologi hari-berikutnya, bekerjasama
dengan FinTech untuk mempercepatkan inovasi dan mencipta makmal inovasi bagi mencetus pemikiran dan budaya inovatif.
4. Sosial Untuk mengambil kesempatan daripada platfom media
sosial dan usaha pemasaran digital bagi menjangkau dan melibatkan pelanggan-pelanggan baharu dan sedia ada.
5. Keselamatan Untuk menyediakan perbankan yang selamat untuk
semua pelanggan di kesemua titik sentuhan digital.
6. UX/UI dan Analisis Untuk menjadi bank digital dan inovatif dengan
keutamaan ke atas pelanggan, berserta analisis untuk menawarkan produk-produk yang betul pada masa yang betul, menggunakan saluran yang betul.
Perbincangan & Analisis Pengurusan
LAPORAN TAHUNAN 2016
19
Prestasi 2016
sewa Beli: Buat pertama kali dalam enam tahun, Jumlah Volum Industri (TIV) bagi pasaran kereta baharu jatuh 13% pada 2016 kepada 580,124 unit berbanding 666,677 unit pada 2015. Ini berikutan ketidaktentuan yang melanda ekonomi, peningkatan kos sara hidup dan kelemahan sentimen pengguna. walau bagaimanapun, bagi mencapai situasi menang-menang dengan peniaga-peniaga utama kami, kami telah berjaya meningkatkan hasil jualan kami sebanyak 30 mata asas (bps). Ini termasuk kerjasama dengan Cycle & Carriage Bintang Bhd, Kah Motor Bhd dan Naza Kia Malaysia Bhd untuk menawarkan insurans gAP sebagai sebahagian daripada tawaran produk mereka. Oleh kerana jualan bagi tahun 2017 dijangka kekal berada di bawah aras 600,000, kami akan terus memberi tumpuan ke atas pemuliharaan aset dan pelaksanaan strategi-strategi menang pantas AFFINITY bagi mendorong pelanggan untuk kembali.
Perniagaan gaDai JanJi: walaupun pasaran hartanah kurang memberangsangkan, Perniagaan gadai Janji telah mencatat prestasi cemerlang pada tahun lepas. Asas pinjaman bertumbuh 13% dan saham pinjaman meningkat 60% berbanding 2015. Ini terutamanya disebabkan oleh pelaksanaan hab jualan dan pengambilan pakar-pakar produk bagi mengukuhkan keupayaan pasukan jualan kami. Kami berhasrat untuk meneruskan momentum yang dicapai pada 2016 kerana kebolehmampuan akan terus menjadi isu utama pada 2017. Ramai pelanggan menunda pembelian besar seperti pembelian rumah ekoran peningkatan kos sara hidup serta jangkaan kewangan dan pekerjaan yang tidak menentu. Bagi menangani isu ini, kami berhasrat untuk meningkatkan aktiviti jualan silang dan pada masa yang sama terus menyasarkan golongan pembeli rumah pertama dari kalangan profesional muda, pemilik rumah yang ingin menaik taraf rumah, dan golongan yang ingin membeli hartanah perumahan mampu milik dengan harga di antara RM300 ribu dan RM700 ribu.
Perniagaan asnB: AFFINBANK adalah pemain baru dalam segmen pembiayaan ASNB berbanding pemain lama seperti Maybank, CIMB dan RHB. Di sebalik cabaran dari segi persaingan dan sumber yang terhad, Perniagaan ASNB kami bertumbuh 152% tahun ke tahun, dan cawangan kami di USJ Taipan telah menerima Anugerah PNB-ASNB Starz 2015/6 untuk catatan bilangan urusniaga kaunter tertinggi bagi AFFINBANK. Pada 2017, kami akan memperbaiki proses ini, membina pasukan jualan yang lebih stabil dan mampan serta menyemai peluang untuk jualan di dalam Kumpulan, LTAT dan Boustead. Kami menyasarkan untuk mencapai kuota PNB-ASNB yang ditetapkan menjelang pertengahan 2017.
Perniagaan kaD: Perniagaan Kad kami telah melangkaui pertumbuhan industri bagi asas pinjaman dengan pertumbuhan 8.7% tahun ke tahun berbanding pertumbuhan industri sebanyak 2.6% (laporan Visa bagi Tahun Kewangan 2016). Kejayaan ini adalah hasil pelaksanaan tiga Hab Jualan Kad iaitu di Pulau Pinang, Johor dan wilayah Tengah, serta kerjasama mantap dengan cawangan-cawangan dan hab-hab produk lain. Bilangan permohonan bertumbuh 142% manakala bilangan kelulusan kad kredit bertumbuh 238%. Selain itu, Perniagaan Kad juga telah berjaya melaksanakan inisiatif pengkadan semula sejajar dengan perubahan pengesahan menggunakan tandatangan kepada PIN. Kami juga telah melancarkan semula AFFINBANK BHPetrol ‘Touch and Fuel’ MasterCard® Contactless dan melancarkan Program Pembayaran Ansuran Cash-on-Call semasa tahun kewangan di bawah tinjauan.
Sebagai sebahagian daripada inisiatif kami di bawah program AFFINITY, lebih banyak tawaran produk kad sedang dirancang untuk 2017. Ini termasuk kad Elite/Infinite untuk segmen pasaran Amat Mewah, UnionPay untuk para pelanggan yang menjalankan perniagaan di China, dan Kad Kredit Islam yang akan membolehkan kami menembusi segmen yang sedang berkembang ini selain menawarkan pilihan yang lebih baik untuk para pelanggan.
Pengurusan kekayaan: Liberalisasi pasaran telah membantu pertumbuhan dalam industri pengurusan harta dan reformasi ini telah membantu meningkatkan kecairan bagi dagangan ekuiti, bon dan derivatif di Malaysia. Perkara ini menyediakan peluang dan cabaran bagi kami dalam menumpukan perhatian ke atas kepentingan pengurusan portfolio keseluruhan untuk pelanggan bernilai tinggi. Pada 2016, Bahagian ini terus bekerja rapat dengan rakan-rakan niaga kami termasuk AFFIN Hwang Asset Management bagi memperkenalkan lebih banyak produk-produk canggih kepada pelanggan mewah Bank. Peralihan fokus – iaitu dari penjualan produk kepada keperluan pelanggan – telah dilaksanakan bagi memperkukuhkan hubungan kami dengan para pelanggan. Justeru itu, pasukan-pasukan Pengurusan Harta telah ditempatkan di cawangan-cawangan terpilih bagi menyediakan perkhidmatan yang lebih baik; yang mana telah membantu dalam pertumbuhan Aset Di Bawah Pengurusan (AUM) dari RM95 juta kepada RM142 juta pada 2016.
Mengambil kesempatan daripada perkara ini, kami sedang membangunkan satu platfom Perbankan Peribadi bagi menawarkan satu pusat penyelesaian kewangan setempat yang mudah untuk para pelanggan bernilai tinggi sebagai sebahagian daripada usaha kami membentuk usul nilai baharu yang akan membantu kami mencapai pengiktirafan sebagai salah satu penyedia khidmat nasihat pelaburan dan perkhidmatan perbankan yang berkualiti untuk segmen pelanggan mewah.
Perbincangan & Analisis Pengurusan
AFFIN BANK BERHAD (25046-T)
20
PerBankan Perniagaan
Bahagian korPorat & Perniagaan awam (CPsBD)
CPSBD terus menjadi penyumbang utama kepada pertumbuhan aset dan penjanaan pendapatan Bank pada 2016. Bahagian ini telah mencatat prestasi cemerlang, mencapai ambang pulangan ekuiti (ROE) merentasi semua kumpulan pelanggan dan mencatat perolehan membanggakan sebanyak RM1.03 bilion atau peningkatan sebanyak 20% berbanding pada 2015. Pertumbuhan positif ini sebahagian besarnya disebabkan oleh disiplin dan strategi kami dalam ‘wallet sharing’ di mana kami menyediakan pelbagai produk dan perkhidmatan bagi memenuhi keperluan pelanggan.
objektif 2016
• PenstrukturandanpelaksanaanmodelPengurusHubungan Baharu (RM) selain segmentasi pelanggan yang teratur bagi perniagaan di antara CPSBD dan SME & Perbankan Komersil.
• PeningkatanfungsirisikoperniagaandanpematuhanCPSBD menjadi sebuah fungsi jabatan yang bebas dan telus sejajar dengan kehendak-kehendak kawal selia dan Kumpulan.
• PelaksanaankitalatLiputandanmodul-modullatihan untuk Pengurus Hubungan, Pasukan Khidmat Pelanggan (CST – Pejabat Tengah) bagi tempoh 12 bulan seterusnya dengan tumpuan ke atas peningkatan tahap pengetahuan mengenai model RM yang baharu.
• Perubahankomposisipinjamankearahmemenuhiinisiatif integrasi Perbankan Islam di mana akaun Perbankan Islam memegang 80% daripada jumlah portfolio pinjaman Bank berbanding 20% seperti sekarang.
Prestasi 2016
Berikutan ketidaktentuan dan ketidakstabilan harga komoditi sepanjang tahun, CPSBD telah mengalihkan tumpuannya ke atas pertumbuhan aset berkualiti dan penjanaan perolehan daripada portfolionya serta pendapatan berasaskan yuran.
Pelaksanaan ‘kitchen sinking’ bagi membetulkan pulangan portfolio telah dijalankan. Ini melibatkan pendekatan berstruktur ke arah ‘wallet sizing’ dan memenuhi sasaran dalaman ROE serta sasaran yang akan dibiaya sendiri.
PertumBuhan PinJaman: Strategi bagi pertumbuhan pinjaman meliputi tumpuan ke atas kualiti aset bersandarkan keadaan ekonomi global/tempatan yang tidak menentu. Dengan fokus dan tumpuan ke atas kualiti aset, kedudukan terjejas keseluruhan bahagian bagi tahun di bawah tinjauan kekal pada aras sihat iaitu 0.43%. Keutamaan juga diberikan ke atas peningkatan deposit semasa tahun di bawah tinjauan, bagi memperkukuhkan nisbah Pinjaman berbanding Deposit (LD) Bank.
Maju ke hadapan, strategi pertumbuhan pinjaman CPSBD melibatkan tumpuan ke atas segmen-segmen sasaran khusus yang dikenalpasti oleh unit-unit perniagaan masing-masing serta pemantauan kritikal dan proaktif ke atas portfolio pinjaman sedia ada. Kami terus memantau dan menyemak kualiti portfolio kami secara konsisten, dan mengkaji semula cara pengasalan dan pengurusan aset kami agar dapat melakukannya dengan cara yang berbeza terutamanya untuk pelanggan korporat dan SME yang baharu.
Perniagaan Dagangan: Bagi meningkatkan perniagaan dagangan, CPSBD menumpukan perhatian ke atas pembinaan gabungan strategik bersama bank-bank, cawangan-cawangan dan hab-hab yang bersesuaian. Ini diperkuatkan lagi dengan pengukuhan dan pembangunan daya saing produk bagi memacu pendapatan faedah dan yuran yang lebih tinggi. Pada masa yang sama, kami berhasrat mengurangkan kos dan meningkatkan kecekapan dengan memacu tahap automasi yang lebih tinggi dalam proses-proses kami. Maju ke hadapan, kami berhasrat untuk menjalin hubungan yang lebih rapat dengan para pelanggan ke arah membangunkan lebih banyak penyelesaian dagangan yang berkaitan untuk mereka.
PADA SUKU TERAKHIR 2016, HASIL DARIPADA PENYELARASAN SEMULA STRATEgI-STRATEgI PERNIAgAAN DAN SEgMENTASI, PERBANKAN PERNIAgAAN AFFINBANK DISTRUKTUR SEMULA KEPADA DUA BAHAgIAN – BAHAgIAN PERNIAgAAN SEKTOR KORPORAT DAN AwAM SERTA BAHAgIAN SME & KOMERSIL. LANgKAH INI MEMBOLEHKAN TUMPUAN YANg LEBIH BERSEPADU DALAM MENYASARKAN SEgMEN-SEgMEN PELANggAN YANg BERBEzA DENgAN MANFAAT PRODUK DAN PERKHIDMATAN YANg DISELARASKAN MENgIKUT KEPERLUAN KHUSUS MEREKA.
Perbincangan & Analisis Pengurusan
LAPORAN TAHUNAN 2016
21
Pengurusan tunai: Pada 2016, strategi bagi pengurusan tunai termasuk dorongan agresif untuk Kempen AffinAce bagi memacu Akaun Semasa Korporat (CACO); mengambil peluang daripada peningkatan permohonan hasil inisiatif “Pre-approved Inquiry Package”; menjalankan kempen bagi meningkatkan penggunaan dan mendapatkan lebih banyak Pengebil Jom-Pay bagi meningkatkan volum urusniaga.
Bagi memastikan kejayaan inisiatif segmentasi perniagaan, meja CPSBD juga telah ditempatkan secara strategik di pusat-pusat perniagaan utama sepanjang tahun di bawah tinjauan. Langkah utama berterusan bagi CPSBD adalah untuk membina kehadirannya di seluruh negara dan memastikan ia berada di semua lokasi geografi. Ini akan membolehkan koordinasi yang baik untuk semua aktiviti liputan pelanggan dan membantu dalam piawaian atau garis arus penglibatan pematuhan di setiap negeri.
Maju ke hadapan, CPSBD bermatlamat untuk meningkatkan kerjasama dengan semua pemegang berkepentingan di dalam Kumpulan bagi mengoptimakan peluang-peluang yang ada dan memastikan kesinambungan perniagaan.
Bahagian Perusahaan keCil Dan seDerhana (Pks) & Perniagaan komersil (smeCBD)
SMECBD yang baru ditubuhkan bertanggungjawab ke atas pengurusan, pembangunan dan perluasan portfolio perniagaan PKS & Komersil Bank maju ke hadapan. Dengan 16 pusat perniagaan sebagai permulaan, SMECBD akan berusaha meluaskan jangkauan, set-set produk serta kemampuan penyampaiannya dengan matlamat menyediakan satu set penyelesaian kewangan yang komprehensif untuk SME di Malaysia.
objektif 2016
• MenyediakanstrukturBahagianPerniagaanSME& Komersil dan pasukan teras sebagai sebahagian daripada AFFINITY menjelang penghujung 2016.
• MerangkapelanstrategikPKS&Komersilbertempoh5tahun dengan sasaran dan penunjuk perniagaan tahap tinggi untuk dilaksanakan pada 2017 dan tahun-tahun seterusnya.
• Merancangdanmemperkenalkaninisiatif-inisiatifjangkapendek dan jangka panjang bagi mempertingkatkan prestasi perniagaan, termasuk projek-projek untuk warga kerja, proses, produk/penyelesaian dan pemboleh perniagaan.
Prestasi 2016
Pencapaian penting bagi SMECBD semasa tahun di bawah tinjauan adalah penyiapan penyelarasan semula bahagian perniagaan mengikut masa yang ditetapkan yang melibatkan perubahan pegawai, portfolio dan infrastruktur. Penyiapan penyelarasan semula ini telah menghasilkan peralihan yang lancar kepada situasi Business-As-Usual.
Bahagian ini bertanggungjawab ke atas pengurusan semua pusat perniagaan sedia ada dan 150 kakitangan dengan portfolio awal bernilai RM3.3 bilion dalam asas peminjaman dan lebih RM4 bilion dalam baki deposit daripada 30,000 pelanggan.
Satu pelan strategik bertempoh 5-tahun telah disediakan bagi menyediakan fokus dan bimbingan kepada pasukan ini. Secara keseluruhan, Bank berhasrat untuk menjadi “Bank Utama” kepada pelanggan PKS serta kekal relevan sebagai “Bank Pilihan” kepada pelanggan gred Komersil. Pelan ini mempunyai beberapa objektif teras yang dicipta dengan berhemah untuk dicapai. Antaranya termasuk saiz portfolio, perolehan & pulangan serta penunjuk kualiti aset.
Pelbagai inisiatif jangka pendek dan jangka panjang telah disediakan bagi memastikan Bank kekal kompetitif dan terus mengambil bahagian dalam ruang PKS & Komersil. Antara perubahan penting ini termasuk:
1. Pusingan Masa (Turn-Around-Time atau TAT) bagi kelulusan permohonan SME bertambah baik dengan hanya kurang 5 hari bekerja secara purata; dan
2. Rangka kerja pematuhan yang menghasilkan perubahan dalam pendekatan pengurusan proaktif bagi pematuhan dan risiko perniagaan.
Sebagai sebuah bahagian yang baharu dalam Bank dengan tumpuan ke atas segmen yang sangat penting dalam ekonomi Malaysia, Bank akan terus melabur sumber kepada SMECBD. Pelan pembangunan dan perluasan akan dilaksanakan dalam beberapa tahun akan datang di bawah bimbingan program AFFINITY bagi memastikan peranan utama Bank dalam segmen PKS. Tatkala ekonomi dilanda pelbagai cabaran yang pasti pada 2017, SMECBD akan terus bertumbuh dengan berhemah dalam semua aspek kritikal sejajar dengan pelan 5 tahunnya.
Perbincangan & Analisis Pengurusan
AFFIN BANK BERHAD (25046-T)
22
DALAM MEMBINA gABUNgAN BAgI MEMPERKUKUHKAN KEDUDUKAN KAMI, BAHAgIAN PERBENDAHARAAN AFFINBANK SECARA AKTIF MELIBATKAN DIRI DENgAN PERSATUAN-PERSATUAN DAN MAJLIS-MAJLIS YANg BERKAITAN BAgI MELUASKAN PENgARUHNYA. PADA MASA INI, BAHAgIAN INI MEMEgANg KEDUDUKAN SEBAgAI SETIAUSAHA KEHORMAT BAgI PERSATUAN PASARAN KEwANgAN MALAYSIA DAN PENgERUSI KEPADA JAwATANKUASA SEMINAR DAN PENDIDIKAN. IA JUgA MEMPUNYAI PERwAKILAN DALAM ECONOMIC COUNCIL OF MALAYSIA-CHINA CHAMBER OF COMMERCE.
PerBenDaharaan
objektif 2016
Objektif-objektif utama Bahagian Perbendaharaan Bank adalah:• MenguruskanTukaranAsing(FX)danrisikokadarfaedah
bagi Bank• Memenuhikeperluanpelangganbagiproduk-produkdan
perkhidmatan berkaitan Perbendaharaan • Memenuhikeperluankecairansertafungsiasetdan
liabiliti (ALM) Bank• Memenuhikehendakpematuhankawalseliadan
dalaman• Menjalankanperniagaandagangan/arbitrari/pelaburan
yang menguntungkan
Prestasi 2016
Tahun 2016 merupakan tahun yang mencabar bagi Bahagian Perbendaharaan. Peristiwa-peristiwa geopolitik seperti Brexit dan pemilihan Presiden Amerika Syarikat telah menyebabkan pelbagai ketidaktentuan serta meningkatkan ketidakstabilan pasaran pada 2016. Selain itu, perubahan besar dalam kadar tukaran ASD/MYR yang disebabkan oleh peristiwa-peristiwa domestik dan antarabangsa telah mencipta lebih banyak cabaran dalam pasaran FX dan pasaran kadar faedah yang sememangnya tidak menentu. Kesemua ini berlaku dalam persekitaran persaingan harga yang meruncing.
Dengan perancangan dan fokus yang berhemah ke atas beberapa inisiatif strategik menerusi pembinaan aset dan pemasaran kreatif, Bahagian Perbendaharaan bukan sahaja berjaya mencapai keputusan yang diingini tetapi juga melangkaui sasaran yang ditetapkan.• Pertumbuhan69.5%bagikeuntungansebelumcukai
(PBT) tahun ke tahun• Pencapaiansebenarsebanyak49.7%berbanding
belanjawan PBT yang ditetapkan oleh Pengurusan • KosPembiayaan(COF)bagiAffinIslamicBankBerhad
(AIBB) dan Affin Bank Berhad (ABB) masing-masing meningkat sebanyak 15 bps dan 24 bps
• MarginbersihAIBBdanABBmasing-masingmeningkatsebanyak 7 bps dan 18 bps
• COFdanmarginbersihKumpulanmasing-masingmeningkat sebanyak 22 bps dan 14 bps
Pertumbuhan pendapatan tanpa faedah Bahagian Perbendaharaan bagi tahun kewangan 2016 (FY2016) juga sejajar dengan arah tuju strategik jangka panjang Bank iaitu nisbah 65:35. Pendapatan berasaskan yuran bagi FY2016 juga meningkat 34.5%.
Kami menjangka lebih banyak ketidaktentuan akan berlaku dan ketidakstabilan luar jangka akan terus mencorakkan pasaran di mana kitaran kadar tidak selaras di peringkat global. Pasaran FX juga akan mengalami aliran modal dan dana yang lebih tinggi yang mana akan meningkatkan ketidakstabilan.
Lanskap kawal selia yang kerap berubah juga merupakan satu cabaran besar bukan sahaja untuk Bahagian Perbendaharaan tetapi juga untuk industri perbankan secara keseluruhan.
Berdasarkan latar belakang ini, Bahagian Perbendaharaan perlu mengambil pandangan berhemah berdasarkan data yang tersedia bagi menyediakan dan meletakkan diri kami dalam kedudukan untuk merebut sebarang peluang yang muncul. Kami juga akan berusaha menutup jurang kecekapan teknikal bagi memenuhi lanskap industri yang mencabar, sama ada dari segi produk atau pematuhan.
Satu pendekatan yang lebih strategik akan diambil bagi memenuhi keperluan kecairan dan isu-isu ALM dalam menangani jurang portfolio liabiliti Bank selain bagi mengurangkan COF Bank untuk membolehkan unit-unit perniagaan menetapkan harga ke atas tawaran-tawaran aset mereka secara cekap agar nilai pemegang saham dapat dipertingkatkan.
Kami akan terus menyokong Bank dalam menyampaikan perkhidmatan dan penyelesaian kewangan yang berkualiti dan boleh dipercayai secara konsisten bagi memenuhi dan melangkaui kehendak-kehendak dan jangkaan pelanggan.
Perbincangan & Analisis Pengurusan
LAPORAN TAHUNAN 2016
23
ramalan: risiko-risiko
Tiga perkembangan besar telah mempengaruhi persekitaran ekonomi dan kewangan global pada 2016:
1. Kejatuhan meruncing harga komoditi terutamanya harga minyak mentah.
2. Peningkatan ketidakstabilan dalam pasaran kewangan yang dipacu oleh aktiviti-aktiviti spekulatif selain perubahan-perubahan dasar dalam ekonomi-ekonomi utama. Amerika Syarikat telah menaikkan kadar faedah buat pertama kalinya sejak Krisis Kewangan global 2008 (gFC) manakala Eurozone dan Jepun telah menggunakan kadar faedah negatif dan meningkatkan rangsangan monetari menerusi program-program pembelian aset masing-masing.
3. Pertumbuhan global menjadi sederhana manakala pertumbuhan dagangan global mengalami kejatuhan mendadak dengan catatan perluasan paling perlahan sejak berlakunya gFC.
Proses penyesuaian masih berterusan dan mungkin mengambil masa lebih lama memandangkan ekonomi global masih berada di bawah prestasi dengan keadaan makroekonomi yang tidak stabil walaupun terdapat tanda-tanda pemulihan di Amerika Syarikat berserta kelemahan ekonomi yang masih jelas di Eropah dan China. Satu tempoh panjang dengan harga minyak global yang rendah dan penyusutan kadar tukaran ringgit dijangka berlaku. Kesemua perkembangan ini berserta ketidakstabilan pasaran yang meruncing telah menyebabkan lebih banyak ketidaktentuan selain menjejaskan sentimen perniagaan dan isi rumah.
Risiko-risiko lazim dalam industri perbankan domestik Malaysia termasuk:
• Permintaanluaryanglemahdibawahkeadaanpasarantidak menentu yang mungkin menyebabkan permintaan domestik yang suram, pertumbuhan pinjaman yang perlahan, tekanan ke atas pendapatan dan kebimbangan mengenai kualiti aset ekoran kemungkinan kenaikan dalam pinjaman terjejas.
• Hutangisirumahyangtinggiekoranperluasanpermintaan yang berterusan dan lanjutan tempoh kadar faedah yang rendah sejak beberapa tahun kebelakangan ini.
• Ketidakseimbangansektorperumahan,yangmanajikatidak ditangani, mungkin menjejaskan pasaran hartanah dengan kesan negatif ke atas bahagian-bahagian lain ekonomi.
• Pengecutanmarginekoranpersaingansengituntukdeposit dalam industri serta syarat-syarat modal dan kecairan yang lebih ketat.
• Peningkatankospematuhankeranapelaburanuntukinfrastruktur Teknologi Maklumat (IT) dan pembangunan modal insan diperlukan bagi mematuhi perkembangan kawal selia selain bagi menguruskan risiko-risiko yang semakin rumit.
• Peningkatanrisikosiber/teknologibersertaancamanperisian hasad yang canggih yang meningkatkan kerentanan maklumat sulit dan wang pelanggan.
Bagi menangani risiko-risiko yang dikenalpasti di atas, Risiko Kumpulan Bank akan terus memperkukuhkan fungsi-fungsi dan amalan-amalan pengurusan risikonya sejajar dengan keutamaan strategik dan struktur Kumpulan. Ini merangkumi aspek-aspek tumpuan berikut:
1. Menyokong pertumbuhan strategik kumpulan menerusi pengurusan risiko yang dipertingkatkan di seluruh syarikat
2. Penyelarasan Julat Risiko di seluruh kumpulan
3. Memperkukuhkan infrastruktur risiko selain mempertingkatkan model-model dan proses-proses pengurusan risiko
4. Mengukuhkan budaya etika, risiko dan pematuhan, pengawasan dan tadbir urus risiko
5. Membina dan meningkatkan kemahiran sumber manusia pengurusan risiko
ramalan: Peluang-Peluang
Ekonomi Malaysia dijangka bertumbuh sebanyak 4.0% - 5.0% pada 2017. Mengambil kesempatan daripada peningkatan momentum ini, AFFINBANK akan mengekalkan tumpuan ke atas pengurusan pertumbuhan dengan tumpuan khusus ke atas pemuliharaan aset, terutamanya dengan pelaksanaan Malaysian Financial Reporting Standard (MFRS) 9 pada 2018.
Objektif Bank pada 2017 adalah untuk mengambil manfaat daripada program AFFINITY untuk beroperasi sebagai rakan niaga yang dipercayai bagi para pelanggan kami; meningkatkan aset kami sasaran pendapatan di dalam rangkuman belanjawan yang ditetapkan oleh bank; dan untuk melaksanakan amalan-amalan industri terbaik dalam mengurus dan bertumbuh bersama pelanggan kami. Segmen-segmen sasaran baharu telah dikenalpasti menurut unjuran impetus pertumbuhan untuk industri tertentu pada 2017. Ini termasuk industri yang terlibat dalam projek-projek berkaitan infrastruktur selain Syarikat-syarikat Berkaitan Kerajaan dan Syarikat-syarikat Pelaburan Berkaitan Kerajaan. Dalam meneroka peluang-peluang berpotensi di dalam sektor-sektor ini, Bank juga beriltizam untuk terus membangunkan AFFINITY bersama kumpulan pelanggan sedia ada dan meningkatkan portfolio produk-produk dan perkhidmatan kami bagi menyampaikan nilai yang berbeza berbanding apa yang ditawarkan oleh pesaing kami.
Perbincangan & Analisis Pengurusan
AFFIN BANK BERHAD (25046-T)
24
Diari Korporat
24 Jun 2016majlis Berbuka Puasa bersama anak-anak yatim & Pelancaran “Priority islamic”
Sempena bulan Ramadhan, Kumpulan AFFINBANK telah menjamu 160 kanak-kanak dari beberapa rumah anak yatim. Selain itu, Bank juga telah melancarkan kempen “Priority Islamic” semasa majlis berbuka puasa tersebut. “Priority Islamic” adalah langkah proaktif Bank dalam menyokong Rangka Strategik Sektor Kewangan Bank Negara Malaysia yang bertempoh 10 tahun, yang bermatlamat mempertingkatkan portfolio pembiayaan Islam kepada 40% menjelang tahun 2020.
14 aPr 2016Perasmian Cawangan affinBank di Denai alam
22 feB 2016lawatan amal sempena tahun Baru Cina ke rumah warga tua ampang
23 feB, 27 Jul, 01 nov 2016kempen Derma Darah di menara affin
26 Jul 2016tabung haji
AFFINBANK telah menaja penerbitan buku bertajuk “wirid Terpilih Untuk Dhuyufurrahman”. Program amal ini dikenali sebagai “Sahabat Korporat Tabung Haji 1435H” anjuran Lembaga Tabung Haji. Buku-buku ini akan diagihkan kepada jemaah haji yang berada di Tanah Suci tahun ini.
21 Jul 2016sambutan aidilfitri bersama kakitangan affinBank
Sambutan Hari Raya Aidilfitri bersama semua kakitangan Kumpulan AFFINBANK.
03 Jun 2016Perasmian Cawangan affinBank di tabuan Jaya
27 mei 2016majlis makan malam bersama Para Pelanggan
Majlis Makan Malam Penghargaan untuk para pelanggan di Ipoh, Perak.
21 Jun 2016Barangan hari raya untuk angkatan tentera malaysia
Sempena sambutan Hari Raya, AFFINBANK telah menyumbang pakej barangan bernilai RM100,000 kepada Tabung Kebajikan Angkatan Tentera Malaysia.
12 mei 2016anugerah kecemerlangan Pendidikan affin 2016
Bank telah menyampaikan Anugerah Kecemerlangan Pendidikan kepada 44 anak kakitangan dari semua jabatan dan cawangan yang mencapai keputusan cemerlang dalam Sijil Pelajaran Malaysia (SPM) 2015.
LAPORAN TAHUNAN 2016
25
08 seP 2016larian Bursa Bull Charge 2016
AFFINBANK turut memberi sokongan kepada Larian Bursa Bull Charge menerusi penyertaan staf dan sumbangan wang.
01 ogos 2016kerjasama kumpulan affinBank dan msu untuk program “eco marine youth expedition 2016”
Kumpulan AFFINBANK telah bekerjasama dengan Universiti Sains Pengurusan (MSU) untuk program “Eco Marine Youth Expedition 2016” yang diadakan di Pulau Redang, Kuala Terengganu. Program tiga hari tersebut melibatkan penanaman pokok dan terumbu karang serta pemuliharaan penyu yang menyaksikan penyertaan 60 pelajar MSU dan 20 kakitangan Bank yang berpangkalan di Terengganu.
22 seP 2016kerjasama kumpulan affinBank bersama asian Banking school untuk Program kesedaran Budaya etika, risiko & Pematuhan
Kumpulan AFFINBANK menandatangani perjanjian bersama Asian Banking School (ABS) untuk penganjuran program latihan khusus yang bertujuan memperkasakan kakitangan dalam membentuk kemahiran pembuatan keputusan yang beretika, kritikal dan berasaskan pulangan risiko selain melengkapkan pengurusan kanan dengan alat-alat yang sesuai bagi memastikan keberkesanannya.
10 Dis 2016“warriors Challenge 2016”
Kumpulan AFFINBANK secara rasminya menjadi penaja utama larian berhalangan bertemakan ketenteraan yang pertama di Malaysia iaitu “warriors Challenge 2016” anjuran Persatuan Veteran Angkatan Tentera Malaysia sebagai sebahagian daripada sambutan Hari Pahlawan yang diadakan setiap tahun bagi menerapkan semangat patriotik di kalangan generasi muda selain bagi memperingati pengorbanan angkatan tentera.
13 ogos - wilayah Selatan
03 seP - wilayah Utara
15 okt - wilayah Tengah
oh! syoknya karnival sukan affinity
Karnival sukan telah diadakan di semua wilayah bagi mengukuhkan hubungan di antara semua kakitangan Kumpulan AFFINBANK di semua peringkat.
15 aPr, 10 ogos 2016taklimat
Satu sesi taklimat oleh Pengarah Urusan/Ketua Pegawai Eksekutif, En. Kamarul Ariffin Mohd Jamil kepada kakitangan mengenai program AFFINITY dan hala tuju strategik maju ke hadapan untuk Bank.
28 ogos 2016larian BhPetrol orange 2016
AFFINBANK menyertai Larian BHPetrol Orange 2016, iaitu larian sejauh 12 km bagi mengumpul dana untuk badan-badan amal terpilih.
Diari Korporat
AFFIN BANK BERHAD (25046-T)
26
Sorotan Kewangan
27.5
60.2
47.6
20.5
59.9
47.8
33.3
59.5
48.0
37.5
56.4
46.1
keuntungan sesahamSen
Jumlah asetRM’bilion
Deposit Daripada PelangganRM’bilion
keuntungan sebelum zakat Dan CukaiRM’milion
Pinjaman, Pendahuluan & Pembiayaan BersihRM’bilion
ekuiti Pemegang sahamRM’bilion
‘13
‘13
‘13 ‘13
‘14
‘14
‘14 ‘14
‘15
‘15
‘15 ‘15
‘16
‘16
‘16
602.8
42.7
5.8
461.2
42.1
5.5
720.1
39.5
5.2
762.2
36.2
4.4
‘13
‘13
‘14
‘14
‘15
‘15
‘16
‘16
‘16
LAPORAN TAHUNAN 2016
27
Penyata Tadbir Urus Korporat
Lembaga Pengarah (‘Lembaga Pengarah’) Affin Bank Berhad (‘Bank’) dan Pengurusan berusaha mematuhi piawaian dan prinsip-prinsip Tadbir Urus Korporat tertinggi dalam semua aspek industri perbankan ke arah meningkatkan kemakmuran perniagaan dan integriti korporat, dengan objektif utama memelihara nilai pemegang saham dan kepentingan pemegang berkepentingan. Lembaga Pengarah secara berterusan menyemak model tadbir urusnya bagi memastikan keberkaitan, keberkesanan dan keupayaannya dalam menangani cabaran-cabaran di masa hadapan. Lembaga Pengarah menyediakan bimbingan dan pengawasan ke atas agenda strategik dan operasi Bank. Lembaga Pengarah menyedari tanggungjawabnya untuk bertindak secara tekun dan bertanggungjawab menurut undang-undang dan kawal selia dalam memenuhi kepentingan pemegang saham, para pelanggan, kakitangan dan masyarakat umum.
Lembaga Pengarah dan Pengurusan adalah sangat komited dan sentiasa berusaha memastikan bahawa Bank beroperasi sejajar dengan Akta Perkhidmatan Kewangan 2013 (‘FSA’), Kod Tadbir Urus Korporat Malaysia 2012 (‘MCCg’), Dokumen Dasar Tadbir Urus Korporat Bank Negara Malaysia bertarikh 3 Ogos 2016 (‘BNM Cg’) serta lain-lain undang-undang dan kawal selia yang berkaitan. Lembaga Pengarah dan Pengurusan menekankan kepentingan keselamatan dan kewibawaan Bank sebagai sebuah institusi kewangan di mana hemat perniagaan dan risiko diseimbangkan dengan sewajarnya. Sepanjang 2016 sehingga kini, Bank terus menjalankan perniagaannya secara berintegriti dan mempamerkan tahap ketelusan dan objektiviti yang tinggi.
Bank mematuhi kehendak kesesuaian dan kewajaran untuk para pengarah menurut kehendak FSA. Lembaga Pengarah dan Pengurusan tegas dalam memastikan pematuhan kepada Kod Etika bagi Industri Perkhidmatan Kewangan yang dikeluarkan oleh Lembaga Profesional Perkhidmatan Kewangan pada Disember 2015 (‘FSPB-01’), yang bermatlamat menerapkan lima nilai iaitu disiplin, integriti, kerendahan hati, keprihatinan dan kreativiti. Lembaga Pengarah dan Pengurusan telah menetapkan piawaian dan amalan perniagaan beretika tinggi untuk pelaksanaan urusan perniagaan serta kod tatalaku untuk kakitangan. Pelaksanaan dasar-dasar dan garis panduan di dalam rangkuman Kod Tatalaku menjadi tanggungjawab Pengurusan di bawah pengawasan Jawatankuasa Audit Lembaga Pengarah. Selain itu, Bank juga mempunyai Kod Tatalakunya sendiri yang terdiri daripada prinsip-prinsip dan piawaian amalan-amalan terbaik yang mantap yang dipatuhi oleh kakitangan.
Bahagian-bahagian seterusnya membentangkan komitmen Bank dalam melaksanakan prinsip-prinsip terbaik Tadbir Urus Korporat dan tahap pematuhan kepada amalan yang dicadangkan.
lemBaga Pengarah
Lembaga Pengarah komited dalam membina nilai mampan jangka panjang untuk para pemegang saham dan pemegang berkepentingan. Bagi membuktikan komitmen ini, Lembaga Pengarah dengan sukacita melaporkan bahawa Bank telah mematuhi semua prinsip-prinsip dan cadangan-cadangan oleh MCCg. Lembaga Pengarah justeru itu telah menggunakan Dasar Kumpulan berkenaan tempoh perkhidmatan maksimum bagi Pengarah Bebas Bukan Eksekutif (‘INED’) agar sejajar dengan BNM Cg. Sehubungan ini, BNM telah membenarkan tempoh peralihan untuk Bank mematuhi sepenuhnya kesemua kehendak-kehendak lain.
Peranan dan tanggungjawab lembaga Pengarah
Lembaga Pengarah menyedari peranan dan tanggungjawabnya ke atas prestasi keseluruhan Bank.
Tanggungjawab Lembaga Pengarah adalah dalam rangkuman rangka kerja FSA, MCCg, BNM Cg dan Manual Dasar Lembaga Pengarah Bank. Lembaga Pengarah mengamalkan kesungguhan dan ketelitian yang tinggi bagi memastikan piawaian etika tertinggi dipatuhi serta kepentingan pemegang berkepentingan tidak terjejas. Ini termasuk tanggungjawab bagi menentukan dasar-dasar dan strategi-strategi umum Bank dalam meluluskan pelan-pelan perniagaan termasuk sasaran dan belanjawan serta dalam meluluskan keputusan-keputusan strategik yang besar.
Manual Dasar Lembaga Pengarah Bank, yang membentangkan prinsip-prinsip utama tadbir urus korporat Bank, mentakrifkan dengan jelas peranan dan tanggungjawab Lembaga Pengarah, Pengerusi dan Pengarah Urusan/Ketua Pegawai Eksekutif dalam hal penetapan strategi, pengurusan syarikat, integriti kawalan dalaman dan komunikasi, pelan peralihan kuasa dan pengurusan risiko.
AFFIN BANK BERHAD (25046-T)
28
Penyata Tadbir Urus Korporat
komposisi dan keseimbangan lembaga Pengarah
Semasa tahun kewangan berakhir 2016, Lembaga Pengarah telah melaksanakan perubahan di peringkat kepimpinan lembaga pengarah sejajar dengan kehendak yang ditetapkan dalam BNM Cg.
Lembaga Pengarah percaya akan kepentingan untuk membina dan mencipta semula dirinya selaku aset strategik dan sumber kelebihan berdaya saing jangka panjang bagi Bank dalam dunia yang sangat kompetitif pada hari ini. Hal ini merangkumi pelan peralihan kuasa jangka panjang bagi Lembaga Pengarah yang mana juga sangat penting.
Lembaga Pengarah sebagai satu pasukan membawa bersama gabungan kemahiran, pengetahuan dan kecekapan yang merangkumi bidang perbankan, perakaunan, kewangan, pengurusan strategik, pentadbiran perniagaan dan pengurusan risiko.
Komposisi Lembaga Pengarah terdiri daripada majoriti pengarah bebas sejak tahun 2011. Lembaga Pengarah kini terdiri daripada tujuh (7) pengarah dengan satu (1) pengarah gantian, dua (2) Pengarah Bebas Bukan Eksekutif (‘INED’) dan lima (5) Pengarah Bukan Bebas Bukan Eksekutif (‘NINED’); Pengerusi Lembaga Pengarah adalah seorang NINED. Profil para pengarah dibentangkan dalam Laporan Tahunan ini.
Komposisi INED dalam Lembaga Pengarah pada mulanya adalah 57.14% sebelum perlantikan semula YBhg. Tan Sri Dato’ Seri Mohamed Jawhar Bin Hassan dan En. Mohd Suffian Bin Haji Haron yang kedua-duanya telah berkhidmat dengan Bank melebihi 9 tahun. Lembaga Pengarah justeru itu telah mengambil langkah-langkah penting untuk memulakan dan menguatkuasakan perubahan pada peringkatnya yang akan meletakkan Bank dalam kedudukan untuk pertumbuhan berterusan selain mencipta nilai berkekalan. Sehubungan ini, Lembaga Pengarah telah melaksanakan usaha bersepadu dan meneruskan fokus bagi memastikan komposisi Lembaga Pengarah berada dalam rangkuman kehendak BNM Cg berkaitan komposisi majoriti INED di dalam jangka masa yang ditetapkan.
Dua (2) INED dalam Lembaga Pengarah pada masa ini tidak mempunyai sebarang hubungan atau keadaan yang mungkin menjejaskan, atau kelihatan seperti menjejaskan penilaian mereka. Mereka membawa bersama perspektif dan sudut pandang luar serta membantu dalam membangunkan usul-usul strategi. Mereka juga meneliti prestasi Pengurusan dalam memenuhi matlamat dan objektif yang diluluskan selain memantau profil risiko perniagaan Bank dan pelaporan prestasi perniagaan bulanan.
Jawatankuasa Penamaan dan Imbuhan Lembaga Pengarah (‘BNRC’) dan Lembaga Pengarah berdasarkan penilaian tahunan mereka telah membuat kesimpulan bahawa dua (2) INED tersebut telah mempamerkan tatacara dan kelakuan yang menjadi penunjuk penting akan kebebasan, dan bahawa setiap seorang terus memenuhi takrif kebebasan menurut BNM Cg.
Peranan INED adalah penting khususnya dalam memastikan bahawa strategi-strategi yang dicadangkan oleh Pengurusan dibincangkan sepenuhnya dan dinilai dengan adil sejajar dengan objektif jangka panjang Bank. Proses pembuatan keputusan Lembaga Pengarah tidak didominasi oleh mana-mana individu atau sekumpulan kecil individu. walaupun begitu, pada setiap tahun BNRC akan menentukan sama ada seorang INED masih kekal objektif dan bebas daripada sebarang hubungan atau pengaruh yang boleh menjejaskan keupayaannya untuk membuat penilaian bebas.
Sungguhpun begitu, pada ketika ini komposisi Lembaga Pengarah terdiri daripada majoriti NINED. Dalam meneruskan usaha untuk mendapatkan komposisi majoriti INED, Lembaga Pengarah komited dan percaya bahawa semua pengarah bertindak demi kepentingan Bank menerusi penggunaan piawaian dan amalan tadbir urus korporat yang mantap.
Jawatankuasa-jawatankuasa lembaga Pengarah
Lembaga Pengarah telah menubuhkan beberapa Jawatankuasa yang mana komposisi dan bidang tugas masing-masing adalah menurut BNM Cg dan konsisten dengan cadangan-cadangan MCCg.
Sehubungan itu, Lembaga Pengarah telah mengagihkan kuasa dan tanggungjawab tertentu kepada Jawatankuasa-jawatankuasa ini, yang beroperasi di bawah bidang kuasa yang diluluskan bagi setiap Jawatankuasa Lembaga Pengarah, terutamanya bagi membantu Lembaga Pengarah dalam pelaksanaan tugas dan tanggungjawabnya. Jawatankuasa-jawatankuasa Lembaga Pengarah ini akan melaporkan keputusan mesyuarat mereka kepada Lembaga Pengarah untuk dibincangkan pada peringkat Lembaga Pengarah, jika perlu. Semua laporan dan perbincangan dirangkumkan ke dalam minit mesyuarat Lembaga Pengarah. Jawatankuasa-jawatankuasa Lembaga Pengarah disenaraikan di bawah:
LAPORAN TAHUNAN 2016
29
Penyata Tadbir Urus Korporat
Jawatankuasa Penamaan dan imbuhan lembaga Pengarah (BnrC)
Pada 27 September 2016, Lembaga Pengarah telah meluluskan penggunaan kelulusan Affin Holdings Berhad (‘AHB’) pada mesyuaratnya yang diadakan pada 11 Ogos 2016 mengenai dasar kumpulan untuk menubuhkan gabungan Jawatankuasa Penamaan dan Imbuhan Lembaga Pengarah untuk Bank.
Sebelum ini, Jawatankuasa Penamaan Lembaga Pengarah (BNC) dan Jawatankuasa Imbuhan Lembaga Pengarah (BRC) Bank adalah dua entiti berasingan.
Kehadiran Ahli-ahli pada mesyuarat-mesyuarat BNC yang diadakan sepanjang 2016 adalah seperti berikut:
Bil. nama Pengarah
Bilangan mesyuarat lembaga Pengarah
kehadiran Bil. mesyuarat
1. En. Abd Malik Bin A RahmanPengerusi / Pengarah Bebas Bukan Eksekutif Dilantik sebagai Pengerusi BNC berkuatkuasa 1 Jun 2016
6 6
2. En. Mohd Suffian Bin Haji Haron ^Ahli / Pengarah Bukan Bebas Bukan Eksekutif
6 6
3. YBhg. Tan Sri Dato’ Seri Lodin Bin wok KamaruddinAhli / Pengarah Bukan Bebas Bukan Eksekutif (Melengkapkan tempoh jawatan pengarah bersama Bank berkuatkuasa 4 Oktober 2016)
4 4
4. YBhg. Tan Sri Dato’ Seri Mohamed Jawhar ^ Ahli / Pengarah Bukan Bebas Bukan Eksekutif
6 6
5. YBhg. Tan Sri Mohd ghazali Bin Mohd Yusoff Ahli / Pengarah Bebas Bukan Eksekutif
6 6
Nota: ^ Ditugaskan semula sebagai Pengarah Bukan Bebas Bukan Eksekutif berkuatkuasa 1 Jun 2016
Kehadiran Ahli-ahli pada mesyuarat-mesyuarat BRC yang diadakan sepanjang 2016 adalah seperti berikut:
Bil. nama Pengarah
Bilangan mesyuarat lembaga Pengarah
kehadiran Bil. mesyuarat
1. En. Abd Malik Bin A Rahman Pengerusi / Pengarah Bebas Bukan Eksekutif Dilantik sebagai Pengerusi BNC berkuatkuasa 1 Jun 2016
1 1
2. En. Mohd Suffian Bin Haji Haron ^Ahli / Pengarah Bukan Bebas Bukan Eksekutif
4 4
3. YBhg. Tan Sri Dato’ Seri Lodin Bin wok KamaruddinAhli / Pengarah Bukan Bebas Bukan Eksekutif (Melengkapkan tempoh jawatan pengarah bersama Bank berkuatkuasa 4 Oktober 2016)
4 4
4. YBhg. Tan Sri Mohd ghazali Bin Mohd Yusoff Ahli / Pengarah Bebas Bukan Eksekutif
4 4
Nota: ^ Ditugaskan semula sebagai Pengarah Bukan Bebas Bukan Eksekutif berkuatkuasa 1 Jun 2016
BNRC bertanggungjawab menyediakan satu prosedur yang formal dan telus untuk perlantikan para Pengarah, Pengarah Urusan /Ketua Pegawai Eksekutif dan Pengurusan Kanan. BNRC menyediakan dasar imbuhan untuk para Pengarah, Pengarah Urusan /Ketua Pegawai Eksekutif, Pengurusan Kanan dan lain-lain pengambil risiko penting, di mana ia menilai keberkesanan setiap Pengarah, Lembaga Pengarah secara keseluruhannya dan prestasi Pengarah Urusan / Ketua Pegawai Eksekutif serta Pengurusan Kanan.
AFFIN BANK BERHAD (25046-T)
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Penyata Tadbir Urus Korporat
BNRC menyemak dan mencadangkan proses-proses untuk pelan peralihan kuasa bagi Lembaga Pengarah, Pengarah Urusan/ Ketua Pegawai Eksekutif dan Pengurusan Kanan; membuat cadangan yang sewajarnya kepada Lembaga Pengarah, memastikan bahawa pelan ganti rugi adalah kompetitif dan konsisten dengan budaya dan objektif strategik Bank. BNRC mendapatkan khidmat nasihat daripada pakar-pakar dalam perihal ganti rugi dan manfaat, dari sumber dalaman dan luar.
Kehadiran Ahli-ahli pada mesyuarat-mesyuarat BNRC yang diadakan sepanjang 2016 adalah seperti berikut:
Bil. nama Pengarah
Bilangan mesyuarat lembaga Pengarah
kehadiran Bil. mesyuarat
1. En. Abd Malik Bin A Rahman Pengerusi / Pengarah Bebas Bukan Eksekutif
1 1
2. En. Mohd Suffian Bin Haji Haron ^Ahli / Pengarah Bukan Bebas Bukan Eksekutif
1 1
3. YBhg. Tan Sri Dato’ Seri Mohamed Jawhar ^Ahli / Pengarah Bukan Bebas Bukan Eksekutif
1 1
4. YBhg. Tan Sri Mohd ghazali Bin Mohd Yusoff Ahli / Pengarah Bebas Bukan Eksekutif
1 1
Nota: ^ Ditugaskan semula sebagai Pengarah Bukan Bebas Bukan Eksekutif berkuatkuasa 1 Jun 2016
Jawatankuasa Pengurusan risiko lembaga Pengarah (BrmC)
BRMC bertanggungjawab menyelia aktiviti-aktiviti Pengurusan dalam menguruskan risiko kredit, risiko pasaran, risiko kecairan, risiko operasi, risiko reputasi perundangan dan risiko-risiko lain bagi memastikan proses pengurusan risiko tersedia dengan secukupnya dan berfungsi dengan berkesan.
Kehadiran Ahli-ahli pada mesyuarat-mesyuarat BRMC yang diadakan sepanjang 2016 adalah seperti berikut:
Bil. nama Pengarah
Bilangan mesyuarat lembaga Pengarah
kehadiran Bil. mesyuarat
1. En. Abd Malik Bin A Rahman Pengerusi / Pengarah Bebas Bukan Eksekutif Dilantik sebagai Pengerusi berkuatkuasa 25 Oktober 2016
2 2
2. YBhg. Tan Sri Mohd ghazali Bin Mohd Yusoff Ahli / Pengarah Bebas Bukan Eksekutif
8 8
3. YBhg. Tan Sri Dato’ Seri Mohamed Jawhar ^Ahli / Pengarah Bukan Bebas Bukan Eksekutif
8 8
4. YBhg. Tan Sri Dato’ Sri Abdul Aziz Bin Abdul Rahman ^^Ahli / Pengarah Bukan Bebas Bukan Eksekutif(Mewakili AFFIN Islamic Bank Berhad)
8 8
5. En. Mohd Suffian Bin Haji Haron ^Ahli / Pengarah Bukan Bebas Bukan Eksekutif
8 8
Nota: ^ Ditugaskan semula sebagai Pengarah Bukan Bebas Bukan Eksekutif berkuatkuasa 1 Jun 2016 ^^ Ditugaskan semula sebagai Pengarah Bukan Bebas Bukan Eksekutif berkuatkuasa 25 Oktober 2016
LAPORAN TAHUNAN 2016
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Jawatankuasa semakan dan Perolehan semula Pinjaman lembaga Pengarah (BlrrC)
BLRRC bertanggungjawab menyediakan semakan kritikal ke atas pinjaman dan lain-lain kemudahan kredit dengan implikasi risiko yang lebih tinggi, selepas proses pemeriksaan, analisis, semakan dan cadangan oleh fungsi Pengurusan Risiko Kumpulan, dan jika perlu, melaksanakan kuasa veto ke atas permohonan pinjaman yang telah diluluskan oleh Jawatankuasa Pinjaman Pengurusan Kumpulan.
Kehadiran Ahli-ahli pada mesyuarat-mesyuarat BLRRC yang diadakan sepanjang 2016 adalah seperti berikut:
Bil. nama Pengarah
Bilangan mesyuarat lembaga Pengarah
kehadiran Bil. mesyuarat
1. YBhg. Jen. Tan Sri Dato’ Seri Ismail Bin Haji Omar (Bersara)Pengerusi / Pengarah Bukan Bebas Bukan Eksekutif
14 14
2. YBhg. Tan Sri Dato’ Seri Lodin Bin wok Kamaruddin Ahli / Pengarah Bukan Bebas Bukan Eksekutif(Melengkapkan tempoh jawatan pengarah bersama Bank berkuatkuasa 4 Oktober 2016)
11 11
3. En. Mohd Suffian Bin Haji Haron ^Ahli / Pengarah Bukan Bebas Bukan Eksekutif
14 14
4. YBhg. Laksamana Madya Tan Sri Dato’ Seri Ahmad Ramli Bin Mohd Nor (Bersara) Ahli / Pengarah Bukan Bebas Bukan Eksekutif(Represent AFFIN Islamic Bank Berhad)
14 14
Nota: ^ Ditugaskan semula sebagai Pengarah Bukan Bebas Bukan Eksekutif berkuatkuasa 1 Jun 2016
Jawatankuasa audit lembaga Pengarah (BaC)
BAC bertanggungjawab menyediakan pengawasan ke atas semakan kecukupan dan integriti sistem kawalan dalaman selain menyelia kerja-kerja juruaudit dalaman dan luar.
Kehadiran Ahli-ahli pada mesyuarat-mesyuarat BAC yang diadakan sepanjang 2016 adalah seperti berikut:
Bil. nama Pengarah
Bilangan mesyuarat lembaga Pengarah
kehadiran Bil. mesyuarat
1. YBhg. Tan Sri Mohd ghazali Mohd YusoffPengerusi / Pengarah Bebas Bukan Eksekutif(Dilantik sebagai Pengerusi berkuatkuasa 25 Oktober 2016)
9 9
2. YBhg. Tan Sri Dato’ Seri Mohamed Jawhar ^Ahli / Pengarah Bukan Bebas Bukan Eksekutif
9 9
3. YBhg. Tan Sri Dato’ Sri Abdul Aziz Abdul Rahman ^^Ahli / Pengarah Bukan Bebas Bukan Eksekutif (Mewakili AFFIN Islamic Bank Berhad)
9 9
4. Assoc. Prof. Dr. Said BouheraouaAhli / Pengarah Bebas Bukan Eksekutif(Mewakili AFFIN Islamic Bank Berhad)
7 9
Nota: ^ Ditugaskan semula sebagai Pengarah Bukan Bebas Bukan Eksekutif berkuatkuasa 1 Jun 2016 ^^ Ditugaskan semula sebagai Pengarah Bukan Bebas Bukan Eksekutif berkuatkuasa 25 Oktober 2016
Penyata Tadbir Urus Korporat
AFFIN BANK BERHAD (25046-T)
32
Jawatankuasa transformasi Pengawasan lembaga Pengarah (BotC)
Lembaga Pengarah telah bermesyuarat pada 26 Julai 2016 dan meluluskan penubuhan BOTC berserta bidang tugasnya.
BOTC bertanggungjawab mengawasi pelan transformasi (Program AFFINITY), memastikan keputusan strategik yang konsisten dan memastikan bahawa pelan transformasi dilaksanakan secara berkesan dan tepat pada masanya.
Kehadiran Ahli-ahli pada mesyuarat-mesyuarat BOTC yang diadakan sepanjang 2016 adalah seperti berikut:
Bil. nama Pengarah
Bilangan mesyuarat lembaga Pengarah
kehadiran Bil. mesyuarat
1. En. Abd Malik Bin A Rahman Pengerusi / Pengarah Bebas Bukan Eksekutif
2 2
2. YBhg. Tan Sri Dato’ Seri Mohamed Jawhar ^Ahli / Pengarah Bukan Bebas Bukan Eksekutif
2 2
3. En. Mohd Suffian Bin Haji Haron ^Ahli / Pengarah Bukan Bebas Bukan Eksekutif
2 2
4. Assoc. Prof. Dr. Said BouheraouaAhli / Pengarah Bebas Bukan Eksekutif(Mewakili AFFIN Islamic Bank Berhad)
2 2
Nota: ^ Ditugaskan semula sebagai Pengarah Bukan Bebas Bukan Eksekutif berkuatkuasa 1 Jun 2016
kebebasan dan konflik kepentingan
Menjadi tanggungjawab para Pengarah untuk mengisytiharkan sama ada mereka mempunyai kepentingan berpotensi atau nyata dalam mana-mana urusniaga Bank. Apabila timbulnya konflik kepentingan bagi sesuatu isu, Pengarah yang terlibat mengisytiharkan perkara tersebut dan mengecualikan diri daripada membincangkan atau mengundi untuk isu terbabit. Ini adalah penting bagi mengurangkan risiko yang mungkin timbul daripada konflik kepentingan atau pengaruh daripada pihak berkepentingan.
Perlantikan Baharu dan Perlantikan semula ke dalam lembaga Pengarah
Sejajar dengan peruntukan dalam FSA dan dokumen-dokumen dasar serta garis panduan yang dikeluarkan oleh BNM, semua perlantikan dan perlantikan semula para pengarah adalah tertakluk kepada kelulusan BNM, dan kelulusan tersebut adalah untuk satu tempoh perlantikan yang tertentu.
Cadangan perlantikan ahli-ahli Lembaga Pengarah baharu serta perlantikan semula ahli-ahli Lembaga Pengarah dicadangkan oleh BNRC bagi memastikan bahawa tahap dan komposisi ahli-ahlinya merangkumi tahap kredibiliti, integriti dan kaliber yang sewajarnya berserta kemahiran dan pengetahuan yang diperlukan.
Perlantikan semula pengarah adalah tertakluk kepada kriteria kesesuaian dan kewajaran seperti yang diluluskan oleh Lembaga Pengarah dan berdasarkan penilaian rakan pengarah mengenai keberkesanan, sumbangan dan penyertaan pengarah terbabit. Ini adalah sejajar dengan Prinsip 2, Cadangan 2.2 di dalam MCCg.
Pemilihan semula Para Pengarah
Sejajar dengan Seksyen 91(a) Tataurusan Penubuhan Syarikat, sekurang-kurangnya satu pertiga (1/3) daripada para Pengarah terkini, atau, sekiranya bilangan mereka bukan tiga (3) atau dalam gandaan tiga (3), bilangan terdekat kepada satu pertiga (1/3), harus bersara pada setiap Mesyuarat Agung Tahunan dan mereka boleh menawarkan diri untuk pemilihan semula.
Penyata Tadbir Urus Korporat
LAPORAN TAHUNAN 2016
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Pendidikan Berterusan
Lembaga Pengarah menyedari kepentingan pendidikan dan latihan berterusan bagi memastikan mereka sentiasa mengetahui perkembangan terkini dalam bidang yang mereka ceburi. Semua Pengarah Bukan Eksekutif yang baharu dilantik disediakan oleh Bank dengan salinan FSA dan lain-lain dokumen perundangan yang berkaitan dengan industri perbankan bagi membantu mereka memahami kehendak-kehendak dalam perniagaan perbankan. Kesemua Pengarah telah menghadiri pelbagai program latihan dalaman dan luar yang dianjurkan oleh badan-badan berkaitan seperti BNM, Suruhanjaya Sekuriti (SC) dan Bursa Malaysia Berhad (Bursa Malaysia). Kesemua Pengarah diwajibkan mengikuti latihan Pendidikan Pengarah Institusi Kewangan (FIDE) anjuran BNM dalam tempoh setahun dari tarikh perlantikan mereka. Ahli-ahli Lembaga Pengarah menyedari kepentingan menaiktaraf set kemahiran dan kecekapan mereka bagi bersedia menghadapi cabaran persaingan dan inovasi pada masa kini dan di masa hadapan. Ahli-ahli Lembaga Pengarah sentiasa mengemaskini pengetahuan mereka mengenai perkembangan semasa dalam industri perniagaan, perbankan dan kewangan serta kehendak-kehendak kawal selia terkini menerusi pelbagai persidangan, seminar dan program-program latihan. Program-program pembangunan dan latihan yang dihadiri oleh para Pengarah sepanjang tahun kewangan berakhir 31 Disember 2016 adalah seperti berikut:
yBhg. Jen. tan sri Dato’ seri ismail Bin haji omar (Bersara)
Jurulatih/Penganjur Tajuk kursus Tarikh
1. BNM Laporan Tahunan BNM 2015/Laporan Kestabilan Kewangan & Sistem Pembayaran 2015 – Sesi Taklimat
23 Mac 2016
2. MINDA Program Lanjutan Para Pengarah Korporat (CDAP): Pengurusan Risiko Keselamatan Siber untuk Boardroom dan C-Suite
24 Mac 2016
3. AHB Ceramah Separuh Hari untuk Para Pengarah 26 September 2016
yBhg. tan sri Dato’ seri lodin Bin wok kamaruddin (Melengkapkan tempoh jawatan pengarah bersama Bank berkuatkuasa 4 Oktober 2016)
Jurulatih/Penganjur Tajuk kursus Tarikh
1. FIDE Sektor Perkhidmatan Ekonomi dan Kewangan: Trend dan Cabaran Masa Hadapan untuk Industri Perbankan
3 Mac 2016
2. SEACEN Persidangan SEACEN mengenai Kerjasama Bank Pusat dan Mandat Penghormatan untuk Mantan gabenor Bank of Thailand, Dr. Puey Unghakorn
14 Mac 2016
3. SC Global Emerging Markets Programme 2016 – Risk Vulnerability of Global Markets: Reinforcing Resilience in Emerging Markets
15 Mac 2016
4. ICLIF Program Pengarah Bebas: “The Essence of Independence” 28 Mac 2016
5. BNM Dialog Tahunan Forum BNM-FIDE ke-3 bersama gabenor BNM 29 Mac 2016
6. FIDE Siri Kepimpinan Lembaga Pengarah Terkemuka ke-2 Forum FIDE – “Avoiding Financial Myopia” oleh Profesor Jeffrey L. Sampler
19 April 2016
7. MINDA Siri Sarapan Pagi Cg bersama Para Pengarah: “The Strategy, the Leadership, the Stakeholders and the Board”
6 Mei 2016
8. AHB Bengkel Pengurusan Risiko mengenai Keselamatan dan Penipuan Siber oleh IBM 9 Mei 2016
9. AIBIM global Islamic Finance Forum (gIFF) 5.0 11 Mei 2016
10. FIDE Sesi Taklimat B untuk Para Pengarah: Pelaksanaan Daftar Pengarah Forum FIDE oleh Forum FIDE
2 Jun 2016
11. wIEF Forum Ekonomi Islam Dunia ke-12 oleh world Islamic Economic Foundation 2 Ogos 2016
12. FIDE “FinTech: Business Opportunity or Disruptor?” oleh Mr. Markus gnirck dan Ms. Veiverne Yuen
4 Ogos 2016
13. Bursa Malaysia Sesi Anjuran mengenai Perbincangan & Analisis Pengurusan (“MD&A”) untuk Ketua Pegawai Eksekutif (“CEO”) dan Ketua Pegawai Kewangan (“CFO”) bagi Syarikat-syarikat Tersenarai oleh Bursa Malaysia
8 Ogos 2016
14. Affin Hwang Siri Persidangan Modal Affin Hwang 2016: “Navigating Through Shifting Sands” 11 Ogos 2016
15. BNM & The world Bank
Simposium global 2016 mengenai Rangkuman Kewangan Inovatif: “Harnessing Technology for Inclusive Finance”
21 September 2016
Penyata Tadbir Urus Korporat
AFFIN BANK BERHAD (25046-T)
34
16. AHB Ceramah Separuh Hari mengenai:i) Risiko Ketidakpatuhan Syariah dan Impaknya ke atas Bank-bank Islam ii) Piawaian Pelaporan Kewangan Malaysia (MFRS) 9 – Instrumen Kewangan dan
Hal-hal Audit Utamaiii) Proses Penilaian Kecukupan Modal Dalaman (ICAAP)
26 September 2016
mr. aubrey li kwok-sing
Jurulatih/Penganjur Tajuk kursus Tarikh
1. PwC Program Pengarah Bukan Eksekutif PwC: “Responsible Investment and green Finance – Paving the way for Sustainable Business”
1 Mac 2016
2. KPMg Forum Pengarah Bebas Bukan Eksekutif KPMg- The Year Ahead- The Way Forward in Financial Reporting- Tax in the Boardroom- Capital Markets
8 Mac 2016
3. KPMg Forum Pengarah Bebas Bukan Eksekutif KPMg- The Way Forward- Audit Committee Institute – Global Boardroom Insights- Seeking Value through Internal Audit- The Way Forward on Financial Reporting- Capital Markets- What are the Lessons from the Panama Papers- Disruptive Innovation and Technology
13 Jun 2016
4. PwC Program Pengarah Bukan Eksekutif PwC- The New Insightful Audit Reports
18 Ogos 2016
5. KPMg Forum Pengarah Bebas Bukan Eksekutif KPMg- What’s Around the Corner- Capital Markets Development- Common Reporting Standard – Are You Ready?- Global Profile of the Fraudster- Using Analytics Successfully to Detect Fraud
5 September 2016
6. CSR Asia/BEA “why Corporate Social Responsibility (CSR) is good for the Bottom Line” 24 November 2016
7. KPMg Forum Pengarah Bebas Bukan Eksekutif KPMg- Welcome and Introduction- From Strategy to Results- Capital Markets Spotlight- The Way Forward on Financial Reporting- The Tax Tsunami
5 Disember 2016
8. PwC/Café de Coral
“Transformation to the Engaged Board” 16 Disember 2016
en. mohd suffian Bin haji haron
Jurulatih/Penganjur Tajuk kursus Tarikh
1. FPLC Seminar Kebangsaan Tahunan mengenai Isu-isu Terkini & Semasa berkaitan Tugas, Tadbir Urus, Kawal Selia para Pengarah 2016
26 – 27 Januari 2016
2. FIDE Taklimat mengenai Daftar Pengarah 17 Februari 2016
3. FIDE Sesi Eksklusif untuk Para Pengarah: Pelaksanaan Daftar Pengarah Forum FIDE 1 Jun 2016
4. FIDE Siri Kepimpinan Lembaga Pengarah Terkemuka ke-3 – “Effective Board Evaluation” oleh Mr. Beverly Behan
25 Julai 2016
5. FIDE “Strategy to Leverage Technology for Business Solutions” 14 November 2016
Penyata Tadbir Urus Korporat
LAPORAN TAHUNAN 2016
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yBhg. tan sri Dato’ seri mohamed Jawhar
Jurulatih/Penganjur Tajuk kursus Tarikh
1. MINDA Program Lanjutan Para Pengarah Korporat (CDAP): Pengurusan Risiko Keselamatan Siber untuk Boardroom dan C-Suite
24 Mac 2016
2. BNM Dialog Tahunan Forum BNM-FIDE ke-3 bersama gabenor BNM 29 Mac 2016
3. FIDE “Directors’ and Officers’ Liability Insurance: Are Directors Sufficiently Protected for Exercising Their Fiduciary Duty”
5 April 2016
4. AIBIM global Islamic Finance Forum (gIFF) 5.0 10 – 12 Mei 2016
5. FIDE Daftar Pengarah Forum FIDE: “Identify the Right Board Talent” 14 September 2016
6. BNM & The world Bank
Simposium global 2016 mengenai Rangkuman Kewangan Inovatif: “Harnessing Technology for Inclusive Finance”
21 – 22 September 2016
yBhg. tan sri mohd ghazali Bin mohd yusoff
Jurulatih/Penganjur Tajuk kursus Tarikh
1. FIDE Piawaian Pelaporan Juruaudit yang Baharu dan Disemak: Implikasi ke atas Institusi-institusi Kewangan
20 Januari 2016
2. FIDE Daftar Pengarah: Sesi Taklimat Industri mengenai Pelaksanaan Daftar Pengarah 17 Februari 2016
3. FIDE Sektor Perkhidmatan Ekonomi dan Kewangan: “Trends and Challenges Moving Forward for the Banking Industry”
3 Mac 2016
4. FIDE “Directors’ and Officers’ Liability Insurance: Are Directors Sufficiently Protected for Exercising Their Fiduciary Duty”
5 April 2016
5. FIDE Siri Kepimpinan Lembaga Pengarah Terkemuka ke-2 – “Avoiding Financial Myopia”
19 April 2016
6. AHB Bengkel Pengurusan Risiko mengenai Keselamatan dan Penipuan Siber oleh IBM 9 Mei 2016
7. PNB International Forum on the World’s Economic Outlook: Challenges & Opportunities for Malaysia Companies
30 Mei 2016
8. FIDE Sesi Eksklusif untuk Para Pengarah: Pelaksanaan Daftar Pengarah Forum FIDE 1 Jun 2016
9. FIDE Siri Kepimpinan Lembaga Pengarah Terkemuka ke-3: “Effective Board Evaluation” oleh Ms. Beverly Behan
25 Julai 2016
10. FIDE “FinTech: Business Opportunity or Disruptor?” oleh Mr. Markus gnirck dan Ms. Veiverne Yuen
4 Ogos 2016
11. FIDE Suruhanjaya Sekuriti – Dialog Forum FIDE: “FinTech’s Impact on Financial Institutions”
29 Ogos 2016
12. BNM Simposium global 21 September 2016
13. AHB Ceramah Separuh Hari mengenai:i) Risiko Ketidakpatuhan Syariah dan Impaknya ke atas Bank-bank Islam ii) Piawaian Pelaporan Kewangan Malaysia (MFRS) 9 – Instrumen Kewangan dan
Hal-hal Audit Utamaiii) Proses Penilaian Kecukupan Modal Dalaman (ICAAP)
26 September 2016
14. FIDE “Technology-based Innovations that Count” oleh Steven Lewis, Patrick Menard dan Shankar Kanabiran, Ernst & Young
2 November 2016
15. AHB Topik Ceramah:i. Pindaan Kehendak-kehendak Penyenaraian Bursa Malaysia;ii. Akta Syarikat 2016;iii. Cadangan Kod Tadbir Urus Korporat; daniv. Dokumen Dasar BNM mengenai Tadbir Urus Korporat
10 November 2016
16. FIDE “Strategy to Leverage Technology for Business Solutions” 14 November 2016
Penyata Tadbir Urus Korporat
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en. abd malik Bin a rahman
Jurulatih/Penganjur Tajuk kursus Tarikh
1. FIDE Piawaian Pelaporan Juruaudit yang Baharu dan Disemak: Implikasi ke atas Institusi-institusi Kewangan
20 Januari 2016
2. FIDE/BNM Siri Kepimpinan Lembaga Pengarah – Pengawasan Risiko Siber 16 Mac 2016
3. Bursa Malaysia/PwC
Panduan Pengarah mengenai Risiko Penipuan & Rasuah 5 April 2016
4. FIDE Siri Kepimpinan Lembaga Pengarah Terkemuka ke-2 – “Avoiding Financial Myopia”
19 April 2016
5. AHB Bengkel Pengurusan Risiko mengenai Keselamatan dan Penipuan Siber oleh IBM 9 Mei 2016
6. FIDE Sesi Eksklusif untuk Para Pengarah: Pelaksanaan Daftar Pengarah Forum FIDE 1 Jun 2016
7. FIDE Siri Kepimpinan Lembaga Pengarah Terkemuka ke-3: “Effective Board Evaluation” oleh Ms. Beverly Behan
25 Julai 2016
8. FIDE “FinTech: Business Opportunity or Disruptor?” oleh Mr. Markus gnirck dan Ms. Veiverne Yuen
4 Ogos 2016
9. SC/FIDE Suruhanjaya Sekuriti – Dialog Forum FIDE: “FinTech’s Impact on Financial Institutions”
29 Ogos 2016
10. Tricor Tax Services Sdn Bhd
Seminar Cukai & Korporat Tricor ke-12 2 November 2016
11. AHB/BOARDROOM/ KPMg
Ceramah: Pindaan Kehendak-kehendak Penyenaraian Bursa Malaysia; Akta Syarikat 2016; Cadangan Kod Tadbir Urus Korporat 2016; dan Dokumen Dasar BNM mengenai Tadbir Urus Korporat
10 November 2016
12. AHIB Latihan Pengarah mengenai Akta Pencegahan Pengubahan wang Haram dan Pencegahan Pembiayaan Keganasan
30 November 2016
mr. tang Peng wah (Pengarah Alternatif Mr. Aubrey Li Kwok-Sing)
Jurulatih/Penganjur Tajuk kursus Tarikh
1. BEASg Compliance Department
Latihan Ulangan AML – Kemaskini Penting ke atas Notis 626 MAS 1 April 2016
2. BEASg Human Resource Department
Pengurusan Prestasi dan Penilaian Kakitangan 21 April 2016
3. BEASg IT Department
Kesedaran Keselamatan Siber 21 April 2016
4. Marsh Singapore
Skim Insurans Pinjaman Tranche 5 6 Mei 2016
5. BEASg Compliance Department
Foreign Account Tax Compliance Act (FATCA) Essentials oleh Thomson Reuters 4 Jun 2016
6. BEASg Compliance Department
Akta Perlindungan Data Peribadi (Singapura) 4 Jun 2016
7. BEASg Compliance Department
Anti-Bribery and Anti-Corruption oleh Thomson Reuters 4 Jun 2016
8. BEASg IT Department
BEA IT Security Awareness oleh Thomson Reuters 4 Jun 2016
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9. BEASg Compliance Department
Insider Trading – Game-Based Assessment oleh Thomson Reuters 6 Jun 2016
10. BEASg Human Resource Department
Kod Tatalaku BEA (Ulangan) 29 Jun 2016
11. BEASg Human Resource Department
Kod Tatalaku – BEA (2016) 8 Ogos 2016
12. KPMg Hong Kong
Piawaian Pelaporan Kewangan Antarabangsa (IFRS) 9 21 September 2016
13. Monetary Authority of Singapore
Acara Bertaraf Tinggi untuk Perasmian Forum EU-Asia mengenai Kawal Selia Kewangan
14 Oktober 2016
14. BEASg Compliance Department
Market Conduct (Global) oleh Thomson Reuters 15 November 2016
15. BEASg Compliance Department
Financial Crime oleh Thomson Reuters 26 November 2016
16. BEASg Compliance Department
Global Fraud Prevention oleh Thomson Reuters 26 November 2016
ringkasan
Affin Hwang - Affin Hwang Investment Bank Berhad
AHB - Affin Holdings Berhad
AIBIM - Association of Islamic Banking Institutions Malaysia
BEASg - The Bank of East Asia, Limited Singapore Branch
BNM - Bank Negara Malaysia
BOARDROOM - Boardroom Corporate Services (KL) Sdn Bhd
FIDE - Financial Institutions Directors’ Education
FPLC - Federation of Public Listed Companies Berhad
ICLIF - The Iclif Leadership and governance Centre
MINDA - Malaysian Directors Academy
PNB - Permodalan Nasional Berhad
PwC - Messrs. PricewaterhouseCoopers
SC - Securities Commission
SEACAN - The SEACAN Centre Kuala Lumpur
wIEF - world Islamic Economic Forum Foundation
Penyata Tadbir Urus Korporat
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mesyuarat dan Bekalan maklumat untuk lembaga Pengarah
Mesyuarat Lembaga Pengarah dijadualkan lebih awal pada permulaan tahun kalendar dengan mesyuarat-mesyuarat tambahan sekiranya perlu untuk menyemak laporan kemajuan prestasi kewangan Bank, strategi-strategi yang diluluskan, pelan-pelan perniagaan dan dasar-dasar penting selain untuk mempertimbangkan usul-usul perniagaan dan usul-usul lain yang memerlukan kelulusan Lembaga Pengarah. Bagi tahun kewangan berakhir 31 Disember 2016, dua puluh empat (24) mesyuarat Lembaga Pengarah telah diadakan iaitu 10 Mesyuarat Lembaga Pengarah terjadual dan 14 Mesyuarat Khas Lembaga Pengarah. Mesyuarat lazimnya diadakan di Bilik Lembaga Pengarah, Tingkat 19, Menara Affin, 80, Jalan Raja Chulan, 50200 Kuala Lumpur.
Lembaga Pengarah mempunyai akses penuh dan mengikut masa ke atas semua maklumat berkaitan menerusi agihan kertas mesyuarat dari perisian BoardPac yang diedarkan sebelum mesyuarat berlangsung bagi membolehkan para Pengarah mendapatkan penjelasan lanjut, sekiranya perlu, agar mereka mendapat makluman yang sewajarnya sebelum mesyuarat diadakan. Kertas Lembaga Pengarah merangkumi minit-minit mesyuarat Lembaga Pengarah yang lepas, minit-minit mesyuarat Jawatankuasa-jawatankuasa Lembaga Pengarah serta laporan-laporan yang berkaitan dengan isu-isu yang akan dibincangkan merangkumi semua aspek perbankan seperti kewangan, pelaburan, teknologi maklumat, operasi, sumber manusia dan hal-hal berkaitan pematuhan kawal selia. Pengarah Urusan/Ketua Pegawai Eksekutif memaklumkan kepada Lembaga Pengarah, mengikut masa yang sepatutnya, mengenai semua hal-hal penting yang memberi kesan ke atas prestasi Bank selain perkembangan-perkembangan penting lain.
Ahli-ahli Pengurusan Kanan dijemput menghadiri mesyuarat-mesyuarat Lembaga Pengarah untuk membentangkan dan memaklumkan Lembaga Pengarah mengenai hal-hal/laporan-laporan yang berkaitan dengan bidang tanggungjawab mereka jika dan apabila perlu.
Kesemua ahli Lembaga Pengarah mempunyai akses tanpa had ke atas maklumat yang tepat dan mengikut masa selain akses kepada khidmat dan nasihat Setiausaha Syarikat, yang bertanggungjawab memastikan prosedur-prosedur mesyuarat Lembaga Pengarah dan semua peraturan dan kawal selia yang berkaitan dipatuhi.
Prosedur disediakan untuk para Pengarah yang ingin mendapatkan khidmat nasihat ahli profesional bebas di atas perbelanjaan Bank. Bank juga menyediakan akses penuh untuk Lembaga Pengarah mendapatkan bahan-bahan dan maklumat yang diperlukan termasuk khidmat Setiausaha Syarikat bagi membolehkan Lembaga Pengarah memenuhi tugas dan tanggungjawab khusus mereka.
Komitmen Lembaga Pengarah dalam melaksanakan tugas dan tanggungjawab mereka ditegaskan menerusi kehadiran mereka ke mesyuarat-mesyuarat Lembaga Pengarah yang diadakan sepanjang tahun kewangan berakhir 31 Disember 2016 seperti berikut:
Bil. nama Pengarah
Bilangan mesyuarat lembaga Pengarah
kehadiran Bil. mesyuarat
1. YBhg. Jen. Tan Sri Dato’ Seri Ismail Bin Haji Omar (Bersara) Pengerusi/Pengarah Bukan Bebas Bukan Eksekutif
24 24
2. YBhg. Tan Sri Dato’ Seri Lodin Bin wok Kamaruddin (Melengkapkan tempoh pegangan jawatan pengarah bersama Bank berkuatkuasa 4 Oktober 2016)
14 19
3. Mr. Aubrey Li Kwok-Sing Pengarah Bukan Bebas Bukan Eksekutif
9 24
4. Mr. Tang Peng wah Pengarah Bukan Bebas Bukan Eksekutif (Pengarah Alternatif kepada Mr. Aubrey Li Kwok-Sing)
13 24
5. En. Mohd Suffian Bin Haji Haron ^Pengarah Bukan Bebas Bukan Eksekutif
24 24
6. YBhg. Tan Sri Dato’ Seri Mohamed Jawhar ^Pengarah Bukan Bebas Bukan Eksekutif
23 24
7. YBhg. Tan Sri Mohd ghazali Bin Mohd Yusoff Pengarah Bebas Bukan Eksekutif
24 24
8. En. Abd Malik Bin A Rahman Pengarah Bebas Bukan Eksekutif
24 24
Nota: ^ Ditugaskan semula sebagai Pengarah Bukan Bebas Bukan Eksekutif berkuatkuasa 1 Jun 2016
Penyata Tadbir Urus Korporat
LAPORAN TAHUNAN 2016
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imBuhan Para Pengarah
Bank menyedari kepentingan untuk menarik dan mengekalkan minat para Pengarah yang berkaliber tinggi dengan kemahiran, kelayakan dan pengalaman yang diperlukan untuk pengawasan berkesan oleh Lembaga Pengarah ke atas aktiviti-aktiviti dan hal ehwal perniagaan Bank.
Bank percaya bahawa aspek yang perlu diberi perhatian oleh Lembaga Pengarah agar ia kekal efektif dalam menjalankan tugas-tugas dan tanggungjawabnya adalah penetapan pakej imbuhan yang adil dan komprehensif yang bersesuaian dengan kepakaran, kemahiran, tanggungjawab dan risiko-risiko yang diambil oleh pengarah sebuah institusi kewangan.
Penetapan pakej imbuhan bagi para Pengarah Bukan Eksekutif (NED) termasuk Pengerusi bukan eksekutif adalah ditentukan sepenuhnya oleh Lembaga Pengarah berdasarkan cadangan yang dibuat oleh BRC selepas melakukan tanda aras bebas berbanding rakan-rakan sejawat luar.
Pakej imbuhan bagi para Pengarah Bukan Eksekutif adalah kompetitif dengan industri dan konsisten dengan dasar perniagaan Bank di mana tahap tanggungjawab mereka dihubungkaitkan dengan sumbangan yang mereka berikan terhadap keberkesanan fungsi Lembaga Pengarah. Emolumen untuk para Pengarah bukan eksekutif terdiri daripada tiga (3) komponen – yuran tahunan sebagai ahli Lembaga Pengarah, elaun untuk kehadiran ke mesyuarat, dan yuran jawatankuasa.
Imbuhan untuk Pengarah Urusan/Ketua Pegawai Eksekutif terdiri daripada gaji, elaun, bonus dan lain-lain manfaat lazim yang wajar. Sebarang semakan gaji mengambilkira kadar di pasaran dan prestasi individu tersebut serta Bank. Sebahagian daripada pakej imbuhan Pengarah Urusan/Ketua Pegawai Eksekutif boleh diubah bergantung kepada prestasi Bank semasa tahun kewangan, yang ditentukan berdasarkan Penunjuk Prestasi Utama yang diselaraskan dengan objektif korporat, dan diluluskan oleh Lembaga Pengarah.
Sejajar dengan tadbir urus korporat yang baik, Lembaga Pengarah telah memaklumkan hasratnya untuk menyemak imbuhan para Pengarah secara berkala. Rangka kerja imbuhan yang sedia ada adalah sejajar dengan amalan keseluruhan Kumpulan AFFIN Holdings berhubung pampasan dan manfaat. Pengarah Urusan/Ketua Pegawai Eksekutif tidak mengambil sebarang bahagian dalam penentuan imbuhannya sendiri. Lembaga Pengarah menentukan imbuhan para Pengarah Bukan Eksekutif.
Emolumen para Pengarah dibentangkan dalam nota berkaitan di dalam penyata kewangan sebagai jumlah agregat, bagi mematuhi rang undang-undang berkaitan.
Pemegang saham
Bank adalah anak syarikat milik penuh AFFIN Holdings Berhad, sebuah syarikat yang disenaraikan di dalam Bursa Malaysia Securities Berhad.
mesyuarat agung tahunan (agm)
Laporan Tahunan dan penyata kewangan bagi tahun berakhir 31 Disember 2015 telah dibentangkan di AgM ke-40 pada 22 Mac 2016. Begitu juga, Laporan Tahunan dan penyata kewangan bagi tahun berakhir 31 Disember 2016 akan dibentangkan di AgM ke-41 pada hari Khamis, 30 Mac 2017.
Penyata Tadbir Urus Korporat
AFFIN BANK BERHAD (25046-T)
40
1. urus taDBir korPorat & Pemerhatian lemBaga Pengarah
a. Lembaga Pengarah menyedari dan melaksanakan tanggungjawab penuh dalam mempromosikan urus tadbir korporat yang baik dan memastikan kemantapan sistem kawalan dalaman dan amalan-amalan pengurusan risiko dikekalkan dalam Kumpulan AFFINBANK.
b. Lembaga Pengarah berpendapat bahawa sistem kawalan dalaman yang diinstitusikan oleh unit-unit operasi Kumpulan bagi tahun di bawah tinjauan dan sehingga tarikh laporan tahunan adalah mantap dan mencukupi bagi melindungi pelaburan pemegang saham, kepentingan para pelanggan dan aset-aset Kumpulan.
c. walau bagaimanapun, penilaian berterusan tetap dijalankan bagi memastikan keberkesanan, kecukupan dan integriti sistem tersebut. Prosedur-prosedur kawalan direka bagi menguruskan dan bukannya untuk menghapuskan sepenuhnya kesemua risiko-risiko kegagalan dalam mencapai objektif-objektif perniagaan dan ia hanya boleh menyediakan jaminan munasabah dan bukannya mutlak dalam menangani kesilapan penting, kerugian, penipuan atau kejadian-kejadian di luar jangkaan.
d. Lembaga Pengarah bermesyuarat secara kerap bagi membincangkan perkara-perkara berkaitan sistem kawalan dalaman yang merangkumi antara lainnya kewangan, kecairan, modal, perjalanan operasi, kredit, teknologi maklumat, pematuhan, prosedur-prosedur pengurusan risiko dan kawalan.
e. Lembaga Pengarah menambah peranan Jawatankuasa Audit Lembaga Pengarah (BAC) dan Jawatankuasa Pengurusan Risiko Lembaga Pengarah (BRMC) bagi merangkumi tanggungjawab penyeliaan ke atas kawalan dalaman dan strategi-strategi pengurusan risiko, dasar-dasar dan lain-lain perkara berkaitan risiko.
f. BAC dan BRMC terdiri daripada Pengarah Bebas Bukan Eksekutif.
g. Laporan-laporan kerap yang diterima daripada pihak pengurusan Kumpulan mengenai prestasi kewangan, statistik operasi utama, pematuhan perundangan dan kawal selia, ketidakpatuhan undang-undang atau kawalan selia, aktiviti-aktiviti yang tidak dibenarkan serta penipuan akan dinilai oleh Lembaga Pengarah.
2. Pelan Perniagaan Dan moDal termasuk BelanJawan
a. Pelan perniagaan dan belanjawan kewangan tahunan bagi Kumpulan AFFINBANK dibentangkan dan diluluskan oleh Lembaga Pengarah.
b. Satu rangka kerja dan proses berstruktur berkaitan perbelanjaan modal dan perolehan telah disediakan.
c. Sasaran modal dalaman ditetapkan setiap tahun.
d. Varians di antara keputusan sebenar dan keputusan yang disasarkan dibentangkan kepada Lembaga Pengarah secara berkala bagi membolehkan maklumbalas dan langkah-langkah pembetulan yang sewajarnya diambil bagi mengurangkan risiko.
3. Jawatankuasa auDit lemBaga Pengarah Dan auDit Dalaman kumPulan (“gia”)
a. Audit Dalaman Kumpulan menyemak secara kerap proses-proses dan aktiviti-aktiviti perniagaan dan teknologi maklumat bagi menilai keberkesanan kawalan dalaman dan bagi menegaskan risiko-risiko penting yang memberi kesan kepada Kumpulan. BAC menjalankan penilaian tahunan ke atas kecukupan skop kerja dan sumber-sumber Bahagian Audit Dalaman Kumpulan.
b. BAC menilai dan berbincang secara kerap dengan pihak pengurusan mengenai langkah-langkah yang diambil bagi menangani isu-isu kawalan dalaman yang dikenalpasti oleh Audit Dalaman Kumpulan, juruaudit luar dan badan-badan kawal selia.
c. Kesemua penemuan penting oleh gIA, juruaudit luar dan badan-badan kawal selia dilaporkan kepada BAC untuk penilaian dan perbincangan dan kemudian dibawa kepada perhatian Lembaga Pengarah.
d. BAC menerusi gIA akan membuat susulan dan memantau status tindakan-tindakan yang disarankan oleh Audit Dalaman Kumpulan, juruaudit luar dan badan-badan kawal selia. Selain itu, BAC juga boleh mengarahkan siasatan bagi sebarang kejadian atau perkara khusus yang dianggap telah melanggar dasar-dasar dalaman berkaitan kerahsiaan atau kesalahan kewangan yang mempunyai kesan penting ke atas Kumpulan.
e. Penemuan berkaitan hal-hal Syariah dibawa kepada perhatian Jawatankuasa Syariah.
Penyata Pengurusan Risiko & Kawalan Dalaman
LAPORAN TAHUNAN 2016
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f. gIA menjalankan program-program kesedaran/latihan secara berterusan berkaitan kawalan dan pematuhan termasuk program-program pensijilan kawalan bagi memperkukuhkan lagi pengetahuan kakitangan (di dalam & antara jabatan) dalam usaha mencipta persekitaran kawalan dan pematuhan yang mantap.
g. Kesemua urusniaga pihak berkaitan dan yuran-yuran berkaitan audit dan bukan audit yang dicadangkan oleh juruaudit luar atau Ketua Pegawai Kewangan (CFO) akan disemak oleh BAC.
4. rangka kerJa Pengurusan risiko
a. Jawatankuasa Pengurusan risiko lembaga Pengarah (BrmC) • GBRMCtelahditubuhkandantanggungjawabnyaantaralainmerangkumipenyeliaankeberkesananpelaksanaan
rangka kerja Pengurusan Risiko Seluruh Perusahaan.
b. Pengurusan risiko • PenilaianRisikodiwujudkanbagimenyediakanprosesmengenalpastirisiko-risikopentingKumpulan,darisegi
pandang impak ke atas kedudukan kewangan dan reputasi Kumpulan. • Kaedah-kaedahpenilaianrisikoyangkonsistendanditerimatelahdiperkenalkanbagimenilaiKecairan,Kedudukan
Modal, Pengurusan Aset dan Liabiliti serta lain-lain ukuran berkaitan.
c. struktur urus tadbir risiko • StrukturUrusTadbirRisikodiselaraskanbagisemuaunit-unitperniagaandananak-anaksyarikatdalamKumpulan.
Penyelarasan ini dilaksanakan menerusi garis arus Rangka Kerja Risiko, Dasar-dasar dan Struktur Organisasi bagi menerap dan mempertingkatkan pengurusan risiko dan budaya risiko.
d. Dasar-dasar dan Prosedur urus tadbir risiko • Dasar-dasardanprosedurPengurusanRisikodisemakdandikemaskinisecarakerapbagimemastikankedua-
duanya kekal relevan kepada keperluan perniagaan terkini serta kehendak-kehendak kawal selia terkini/berkaitan.
e. Dasar Pelaporan salah laku • Dasarinimenyediakansaluranbagikakitanganuntukmelaporkankejadian-kejadiansalahamal,salahlakudan
ketidakpatuhan terhadap dasar-dasar Kumpulan dalam cara yang selamat dan tertutup.
f. Pengurusan risiko operasi • ProsesinidibantuolehRisikoKumpulan. • PenilaianKendiriKawalanRisiko(RCSA)telahdilaksanakanbagimembolehkanpihakpengurusanmengenalpasti
dan menilai risiko-risiko di bawah pengawasan dan kawalannya secara berterusan. • IniberperanansebagaititikpencetusbagimenentukanPenunjukRisikoUtama(KRI)yangakandigunapakaidan
bagi memantau pendedahan risiko operasi.
g. Sebarang kebimbangan dan perlanggaran pematuhan akan dibawa kepada perhatian Ketua Pegawai Eksekutif Kumpulan dan Jawatankuasa Pengurusan Risiko Lembaga Pengarah (BRMC). Perkara yang sama akan dibawa kepada perhatian Lembaga Pengarah.
h. Risiko operasi disemak dan dipantau oleh Pengurusan Risiko Kumpulan. Sebarang kepincangan akan dibawa kepada perhatian Jawatankuasa Pengurusan Risiko Operasi Kumpulan (gORMC), BRMC, BAC dan Jawatankuasa Syariah (SC) bagi hal-hal berkaitan Syariah. Latihan yang berkaitan dengan Risiko Operasi seperti Akta Pencegahan Pengubahan wang Haram (AMLA), Dasar Pelaporan Salah Laku, Pelan Kesinambungan Perniagaan dan sebagainya disediakan oleh Bahagian Pengurusan Risiko Kumpulan (gRMD).
5. rangka kerJa Pematuhan
a. Kumpulan AFFINBANK memiliki Rangka Kerja Pematuhan. Fungsi utama pematuhan adalah untuk membantu dalam khidmat nasihat, memantau dan mendidik unit-unit/entiti-entiti perniagaan dan sokongan agar bertindak menurut undang-undang, kawal selia dan garis panduan. Selaras dengan urus tadbir yang baik, Jabatan Pematuhan bebas membuat laporan kepada Lembaga Pengarah.
• RangkaKerjaPematuhan:Dasar-dasardanProsedur - Dasar-dasar dan prosedur disemak secara berkala atau apabila diperlukan bagi mencerminkan amalan-
amalan terkini dan kehendak-kehendak perundangan/kawal selia yang berkaitan.
Penyata Pengurusan Risiko & Kawalan Dalaman
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• Latihan - Latihan berjadual dijalankan secara kerap bagi mencipta kesedaran di kalangan kakitangan.
• MatriksPematuhan - Matriks pematuhan telah diwujudkan. Ia adalah satu dokumen yang merangkumi undang-undang, kawal selia
dan garis panduan berkaitan yang digunapakai untuk unit-unit/entiti-entiti perniagaan dan sokongan.
• PelanPematuhan - Jabatan Pematuhan telah merangka pelan pematuhan yang akan dibentangkan dan diluluskan oleh Lembaga
Pengarah.
• AktaPencegahanPengubahanWangHaram/PencegahanPembiayaanKeganasan(AML/CFT) - Fungsi pejabat AMLA Kumpulan iaitu satu unit dalam Bahagian Pengurusan Risiko Kumpulan bertugas
menguruskan dasar-dasar dan prosedur AML/CFT Kumpulan yang diluluskan oleh BRMC.
6. rangka kerJa urus taDBir syariah
a. Jawatankuasa Syariah bertanggungjawab menyelia semua hal-hal berkaitan Syariah dalam Kumpulan. Jawatankuasa Syariah, antara lainnya, memastikan bahawa peraturan-peraturan Syariah berkaitan perbankan Islam serta produk-produk dan perkhidmatan pasaran modal mematuhi asas-asas Syariah dan resolusi-resolusi oleh badan-badan Syariah yang berkaitan.
b. Jawatankuasa Syariah bertindak sebagai penasihat bagi hal-hal berkaitan Syariah kepada semua unit-unit perniagaan dan sokongan di dalam kumpulan dalam menjalankan aktiviti-aktiviti kewangan Islam mereka.
c. Rangka Kerja Urus Tadbir Syariah (SgF) adalah pelan pengurusan Syariah bagi keseluruhan syarikat yang terdiri daripada mekanisma urus tadbir Syariah yang akan dilaksanakan oleh bahagian-bahagian berkaitan di seluruh Kumpulan. Pelaksanaan SgF adalah selaras dengan kehendak-kehendak BNM yang dilaksanakan menerusi fungsi-fungsi berikut dalam anak-anak syarikat:
• PenyelidikanSyariah - Unit Penyelidikan Syariah terdiri daripada pegawai-pegawai Syariah berkelayakan yang menjalankan proses
pra-pelulusan produk, penyelidikan, pemeriksaan isu-isu untuk penyerahan dan tugas-tugas pentadbiran yang berkaitan dengan Jawatankuasa Syariah.
• SemakanSyariah - Semakan Pematuhan Syariah yang terdiri daripada pegawai-pegawai Syariah berkelayakan,
bertanggungjawab melaksanakan fungsi semakan pematuhan Syariah.
- Semakan Pematuhan Syariah telah mewujudkan Manual Dasar dan Prosedur yang membentangkan fungsi semakan pematuhan Syariah, merangkumi penilaian lazim ke atas pematuhan Syariah dalam aktiviti-aktiviti dan operasi anak-anak syarikat, termasuk memeriksa dan menilai tahap pematuhan Syariah, langkah-langkah pembetulan bagi menyelesaikan ketidakpatuhan serta mekasnisma kawalan bagi mengelak kejadian sama berulang.
• PengurusanRisikoSyariah - Risiko Ketidakpatuhan Syariah (SNC) dikenalpasti sebagai salah satu risiko penting di bawah perniagaan
perbankan Islam. Dalam hal ini, Kumpulan AFFINBANK telah menubuhkan satu pasukan Pengurusan Risiko Syariah bagi membantu pendekatan yang sistematik dan konsisten dalam menguruskan SNC.
• AuditSyariah - Bahagian Audit Dalaman Kumpulan memberi jaminan bebas ke atas kecekapan dan keberkesanan sistem
kawalan dalaman serta dasar-dasar dan prosedur yang dilaksanakan oleh pihak pengurusan yang mengurus tadbir produk-produk dan perkhidmatan Islam. Penemuan berkaitan produk-produk dan perkhidmatan Syariah dilaporkan kepada Jawatankuasa Syariah bagi setiap anak syarikat dan BAC.
Penyata Pengurusan Risiko & Kawalan Dalaman
LAPORAN TAHUNAN 2016
43
7. Proses Peningkatan
a. Saluran-saluran komunikasi dan prosedur telah diwujudkan bagi membolehkan laporan segera dibuat kepada Lembaga Pengarah dan tahap pengurusan yang sewajarnya mengenai sebarang kegagalan atau kelemahan kawalan yang ketara yang dikenalpasti berserta butiran tindakan pembetulan yang diambil.
b. Penjejak Tindakan Pembetulan berkenaan penyelesaian bagi isu-isu/penemuan yang dibangkitkan oleh audit luar, Audit Dalaman Kumpulan dan badan-badan kawal selia, jika ada, juga telah dibawa kepada perhatian Mesyuarat Jawatankuasa Pengurusan Kumpulan (MCM), BAC dan Lembaga Pengarah.
8. sumBer manusia
a. Kumpulan mengiktiraf bahawa pembangunan insan adalah mustahak dalam memastikan kakitangan mempunyai kecekapan yang sewajarnya dalam menjalankan tugasan mereka serta berkebolehan membuat penilaian yang terbaik dalam memenuhi tanggungjawab tersebut.
b. Dasar-dasar dan Prosedur Sumber Manusia (HRPP)
• HRPPdiwujudkandanmemberikejelasankepadaorganisasidalamsemuaaspekpengurusansumbermanusiadalam Kumpulan.
• Secaraberkala,HRPPdisemakbagimemastikandasar-dasardanprosedurkekalrelevandanbahawakawalanyang sewajarnya wujud bagi menangani risiko-risiko operasi. Sebarang perubahan, jika ada, disampaikan kepada semua kakitangan menerusi intranet.
c. Sumber Manusia mewujudkan pelbagai inisiatif dan program latihan bagi menangani kehendak modal insan, termasuk pengurusan pengetahuan.
d. Satu sistem penilaian berdasarkan prestasi bagi menilai dan memberi ganti rugi/ganjaran sewajarnya kepada kakitangan telah diwujudkan. Penilaian prestasi kakitangan dijalankan setiap tahun.
e. Proses pengambilan termasuk proses saringan diwujudkan.
f. Kemudahan-kemudahan e-pembelajaran dalam anak-anak syarikat memberikan kebebasan kepada kakitangan dari segi masa dan ruang untuk belajar dan mengemaskini pengetahuan mereka dan pada masa yang sama memenuhi kehendak organisasi yang memerlukan kakitangannya di setiap lokasi agar berkecekapan dalam bidang-bidang utama.
9. Dasar-Dasar/ProseDur termasuk Pemerkasaan Dan Pelulusan Dasar-Dasar BaDan Berkuasa
a. Dasar-dasar dan Prosedur-prosedur yang merangkumi semua fungsi telah dibangunkan di keseluruhan Kumpulan dan kelulusan telah diperolehi daripada jawatankuasa-jawatankuasa yang berkaitan serta Lembaga Pengarah. Dasar-dasar dan prosedur-prosedur ini dikemaskini secara kerap bagi merangkumkan perubahan-perubahan yang dibuat ke atas sistem, persekitaran kerja dan garis panduan yang dikeluarkan oleh badan-badan kawal selia.
b. Pemerkasaan dan Pelulusan Dasar-dasar Badan Berkuasa
Terdapat rangka kerja yang jelas dan pemerkasaan yang diluluskan oleh Lembaga Pengarah anak-anak syarikat utama untuk pemerolehan dan pelupusan hartanah, loji dan peralatan, penganugerahan tender, permohonan untuk perbelanjaan modal, hapus kira item-item operasi dan kredit, pelulusan perbelanjaan am termasuk sumbangan derma dan sebagainya.
10. rumusan
a. Penyata Pengurusan Risiko dan Kawalan Dalaman disemak oleh juruaudit luar sejajar dengan Panduan Amalan yang Dicadangkan (RPg) 5 (Disemak) oleh Institut Juruaudit Dalaman Malaysia (MIA).
b. Lembaga Pengarah menerusi BAC, BRMC dan Jawatankuasa Syariah telah menyemak keberkesanan Rangka Kerja Urus Tadbir Syariah (SgF), Rangka Kerja Kawalan Dalaman dan Pengurusan Risiko dan beroperasi secukupnya serta berkesan dalam semua aspek-aspek penting semasa tahun kewangan di bawah tinjauan berdasarkan kehendak-kehendak Syariah, Pengurusan Risiko dan sistem Kawalan Dalaman yang digunapakai oleh Kumpulan.
c. Dengan mengambil kira jaminan daripada pihak pengurusan dan input daripada penyedia-penyedia jaminan yang berkaitan, adalah dirumuskan bahawa Sistem Kawalan Dalaman dan Pengurusan Risiko Kumpulan beroperasi dengan secukupnya dan berkesan dalam melindungi pelaburan pemegang saham dan aset-aset Kumpulan AFFINBANK.
Penyata Pengurusan Risiko & Kawalan Dalaman
AFFIN BANK BERHAD (25046-T)
44
Lembaga Pengarah berbesar hati membentangkan Laporan Jawatankuasa Audit Lembaga Pengarah (BAC) bagi Tahun Kewangan berakhir 31 Disember 2016.
Jawatankuasa auDit lemBaga Pengarah
BAC terdiri daripada para Pengarah seperti berikut:
terma-terma ruJukan
1. oBJektif
Jawatankuasa Audit Lembaga Pengarah (BAC) ditubuhkan sebagai Jawatankuasa Lembaga Pengarah. Objektif utama BAC adalah untuk:
a. Mewujudkan rangka kerja dan menyelia fungsi audit Kumpulan AFFINBANK;
b. Membantu Lembaga Pengarah memenuhi tanggungjawab berkanun dan fidusiari dalam memastikan bahawa Urus Tadbir Korporat yang baik, sistem kawalan dalaman, kod tatalaku dan pematuhan kepada kehendak-kehendak kawal selia dan berkanun dikekalkan dalam Kumpulan AFFINBANK;
c. Melaksana dan menyokong fungsi Lembaga Pengarah dengan menegaskan kebebasan dan objektiviti Bahagian Audit Dalaman Kumpulan (gIA); dan
d. Memastikan bahawa fungsi-fungsi Audit Dalaman dan Luar dijalankan dengan sebaik-baiknya dan cadangan-cadangan audit dilaksanakan dengan berkesan.
2. komPosisi Dan Perlantikan
a. BAC harus memiliki sekurang-kurangnya tiga (3) ahli yang mana kesemuanya adalah Pengarah Bukan Eksekutif dengan majoriti daripada mereka adalah Pengarah Bebas. Pengerusi Jawatankuasa ini adalah seorang Pengarah Bebas Bukan Eksekutif. Tiada Pengarah gantian akan dilantik oleh BAC.
b. Sekurang-kurangnya satu (1) ahli Jawatankuasa ini adalah seorang akauntan berkelayakan.
c. Ahli-ahli BAC dan Pengerusinya harus dilantik oleh Lembaga Pengarah berdasarkan cadangan Jawatankuasa Pencalonan.
d. Lembaga Pengarah harus menyemak Terma-terma Rujukan dan prestasi BAC serta setiap ahlinya sekurang-kurangnya sekali setiap tiga (3) tahun bagi menentukan sama ada BAC telah melaksanakan tanggungjawabnya menurut Terma-terma Rujukannya.
Laporan Jawatankuasa Audit Lembaga Pengarah
yBhg. tan sri Dato’ sri abdul aziz abdul rahmanPengerusi/Pengarah Bebas Bukan Eksekutif (Ditugaskan semula sebagai Pengarah Bukan Bebas Bukan Eksekutif dan berhenti daripada jawatan Pengerusi berkuatkuasa 25 Oktober 2016)
yBhg. tan sri Dato’ seri mohamed JawharAhli/Pengarah Bukan Bebas Bukan Eksekutif
yBhg. tan sri mohd ghazali mohd yusoffAhli/Pengarah Bebas Bukan Eksekutif (Pengerusi berkuatkuasa 25 Oktober 2016)
Prof. madya Dr. said BouheraouaAhli/Pengarah Bebas Bukan Eksekutif
LAPORAN TAHUNAN 2016
45
e. Jika seorang ahli Jawatankuasa ini meletak jawatan atau untuk sebarang sebab berhenti daripada menjadi ahli dalam BAC yang mana menyebabkan ketidakpatuhan kepada syarat-syaratnya, dalam tempoh tiga (3) bulan daripada peristiwa tersebut, ahli baharu bagi menggantikan bilangan terbabit harus dilantik.
f. BAC tidak mempunyai kuasa eksekutif.
3. kuorum
Korum mesyuarat bagi Jawatankuasa ini adalah dua pertiga (2/3) daripada bilangan ahli Jawatankuasa di mana majoriti yang hadir adalah Pengarah Bebas Bukan Eksekutif. Jika Pengerusi tidak dapat menghadiri mana-mana mesyuarat, mana-mana ahli Bebas Bukan Eksekutif yang hadir akan bertindak sebagai Pengerusi. Kesemua resolusi Jawatankuasa akan digunapakai berdasarkan undian majoriti yang ringkas, di mana setiap ahli mempunyai satu (1) undi. Dalam kes di mana terdapat kesetaraan undi, Pengerusi akan membuat undian kedua atau undian penentu.
4. kehaDiran mesyuarat
a. Notis mesyuarat akan diberikan kepada ahli-ahli BAC sekurang-kurangnya tujuh (7) hari sebelum mesyuarat berlangsung. Agenda dan kertas-kertas BAC akan diedarkan sekurang-kurangnya lima (5) hari sebelum setiap mesyuarat berlangsung.
b. Ketua Audit Dalaman Kumpulan dijemput menghadiri semua mesyuarat Jawatankuasa Audit Lembaga Pengarah.
c. Jawatankuasa ini boleh menjemput ahli-ahli Pengurusan, Juruaudit Luar atau mana-mana kakitangan yang berkenaan untuk mengambil bahagian dalam mesyuarat BAC di mana wajar bagi melaksanakan tanggungjawab Jawatankuasa.
d. Kesemua Minit Mesyuarat BAC yang asli adalah dalam simpanan Setiausaha Syarikat dan akan ditandatangani oleh Pengerusi mesyuarat yang diadakan atau oleh Pengerusi mesyuarat yang seterusnya. Minit-minit yang telah ditandatangani adalah bukti konklusif tanpa memerlukan bukti-bukti lanjut mengenai perkara-perkara yang tertera. Minit-minit bagi setiap mesyuarat akan diedarkan kepada ahli-ahli BAC dan semua ahli-ahli lain dalam Lembaga Pengarah.
5. kekeraPan mesyuarat
a. BAC akan bermesyuarat sekurang-kurangnya empat (4) kali dalam setiap tahun kewangan dengan objektif untuk menyemak laporan audit dalaman dan laporan kewangan Kumpulan AFFINBANK. BAC melengkapi perkara ini menerusi mesyuarat-mesyuarat yang kerap dengan Pengurusan Kanan serta Juruaudit Dalaman dan Luar bagi menyemak keadaan keseluruhan urus tadbir dan kawalan dalaman Kumpulan AFFINBANK. Bagi memastikan bahawa isu-isu kritikal ditekankan kepada semua ahli Lembaga Pengarah mengikut ketetapan masa, di mana wajar, mesyuarat-mesyuarat BAC akan diadakan sebelum mesyuarat-mesyuarat Lembaga Pengarah. BAC, menerusi Pengerusinya, akan memberi laporan kepada Lembaga Pengarah selepas setiap mesyuarat di mana isu-isu tersebut akan dibincangkan dengan lebih lanjut, jika perlu.
b. Selain bilangan minimum empat (4) mesyuarat BAC dalam setahun, mesyuarat-mesyuarat tambahan akan dijadualkan apabila dianggap perlu oleh Pengerusi BAC atau majoriti ahli-ahli Jawatankuasa ini.
6. kuasa
BAC diberikan kuasa oleh Lembaga Pengarah untuk:
a. Menyiasat sebarang aktiviti atau perkara dalam rangkuman Terma-terma Rujukannya.
b. Mendapatkan khidmat nasihat perundangan luar atau dari badan-badan profesional bebas lain atau sumber-sumber lain yang perlu bagi melaksanakan tanggungjawabnya;
c. Memiliki Akses penuh dan tanpa had kepada sebarang maklumat berkaitan Kumpulan AFFINBANK;
d. Mengekalkan saluran komunikasi langsung dengan Juruaudit Luar, Juruaudit Dalaman dan semua kakitangan Kumpulan AFFINBANK;
e. Mengadakan mesyuarat dengan Juruaudit-juruaudit Luar dan Dalaman tanpa kehadiran ahli-ahli Jawatankuasa Pengurusan sekurang-kurangnya dua kali setahun; dan
f. Melaporkan kepada Badan-badan Kawal Selia mengenai perkara-perkara yang telah dilaporkannya kepada Lembaga Pengarah tetapi belum ditangani dengan memuaskan yang mana menyebabkan perlanggaran kepada peraturan-peraturan kawal selia.
Laporan Jawatankuasa Audit Lembaga Pengarah
AFFIN BANK BERHAD (25046-T)
46
7. fungsi Dan tugas
Fungsi dan tugas BAC adalah merangkumi, tetapi tidak terhad kepada yang berikut:
a. Menyemak Keputusan Kewangan Suku Tahunan dan Penyata Kewangan Akhir Tahun sebelum mendapatkan kelulusan Lembaga Pengarah dengan memberi tumpuan ke atas perkara-perkara berikut:
• PerubahanataupelaksanaandasarPerakaunanpenting;
• Peristiwa-peristiwapentingdanluarbiasaatausebarangandaianusahaberterusan;
• Pelarasanpentingyangtimbuldaripadaaudit;dan
• PematuhankepadapiawaianPerakaunan,kehendak-kehendakpendedahandanlain-lainkehendakperundangan.
b. Untuk bertindak mengikut permintaan Lembaga Pengarah untuk menyiasat dan melaporkan sebarang isu kebimbangan seperti yang diutarakan kepada pihak Pengurusan Kumpulan.
c. Untuk mendapatkan khidmat nasihat dari badan-badan professional luar dan menjemput pihak luar dengan pengalaman yang berkaitan untuk menghadiri mesyuarat, tertakluk kepada kelulusan badan kawal selia yang berkaitan, di mana perlu.
d. Untuk mencadangkan kepada Lembaga Pengarah mengenai perlantikan Juruaudit Luar dan yuran audit mereka.
e. Untuk menyemak bersama Juruaudit Luar mengenai skop rancangan audit, sistem kawalan dalaman, laporan audit (termasuk surat Pengurusan dan maklumbalas Pengurusan), bantuan yang diberikan oleh Pengurusan dan sebarang penemuan atau tindakan yang diambil.
f. Untuk bermesyuarat dengan Juruaudit Luar tanpa kehadiran ahli-ahli pengurusan sekurang-kurangnya dua kali setahun.
g. Untuk menyemak cadangan bagi khidmat bukan audit yang diberikan oleh Juruaudit Luar atau pihak ketiga. Jika Juruaudit Luar terlibat, BAC bertanggungjawab memastikan bahawa penglibatan tersebut tidak menjejaskan kebebasan Juruaudit Luar dalam peranan mereka sebagai Juruaudit Berkanun bagi Kumpulan AFFINBANK.
h. Untuk menyemak kecukupan dan keberkesanan persekitaran kawalan Kumpulan AFFINBANK.
i. Untuk mempertimbangkan penemuan-penemuan penting hasil siasatan dalaman serta maklumbalas Pengurusan.
j. Untuk menyemak sebarang penemuan hasil pemeriksaan badan-badan kawal selia serta maklumbalas Pengurusan.
k. Untuk menyemak dasar-dasar dan amalan-amalan sedia ada dalam Kumpulan AFFINBANK bagi mengawal selia dan menggaris arus perkara yang sama untuk memastikan keseragaman.
l. Untuk memastikan Akaun-akaun disediakan mengikut masa dan ketepatan yang sepatutnya dengan semakan yang kerap ke atas kecukupan peruntukan untuk menangani hutang lapuk dan ragu serta luar jangka.
m. Untuk menyemak sebarang urusniaga pihak berkaitan yang mungkin timbul dari dalam Kumpulan AFFINBANK.
n. Untuk menyemak kecukupan skop, fungsi-fungsi, kecekapan, sumber-sumber dan prestasi Bahagian Audit Dalaman Kumpulan serta kuasa yang sewajarnya bagi melaksanakan tugasnya. Semakan ini mungkin merangkumi rancangan kerja audit, program-program audit dalaman, keputusan bagi kerja yang telah disiapkan serta pelaksanaan Pengurusan bagi tindakan-tindakan yang telah dipersetujui seperti yang dicadangkan oleh Ketua Audit Dalaman Kumpulan (gIA). Di mana wajar, Jawatankuasa boleh mengarahkan Pengurusan untuk memperbaiki dan mempertingkatkan sistem kawalan dalaman dan prosedur-prosedur berdasarkan cadangan dan saranan Juruaudit Dalaman Kumpulan untuk penambahbaikan.
Laporan Jawatankuasa Audit Lembaga Pengarah
LAPORAN TAHUNAN 2016
47
8. mesyuarat Jawatankuasa auDit lemBaga Pengarah yang DiaDakan sePanJang tahun kewangan Berakhir 31 DisemBer 2016
Semasa Tahun Kewangan Berakhir 31 Disember 2016, sejumlah sembilan (9) mesyuarat BAC telah diadakan. Ahli-ahli BAC dan butiran kehadiran setiap ahli pada mesyuarat-mesyuarat tersebut adalah seperti berikut:
nama ahli Jawatankuasa kehadiran
YBhg. Tan Sri Mohd ghazali Mohd YusoffAhli/Pengarah Bebas Bukan Eksekutif(Dilantik sebagai Pengerusi berkuatkuasa 25 Oktober 2016)
9/9
YBhg. Tan Sri Dato’ Sri Abdul Aziz Abdul RahmanAhli/Pengarah Bebas Bukan Eksekutif(Ditugaskan semula sebagai Pengarah Bukan Bebas Bukan Eksekutif dan berhenti daripada jawatan Pengerusi berkuatkuasa 25 Oktober 2016)
9/9
YBhg. Tan Sri Dato’ Seri Mohamed JawharAhli/Pengarah Bebas Bukan Eksekutif
9/9
Prof. Madya Dr. Said BouheraouaAhli/Pengarah Bebas Bukan Eksekutif
7/9
BAC mematuhi prinsip-prinsip dan amalan-amalan terbaik yang dinyatakan dalam Kod Urus Tadbir Korporat Malaysia. Ahli-ahli BAC terdiri daripada individu-individu dengan pelbagai kemahiran, pengetahuan dan kaliber dalam menyediakan pemerhatian yang bebas, objektif dan berkesan.
Agenda mesyuarat BAC, kertas-kertas BAC dan laporan-laporan audit yang berkaitan diedarkan kepada ahli-ahli BAC lima (5) hari sebelum tarikh mesyuarat.
Juruaudit Luar Kumpulan AFFINBANK telah menghadiri tiga (3) mesyuarat BAC semasa tempoh dalam tinjauan. Terdapat perbincangan di antara BAC dan Juruaudit Luar mengenai isu-isu penting audit, perubahan dalam pelaksanaan dasar-dasar penting Perakaunan, pematuhan kepada piawaian Perakaunan dan lain-lain kehendak perundangan termasuk kehendak kawal selia dan isu-isu perniagaan yang ditekankan oleh mereka bagi Tahun Kewangan Berakhir 31 Disember 2016. BAC juga telah menyemak Pelan Audit Juruaudit Luar bagi Tahun Kewangan Berakhir 31 Disember 2016.
BAC telah mengadakan dua (2) mesyuarat tertutup bersama Juruaudit Luar tanpa kehadiran Pengurusan dan Juruaudit Dalaman pada 2016. Selain itu, Juruaudit Luar telah dijemput untuk menghadiri mesyuarat agung tahunan bagi menjawab pertanyaan para pemegang saham mengenai isu-isu berkaitan audit. BAC juga diberi Akses langsung dan tanpa had kepada Juruaudit Dalaman dan telah mengadakan perbincangan ad-hoc bersama Juruaudit Dalaman tanpa kehadiran Pengurusan.
Oleh kerana Lembaga Pengarah bertanggungjawab penuh ke atas pelaporan kewangan dan pengurusan keseluruhan Kumpulan AFFINBANK, Pengerusi Jawatankuasa Audit Lembaga Pengarah secara konsisten telah memberi taklimat kepada Lembaga Pengarah mengenai isu-isu yang dibincangkan pada mesyuarat-mesyuarat BAC manakala minit-minit mesyuarat BAC dibentangkan kepada Lembaga Pengarah untuk makluman dan tindakan Lembaga Pengarah di mana wajar.
Ahli-ahli BAC telah menghadiri beberapa latihan sepanjang Tahun Kewangan Berakhir 2016 untuk peningkatan berterusan.
9. rumusan aktiviti Jawatankuasa auDit lemBaga Pengarah
Jawatankuasa Audit Lembaga Pengarah telah menjalankan aktiviti-aktiviti berikut dalam pelaksanaan tugas dan tanggungjawabnya sepanjang Tahun Kewangan Berakhir 31 Disember 2016:
9.1 auDit luar
a. Menyemak Pelan Audit 2016 bagi memastikan skop kerja merangkumi secukupnya aktiviti-aktiviti Kumpulan AFFINBANK;
b. Menyemak penemuan-penemuan penting audit, perakaunan, percukaian dan lain-lain perkara yang dibangkitkan oleh juruaudit luar; dan
c. Menyemak dan menilai prestasi, objektiviti dan kebebasan Audit Luar sepanjang tahun tinjauan sebelum mencadangkan perlantikan semula mereka kepada Lembaga Pengarah.
Laporan Jawatankuasa Audit Lembaga Pengarah
AFFIN BANK BERHAD (25046-T)
48
9.2 khiDmat Bukan auDit
Menyemak khidmat bukan audit yang diberikan oleh Juruaudit Luar atau pihak ketiga.
9.3 auDit Dalaman kumPulan
a. Menyemak dan meluluskan Pelan Tahunan Audit Dalaman Kumpulan (dicadangkan oleh Ketua Juruaudit Dalaman Kumpulan) dan Belanjawan Latihan bagi Tahun 2015 dalam memastikan bahawa skop yang mencukupi dan liputan yang komprehensif ke atas aktiviti-aktiviti audit dan aspek-aspek risiko yang kritikal telah dikenalpasti dan dirangkumi secukupnya;
b. Menyemak dan menilai kecukupan sumber-sumber dan kecekapan kakitangan Bahagian Audit Dalaman Kumpulan (gIAD) dalam melaksanakan pelan serta program-program audit yang digunakan dalam pelaksanaan tugas Juruaudit Dalaman bagi memastikan prestasi gIAD yang memuaskan;
c. Menyemak isu-isu kawalan dalaman yang dikenalpasti oleh gIAD, Juruaudit Luar dan Juruaudit Kawal Selia serta maklumbalas Pengurusan terhadap cadangan-cadangan audit dan pelaksanaan pelan-pelan tindakan yang dipersetujui dengan memberi perhatian kepada perkara-perkara berikut:
• Persekitarankawalan(integriti,nilai-nilaietikadankecekapanparapegawai)
• Aktiviti-aktivitikawalan(dasar-dasardanprosedur)
• Penilaianrisiko(mengenalpastidanmenilairisiko-risikoberkaitanbersertalangkah-langkahpencegahannya);dan
• Memantaustatustindakan-tindakanpembetulanyangdiambilolehPengurusanbagimembetulkansebarangkekurangan yang dikenalpasti oleh Audit Dalaman serta memastikan bahawa semua isu-isu telah diselesaikan secukupnya mengikut masa yang ditetapkan;
d. Menyemak laporan status aktiviti-aktiviti Audit Dalaman Kumpulan bagi Tahun Kewangan berakhir 31 Disember 2016 bagi memastikan semua aktiviti-aktiviti yang dirancang telah dilaksanakan dengan sempurna;
e. Menyemak rumusan penemuan audit oleh Juruaudit Dalaman entiti-entiti operasi yang utama bagi memastikan penemuan audit penting mereka terutamanya yang berkaitan penyiasatan, penipuan dan ketidakpatuhan terhadap kehendak-kehendak kawal selia dan berkanun telah ditangani dengan sewajarnya; dan
f. Menyemak Terma-terma Rujukan Jawatankuasa Audit Lembaga Pengarah dan Manual Audit Dalaman Kumpulan.
9.4 fungsi auDit Dalaman kumPulan
a. Audit Dalaman Kumpulan dipandu oleh Piagam Audit Dalaman Kumpulannya. Peranan utamanya adalah untuk membantu Jawatankuasa Audit Kumpulan dalam menjalankan tugas-tugas dan tanggungjawabnya dengan menyemak dan melaporkan secara bebas kecukupan dan integriti pengurusan risiko, kawalan dalaman dan proses-proses urus tadbir Kumpulan;
b. Audit Dalaman Kumpulan menggunapakai satu pendekatan berasaskan risiko dalam merancang dan melaksanakan audit, iaitu konsisten dengan rangka kerja Kumpulan dalam merekacipta, melaksana dan memantau sistem kawalan dalamannya;
c. Juruaudit dalaman kumpulan memantau secara dekat pelaksanaan cadangan-cadangan audit bagi mendapatkan jaminan bahawa semua kebimbangan berkaitan risiko dan kawalan telah ditangani dengan sempurna. Laporan audit dibentangkan kepada pihak pengurusan dan Jawatankuasa Audit Kumpulan;
d. Audit Dalaman Kumpulan bekerja rapat dengan juruaudit luar bagi memastikan isu-isu penting ditangani dengan sempurna dan diselesaikan mengikut ketetapan masa; dan
e. Jumlah kos Audit Dalaman Kumpulan bagi 2016 adalah RM4.3 juta.
Laporan Jawatankuasa Audit Lembaga Pengarah
LAPORAN TAHUNAN 2016
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9.5 kePutusan kewangan
a. Menyemak bersama Pengurusan kanan keputusan kewangan tidak diaudit bagi suku tahun dan separuh tahun sebelum mencadangkannya kepada Lembaga Pengarah untuk kelulusan.
b. Menyemak bersama Pengurusan kanan dan Juruaudit Luar penyata kewangan tahunan Syarikat yang diaudit sebelum mencadangkannya kepada Lembaga Pengarah untuk kelulusan. Semakan mereka adalah tertumpu kepada perkara-perkara yang dinyatakan dalam Kehendak-kehendak, Akta-akta dan Piawaian-piawaian berikut:
• PeruntukanAktaSyarikat;
• AktaKhidmatKewangandanAktaKhidmatKewanganIslam;
• PiawaianPerakaunanyangberkaitandandiluluskandiMalaysia;dan
• Lain-lainkehendak-kehendakperundangandankawalseliayangberkaitan.
9.6 urusniaga Pihak Berkaitan
Menyemak urusniaga pihak berkaitan dan urusniaga pihak berkaitan yang berulang serta kesesuaian urusniaga-urusniaga tersebut bagi mengelak konflik kepentingan atau potensinya berlaku. Ini juga bagi memastikan bahawa keputusan dibuat untuk kebajikan syarikat dan pemegang sahamnya.
9.7 lain-lain
Menyemak Penyata Kawalan Dalaman dan Laporan Jawatankuasa Audit Lembaga Pengarah untuk rangkuman Laporan Tahunan 2016 sebelum mencadangkannya kepada Lembaga Pengarah untuk kelulusan.
Laporan Jawatankuasa Audit Lembaga Pengarah
AFFIN BANK BERHAD (25046-T)
50
Rangkaian Cawangan
wilayah Persekutuan
1. Bangsar No. 4 & 6, Jalan Telawi 3, Bangsar Baru, 59100 Kuala Lumpur. Tel : 03-2283 5025 Faks : 03-2283 5028
2. Bangunan getah asli Tingkat Bawah, 148, Jalan Ampang, 50450 Kuala Lumpur. Tel : 03-2162 8770 Faks : 03-2162 8587
3. Batu Cantonment No. 840 & 842, Batu 4 3/4, Jalan Ipoh, 51200 Kuala Lumpur. Tel : 03-6258 7370 Faks : 03-6251 8214
4. Central ground & Mezzanine Floor, 80, Menara Affin, Jalan Raja Chulan, P.O.Box 12744, 50788 Kuala Lumpur. Tel : 03-2055 2222 Faks : 03-2070 7592
5. Jalan Bunus 133, Jalan Bunus, Off Jalan Masjid India, 50100 Kuala Lumpur. Tel : 03-2693 4686 Faks : 03-2691 3207
6. Jalan ipoh 468-11 & 468-11B, Batu 3, Jalan Ipoh, 51200 Kuala Lumpur. Tel : 03-4042 5554 Faks : 03-4042 4912
7. ltat ground Floor, Bangunan LTAT, Jalan Bukit Bintang, 55100 Kuala Lumpur. Tel : 03-2142 6311 Faks : 03-2148 0586
8. selayang 81-85, Jalan 2/3A, Pusat Bandar Utara, KM 12, Jalan Ipoh, 68100 Batu Caves, Kuala Lumpur. Tel : 03-6137 2053 Faks : 03-6138 7122
9. seri Petaling 10-12, Jalan Raden Tengah, Bandar Baru Seri Petaling, 57000 Kuala Lumpur. Tel : 03-9058 5600 Faks : 03-9058 8513
10. setapak 159 & 161, Jalan genting Kelang, P.O.Box 202, 53300 Setapak, Kuala Lumpur. Tel : 03-4023 0455 Faks : 03-4021 3921
11. taman maluri 250 & 252, Jalan Mahkota, Taman Maluri, 55100 Kuala Lumpur. Tel : 03-9282 7250 Faks : 03-9283 4380
12. taman midah 38 & 40, Jalan Midah 1, Taman Midah, Cheras, 56000 Kuala Lumpur. Tel : 03-9130 0366 Faks : 03-9131 7024
13. taman tun Dr. ismail 47 & 49, Jalan Tun Mohd Fuad 3, Taman Tun Dr. Ismail, 60000 Kuala Lumpur. Tel : 03-7727 9080 Faks : 03-7727 9543
14. wangsa maju No. 2 & 4, Jalan 1/27F, Kuala Lumpur Sub-Urban Centre, wangsa Maju, 53300 Kuala Lumpur. Tel : 03-4143 2814 Faks : 03-4143 3095
15. wisma Pertahanan g.05, Tingkat Bawah, wisma Pertahanan, Kementerian Pertahanan Malaysia, Jalan Padang Tembak, 50634 Kuala Lumpur. Tel : 03-2698 7912 Faks : 03-2698 6071
wilayah Persekutuan PutraJaya
1. Putrajaya Bangunan Jabatan Akauntan
Negara, Kompleks Kementerian Kewangan, No. 1, Persiaran Perdana, Presint 2, 62594 Putrajaya, wilayah Persekutuan. Tel : 03-8888 3814 Faks : 03-8889 2082
wilayah Persekutuan laBuan (offshore)
1. labuan offshore Unit 3 (J), Level 3, Main Office Tower, Financial Park Labuan, Jalan Merdeka, 87000 Federal Territory Labuan. Tel : 087-411 931 Faks : 087-411 973
selangor
1. ampang Jaya No. 11 & 11A, Jalan Mamanda 7/1, Ampang Point, 68000 Ampang, Selangor. Tel : 03-4257 6802 Faks : 03-4257 8636
2. ampang new village No. 21g & 23g, Jalan wawasan 2/2, Bandar Baru Ampang, 68000 Ampang, Selangor. Tel : 03-4296 2311 Faks : 03-4296 2206
3. ara Damansara Unit B-g-07 & B-g-08 Block B, No. 2 Jalan PJU 1A/7A, Ara Damansara, 47301 Petaling Jaya, Selangor. Tel : 03-7847 3177 Faks : 03-7847 2677
LAPORAN TAHUNAN 2016
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4. Bandar Bukit tinggi No. 77 & 79, Jalan Batu Nilam 5, Bandar Bukit Tinggi, 41200 Klang, Selangor. Tel : 03-3323 2822 Faks : 03-3323 2858
5. Cyberjaya P1-13, Shaftsbury Square, Lot No. 2350, Cyber 6, Persiaran Multimedia, 63000 Cyberjaya, Selangor. Tel : 03-8318 1944 Faks : 03-8318 1934
6. Denai alam No. 1, ground Floor, Jalan Elektron U16/J, Seksyen U16, Denai Alam, 40160 Shah Alam, Selangor. Tel : 03-7831 8895 Faks : 03-7831 8859
7. Jalan meru, klang No. 38 & 40, Pelangi Avenue, Jalan Kelicap 42A/KU1, Klang Bandar Di Raja, 41050 Klang, Selangor. Tel : 03-3341 5237 Faks : 03-3341 5427
8. kajang 2 & 3, Jalan Saga, Taman Sri Saga, Off Jalan Sg. Chua, 43000 Kajang, Selangor. Tel : 03-8737 7435 Faks : 03-8737 7433
9. kepong 6, Jalan 54, Desa Jaya, 52100 Kepong, Selangor. Tel : 03-6276 4942 Faks : 03-6276 6375
10. kinrara No. 1, Jalan TK1/11A, Taman Kinrara, Section 1, Batu 7 1/2, Jalan Puchong, 47100 Puchong, Selangor. Tel : 03-8075 5682 Faks : 03-8075 8159
11. klang utara No. 29 & 31, Jalan Tiara 3, Bandar Baru Klang, 41150 Klang, Selangor. Tel : 03-3342 1585 Faks : 03-3342 1719
12. shah alam Vista Alam, F-g-38 & 39, Jalan Ikhtisas 14/1, Off Persiaran Damai, Seksyen 14, 40000 Shah Alam, Selangor. Tel : 03-5524 7780 Faks : 03-5524 7380
13. kota Damansara Nos. B-g-19, 20 & 21 (gF), Dataran Cascades, Jalan PJU 5/1, Kota Damansara PJU 5, 47810 Petaling Jaya, Selangor. Tel : 03-7610 0890 Faks : 03-7610 0889
14. kota kemuning No. 15-1 & 17-1 (gF), No. 8 Jalan Anggerik Vanilla, BE 31/BE Kota Kemuning, Seksyen 31, 40460 Shah Alam, Selangor. Tel : 03-5120 1811 Faks : 03-5120 1588
15. kota warisan No. g-3, ground Floor, Jalan warisan 1, KIP Sentral Kota warisan, 43900 Sepang, Selangor Darul Ehsan. Tel : 03-8705 4899 Faks : 03-8705 1141
16. PJ state No. 38 & 40, Jalan Yong Shook Lin, 46050 Petaling Jaya, Selangor. Tel : 03-7955 0032 Faks : 03-7954 0012
17. Port klang No. 1, Jalan Berangan, 42000 Port Klang, Selangor. Tel : 03-3168 8366 Faks : 03-3167 6432
18. Puchong J-03-g, Block J, Setiawalk, Persiaran wawasan, Pusat Bandar Puchong, 47160 Puchong, Selangor. Tel : 03-5882 2880 Faks : 03-5882 2881
19. rawang No. 33g & 35g, Jln 1B, Fortune Avenue, 48000 Rawang, Selangor. Tel : 03-6091 3322 Faks : 03-6091 3344
20. sea Park 20-22, Jalan 21/12, Sea Park, 46300 Petaling Jaya, Selangor. Tel : 03-7875 6514 Faks : 03-7876 6020
21. seri kembangan No. 36, Jalan PSK 3, Pusat Perdagangan Seri
Kembangan, 43300 Seri Kembangan, Selangor. Tel : 03-8945 6429 Faks : 03-8945 6442 03-8943 5306
22. subang Jaya 7 & 9, Jalan SS 15/8A, 47500 Subang Jaya, Selangor. Tel : 03-5634 8045 Faks : 03-5634 8040
23. taman Demang No. 47, Jalan DD3A/1, BASCO Business Centre, Taman Dato’ Demang, 43300 Seri Kembangan, Selangor. Tel : 03-8959 2588 Faks : 03-8958 5288
24. the Curve Lot K-g32A-D & g32, ground Floor, The Curve Shopping Complex, Jalan PJU 7/8, Mutiara Damansara, 47800 Petaling Jaya, Selangor. Tel : 03-7726 7258 Faks : 03-7727 8912
25. uitm Universiti Teknologi MARA, Tingkat 2, Menara Sultan Abdul Aziz Shah, 40450 Shah Alam, Selangor. Tel : 03-5519 2377 Faks : 03-5510 5580
26. usJ taipan 8A & 8B, Jalan USJ 10/1J, 47610 UEP Subang Jaya, Petaling Jaya, Selangor. Tel : 03-8023 7271 Faks : 03-8023 9161
Rangkaian Cawangan
AFFIN BANK BERHAD (25046-T)
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Rangkaian Cawangan
negeri semBilan
1. gemas No. 1 & 2, ground Floor, Laman Niaga Pernama, Kem Syed Sirajuddin, 73400 gemas, Negeri Sembilan. Tel : 07-948 3622 Faks : 07-948 5022
2. nilai 5733 & 5734, Jalan TS 2/1, Taman Semarak Phase II, 71800 Nilai, Negeri Sembilan. Tel : 06-799 4114 Faks : 06-799 5115
3. Port Dickson 3 & 4, Jalan Mahajaya, P.D. Centre Point, 71000 Port Dickson, Negeri Sembilan. Tel : 06-647 3950 Faks : 06-647 4776
4. seremban No. 175, Jalan Dato’ Bandar Tunggal, 70000 Seremban, Negeri Sembilan. Tel : 06-762 9651 Faks : 06-763 6125
melaka
1. Bukit Baru No. 7 & 8, Jalan DR1, Delima Point, Taman Delima Raya, 75150 Melaka. Tel : 06-232 1386 Faks : 06-232 1579
2. melaka raya 200 & 201, Taman Melaka Raya, Off Jalan Parameswara, 75000 Melaka. Tel : 06-283 5500 Faks : 06-284 6618
Johor
1. ayer hitam No. 765, Jalan Batu Pahat, 86100 Ayer Hitam, Johor. Tel : 07-758 1100 Faks : 07-758 1001
2. Batu Pahat No. 3 & 4, Jalan Merah, Taman Bukit Pasir, 83000 Batu Pahat, Johor. Te : 07-433 4210 Faks : 07-433 3246
3. Danga Bay No. 17 & 18 Blok 6, Danga Bay, Jalan Skudai, 80200 Johor Bahru, Johor. Tel : 07-234 3842 Faks : 07-234 8852
4. Johor Bahru No. 24 & 25, Jalan Kebun Teh 1, Kebun Teh Commercial City, 80250 Johor Bahru, Johor. Tel : 07-221 2403 Faks : 07-221 2462
5. Johor Jaya 130 & 132, Jalan Ros Merah 2/17, Taman Johor Jaya, 81100 Johor Bahru, Johor. Tel : 07-351 8602 Faks : 07-351 4122
6. kluang 503, Jalan Mersing, 86000 Kluang, Johor. Tel : 07-772 4736 Faks : 07-772 4486
7. kulai 199 & 200, Jalan Kenanga 29/4, Indahpura, 81000 Kulai, Johor. Tel : 07-660 8495 Faks : 07-660 8363
8. muar No. 30A & 30A-1, Jalan Arab, 84000 Muar, Johor. Tel : 06-953 2384 Faks : 06-953 3489
9. mutiara rini No. 28 & 30, Jalan Utama 45, Taman Mutiara Rini, 81300, Skudai, Johor. Tel : 07-557 0900 Faks : 07-557 1244
10. Permas Jaya 23 & 25, Jalan Permas 10/2, Bandar Baru Permas Jaya, 81750 Johor Bahru, Johor. Tel : 07-386 3703 Faks : 07-386 5061
11. segamat No. 1, g-Floor, Jalan Nagasari 23, Bandar Segamat Baru, 85000 Segamat, Johor. Tel : 07-943 1378 Faks : 07-943 1373
12. tampoi No. 49 & 51, Jalan Sri Perkasa 2/1, Taman Tampoi Utama, 81200 Tampoi, Johor Bahru, Johor. Tel : 07-241 4946 Faks : 07-241 4953
LAPORAN TAHUNAN 2016
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Perak
1. ipoh No. 1 & 3, ground & First Floor, Persiaran greentown 9, greentown Business Centre, 30450 Ipoh, Perak. Tel : 05-255 0980 Faks : 05-255 0976
2. ipoh garden No. 27A-27A1, Jalan Sultan Azlan Shah Utara, 31400 Ipoh, Perak. Tel : 05-549 7277 Faks : 05-549 7299
3. lumut ground Floor, Kompleks Mutiara Armada, Jalan Nakhoda, Pengkalan TLDM, 32100 Lumut, Perak. Tel : 05-683 5051 Faks : 05-683 5579
4. sitiawan No. 11 & 12, Taman Sitiawan 1, Jalan Lumut, 32000 Sitiawan, Perak. Tel : 05-692 8401 Faks : 05-691 7339
5. taiping No. 40 & 42, Jalan Tupai, 34000 Taiping, Perak. Tel : 05-806 6816 Faks : 05-808 0432
6. teluk intan 11, Medan Sri Intan, Jalan Sekolah, 36000 Teluk Intan, Perak. Tel : 05-621 0130 Faks : 05-621 0128
Pulau Pinang
1. Bayan Baru 124 & 126, Jalan Mayang Pasir, Taman Sri Tunas, 11950 Bayan Baru, Pulau Pinang. Tel : 04-644 7593 Faks : 04-645 2709
2. Butterworth 55-57, Jalan Selat, Taman Selat, P.O.Box 165, Off Jalan Bagan Luar, 12000 Butterworth, Pulau Pinang. Tel : 04-333 1372 Faks : 04-332 3299
3. fettes Park No. 98-g-31 & 32, Jalan Fettes, Prima Tanjung Business Centre, Tanjung Tokong, 11200 Pulau Pinang. Tel : 04-899 9069 Faks : 04-899 0767
4. Jalan macalister No. 104C, 104D & 104E, Jalan Macalister, 10400 Pulau Pinang. Tel : 04-229 1495 Faks : 04-226 1530
5. kepala Batas Lot 1317 & 1318, Lorong Malinja, Taman Sepakat, Off Jalan Butterworth, 13200 Kepala Batas, Seberang Prai Utara, Pulau Pinang. Tel : 04-575 1824 Faks : 04-575 1975
6. Prai No. 2, Tingkat Kikik 7, Taman Inderawasih, 13600 Prai, Pulau Pinang. Tel : 04-397 8543 Faks : 04-397 9243
7. seberang Jaya No. 10, Jalan Todak Satu, Pusat Bandar Seberang Jaya, 13700 Prai, Pulau Pinang. Tel : 04-399 5881 Faks : 04-399 2881
8. wisma Pelaut 1A, Light Street, wisma Pelaut, 10200 Pulau Pinang. Tel : 04-263 6633 Faks : 04-261 9801
keDah
1. alor setar No. 147 & 148, Susuran Sultan Abdul Hamid 8, Kompleks Sultan Abdul Hamid, Fasa 2, Persiaran Sultan Abdul
Hamid, 05050 Alor Setar, Kedah. Tel : 04-772 1477 Faks : 04-771 4796
2. kulim No. 13 & 14, Jalan KLC Satu (1), Kulim Landmark Central, 09000 Kulim, Kedah. Tel : 04-495 5566 Faks : 04-490 4717
3. langkawi 149-151, Persiaran Bunga Raya, Langkawi Mall, 07000 Kuah, Langkawi, Kedah. Tel : 04-966 4426 Faks : 04-966 4717
4. sungai Petani No. 55, Jalan Perdana Heights, 2/2, Perdana Heights, 08000 Sungai Petani, Kedah. Tel : 04-421 1808 Faks : 04-422 6675
Rangkaian Cawangan
AFFIN BANK BERHAD (25046-T)
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terengganu
1. kemaman K711-713, wisma IKY Naga, Jalan Sulaimani, 24000 Kemaman, Terengganu. Tel : 09-858 1744 Faks : 09-859 1572
2. kemaman supply Base ground Floor, Admin Building Block B, Kemaman Supply Base, 24007 Kemaman, Terengganu. Tel : 09-863 1297 Faks : 09-863 1295
kelantan
1. Jeli A1 & A2, Blok A, Bandar Baru Bukit Bunga, 11700 Bukit Bunga, Tanah Merah, Kelantan. Tel : 09-946 8955 Faks : 09-946 8954
2. kota Bharu 3788H & 3788I, Seksyen 13, Jalan Sultan Ibrahim, 15050 Kota Bharu, Kelantan. Tel : 09-744 5688 Faks : 09-744 2202
Pahang
1. Jengka Nadi Kota, 26400 Bandar Jengka, Pahang. Tel : 09-466 2233 Faks : 09-466 2422
2. kuantan g2-ground Floor g2, Menara zenith, Jalan Putra, Square 6, Putra Square, 25200 Kuantan, Pahang. Tel : 09-514 8584 Faks : 09-514 8580
3. mentakab 70, Jalan Temerloh, 28400 Mentakab, Pahang. Tel : 09-278 4487 Faks : 09-277 6654
4. temerloh No. 9, ground Floor, Jalan Ahmad Shah, 28000 Temerloh, Pahang. Tel : 09-296 8811 Faks : 09-296 8800
Perlis
1. kangar No. 25 & 27, Jalan Satu, Taman Pertiwi Indah, Jalan Kangar - Alor Setar, 01000 Kangar, Perlis Tel : 04-977 7200 Faks : 04-977 6100
saBah
1. Jalan gaya, kota kinabalu No. 86, Jalan gaya, 88000 Kota Kinabalu, Sabah. Tel : 088-230 213 Faks : 088-265 430/ 088-212 476
2. kota kinabalu Lot 19 & 20, Block K, Sadong Jaya Complex, Jalan Ikan Juara 3, Karamunsing, 88300 Kota Kinabalu, Sabah. Tel : 088-264 410 Faks : 088-261 414
3. lahad Datu ground Floor, Lot 1 & 2, Bandar Sri Perdana, Fasa 5 KM4, Jalan Silam Bandar Sri Perdana, 91100 Lahad Datu, Sabah. Tel : 089-865 733 Faks : 089-865 735
4. sandakan Lot No. 163 & 164, Block 18, Jalan Prima Square, Batu 4, Jalan Utara, 90000 Sandakan, Sabah. Tel : 089-212 752 Faks : 089-212 644
5. tawau TB. 281, 282 & 283, Jalan Haji Karim, Town Extension II, P.O. Box 630, 91008 Tawau, Sabah. Tel : 089-778 197 Faks : 089-762 199
sarawak
1. Bintulu Sub Lot 13, Off Lot 3299, Parkcity Commerce Square, 97000 Bintulu, Sarawak. Tel : 086-314 248 Faks : 086-314 206
2. kuching Lot 247 & 248, Section 49, KTLD, Jalan Tuanku Abdul Rahman, 93100 Kuching, Sarawak. Tel : 082-245 888 Faks : 082-257 366
3. miri Lot 2387 & 2388, 1st Floor, Block A4, Jalan Boulevard 1A, Boulevard Commercial Center, KM 3, Jalan Miri-Pujut, 98000 Miri, Sarawak. Tel : 085-437 442 Faks : 085-437 297
4. Prince Commercial Centre No. 1 & 2, Jalan Penrissen Batu 7, Kota Sentosa, 93250 Kuching, Sarawak. Tel : 082-613 466 Faks : 082-629 466
5. sibu No. 91 & 93, Jalan Kampung Nyabor, 96000 Sibu, Sarawak. Tel : 084-325 926 Faks : 084-325 960
6. tabuan Jaya Lot No. 77, ground Floor, Tabuan Tranquility, Jalan Canna, Tabuan Jaya, 93350 Kuching, Sarawak Tel : 082-363 385 Faks : 082-363 061
Rangkaian Cawangan
LAPORAN TAHUNAN 2016
55
AgendA
1. Untuk menerima Penyata Akaun Berkanun bagi tahun berakhir 31 Disember 2016 berserta Laporan-laporan para Pengarah dan Juruaudit-juruaudit.
2. Untuk mengisytiharkan dividen satu peringkat sebanyak 4.52 sen sesaham yang berjumlah RM76,300,000 bagi tahun kewangan berakhir 31 Disember 2016.
3. Untuk melantik semula para Pengarah berikut yang akan bersara menurut Artikel 91(a) Tataurusan Penubuhan Syarikat dan, oleh kerana layak, menawarkan diri mereka untuk dilantik semula:
(a) En. Mohd Suffian bin Haji Haron
(b) YBhg. Tan Sri Mohd Ghazali bin Mohd Yusoff
4. Untuk meluluskan pembayaran yuran para Pengarah dan yuran Jawatankuasa-jawatankuasa bagi tahun kewangan berakhir 31 Disember 2016.
5. Untuk melantik semula Tetuan PricewaterhouseCoopers sebagai Juruaudit bagi tahun kewangan berakhir 31 Disember 2017 dan untuk membenarkan para Pengarah menentukan imbuhan mereka.
6. Untuk menjalankan lain-lain urusan lazim Syarikat.
MenURUT PeRInTAH LeMBAgA PengARAH
nIMMA SAFIRA BInTI KHALId
Setiausaha
nOTA:
1. Seorang ahli yang layak hadir dan mengundi pada Mesyuarat ini adalah layak untuk melantik seorang proksi untuk hadir dan mengundi bagi pihaknya dan proksi tersebut tidak semestinya seorang ahli dalam Syarikat.
Instrumen perlantikan proksi haruslah dalam bentuk bertulis yang ditandatangani oleh ahli yang melantik atau peguamnya yang diberi kuasa untuk berbuat sedemikian, atau sekiranya ahli yang melantik adalah sebuah syarikat, di bawah cop meterainya atau cara lain yang dibenarkan oleh para Pengarah.
Instrumen perlantikan proksi dan kuasa peguam atau kuasa lain, jika ada, yang mana tandatangan telah diturunkan atau dengan salinan sah kuasa yang disaksikan oleh notari awam harus diserahkan di pejabat berdaftar Syarikat di Tingkat 17, Menara Affin, 80, Jalan Raja Chulan, 50200 Kuala Lumpur, sekurang-kurangnya empat puluh lapan (48) jam sebelum masa yang ditetapkan untuk mengadakan Mesyuarat atau menunda Mesyuarat di mana sekiranya gagal berbuat demikian, individu yang dinamakan tidak layak untuk mengundi.
DENGAN INI DIMAKLUMKAN BAHAWA MeSYUARAT AgUng TAHUnAn Ke-41 AFFIn BAnK BeRHAd AKAN DIADAKAN DI BILIK LEMBAGA PENGARAH, TINGKAT 19, MENARA AFFIN, 80, JALAN RAJA CHULAN, 50200 KUALA LUMPUR PADA HARI KHAMIS, 30 MAC 2017 PADA JAM 10.00 PAgI BAGI MENJALANKAN URUSAN-URUSAN BERIKUT:
Notis Mesyuarat Agung Tahunan
AFFIN BANK BERHAD (25046-T)
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Notes to the Financial Statementsfor the financial year ended 31 December 2016
58 Directors’ Report
64 Statements of Financial Position
65 Income Statements
66 Statements of Comprehensive Income
67 Statements of Changes in Equity
69 Statements of Cash Flows
72 Summary of Significant Accounting Policies
90 Notes to the Financial Statements
197 Statement by Directors
197 Statutory Declaration
198 Independent Auditors’ Report
201 Basel II Pillar 3 Disclosures
Financial Statements
The Directors hereby submit their report together with the audited financial statements of the Group and the Bank for the financial year ended 31 December 2016.
PRINCIPAL ACTIVITIES
The principal activities of the Bank during the financial year are banking and related financial services. The principal activities of the subsidiaries are Islamic banking business, property management services, nominee and trustee services. Islamic banking business refers generally to the acceptance of deposits and granting of financing under the Shariah principles. There were no significant changes in the nature of these activities during the financial year.
FINANCIAL RESULTS
The Group The Bank RM’000 RM’000
Profit before zakat and taxation 602,758 456,135
Zakat (2,887) -
Profit before taxation 599,871 456,135
Taxation (135,740) (104,819)
Net profit for the financial year 464,131 351,316
DIVIDENDS
The dividends on ordinary shares paid or declared by the Bank since 31 December 2015 were as follows:
In respect of the financial year ended 31 December 2015 as shown in the Directors’ report for that financial year:
RM’000
Final single-tier dividend of 6.18 sen per share paid on 31 March 2016 104,366
In respect of the financial year ended 31 December 2016:
Single-tier interim dividend of 3.80 sen per share paid on 30 November 2016 64,173
The Directors now recommend the payment of a final single-tier dividend of 1.39 sen per share on the Bank’s issued and paid up capital of RM1,688,769,616 comprising of 1,688,769,616 shares amounting to RM23,473,898 for the financial year ended 31 December 2016 which is subject to the approval of member at the forthcoming Annual General Meeting of the Bank.
RESERVES AND PROVISIONS
All material transfers to or from reserves or provisions during the financial year are shown in the financial statements and notes to the financial statements.
BAD AND DOUBTFUL DEBTS AND FINANCING
Before the financial statements of the Group and the Bank were made out, the Directors took reasonable steps to ascertain that proper action had been taken in relation to the writing off of bad debts and financing and the making of allowance for bad and doubtful debts and financing, and satisfied themselves that all known bad debts and financing had been written off and adequate allowances made for doubtful debts and financing.
At the date of this report, the Directors are not aware of any circumstances which would render the amount written off for bad debts and financing, or the amount of the allowance for doubtful debts and financing, in the financial statements of the Group and the Bank inadequate to any substantial extent.
Directors’ Reportfor the financial year ended 31 December 2016
AFFIN BANK BERHAD (25046-T)
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CURRENT ASSETS
Before the financial statements of the Group and the Bank were made out, the Directors took reasonable steps to ascertain that any current assets, other than debts and financing, which were unlikely to realise in the ordinary course of business, their values as shown in the accounting records of the Group and the Bank, have been written down to an amount which they might expected so to realise.
At the date of this report, the Directors are not aware of any circumstances which would render the values attributed to the current assets in the financial statements of the Group and the Bank misleading.
VALUATION METHODS
At the date of this report, the Directors are not aware of any circumstances which have arisen which render adherence to the existing methods of valuation of assets or liabilities in the Group’s and the Bank’s financial statements misleading or inappropriate.
CONTINGENT AND OTHER LIABILITIES
At the date of this report there does not exist:
(a) any charge on the assets of the Group or the Bank which has arisen since the end of the financial year which secures the liabilities of any other person; or
(b) any contingent liability in respect of the Group or the Bank that has arisen since the end of the financial year other than in the ordinary course of banking business or activities of the Group.
No contingent or other liability of the Group or the Bank has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may substantially affect the ability of the Group or the Bank to meet their obligation as and when they fall due.
CHANGE OF CIRCUMSTANCES
At the date of this report, the Directors are not aware of any circumstances, not otherwise dealt with in this report or the financial statements of the Group and the Bank that would render any amount stated in the financial statements misleading.
ITEMS OF AN UNUSUAL NATURE
The results of the operations of the Group and the Bank during the financial year were not, in the opinion of the Directors, substantially affected by any item, transaction or event of a material and unusual nature.
There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors, to affect substantially the results of the operations of the Group or the Bank for the current financial year in which this report is made.
SIGNIFICANT EVENT DURING THE FINANCIAL YEAR
There is no significant event during the financial year.
SUBSEQUENT EVENTS
There were no material events subsequent to the reporting date that require disclosure or adjustments to the financial statements, other than those disclosed in Note 50 of the financial statements.
Directors’ Reportfor the financial year ended 31 December 2016
59
ANNUAL REPORT 2016
DIRECTORS
The Directors of the Bank who have held office since the date of the last report and at the date of this report are:
Jen Tan Sri Dato’ Seri Ismail Bin Haji Omar (Bersara)Chairman / Non-Independent Non-Executive Director
Tan Sri Dato’ Seri Lodin Bin Wok KamaruddinNon-Independent Non-Executive Director(Completion of directorship on 4 October 2016)
Mr Aubrey Li Kwok-SingNon-Independent Non-Executive Director
En. Mohd Suffian Bin Haji HaronNon-Independent Non-Executive Director(Redesignated as Non-Independent Non-Executive Director on 1 June 2016)
Tan Sri Dato’ Seri Mohamed JawharNon-Independent Non-Executive Director(Redesignated as Non-Independent Non-Executive Director on 1 June 2016)
Tan Sri Mohd Ghazali Bin Mohd YusoffIndependent Non-Executive Director
En. Abd Malik Bin A RahmanIndependent Non-Executive Director
Mr Tang Peng WahNon-Independent Non-Executive Director (Alternate Director to Mr Aubrey Li Kwok-Sing)
RESPONSIBILITY STATEMENT BY BOARD OF DIRECTORS
In the course of preparing the annual financial statements of the Group and of the Bank, the Directors are collectively responsible in ensuring that these financial statements are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.
It is the responsibility of the Directors to ensure that the financial reporting of the Group and of the Bank present a true and fair view of the state of affairs of the Group and of the Bank as at 31 December 2016 and of the financial results and cash flows of the Group and of the Bank for the financial year then ended.
The financial statements are prepared on the going concern basis and the Directors have ensured that proper accounting records are kept, applied the appropriate accounting policies on a consistent basis and made accounting estimates that are reasonable and fair so as to enable the preparation of the financial statements of the Group and of the Bank with reasonable accuracy.
The Directors have also taken the necessary steps to ensure that appropriate systems are in place for the assets of the Group and of the Bank to be properly safeguarded for the prevention and detection of fraud and other irregularities. The systems, by their nature, can only provide reasonable and not absolute assurance against material misstatements, whether due to fraud or error.
The Statement by Directors pursuant to Section 169 of the Companies Act, 1965 is set out on page 197 of the financial statements.
Directors’ Reportfor the financial year ended 31 December 2016
AFFIN BANK BERHAD (25046-T)
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DIRECTORS’ INTERESTS
According to the register of Directors’ shareholdings, the interest of Directors in office at the end of the financial year in shares, warrants and options of related companies is as follows:
Ordinary shares of RM10 each; RM5 uncalled
As at As at
1.1.2016 Bought Sold 31.12.2016
ABB Trustee Berhad **
Jen Tan Sri Dato’ Seri Ismail Bin Haji Omar (Bersara) 20,000 - - 20,000
** Shares held in trust for the Bank
Ordinary shares of RM1 each
As at As at
1.1.2016 Bought Sold 31.12.2016
AFFIN Holdings Berhad
Abd Malik Bin A Rahman - 10,000 - 10,000
Boustead Heavy Industries Corporation Berhad
Abd Malik Bin A Rahman 3,000 - - 3,000
Abd Malik Bin A Rahman* 1,000 - - 1,000
Ordinary shares of 50 sen each
As at As at
1.1.2016 Bought Sold 31.12.2016
Boustead Holdings Berhad
Abd Malik Bin A Rahman - 6,580 - 6,580
Abd Malik Bin A Rahman* 1,000 12,580 - 13,580
Boustead Plantations Berhad
Abd Malik Bin A Rahman 2,000 - - 2,000
Abd Malik Bin A Rahman* 2,000 - - 2,000
* Indirect shares
Other than the above, the Directors in office at the end of the financial year did not have any other interest in shares, warrants and options over shares in the Bank or its related corporations during the financial year.
DIRECTORS’ BENEFITS
During and at the end of the financial year, no other arrangements subsisted to which the Bank or any of its subsidiaries is a party with the object or objects of enabling Directors of the Bank or any of its subsidiaries to acquire benefits by means of the acquisition of shares in, or debenture of, the Bank or any other body corporate.
Since the end of the previous financial year, no Director of the Bank has received or become entitled to receive a benefit (other than the fees and other emoluments shown in the Note 34 to the financial statements) by reason of a contract made by the Bank or by a related corporation with the Director or with a firm of which he is a member or with a company in which he has a substantial financial interest.
Directors’ Reportfor the financial year ended 31 December 2016
61
ANNUAL REPORT 2016
BUSINESS PLAN AND STRATEGY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2016
In 2016, economic prospects in major advanced and many emerging market economies remain challenging, and downside risks have become more dominant. Stemming from the softening of export sector and volatile commodity prices, Malaysia’s economy too has experienced a slow-down. Over the fiscal year, Ringgit depreciated against most major and regional currencies with the shift in investor sentiment. However, due to the strong private investment, positive consumer sentiment and continuation of active investment undertakings; the overall impact was partially absorbed and reduced.
Notwithstanding the challenging year, the Group’s profit before tax and zakat of RM602.8 million accounted for 30.68% of the prior year’s performance. Together with the ROA (before tax) of 1.00% and ROE (before tax) of 10.91%, the Bank recorded a notable improvement from the previous year and against the industry average.
BUSINESS OUTLOOK FOR 2017
As for 2017, despite the economic recovery continues to move at a slow pace; our national real GDP’s growth is expected to edge up moderately between 4.0% - 5.0%. Meanwhile, the export sector is expected to experience positive movement from a higher external demand on Electrical and Electronic sector and likewise, private investment is projected to continue drive economic growth (albeit moderately) at 5.8%.
Bank Negara Malaysia (‘BNM’) maintains its accommodative stance in supporting economic growth with the Overnight Policy Rate (‘OPR’) stable at 3.00% and reduction of Statutory Reserve Rate (‘SRR’) to 3.5%. Nevertheless, the cost-push inflation is projected to be at the 2.0% - 3.0% range.
Although the economy is rebounding, it has been a slow and uneven recovery for businesses and individuals alike. The banking industry in Malaysia is expected to remain operating in challenging environment as the dragging down of asset quality and profitability continues. However, we are optimistic in retaining our competitive edge and business growth by prioritizing on business efficiency, brand visibility and customer experience.
Currently, Affin Bank Group is enhancing our digital banking positioning and innovation to elevate our competitiveness in the industry. It is our aspiration to become the preferred bank for the Small and Medium Enterprises (‘SME’) segment and the millennials. After solidifying our sales and services foundation, we are in the midst of enhancing our processes through system automation to improve productivity and turnaround time. The Bank has embarked on the Group Strategic Transformation Program known as ‘AFFINITY’ that aims for better tangible benefits in the form of lower cost-to-income ratio, robust fee income generation and efficient business operations in the near future.
Moving ahead, the Bank will continue our best efforts in serving our customers’ interest by managing liquidity, safeguarding asset quality, preserving margins and maintain our strong capital levels.
Directors’ Reportfor the financial year ended 31 December 2016
AFFIN BANK BERHAD (25046-T)
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RATING BY EXTERNAL AGENCIES
The Bank has been rated by the following external rating agency:
Name of rating agency : RATING AGENCY MALAYSIA BERHAD (‘RAM’)
Date of rating : 2 June 2016
Rating classifications:
- Long term : AA3
- Short term : P1
RAM has reaffirmed the Bank’s long-term and short-term financial institution ratings, at AA3 and P1, respectively, with a stable outlook.
‘AA’ rating is defined by RAM as an entity has a strong capacity to meets its financial obligations and is resilient against adverse changes in circumstances, economic condition and/or operating environments. The subscript 3 in this category indicates as the lower end of its generic rating in the AA category.
A P1 rating is defined by RAM as obligations which are supported by superior ability with regards to timely payment of obligations.
ZAKAT
The Bank’s subsidiary, AFFIN Islamic Bank Berhad (‘AFFIN Islamic’) is obliged to pay zakat to comply with the principles of Shariah. AFFIN Islamic does not pay zakat on behalf of its depositors.
HOLDING COMPANY AND ULTIMATE HOLDING CORPORATE BODY
The holding company of the Bank is AFFIN Holdings Berhad, a public listed company incorporated in Malaysia and the ultimate holding corporate body is Lembaga Tabung Angkatan Tentera, a statutory body incorporated under the Tabung Angkatan Tentera Act, 1973.
AUDITORS
The auditors, PricewaterhouseCoopers, have expressed their willingness to continue in office.
In accordance with resolution of the Board of Directors dated 21 March 2017.
Mohd Suffian Bin Haji HaronDirector
Tan Sri Mohd Ghazali Bin Mohd YusoffDirector
Directors’ Reportfor the financial year ended 31 December 2016
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ANNUAL REPORT 2016
The Group The Bank 2016 2015 2016 2015 Note RM’000 RM’000 RM’000 RM’000
ASSETSCash and short-term funds 2 4,364,490 4,070,710 3,337,831 2,203,022 Deposits and placements with banks and other financial institutions 3 152,234 351,687 406,075 349,772Investment accounts due from designated financial institution - - 2,110,079 1,331,318Financial assets held-for-trading 4 - 150,121 - 150,121Derivative financial assets 5 167,304 174,037 166,240 174,745Financial investments available-for-sale 6 10,279,997 10,287,350 8,446,589 8,811,977Financial investments held-to-maturity 7 373,524 380,654 301,402 304,372Loans, advances and financing 8 42,668,297 42,104,597 30,753,354 32,902,688Other assets 9 61,932 84,655 53,941 80,403Amount due from subsidiaries 10 - - 196,839 61Amount due from joint ventures 11 46,725 39,936 - -Amount due from associate 12 500 - - -Tax recoverable 15,492 46,206 15,462 46,179Deferred tax assets 13 8,056 3,598 - -Statutory deposits with Bank Negara Malaysia 14 1,482,000 1,604,600 1,150,000 1,345,000Investment in subsidiaries 15 - - 575,224 489,074Investment in joint ventures 16 - - - -Investment in associate 17 750 - - -Property and equipment 18 401,799 407,313 394,717 399,913Intangible assets 19 164,089 153,137 167,982 156,604
TOTAL ASSETS 60,187,189 59,858,601 48,075,735 48,745,249
LIABILITIES AND EQUITYDeposits from customers 20 47,633,056 47,813,213 37,106,463 37,814,118Deposits and placements of banks and other financial institutions 21 3,547,203 2,735,596 2,583,235 1,778,206Obligation on securities sold under repurchase agreements 999,740 1,740,946 999,740 1,740,946Derivative financial liabilities 22 402,772 414,140 409,283 413,944Bills and acceptances payable 37,726 77,114 37,726 77,114Recourse obligation on loans sold to Cagamas Berhad 23 - 134,585 - 134,585Other liabilities 24 439,488 411,575 402,445 365,865Amount due to subsidiaries 25 - - 41,395 422,166Provision for taxation 6,022 10,052 - -Deferred tax liabilities 13 12,884 15,104 12,884 15,104Subordinated term loan 26 1,304,592 1,004,446 1,304,592 1,004,446
TOTAL LIABILITIES 54,383,483 54,356,771 42,897,763 43,766,494
Share capital 27 1,688,770 1,688,770 1,688,770 1,688,770Reserves 28 4,114,936 3,813,060 3,489,202 3,289,985
TOTAL EQUITY 5,803,706 5,501,830 5,177,972 4,978,755
TOTAL LIABILITIES AND EQUITY 60,187,189 59,858,601 48,075,735 48,745,249
COMMITMENTS AND CONTINGENCIES 40 22,483,498 22,301,945 21,185,728 20,192,355
The accounting policies and notes form an integral part of these financial statements.
Statements of Financial Positionas at 31 December 2016
AFFIN BANK BERHAD (25046-T)
64
The accounting policies and notes form an integral part of these financial statements.
The Group The Bank 2016 2015 2016 2015 Note RM’000 RM’000 RM’000 RM’000
Interest income 29 2,327,761 2,326,816 2,325,217 2,325,444
Interest expense 30 (1,495,679) (1,495,771) (1,495,688) (1,495,791)
Net interest income 832,082 831,045 829,529 829,653
Income from Islamic banking business 31 272,806 238,921 - -
1,104,888 1,069,966 829,529 829,653
Other operating income 32 219,542 184,577 219,323 185,068
Net income 1,324,430 1,254,543 1,048,852 1,014,721
Other operating expenses 33 (694,116) (628,358) (561,401) (514,054)
Operating profit before allowances 630,314 626,185 487,451 500,667
Allowances for impairment losses on loans, advances and financing 35 (23,701) (186,987) (27,461) (178,475)
(Allowances for)/write-back of impairment losses on securities (3,855) 22,037 (3,855) 22,037
Profit before zakat and taxation 602,758 461,235 456,135 344,229
Zakat (2,887) (3,779) - -
Profit before taxation 599,871 457,456 456,135 344,229
Taxation 37 (135,740) (111,874) (104,819) (82,939)
Net profit after zakat and taxation 464,131 345,582 351,316 261,290
Attributable to:
Equity holder of the Bank 464,131 345,582 351,316 261,290
Earnings per share (sen):
- Basic 38 27.5 20.5 20.8 15.5
Income Statementsfor the financial year ended 31 December 2016
65
ANNUAL REPORT 2016
The accounting policies and notes form an integral part of these financial statements.
The Group The Bank 2016 2015 2016 2015 Note RM’000 RM’000 RM’000 RM’000
Profit after zakat and taxation 464,131 345,582 351,316 261,290
Other comprehensive income:
Items that may be reclassified subsequently to profit and loss:
Net fair value change in financial investments available-for-sale 8,002 67,820 21,365 70,495
Deferred tax on financial investments available-for-sale 13 (1,718) (16,479) (4,925) (17,121)
Other comprehensive income for the financial year, net of tax 6,284 51,341 16,440 53,374
Total comprehensive income for the financial year 470,415 396,923 367,756 314,664
Attributable to equity holder of the Bank:
- Total comprehensive income 470,415 396,923 367,756 314,664
Statements of Comprehensive Incomefor the financial year ended 31 December 2016
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66
Attributable to Equity Holder of the Bank
AFS Share Share Statutory revaluation Regulatory Retained capital premium reserves reserves reserves profits Total The Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
At 1 January 2016 1,688,770 858,904 1,577,509 68,945 278,547 1,029,155 5,501,830
Net profit for the financial year - - - - - 464,131 464,131
Other comprehensive income (net of tax)
- Financial investments available-for-sale - - - 6,284 - - 6,284
Total comprehensive income - - - 6,284 - 464,131 470,415
Dividends paid (Note 39) - - - - - (168,539) (168,539)
Transfer to statutory reserves / regulatory reserves - - 144,128 - 1,657 (145,785) -
At 31 December 2016 1,688,770 858,904 1,721,637 75,229 280,204 1,178,962 5,803,706
At 1 January 2015 1,688,770 858,904 1,469,794 17,604 184,366 951,500 5,170,938
Net profit for the financial year - - - - - 345,582 345,582
Other comprehensive income (net of tax)
- Financial investments available-for-sale - - - 51,341 - - 51,341
Total comprehensive income - - - 51,341 - 345,582 396,923
Dividends paid (Note 39) - - - - - (66,031) (66,031)
Transfer to statutory reserves / regulatory reserves - - 107,715 - 94,181 (201,896) -
At 31 December 2015 1,688,770 858,904 1,577,509 68,945 278,547 1,029,155 5,501,830
Statements of Changes in Equityfor the financial year ended 31 December 2016
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ANNUAL REPORT 2016
Non-distributable Distributable
AFS Share Share Statutory revaluation Regulatory Retained capital premium reserves reserves reserves profits Total The Bank RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
At 1 January 2016 1,688,770 858,904 1,328,792 76,852 220,148 805,289 4,978,755
Net profit for the financial year - - - - - 351,316 351,316
Other comprehensive income (net of tax)
- Financial investments available-for-sale - - - 16,440 - - 16,440
Total comprehensive income - - - 16,440 - 351,316 367,756
Dividends paid (Note 39) - - - - - (168,539) (168,539)
Transfer to statutory reserves / regulatory reserves - - 87,829 - (13,122) (74,707) -
At 31 December 2016 1,688,770 858,904 1,416,621 93,292 207,026 913,359 5,177,972
At 1 January 2015 1,688,770 858,904 1,263,470 23,478 135,347 760,153 4,730,122
Net profit for the financial year - - - - - 261,290 261,290
Other comprehensive income (net of tax)
- Financial investments available-for-sale - - - 53,374 - - 53,374
Total comprehensive income - - - 53,374 - 261,290 314,664
Dividends paid (Note 39) - - - - - (66,031) (66,031)
Transfer to statutory reserves / regulatory reserves - - 65,322 - 84,801 (150,123) -
At 31 December 2015 1,688,770 858,904 1,328,792 76,852 220,148 805,289 4,978,755
The accounting policies and notes form an integral part of these financial statements.
Statements of Changes in Equityfor the financial year ended 31 December 2016
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The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before taxation 599,871 457,456 456,135 344,229
Adjustments for items not involving the movement of cash and cash equivalents:
Interest income:
- financial assets held-for-trading (240) (123) (240) (123)
- financial investments available-for-sale (301,744) (293,991) (301,744) (293,991)
- financial investments held-to-maturity (17,776) (17,267) (17,776) (17,267)
Dividend income:
- financial investments available-for-sale (2,673) (2,635) (2,673) (2,635)
Gain on sale:
- financial assets held-for-trading (432) (498) (432) (498)
- financial investments available-for-sale (32,993) (10,678) (32,993) (10,678)
Unrealised (gain)/loss on revaluation:
- financial assets held-for-trading (2) 232 (2) 232
- derivatives (4,965) 3,750 (4,965) 3,750
- foreign exchange (30,226) (45,358) (30,226) (45,358)
Allowance/(write-back) for impairment loss:
- financial investments available-for-sale 318 - 318 -
- financial investments held-to-maturity 3,537 (22,037) 3,537 (22,037)
Depreciation of property and equipment 14,724 15,044 13,688 13,960
Property and equipment written-off 57 84 55 76
Foreclosed properties - impairment made 59 - 59 -
Loss/(gain) on sale of property and equipment 94 (1) 94 (1)
Amortisation of intangible assets 9,681 6,200 9,255 5,735
Gain on sale of foreclosed properties (153) (684) (153) (684)
Net individual impairment 21,918 250,352 38,441 246,840
Net collective impairment 49,832 17,224 35,935 11,265
Bad debt and financing written-off 2,838 3,603 2,816 3,596
Interest expense - subordinated term loan 46,616 28,189 46,616 28,189
Zakat 2,887 3,779 - -
Operating profit before changes in working capital 361,228 392,641 215,745 264,600
Statements of Cash Flowsfor the financial year ended 31 December 2016
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ANNUAL REPORT 2016
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
CASH FLOWS FROM OPERATING ACTIVITIES
Decrease/(increase) in operating assets:
Deposits and placements with banks and other financial institutions 199,453 (113,465) (56,303) 97,199
Investment accounts due from designated financial institutions - - (778,761) (816,239)
Financial assets held-for-trading 150,795 172 150,795 172
Loans, advances and financing (638,288) (2,919,604) 2,072,142 (871,838)
Other assets 589,059 (318,117) 590,289 (361,174)
Derivative financial instruments (4,635) 91,335 3,844 90,452
Statutory deposits with Bank Negara Malaysia 122,600 91,950 195,000 53,550
Amount due from subsidiaries - - (563,699) 125,762
Amount due from joint ventures (6,789) (25,081) - -
Amount due from associate (500) - - -
(Decrease)/increase in operating liabilities:
Deposits from customers (180,157) (234,011) (707,655) (366,094)
Deposits and placements of banks and other financial institutions 811,607 (2,114,080) 805,029 (1,921,180)
Obligation on securities sold under repurchase agreements (741,206) 1,740,946 (741,206) 1,740,946
Bills and acceptances payable (39,388) (17,194) (39,388) (17,194)
Recourse obligation on loans sold to Cagamas Berhad (134,585) (4,562) (134,585) (4,562)
Other liabilities 39,745 41,808 48,437 25,944
Cash generated from/(used in) operations 528,939 (3,387,262) 1,059,684 (1,959,656)
Zakat paid (2,862) (5,511) - -
Tax refund 5,459 1,364 5,440 1,350
Tax paid (122,913) (179,258) (86,687) (156,206)
Net cash generated from/(used in) operating activities 408,623 (3,570,667) 978,437 (2,114,512)
Statements of Cash Flowsfor the financial year ended 31 December 2016
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The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in associate (250) - - -
Interest received:
- financial investments available-for-sale 301,744 293,991 301,744 293,991
- financial investments held-to-maturity 17,776 17,267 17,776 17,267
Dividend income:
- financial investments available-for-sale 2,673 2,635 2,673 2,635
Redemption of financial investments held-to-maturity net of purchase 3,594 117,538 (567) 111,066
Net purchase/(sale) of financial investments available-for-sale 47,530 (260,940) 419,428 (315,392)
Proceeds from disposal of
- property and equipment 230 2 230 2
- foreclosed properties 588 4,877 588 4,877
Purchase of property and equipment (27,544) (285,117) (26,991) (284,710)
Purchase of intangible assets (2,680) (5) (2,680) (5)
Net cash generated from/(used in) investing activities 343,661 (109,752) 712,201 (170,269)
CASH FLOWS FROM FINANCING ACTIVITIES
Investment in subsidiary - - (100,000) (100,000)
Interest payment on subordinated term loan (46,469) (28,053) (46,469) (28,053)
Drawdown of subordinated term loan 300,000 400,000 300,000 400,000
Payment of dividend (168,539) (66,031) (168,539) (66,031)
Net cash generated from/(used in) financing activities 84,992 305,916 (15,008) 205,916
Net increase/(decrease) in cash and cash equivalents 837,276 (3,374,503) 1,675,630 (2,078,865)
Net (decrease)/increase in foreign exchange (543,496) 506,301 (540,821) 504,845
Cash and cash equivalents at beginning of the financial year 4,070,710 6,938,912 2,203,022 3,777,042
CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL YEAR (Note 2) 4,364,490 4,070,710 3,337,831 2,203,022
The accounting policies and notes form an integral part of these financial statements.
Statements of Cash Flowsfor the financial year ended 31 December 2016
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ANNUAL REPORT 2016
The following accounting policies have been used consistently in dealing with items which are considered material in relation to the financial statements. These policies have been consistently applied to all the financial years presented, unless otherwise stated.
(A) BASIS OF PREPARATION
The financial statements of the Group and the Bank have been prepared in accordance with Malaysian Financial Reporting Standards (‘MFRS’), International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. The financial statements incorporate those activities relating to Islamic banking business which have been undertaken by AFFIN Islamic Bank Berhad, a wholly owned subsidiary of the Bank. Islamic banking business refers generally to the acceptance of deposits and granting of financing under the Shariah principles.
The financial statements of the Group and the Bank have been prepared under the historical cost convention, unless otherwise indicated in this summary of significant accounting policies.
The preparation of financial statements in conformity with MFRS requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported period. It also requires Directors to exercise their judgment in the process of applying the Group and Bank’s accounting policies. Although these estimates and judgment are based on the Directors’ best knowledge of current events and actions, actual results may differ. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 48.
Standards, amendments to published standards and interpretations that are effective
The Group and the Bank have applied the following amendments for the first time for the financial year beginning on 1 January 2016:
• AmendmentstoMFRS11‘Jointarrangements’-Accountingforacquisitionofinterestsinjointoperations
• AmendmentstoMFRS101‘Presentationoffinancialstatements’-Disclosureinitiative
• AmendmentstoMFRS127“Equitymethodinseparatefinancialstatements”
• AnnualImprovementstoMFRSs2012-2014Cycle
The adoption of these amendments did not have any impact on the current or any prior year and are not likely to affect future periods.
Standards, amendments to published standards and interpretations to existing standards that are applicable to the Group and the Bank but not yet effective
A number of new standards and amendments to standards and interpretations are effective for financial year beginning on or after 1 January 2017. None of these is expected to have a significant effect on the financial statements of the Group and the Bank, except the following:
• AmendmentstoMFRS107‘StatementofCashFlows–DisclosureInitiative’(effectivefrom1January2017)introduceanadditional disclosure on changes in liabilities arising from financing activities.
• AmendmentstoMFRS112‘IncomeTaxes-RecognitionofDeferredTaxAssetsforUnrealisedLosses’(effectivefrom1January 2017) clarify the requirements for recognising deferred tax assets on unrealised losses arising from deductible temporary difference on asset carried at fair value.
In addition, in evaluating whether an entity will have sufficient taxable profits in future periods against which deductible temporary differences can be utilised, the amendments require an entity to compare the deductible temporary differences with future taxable profits that excludes tax deductions resulting from the reversal of those temporary differences.
The amendments shall be applied retrospectively.
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(A) BASIS OF PREPARATION
Standards, amendments to published standards and interpretations to existing standards that are applicable to the Group and the Bank but not yet effective (continued)
• MFRS9‘FinancialInstruments’(effectivefrom1January2018)willreplaceMFRS139“FinancialInstruments:RecognitionandMeasurement”.
MFRS 9 retains but simplifies the mixed measurement model in MFRS 139 and establishes three primary measurement categories for financial assets: amortised cost, fair value through profit or loss and fair value through other comprehensive income(“OCI”).Thebasisofclassificationdependsontheentity’sbusinessmodelandthecashflowcharacteristicsofthe financial asset. Investments in equity instruments are always measured at fair value through profit or loss with an irrevocable option at inception to present changes in fair value in OCI (provided the instrument is not held for trading). A debt instrument is measured at amortised cost only if the entity is holding it to collect contractual cash flows and the cash flows represent principal and interest.
For liabilities, the standard retains most of the MFRS 139 requirements. These include amortised cost accounting for most financial liabilities, with bifurcation of embedded derivatives. The main change is that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change due to an entity’s own credit risk is recorded in other comprehensive income rather than the income statement, unless this creates an accounting mismatch.
MFRS 9 introduces an expected credit loss model on impairment that replaces the incurred loss impairment model used in MFRS 139. The expected credit loss model is forward-looking and eliminates the need for a trigger event to have occurred before credit losses are recognised.
• MFRS15‘Revenuefromcontractswithcustomers’(effectivefrom1January2018)replacesMFRS118‘Revenue’andMFRS 111 ‘Construction contracts’ and related interpretations. The core principle in MFRS 15 is that an entity recognises revenue to depict the transfer of promised goods or services to the customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
Revenue is recognised when a customer obtains control of goods or services, i.e. when the customer has the ability to direct the use of and obtain the benefits from the goods or services.
A new five-step process is applied before revenue can be recognised:
• Identifycontractswithcustomers;
• Identifytheseparateperformanceobligations;
• Determinethetransactionpriceofthecontract;
• Allocatethetransactionpricetoeachoftheseparateperformanceobligations;and
• Recognisetherevenueaseachperformanceobligationissatisfied.
Key provisions of the new standard are as follows:
• Anybundledgoodsorservices thataredistinctmustbeseparately recognised,andanydiscountsor rebateson thecontract price must generally be allocated to the separate elements.
• If the consideration varies (such as for incentives, rebates, performance fees, royalties, success of an outcomeetc),minimum amounts of revenue must be recognised if they are not at significant risk of reversal.
• Thepointatwhichrevenueisabletoberecognisedmayshift:somerevenuewhichiscurrentlyrecognisedatapointintime at the end of a contract may have to be recognised over the contract term and vice versa.
• Therearenewspecific ruleson licenses,warranties,non-refundableupfront fees,andconsignmentarrangements, toname a few.
• Aswithanynewstandard,therearealsoincreaseddisclosures.
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(A) BASIS OF PREPARATION
Standards, amendments to published standards and interpretations to existing standards that are applicable to the Group and the Bank but not yet effective (continued)
• MFRS16‘Leases’(effectivefrom1January2019)supersedesMFRS117‘Leases’andtherelatedinterpretations.
Under MFRS 16, a lease is a contract (or part of a contract) that conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
MFRS 16 eliminates the classification of leases by the lessee as either finance leases (on balance sheet) or operating leases(offbalancesheet).MFRS16requiresalesseetorecognisea“right-of-use”oftheunderlyingassetandaleaseliability reflecting future lease payments for most leases.
The right-of-use asset is depreciated in accordance with the principle in MFRS 116 ‘Property, Plant and Equipment’ and the lease liability is accreted over time with interest expense recognised in the income statement.
For lessors, MFRS 16 retains most of the requirements in MFRS 117. Lessors continue to classify all leases as either operating leases or finance leases and account for them differently.
The Group and the Bank will apply these standards when effective. The adoption of the above standards, amendments to published standards and interpretations to existing standards are not expected to have any significant impact on the financial statements of the Group and the Bank except for MFRS 9. The financial effect of adoption of MFRS 9 is still being assessed by the Group and the Bank.
(B) CONSOLIDATION
The consolidated financial statements include the financial statements of the Bank, subsidiaries and a joint venture, made up to the end of the financial year.
(i) Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct relevant activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.
The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement and fair value of any pre-existing equity interest in the subsidiary. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the acquiree on the acquisition-by-acquisition basis, either at fair value or at the non-controlling interest’s proportionate share of the recognised amounts of acquiree’s identifiable net assets.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets acquired is recognised as goodwill. If the total of the consideration transferred, non-controlling interest recognised and previously held interest measured is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in the income statement.
Acquisition related costs are expensed as incurred.
If the business combination is achieved in stages, the carrying value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date, any gains or losses arising from such re-measurement are recognised in profit or loss.
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(B) CONSOLIDATION
(i) Subsidiaries (continued)
Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised in accordance with MFRS 139 in profit or loss. Contingent consideration that is classified as equity is not remeasured, and its subsequent settlement is accounted for within equity.
The Group applies predecessor accounting to account for business combinations under common control. Under the predecessor accounting, assets and liabilities acquired are not restated to their respective fair values but at the carrying amounts from the consolidated financial statements of the ultimate holding company of the Group and adjusted to ensure uniform accounting policies of the Group. The difference between any consideration given and the aggregate carrying amounts of the assets and liabilities (as of the date of the transaction) of the acquired entity is recognised as an adjustment to equity. No additional goodwill is recognised.
The acquired entity’s results, assets and liabilities are consolidated from the date on which the business combination between entities under common control occurred. Consequently, the consolidated financial statements do not reflect the results of the acquired entity for the period before the transaction occurred. The corresponding amounts for the previous year are not restated.
Inter-company transactions, balances, unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
(ii) Changes in ownership interests in subsidiaries without change of control
Transactions with non-controlling interests that do not result in loss of control are accounted for as transactions with equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognised in equity attributable to owners of the Group.
(iii) Disposal of subsidiaries
When the Group ceases to consolidate because of a loss of control, any retained interest in the entity is re-measured to its fair value with the change in carrying amount recognised in profit or loss. This fair value becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.
Gains or losses on the disposal of subsidiaries include the carrying amount of goodwill relating to the subsidiaries sold.
(iv) Joint arrangements
A joint arrangement is an arrangement of which there is contractually agreed sharing of control by the Group with one or more parties, where decisions about the relevant activities relating to the joint arrangement require unanimous consent of the parties sharing control. The classification of a joint arrangement as a joint operation or a joint venture depends upon the rights and obligations of the parties to the arrangement. A joint venture is a joint arrangement whereby the joint venturers have rights to the net assets of the arrangement. A joint operation is a joint arrangement whereby the joint operators have rights to the assets and obligations for the liabilities, relating to the arrangement.
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(B) CONSOLIDATION
(iv) Joint arrangements (continued)
Interests in joint ventures are accounted for using the equity method, after initially being recognised at cost in the consolidated statement of financial position. Under the equity method, the investment in a joint venture is initially recognised at cost, and adjusted thereafter to recognise the Group’s share of the post-acquisition profits or losses of the joint venture in profit or loss, and the Group’s share of movements in other comprehensive income of the joint venture in other comprehensive income. Dividends received or receivable from a joint venture are recognised as a reduction in the carrying amount of the investment. When the Group’s share of losses in a joint venture equals or exceeds its interests in the joint venture, including any long-term interests that, in substance, form part of the Group’s net investment in the joint venture, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the joint venture.
The Group determines at each reporting date whether there is any objective evidence that the investment in the joint venture is impaired. An impairment loss is recognised for the amount by which the carrying amount of the joint venture exceeds its recoverable amount.
Unrealised gains on transactions between the Group and its joint ventures are eliminated to the extent of the Group’s interests in the joint ventures. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of the joint ventures have been changed where necessary to ensure consistency with the policies adopted by the Group.
When the Group ceases to equity account its joint venture because of a loss of joint control, any retained interest in the entity is remeasured to its fair value with the change in carrying amount recognised in profit or loss. This fair value becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate or financial asset. In addition, any amount previously recognised in other comprehensive income in respect of the entity is accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.
If the ownership interest in a joint venture is reduced but joint control is retained, only a proportionate share of the amounts previously recognised in other comprehensive income is reclassified to profit or loss where appropriate.
(C) INVESTMENTS IN SUBSIDIARIES AND JOINT VENTURES IN SEPARATE FINANCIAL STATEMENTS
In the Bank’s separate financial statements, investments in subsidiaries and joint ventures are carried at cost less accumulated impairment losses. On disposal of investments in subsidiaries and joint ventures, the difference between disposal proceeds and carrying amounts of the investments are recognised in profit or loss.
(D) INTANGIBLE ASSETS
Goodwill
Goodwill arises from a business combination and represents the excess of the aggregate of fair value of consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of any previous equity interest in the acquiree over the fair value of the net identifiable assets acquired and liabilities assumed on the acquisition date. If the fair value of consideration transferred, the amount of non-controlling interest and the fair value of previously held interest in the acquiree are less than the fair value of the net identifiable assets of the acquiree, the resulting gain is recognised in the profit or loss.
Goodwill is not amortised but it is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired, and carried at cost less accumulated impairment losses. For the purpose of impairment testing,goodwillacquiredinabusinesscombinationisallocatedtoeachofthecashgeneratingunits(“CGUs”),orgroupsofCGUs, that are expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating segment level.
The carrying value of goodwill is compared to the recoverable amount, which is the higher of value in use and the fair value less costs of disposal. Any impairment is recognised immediately as an expense and is not subsequently reversed.
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(D) INTANGIBLE ASSETS
Computer software
Costs associated with maintaining computer software programmes are recognized as an expense as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the Group and the Bank are recognised as intangible assets when the following criteria are met:
(i) it is technically feasible to complete the software product so that it will be available for use;
(ii) management intends to complete the software product and use or sell it;
(iii) there is an ability to use or sell the software product;
(iv) it can be demonstrated how the software product will generate probable future economic benefits;
(v) adequate technical, financial and other resources to complete the development and to use or sell the software product are available; and
(vi) the expenditure attributable to the software product during its development can be reliably measured.
Directly attributable costs that are capitalised as part of the software product include the software development employee costs and an appropriate portion of relevant overheads.
Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.
Computer software development costs recognised as assets are amortised from the point at which the asset is ready for use over their estimated useful lives of five years.
(E) IMPAIRMENT OF NON-FINANCIAL ASSETS
Assets that have an indefinite useful life, for example goodwill, are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.
The impairment loss is charged to the income statement unless it reverses a previous revaluation in which case it is charged to the revaluation surplus. Impairment losses on goodwill are not reversed. In respect of other assets, any subsequent increase in recoverable amount is recognised in the income statement unless it reverses an impairment loss on a revalued asset in which case it is taken to revaluation surplus reserve.
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(F) RECOGNITION OF INTEREST AND FINANCING INCOME AND EXPENSE
Interestandfinancingincomeandexpenseforall interest/profit-bearingfinancial instrumentsarerecognisedwithin“interestincome”, “interest expense” and “income from Islamic banking business” respectively in the income statement using theeffective interest/profit method.
The effective interest/profit method is a method of calculating the amortised cost of a financial asset or a financial liability and of allocating the interest and financing income or expense over the relevant period. The effective interest/profit rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instruments or, when appropriate, a shorter period to the net carrying amount of the financial asset or financial liability. When calculating the effective interest/profit rate, the Group and the Bank take into account all contractual terms of the financial instrument and includes any fees or incremental costs that are directly attributable to the instrument and are an integral part of the effective interest rate, but not future credit losses.
Interest/profit income on impaired financial assets is recognised using the rate of interest/profit used to discount the future cash flows for the purpose of measuring the impairment loss. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated.
When a loan/financing receivable is impaired, the Group and the Bank reduce the carrying amount to its recoverable amount, being the estimated future cash flow discounted at the original effective interest/profit rate of the instrument, and continues unwinding the discount as interest/profit income. Interest/profit income on impaired loans/financing and receivables are recognised using the original effective interest/profit rate.
(G) RECOGNITION OF FEES AND OTHER INCOME
Fees and commissions are recognised as income when all conditions precedent are fulfilled. Commitment fees for loans, advances and financing that are likely to be drawn down are deferred (together with related direct costs) and income which forms an integral part of the effective interest/profit rate of a financial instrument is recognised as an adjustment to the effective interest/profit rate on the financial instrument.
Commitment fees and guarantee fees which are material are recognised as income based on a time apportionment method.
Dividends are recognised when the right to receive payment is established. This applies even if they are paid out of pre-acquisition profits. However, the investment may need to be tested for impairment as a consequence.
Net profit from financial assets held at fair value through profit or loss and financial investments available-for-sale are recognised upon disposal of the assets, as the difference between net disposal proceeds and the carrying amount of the assets.
(H) FINANCIAL ASSETS
Classification
The Group and the Bank classify its financial assets in the following categories: at fair value through profit or loss, loans and receivables, available-for-sale and held-to-maturity. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification at initial recognition and, in the case of assets classified as held-to-maturity, re-evaluate this designation at the end of each reporting period.
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(H) FINANCIAL ASSETS
Classification (continued)
(i) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held-for-trading. A financial asset is classified in this category if it is acquired or incurred principally for the purpose of selling it in the short term. Derivatives are also categorised as held for trading unless they are designated as hedges (Note O).
The Group and the Bank have not elected to designate any financial assets at fair value through profit or loss.
(ii) Loans/financing and receivables
Loans/financing and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.
(iii) Financial investments available-for-sale
Financial investments available-for-sale are non-derivatives that are either designated in this category or not classified in any of the other categories.
(iv) Financial investments held-to-maturity
Financial investments held-to-maturity are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Group’s and the Bank’s management have the positive intention and ability to hold to maturity. If the Group and the Bank were to sell other than an insignificant amount of held-to-maturity financial assets, the whole category would be tainted and reclassified as available-for-sale.
Recognition and initial measurement
Regular purchases and sales of financial assets are recognised on the settlement date, the date that an asset is delivered to or by the Group and the Bank.
Financial assets are initially recognised at fair value plus transaction costs that are directly attributable to the acquisition of the financial asset for all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at fair value, and transaction costs are expensed in profit or loss.
Subsequent measurement – gains and losses
Financial investments available-for-sale and financial assets at fair value through profit or loss are subsequently carried at fair value. Loans/financing and receivables and held-to-maturity financial assets are subsequently carried at amortised cost using the effective interest/profit method.
Changes in the fair values of financial assets at fair value through profit or loss, including the effects of currency translation, interest/profit and dividend income are recognised in income statement in the period in which the changes arise.
Changes in the fair value financial investments available-for-sale are recognised in other comprehensive income, except for impairment losses (Note I) and foreign exchange gains and losses on monetary assets (Note N).
Interest/profit and dividend income on financial investments available-for-sale are recognised separately in income statements. Interest/profit on financial investments available-for-sale calculated using the effective interest/profit method is recognised in income statements. Dividend income on available-for-sale equity instruments are recognised in income statements when the Group’s right to receive payments is established.
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(H) FINANCIAL ASSETS
De-recognition
Financial assets are de-recognised when the rights to receive cash flows from the investments have expired or have been transferred and the Group and the Bank have transferred substantially all risks and rewards of ownership.
Loans/financing and receivables that are factored out to banks and other financial institutions with recourse to the Group and the Bank are not derecognised until the recourse period has expired and the risks and rewards of the receivables have been fully transferred. The corresponding cash received from the financial institutions is recorded as borrowings.
When financial investments available-for-sale are sold, the accumulated fair value adjustments recognised in other comprehensive income are reclassified to profit or loss.
Reclassification of financial assets
The Group and the Bank may choose to reclassify a non-derivative trading financial asset out of the held-for-trading category if the financial asset is no longer held for the purpose of selling it in the near term. Financial assets other than loans/financing and receivables are permitted to be reclassified out of the held-for-trading category only in rare circumstances arising from a single event that is unusual and highly unlikely to recur in the near term. In addition, the Group and the Bank may choose to reclassify financial assets that would meet the definition of loans/financing and receivables out of the held-for-trading or available-for-sale categories if the Group and the Bank have the intention and ability to hold these financial assets for the foreseeable future or until maturity at the date of reclassification.
Reclassifications are made at fair value as of the reclassification date. Fair value becomes the new cost or amortised cost as applicable, and no reversals of fair value gains or losses recorded before reclassification date are subsequently made. Effective interest/profit rates for financial assets reclassified to loans/financing and receivables and held-to-maturity categories are determined at the reclassification date. Further increases in estimates of cash flows adjust the effective interest/profit rates prospectively.
(I) IMPAIRMENT OF FINANCIAL ASSETS
Assets carried at amortised cost
The Group and the Bank assess at the end of the reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.
The criteria that the Group and the Bank use to determine that there is objective evidence of an impairment loss include among others:
• pastduecontractualpayments;
• significantfinancialdifficultiesoftheborrower;
• probabilityofbankruptcyorotherfinancialre-organisation;
• defaultofrelatedborrower;
• measurabledecreaseinestimatedfuturecashflowthanwasoriginallyenvisaged;and
• significantdeteriorationinissuer’screditrating.
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(I) IMPAIRMENT OF FINANCIAL ASSETS
The amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest/profit rate. The asset’s carrying amount of the asset is reduced and the amount of the loss is recognised in income statements. If ‘loans/financing and receivables’ or a ‘held-to-maturity investment’ has a variable interest/profit rate, the discount rate for measuring any impairment loss is the current effective interest/profit rate determined under the contract.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor’s credit rating), the reversal of the previously recognised impairment loss is recognised in income statements.
When an asset is uncollectible, it is written off against the related allowance account. Such assets are written off after all the necessary procedures have been completed and the amount of the loss has been determined.
For loans, advances and financing, the Group and the Bank first assess whether objective evidence of impairment exists individually for loans, advances and financing that are individually significant, and individually or collectively for loans, advances and financing that are not individually significant. If the Group and the Bank determine that no objective evidence of impairment exists for individually assessed loans, advances and financing, whether significant or not, it includes the asset in a group of loans, advances and financing with similar credit risk characteristics and collectively assesses them for impairment.
(i) Individual impairment allowance
Loans, advances and financing that are individually assessed for impairment and for which an impairment loss is or continues to be recognised are not included in a collective assessment of impairment. Loans/financings that are individually assessed for impairment and for which no impairment loss is required (over-collateralised loans/financing) are collectively assessed as a separate segment.
The amount of the loss is measured as the difference between the loan/financing’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the loan/financing’s original effective interest/profit rate. The carrying amount of the loan/financing is reduced through the use of an allowance account and the amount of the loss is recognised in the income statement. If a loan/financing has a variable interest/profit rate, the discount rate for measuring any impairment loss is the current effective interest/profit rate determined under the contract.
The calculation of the present value of the estimated future cash flows of a collateralised loan/financing reflects the cash flows that may result from foreclosure less costs for obtaining and selling the collateral, whether or not foreclosure is probable.
(ii) Collective impairment allowance
For the purposes of a collective evaluation of impairment, loans, advances and financing are grouped on the basis of similar credit risk characteristics. Those characteristics are relevant to the estimation of future cash flows for groups of such loans, advances and financing by being indicative of the borrowers’ ability to pay all amounts due according to the contractual terms of the loans/financing being evaluated.
Future cash flows in a group of loans/financing that are collectively evaluated for impairment are estimated on the basis of the contractual cash flows of the loans/financing in the Bank and historical loss experience for loans/financing with credit risk characteristics similar to those in the Bank. Historical loss experience is adjusted on the basis of current observable data to reflect the effects of current conditions that did not affect the period on which the historical loss experience is based and to remove the effects of conditions in the historical period that do not currently exist.
Estimates of changes in future cash flows for groups of loans/financing should reflect and be directionally consistent with changes in related observable data from period to period (for example, changes in unemployment rates, property prices, payment status, or other factors indicative of changes in the probability of losses in the Group and the Bank and their magnitude). The methodology and assumptions used for estimating future cash flows are reviewed regularly by the Group and the Bank to reduce any differences between loss estimates and actual loss experience.
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(I) IMPAIRMENT OF FINANCIAL ASSETS
(ii) Collective impairment allowance (continued)
Based on the Guideline on Classification and Impairment Provisions for Loans/Financing, banking institutions are required to maintain, in aggregate, collective impairment provisions and regulatory reserves of no less than 1.2% of total outstanding loans/financing (excluding loans/financing with an explicit guarantee from the Federal Government of Malaysia), net of individual impairment provisions. Banking institutions are required to comply with the requirement by 31 December 2015.
As at reporting date, the Group and the Bank have maintained the collective impairment provisions and regulatory reserves of no less than 1.2% in the books.
Assets classified as available-for-sale
The Group and the Bank assess at the end of the reporting period whether there is objective evidence that a financial asset or a group of financial assets is impaired.
For debt securities, the Group and the Bank assess at each date of the statement of financial position whether there is any objective evidence that a financial investment or group of financial investments is impaired. The criteria the Group and the Bank use to determine whether there is objective evidence of impairment include non-payment of coupon or principal redemption, significant financial difficulty of issuer or obligor and significant drop in rating.
In the case of equity securities classified as available-for-sale, in addition to the criteria above, a significant or prolonged decline in the fair value of the security below its cost is also considered as an indicator that the assets are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss that had been recognised directly in equity is removed from equity and recognised in income statements. The amount of cumulative loss reclassified to profit or loss is the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in income statements. Impairment losses recognised in income statements on equity instruments classified as available-for-sale are not reversed through income statements.
If, in a subsequent period, the fair value of a debt instrument classified as available-for-sale increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in income statements, the impairment loss is reversed through income statements in subsequent periods.
(J) FINANCIAL LIABILITIES
All financial liabilities which include derivative financial instruments have to be recognised in the statement of financial position and measured in accordance with their assigned category.
The Group and the Bank’s holding in financial liabilities are in financial liabilities at fair value through profit or loss (including financial liabilities held-for-trading and those that designated at fair value) and financial liabilities at amortised cost. Financial liabilities are initially recognised at fair value plus transaction costs for all financial liabilities not carried at fair value through profit or loss.
Financial liabilities at fair value through profit or loss
This category comprises two sub-categories: financial liabilities classified as held-for-trading, and financial liabilities designated by the Group and the Bank as at fair value through profit or loss upon initial recognition. The Group and the Bank do not have any non-derivative financial liabilities designated at fair value through profit or loss.
A financial liability is classified as held-for-trading if it is acquired or incurred principally for the purpose of selling or repurchasing it in the near term or if it is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking. Derivatives are also categorised as held-for-trading unless they are designated and effective as hedging instruments.
Financial liabilities classified as held-for-trading are initially recognised at fair value, and transaction costs are expensed in profit or loss. Gains and losses arising from changes in fair value of financial liabilities classified held-for-trading are included in the income statement.
Summary of Significant Accounting Policiesfor the financial year ended 31 December 2016
AFFIN BANK BERHAD (25046-T)
82
(J) FINANCIAL LIABILITIES
Other liabilities measured at amortised cost
Financial liabilities that are not classified as at fair value through profit or loss fall into this category and are measured at amortised cost.
De-recognition
Financial liabilities are de-recognised when they have been redeemed or otherwise extinguished.
(K) OFFSETTING FINANCIAL INSTRUMENTS
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the assets and settle the liability simultaneously.
The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy.
(L) PROPERTY AND EQUIPMENT AND DEPRECIATION
Property and equipment are initially stated at cost, net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the government. When the amount of GST incurred is not recoverable from the government, the GST is recognised as part of the cost of acquisition of the property and equipment.
Property and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. The cost of an item of property and equipment initially recognised includes its purchase price and any cost that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Cost also include borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is de-recognised. All other repairs and maintenance are recognised as expenses in profit or loss during the financial period in which they are incurred.
Freehold land is not depreciated as it has an infinite life. Other property and equipment are depreciated on the straight-line basis to allocate the cost, to their residual values over their estimated useful lives, summarised as follows:
Buildings 50 years Leasehold buildings 50 years or over the remaining lease period, whichever is shorter Renovation and leasehold premises 5 years or the period of the lease whichever is greater Office equipment and furniture 10 years Computer equipment and software 5 years Motor vehicles 5 years
Depreciation on capital work in progress commences when the assets are ready for their intended use.
Residual value and useful lives of assets are reviewed, and adjusted if appropriate, at the end of each reporting period.
At the end of the reporting period, the Group assesses whether there is any indication of impairment or whenever events or changes in circumstances indicate the carrying amount may not be recoverable. A write down is made if the carrying amount exceeds the recoverable amount.
Gains and losses on disposal are determined by comparing proceeds with carrying amount and are recognised within other operating income in the income statement.
Summary of Significant Accounting Policiesfor the financial year ended 31 December 2016
83
ANNUAL REPORT 2016
(M) LEASES
Accounting by lessee
Finance leases
Leases of property and equipment where the Group assumes substantially all the benefits and risks of ownership are classified as finance leases. Finance leases are capitalised at the inception of the lease at the lower of the fair value of the leased property and the present value of the minimum lease payments.
Each lease payment is allocated between the liability and finance charges so as to achieve a periodic constant rate on the finance balance outstanding. The corresponding rental obligations, net of finance charges, are included in borrowings. The interest element of the finance charge is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Property and equipment acquired under finance leases are depreciated over the shorter of the estimated useful life of the asset and the lease term if there is no reasonable certainty that the Group will obtain ownership at the end of the lease term.
Initial direct costs incurred by the Group in negotiating and arranging finance leases are added to the carrying amount of the leased assets and recognised as an expense in income statement over the lease term on the same basis as the lease expense.
Operating leases
Leases of assets where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on the straight-line basis over the lease period.
Initial direct costs incurred by the Group in negotiating and arranging operating leases are recognised in income statement when incurred.
(N) FOREIGN CURRENCY TRANSLATIONS
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The financial statements are presented in Ringgit Malaysia, which is the Bank’s functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchanges rate prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement. However, exchange differences are deferred in other comprehensive income when they arose from qualifying cashflow or net investment hedge or are attributable to items that form part of the net investment in a foreign operation.
Changes in the fair value of monetary securities denominated in foreign currency classified as available-for-sale are analysed between translation differences resulting from changes in the amortised cost of the security and other changes in the carrying amount of the security. Translation differences related to changes in the amortised cost are recognised in income statement, and other changes in the carrying amount are recognised in other comprehensive income.
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. Translation differences on non-monetary financial assets and liabilities such as equities held at fair value through profit and loss, are reported as part of the fair value gain or loss. Translation differences on non-monetary financial assets such as equities classified as available-for-sale are included in other comprehensive income.
Summary of Significant Accounting Policiesfor the financial year ended 31 December 2016
AFFIN BANK BERHAD (25046-T)
84
(O) DERIVATIVE FINANCIAL INSTRUMENTS
Derivatives are initially recognised at fair values on the date on which derivative contracts are entered into and are subsequently remeasured at their fair values at the end of each reporting period. Fair values are obtained from quoted market prices in active markets, including recent market transactions, and valuation techniques, including discounted cash flow models and option pricing models, as appropriate. All derivatives are carried as assets when fair values are positive and as liabilities when fair values are negative.
The best evidence of fair value of a derivative at initial recognition is the transaction price (i.e the fair value of the consideration given or received) unless fair value of the instrument is evidenced by comparison with other observable current market transactions in the same instrument (i.e without modification or repackaging) or based on a valuation technique whose variables include only data from observable markets.
The accounting for subsequent changes in fair value depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.
As at reporting date, the Group and the Bank have not designated any derivative as hedging instruments.
Changes in the fair value of any derivative instrument that does not qualify for hedge accounting are recognised immediately in the income statement.
(P) CURRENT AND DEFERRED INCOME TAXES
Current tax
Tax expense for the period comprises current and deferred income tax. The income tax expense or credit for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses. Tax is recognised in income statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case the tax is also recognised in other comprehensive income or directly in equity, respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the Group’s subsidiaries and branch operate and generate taxable income.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. This liability is measured using the single best estimate of the most likely outcome.
Deferred tax
Deferred tax is provided in full, using the liability method, on temporary differences arising between the amounts attributed to assets and liabilities for tax purposes and their carrying amounts in the financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.
Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses or unused tax credits can be utilised.
Deferred tax is determined using tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period and are expected to apply when the related deferred tax assets is realised or the deferred tax liability is settled.
Summary of Significant Accounting Policiesfor the financial year ended 31 December 2016
85
ANNUAL REPORT 2016
(P) CURRENT AND DEFERRED INCOME TAXES
Deferred tax (continued)
Deferred tax liability is recognised for all temporary differences associated with investment in subsidiaries and joint venture except where the timing of the reversal of the temporary difference can be controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Generally, the joint venturer is unable to control the reversal of the temporary difference for joint ventures. Only where there is an agreement in place that gives the joint venturer the ability to control the reversal of the temporary difference, a deferred tax liability is not recognised.
Deferred income tax assets are recognised on deductible temporary differences arising from investment in subsidiaries and joint arrangements only to the extent that it is probable the temporary difference will reverse in future and there is sufficient taxable profit available against which the deductible temporary difference can be utilised.
Deferred and income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on net basis.
(Q) ZAKAT
Zakat represents business zakat payable by the Group to comply with the principles of Shariah and as approved by the Shariah Committee. The Bank’s subsidiary, AFFIN Islamic Bank Berhad only pays zakat on its business and does not pay zakat on behalf of depositors. Zakat provision is calculated based on 2.5775% of the prior year’s net asset method.
(R) CASH AND CASH EQUIVALENTS
Cash and cash equivalents consists of cash in hand, bank balances and deposits and placements maturing within one month which are held for the purpose of meeting short term commitments and are readily convertible to known amount of cash without significant risk of changes in value.
(S) FORECLOSED PROPERTIES
Foreclosed properties are stated at the lower of their carrying amount and fair value less cost to sell.
(T) CONTINGENT LIABILITIES AND CONTINGENT ASSETS
The Group and the Bank do not recognise contingent assets and liabilities other than those arising from business combination, but disclose its existence in the financial statements. A contingent liability is possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group and the Bank or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in the extremely rare case where there is a liability that cannot be recognised because it cannot be measured reliably. However, contingent liabilities do not include financial guarantee contracts.
A contingent asset is a possible asset that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group and the Bank. The Group and the Bank do not recognise contingent assets but discloses its existence where inflows of economic benefits are probable, but not virtually certain.
Summary of Significant Accounting Policiesfor the financial year ended 31 December 2016
AFFIN BANK BERHAD (25046-T)
86
(U) BILLS AND ACCEPTANCES PAYABLE
Bills and acceptances payable, which are financial liabilities, represent the Bank’s own bills and acceptances rediscounted and outstanding in the market (Note J).
(V) PROVISIONS
Provisions are recognised by the Group and the Bank when all of the following conditions have been met:
• theGroupandtheBankhaveapresentlegalorconstructiveobligationasaresultofpastevents;
• itisprobablethatanoutflowofresourcestosettletheobligationwillberequired;and
• areliableestimateoftheamountofobligationcanbemade.
Where the Group and the Bank expect a provision to be reimbursed (for example, under an insurance contract), the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of management’s best estimate of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as finance cost expense.
(W) EMPLOYEE BENEFITS
Short-term employee benefits
Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees’ services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled.
Defined contribution plan
The defined contribution plan is a pension plan under which the Group pays fixed contributions to the National Pension Scheme, the Employees’ Provident Fund (‘EPF’) and will have no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee service in the current and prior periods.
The Group’s contribution to defined contribution plans are charged to the income statement in the period to which they relate. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.
Termination benefits
Termination benefits are payable whenever an employee’s employment is terminated before the normal retirement date or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits when it is demonstrably committed to either terminate the employment of current employees according to a detailed formal plan without any possibility of withdrawal or to provide termination benefits as a result of an offer made to encourage voluntary redundancy.
Summary of Significant Accounting Policiesfor the financial year ended 31 December 2016
87
ANNUAL REPORT 2016
(X) FINANCIAL GUARANTEE CONTRACTS
Financial guarantee contracts are contracts that require the Group or Bank to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due, in accordance with the terms of a debt instrument. Such financial guarantees are given to financial institutions and other bodies on behalf of customers to secure loans, overdrafts and other banking facilities.
Financial guarantee contracts are recognised as a financial liability at the time the guarantee is issued. The liability is initially measuredatfairvalueandsubsequentlyatthehigheroftheamountdeterminedinaccordancewithMFRS137“Provisions,contingentliabilitiesandcontingentassets”andtheamountinitiallyrecognisedlesscumulativeamortisation,whereappropriate.
The fair value of financial guarantees is determined as the present value of the difference in net cash flows between the contractual payments under the debt instrument and the payments that would be required without the guarantee, or the estimated amount that would be payable to a third party for assuming the obligations.
Where financial guarantees in relation to loans/financing or payables of subsidiaries are provided by the Bank for no compensation, the fair values are accounted for as contributions and recognised as part of the cost of investment in subsidiaries.
(Y) SALE AND REPURCHASE AGREEMENTS
Securities purchased under resale agreements are securities which the Group and the Bank have purchased with a commitment to resell at future dates. The commitment to resell the securities is reflected as an asset on the statements of financial position.
Conversely, obligations on securities sold under repurchase agreements are securities which the Group and the Bank have sold from its portfolio, with a commitment to repurchase at future dates. Such financing and the obligation to repurchase the securities is reflected as a liability on the statement of financial position.
The difference between sale and repurchase price as well as purchase and resale price are amortised as interest income and interest expense respectively on an effective yield method.
(Z) RESTRICTED INVESTMENT ACCOUNTS (‘RIA’)
These deposits are used to fund specific financing. The RIA is a contract based on the Shariah concept of Mudharabah between two parties, i.e. investor and entrepreneur to finance a business venture where the investor provides capital and the business venture is managed solely by the entrepreneur. The profit of the business venture will be shared based on pre-agreed ratios with the Bank as Mudarib (manager or manager of funds), and losses shall be borne solely by capital provider.
(AA) SHARE CAPITAL
Classification
Ordinary shares are classified as equity. Other shares are classified as equity and/or liability according to the economic substance of the particular instrument.
Share issue costs
Incremental costs directly attributable to the issue of new shares or options are deducted against share premium account.
Dividend distribution
Liability is recognised for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the Group, on or before the end of the reporting period but not distributed at the end of the reporting period.
Distributions to holders of an equity instrument are recognised directly in equity.
Summary of Significant Accounting Policiesfor the financial year ended 31 December 2016
AFFIN BANK BERHAD (25046-T)
88
(AA) SHARE CAPITAL
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing:
• theprofitattributabletoownersoftheBank,excludinganycostsofservicingequityotherthanordinaryshares;and
• bytheweightedaveragenumberofordinarysharesoutstandingduringthefinancialyear,adjustedforbonuselementsinordinary shares issued during the year and excluding treasury shares.
Diluted earnings per share
Diluted earnings per share adjusts the figures in the determination of basic earnings per share to take into account:
• theafterincometaxeffectofinterestandotherfinancingcostsassociatedwithdilutivepotentialordinaryshares,and
• theweightedaveragenumberofadditionalordinarysharesthatwouldhavebeenoutstandingassumingtheconversionofall dilutive potential ordinary shares.
(AB) BORROWINGS
Borrowings are recognised initially at fair value, net of transaction costs incurred.
Borrowings are subsequently carried at amortised cost; any difference between initial recognised amount and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest/profit method.
All borrowing costs are recognised in profit or loss in the period in which they are incurred.
Summary of Significant Accounting Policiesfor the financial year ended 31 December 2016
89
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
1 GENERAL INFORMATION
The Bank is principally engaged in all aspects of banking and related financial services. The principal activities of the Bank’s subsidiaries are Islamic banking business, property management services, nominee and trustee services. There have been no significant changes in the nature of these activities during the financial year.
The holding company of the Bank is AFFIN Holdings Berhad, a public listed company incorporated in Malaysia and the ultimate holding corporate body is Lembaga Tabung Angkatan Tentera, a statutory body incorporated under the Tabung Angkatan Tentera Act, 1973.
The Bank is a limited liability company, incorporated and domiciled in Malaysia.
2 CASH AND SHORT-TERM FUNDS
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Cash and bank balances with banks and other financial institutions 289,669 837,705 282,862 830,099
Money at call and deposit placements maturing within one month 4,074,821 3,233,005 3,054,969 1,372,923
4,364,490 4,070,710 3,337,831 2,203,022
3 DEPOSITS AND PLACEMENTS WITH BANKS AND OTHER FINANCIAL INSTITUTIONS
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Licensed banks 152,234 316,653 406,075 349,772
Other financial institutions - 35,034 - -
152,234 351,687 406,075 349,772
4 FINANCIAL ASSETS HELD-FOR-TRADING
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
At fair value
Negotiable Instruments of Deposit - 150,121 - 150,121
- 150,121 - 150,121
AFFIN BANK BERHAD (25046-T)
90
Notes to the Financial Statementsfor the financial year ended 31 December 2016
5 DERIVATIVE FINANCIAL ASSETS
The Group The Group 2016 2015 Contract/ Contract/ notional notional amount Assets amount Assets RM’000 RM’000 RM’000 RM’000
At fair value
Foreign exchange derivatives:
Currency forwards 1,764,528 113,263 966,652 76,445
Cross currency swaps 1,963,860 36,441 2,571,803 81,272
Currency options - - 39,130 (12)
Interest rate derivatives:
Interest rate swaps 1,013,500 17,600 1,610,148 16,332
4,741,888 167,304 5,187,733 174,037
The Bank The Bank 2016 2015 Contract/ Contract/ notional notional amount Assets amount Assets RM’000 RM’000 RM’000 RM’000
At fair value
Foreign exchange derivatives:
Currency forwards 1,738,521 111,513 1,099,793 77,153
Cross currency swaps 2,060,604 37,127 2,571,803 81,272
Currency options - - 39,130 (12)
Interest rate derivatives:
Interest rate swaps 1,013,500 17,600 1,610,148 16,332
4,812,625 166,240 5,320,874 174,745
91
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
6 FINANCIAL INVESTMENTS AVAILABLE-FOR-SALE
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
At fair value
Money market instruments:
Malaysian Government securities 90,237 39,997 90,237 39,997
Malaysian Government investment issues 1,527,767 1,863,822 898,982 1,249,964
Sukuk Perumahan Kerajaan 406,288 655,690 276,858 468,472
Negotiable Instruments of Deposit and Islamic Debt Certificates 2,514,468 2,134,612 2,514,468 2,134,612
Khazanah Bonds/Sukuk 439,219 437,819 265,931 272,538
4,977,979 5,131,940 4,046,476 4,165,583
Unquoted securities:
Shares in Malaysia 216,948 206,724 216,948 205,167
Corporate bonds/Sukuk
- in Malaysia 4,663,751 4,446,167 3,761,846 3,937,676
- outside Malaysia 421,675 503,820 421,675 503,820
10,280,353 10,288,651 8,446,945 8,812,246
Allowance for impairment losses (356) (1,301) (356) (269)
10,279,997 10,287,350 8,446,589 8,811,977
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Movement in allowance for impairment losses
At beginning of the financial year 1,301 45,322 269 44,290
Allowance made during the financial year 318 - 318 -
Amount written-off (1,263) (44,021) (231) (44,021)
At end of the financial year 356 1,301 356 269
Included in the Group and the Bank’s financial investments available-for-sale are corporate bonds amounting to RM1,057.7 million (2015: RM1,864.9 million) which are pledged as collateral for obligation on the securities sold under repurchase agreements.
AFFIN BANK BERHAD (25046-T)
92
Notes to the Financial Statementsfor the financial year ended 31 December 2016
7 FINANCIAL INVESTMENTS HELD-TO-MATURITY
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
At amortised cost
Unquoted securities:
Corporate bonds/Sukuk in Malaysia 377,061 380,832 304,939 304,550
Allowance for impairment losses (3,537) (178) (3,537) (178)
373,524 380,654 301,402 304,372
Movement in allowance for impairment losses
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
At beginning of the financial year 178 44,278 178 44,278
Allowance made during the financial year 3,537 - 3,537 -
Amount write-back - (22,037) - (22,037)
Amount written-off (178) (22,063) (178) (22,063)
At end of the financial year 3,537 178 3,537 178
93
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
8 LOANS, ADVANCES AND FINANCING
(i) By type
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Overdrafts 1,919,668 1,960,022 1,640,789 1,645,595
Term loans/financing
- Housing loans/financing 6,964,223 6,172,180 4,106,693 4,075,922
- Hire purchase receivables 11,920,683 12,000,990 8,739,325 9,290,597
- Syndicated financing 2,079,384 1,810,209 1,496,645 1,319,486
- Business term loans/financing 13,440,419 13,416,080 9,898,640 10,555,927
Bills receivables 30,113 321,091 8,738 284,455
Trust receipts 297,955 298,417 291,017 285,817
Claims on customers under acceptances credits 1,082,209 1,016,613 907,586 892,716
Staff loans/financing (of which RM Nil to Directors) 155,172 146,494 142,063 136,958
Credit cards 91,091 83,769 91,091 83,769
Revolving credits 5,069,950 5,373,961 3,750,341 4,751,488
Factoring 1,560 4,369 1,560 4,369
Gross loans, advances and financing 43,052,427 42,604,195 31,074,488 33,327,099
Less:
Allowance for impairment losses
- Individual (149,499) (270,137) (131,497) (231,621)
- Collective (234,631) (229,461) (189,637) (192,790)
Total net loans, advances and financing 42,668,297 42,104,597 30,753,354 32,902,688
Included in the Group and the Bank’s term loans are housing loans sold to Cagamas Berhad with recourse amounting to RM Nil (2015: RM134.6 million).
Included in the Group’s business term loans/financing as at reporting date is RM53.7 million (2015: RM53.7 million) and RM78.0 million (2015: RM63.9 million) of term financing disbursed by AFFIN Islamic Bank Berhad to joint ventures AFFIN-i Nadayu Sdn Bhd and KL South Development Sdn Bhd respectively.
(ii) By maturity structure
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Maturing within one year 8,828,952 9,755,365 6,790,065 8,329,031
One year to three years 4,700,048 4,455,462 3,690,330 3,913,159
Three years to five years 7,072,074 6,700,288 5,696,213 5,772,922
Over five years 22,451,353 21,693,080 14,897,880 15,311,987
43,052,427 42,604,195 31,074,488 33,327,099
AFFIN BANK BERHAD (25046-T)
94
Notes to the Financial Statementsfor the financial year ended 31 December 2016
8 LOANS, ADVANCES AND FINANCING
(iii) By type of customer
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Domestic banking institutions 3,033 - 3,033 -
Domestic non-banking institutions
- Stockbroking companies - 221 - 221
- Others 814,693 1,575,279 605,194 1,447,078
Domestic business enterprises
- Small medium enterprises 12,504,565 9,069,401 10,729,868 8,060,187
- Others 10,225,035 13,078,516 7,708,023 10,448,275
Government and statutory bodies 1,467,488 1,137,674 85,570 534,604
Individuals 17,663,433 16,799,087 11,696,882 12,067,560
Other domestic entities 88,036 109,263 78,346 83,478
Foreign entities 286,144 834,754 167,572 685,696
43,052,427 42,604,195 31,074,488 33,327,099
(iv) By interest/profit rate sensitivity
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Fixed rate
- Housing loans/financing 403,899 400,386 357,962 347,831
- Hire purchase receivables 11,920,683 12,000,990 8,739,326 9,290,597
- Other fixed rate loans/financing 3,434,446 3,986,107 2,079,862 2,670,561
Variable rate
- BLR plus 16,749,266 16,014,700 11,359,696 12,228,698
- Cost plus 10,544,133 10,202,012 8,537,642 8,789,412
43,052,427 42,604,195 31,074,488 33,327,099
95
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
8 LOANS, ADVANCES AND FINANCING
(v) By economic sectors
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Primary agriculture 896,922 692,126 494,803 413,218
Mining and quarrying 861,542 723,167 850,194 710,130
Manufacturing 2,102,831 2,254,941 1,768,086 2,029,121
Electricity, gas and water supply 182,805 173,888 118,436 116,517
Construction 2,509,215 3,521,131 1,986,124 2,966,971
Real estate 7,845,338 6,885,709 6,389,929 5,715,112
Wholesale & retail trade and restaurants & hotels 2,791,557 2,437,432 2,383,908 2,218,930
Transport, storage and communication 2,082,979 2,072,151 1,798,763 1,866,149
Finance, insurance and business services 2,835,367 4,285,232 2,374,384 3,718,355
Education, health and others 3,077,832 2,590,004 1,046,112 1,388,887
Household 17,795,793 16,925,393 11,793,554 12,164,391
Others 70,246 43,021 70,195 19,318
43,052,427 42,604,195 31,074,488 33,327,099
(vi) By economic purpose
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Purchase of securities 664,778 299,011 389,262 296,578
Purchase of transport vehicles 12,281,400 12,438,031 9,030,869 9,702,193
Purchase of landed property of which:
- Residential 7,078,070 6,404,657 4,134,200 4,229,105
- Non-residential 5,991,465 5,891,022 4,879,275 4,911,687
Fixed assets other than land and building 325,485 240,609 253,064 164,273
Personal use 691,241 745,510 637,648 709,015
Credit card 91,091 83,769 91,091 83,769
Consumer durable 879 852 879 852
Construction 3,215,672 3,127,244 2,319,987 2,325,499
Merger and acquisition 97,992 247,706 97,992 247,706
Working capital 12,251,552 12,777,233 9,114,083 10,440,927
Others 362,802 348,551 126,138 215,495
43,052,427 42,604,195 31,074,488 33,327,099
AFFIN BANK BERHAD (25046-T)
96
Notes to the Financial Statementsfor the financial year ended 31 December 2016
8 LOANS, ADVANCES AND FINANCING
(vii) By geographical distribution
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Perlis 195,079 155,914 47,641 34,185
Kedah 1,434,211 1,362,515 772,318 803,114
Pulau Pinang 2,369,676 2,142,594 2,007,416 1,911,468
Perak 1,416,128 1,302,338 973,397 914,655
Selangor 12,411,054 12,878,079 8,950,162 9,800,065
Wilayah Persekutuan 12,986,958 13,155,004 8,752,844 10,272,358
Negeri Sembilan 1,216,093 994,321 767,492 663,569
Melaka 1,030,455 1,003,701 831,300 854,858
Johor 4,046,707 3,449,496 3,212,336 3,004,105
Pahang 897,686 845,284 595,356 551,457
Terengganu 743,413 803,862 347,503 385,226
Kelantan 216,290 229,607 63,115 67,998
Sarawak 1,710,795 1,577,489 1,578,664 1,508,223
Sabah 1,626,472 1,621,746 1,570,576 1,593,194
Labuan 664,510 684,220 600,536 684,164
Outside Malaysia 86,900 398,025 3,832 278,460
43,052,427 42,604,195 31,074,488 33,327,099
(viii) Movements of impaired loans
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
At beginning of the financial year 767,847 713,648 626,139 584,491
Classified as impaired 679,669 872,231 515,330 763,856
Reclassified as non-impaired (383,917) (394,738) (272,326) (326,841)
Amount recovered (197,704) (149,944) (110,492) (131,082)
Amount written-off (177,949) (273,350) (168,204) (264,285)
At end of the financial year 687,946 767,847 590,447 626,139
Ratio of gross impaired loans, advances and financing to gross loans, advances and financing 1.60% 1.80% 1.90% 1.88%
97
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
8 LOANS, ADVANCES AND FINANCING
(ix) Movements in allowance for impairment on loans, advances and financing
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Individual impairment
At beginning of the financial year 270,137 239,259 231,621 207,740
Allowance made during the financial year 81,349 257,645 62,010 254,086
Amount recovered (59,431) (7,293) (23,569) (7,246)
Amount written-off (132,589) (192,965) (128,440) (190,583)
Unwinding of income (10,324) (33,004) (10,125) (32,376)
Exchange differences 357 6,495 - -
At end of the financial year 149,499 270,137 131,497 231,621
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Collective impairment
At beginning of the financial year 229,461 292,619 192,790 255,226
Net allowance made during the financial year 49,832 17,224 35,935 11,265
Amount written-off (44,662) (80,382) (39,088) (73,701)
At end of the financial year 234,631 229,461 189,637 192,790
(x) Impaired loans by economic sectors
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Primary agriculture 14,331 14,388 14,288 14,388
Mining and quarrying 120 15 63 15
Manufacturing 20,434 35,535 19,406 35,187
Electricity, gas and water supply 207 148 96 148
Construction 102,416 81,302 97,335 80,914
Real estate 56,931 89,268 23,296 3,401
Wholesale & retail trade and restaurants & hotels 46,878 37,463 46,289 35,563
Transport, storage and communication 2,106 3,314 1,799 3,013
Finance, insurance and business services 128,829 216,444 128,337 216,333
Education, health and others 732 2,602 570 2,460
Household 314,962 287,368 258,968 234,717
687,946 767,847 590,447 626,139
AFFIN BANK BERHAD (25046-T)
98
Notes to the Financial Statementsfor the financial year ended 31 December 2016
8 LOANS, ADVANCES AND FINANCING
(xi) Impaired loans by economic purpose
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Purchase of securities 158 804 158 804
Purchase of transport vehicles 86,062 82,026 69,732 69,400
Purchase of landed property of which:
- Residential 203,075 180,137 161,680 140,674
- Non-residential 54,715 24,010 48,562 22,634
Fixed assets other than land and building 878 164 651 164
Personal use 28,441 20,539 27,616 20,044
Credit card 408 389 408 389
Consumer durable 17 16 17 16
Construction 39,998 98,031 39,998 12,164
Working capital 267,187 338,087 234,618 336,206
Others 7,007 23,644 7,007 23,644
687,946 767,847 590,447 626,139
(xii) Impaired loans by geographical distribution
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Perlis 5,245 680 443 639
Kedah 48,834 19,972 45,818 18,964
Pulau Pinang 41,022 42,525 38,916 41,000
Perak 18,490 18,793 14,165 14,871
Selangor 264,698 417,971 233,730 389,349
Wilayah Persekutuan 79,564 89,094 76,894 83,164
Negeri Sembilan 79,423 13,949 74,573 11,230
Melaka 16,091 7,231 15,153 6,749
Johor 27,974 25,596 26,457 23,518
Pahang 9,574 8,262 7,880 6,917
Terengganu 6,245 5,307 1,229 1,389
Kelantan 5,337 5,068 1,694 1,435
Sarawak 7,951 6,918 7,753 6,666
Sabah 45,914 20,614 45,742 20,248
Outside Malaysia 31,584 85,867 - -
687,946 767,847 590,447 626,139
99
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
9 OTHER ASSETS
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Other debtors 21,343 49,586 19,424 46,847
Prepayments and deposits 21,898 23,360 21,429 22,740
Cheque clearing accounts 10,721 6,803 7,759 6,501
Foreclosed properties (a) 7,970 4,906 5,329 4,315
61,932 84,655 53,941 80,403
(a) Foreclosed properties
At beginning of the financial year 4,906 9,099 4,315 8,508
Purchased during the financial year 3,558 - 1,508 -
Disposal during the financial year (435) (4,193) (435) (4,193)
8,029 4,906 5,388 4,315
Foreclosed properties - impairment made (59) - (59) -
At end of the financial year 7,970 4,906 5,329 4,315
10 AMOUNT DUE FROM SUBSIDIARIES
The Bank 2016 2015 RM’000 RM’000
Advances to AFFIN Islamic Bank Berhad 196,828 -
Advances to other subsidiaries 11 61
196,839 61
The advances to subsidiaries are unsecured, bear no interest rate (2015: Nil) and repayable on demand.
11 AMOUNT DUE FROM JOINT VENTURES
The Group 2016 2015 RM’000 RM’000
Advances to joint ventures 46,725 39,936
46,725 39,936
The advances to joint ventures are unsecured, bear average profit rate 7.72% (2015: 7.85%) and repayable on demand.
12 AMOUNT DUE FROM ASSOCIATE
The Group 2016 2015 RM’000 RM’000
Advances to associate 500 -
500 -
The advances to associates are unsecured, bear no profit rate and payable on demand.
AFFIN BANK BERHAD (25046-T)
100
Notes to the Financial Statementsfor the financial year ended 31 December 2016
13 DEFERRED TAX ASSETS / (LIABILITIES)
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred taxes relate to the same tax authority. The following amounts determined after appropriate offsetting, are shown in the statement of financial position:
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Deferred tax assets 8,056 3,598 - -
Deferred tax liabilities (12,884) (15,104) (12,884) (15,104)
(4,828) (11,506) (12,884) (15,104)
Deferred tax assets:
- settled more than 12 months - - - -
- settled within 12 months 35,380 20,517 27,071 16,549
Deferred tax liabilities:
- settled more than 12 months (6,705) (4,219) (6,685) (4,012)
- settled within 12 months (33,503) (27,804) (33,270) (27,641)
Deferred tax (liabilities)/assets (4,828) (11,506) (12,884) (15,104)
At beginning of the financial year (11,506) 3,118 (15,104) 218
Credited/(charged) to income statement (Note 37) 8,396 1,855 7,145 1,799
Charged to equity (1,718) (16,479) (4,925) (17,121)
At end of the financial year (4,828) (11,506) (12,884) (15,104)
The movement in deferred tax assets and liabilities during the financial year are as follows (RM’000):
Provision Financial The Group Property and Intangible for other investment 2016 equipment assets liabilities AFS Total
At beginning of the financial year (3,285) (4,204) 18,021 (22,038) (11,506)
(Charged)/credited to income statements (343) (2,916) 11,655 - 8,396
Charged to equity - - - (1,718) (1,718)
At end of the financial year (3,628) (7,120) 29,676 (23,756) (4,828)
Provision Financial The Group Property and Intangible for other investment 2015 equipment assets liabilities AFS Total
At beginning of the financial year (3,950) (3,422) 16,049 (5,559) 3,118
Credited/(charged) to income statements 665 (782) 1,972 - 1,855
Charged to equity - - - (16,479) (16,479)
At end of the financial year (3,285) (4,204) 18,021 (22,038) (11,506)
101
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
13 DEFERRED TAX ASSETS / (LIABILITIES)
Provision Financial The Bank Property and Intangible for other investment 2016 equipment assets liabilities AFS Total
At beginning of the financial year (3,018) (4,101) 16,551 (24,536) (15,104)
(Charged)/credited to income statements (358) (3,019) 10,522 - 7,145
Charged to equity - - - (4,925) (4,925)
At end of the financial year (3,376) (7,120) 27,073 (29,461) (12,884)
Provision Financial The Bank Property and Intangible for other investment 2015 equipment assets liabilities AFS Total
At beginning of the financial year (3,638) (3,208) 14,479 (7,415) 218
Credited/(charged) to income statements 620 (893) 2,072 - 1,799
Charged to equity - - - (17,121) (17,121)
At end of the financial year (3,018) (4,101) 16,551 (24,536) (15,104)
The amount of unused tax losses for which no deferred tax asset is recognised in the statement of financial position are as follows:
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Tax losses 98,867 98,865 - -
14 STATUTORY DEPOSITS WITH BANK NEGARA MALAYSIA
A non-interest bearing statutory deposit is maintained with Bank Negara Malaysia in compliance with requirements of Section 26(2)(c) of the Central Bank of Malaysia Act 2009, the amounts of which is determined at a set percentage of total eligible liabilities.
15 INVESTMENT IN SUBSIDIARIES
The Bank 2016 2015 RM’000 RM’000
Unquoted shares, at cost 578,103 519,509
Less: Allowance for impairment losses (2,879) (30,435)
575,224 489,074
AFFIN BANK BERHAD (25046-T)
102
Notes to the Financial Statementsfor the financial year ended 31 December 2016
15 INVESTMENT IN SUBSIDIARIES
The Bank 2016 2015 RM’000 RM’000
Movement in allowance for impairment losses
At beginning of the financial year 30,435 30,435
Amount written off (27,556) -
At end of the financial year 2,879 30,435
The subsidiaries of the Bank, all of which are incorporated in Malaysia, are as follows:
Percentage of equity held Name Principal Activities 2016 2015 % %
AFFIN Islamic Bank Bhd Islamic banking business 100 100
PAB Properties Sdn Bhd Property management services 100 100
ABB Nominee (Tempatan) Sdn Bhd Share nominee services 100 100
ABB Trustee Berhad * Trustee management services 100 100
AFFIN Recoveries Bhd Dormant 100 100
ABB Nominee (Asing) Sdn Bhd Dormant 100 100
AFFIN Factors Sdn Bhd (#) Dormant - 100
AFFIN Futures Sdn Bhd (#) Dormant - 100
ABB IT & Services Sdn Bhd (#) Dormant - 100
BSNCB Nominees (Tempatan) Sdn Bhd (#) Dormant - 100
BSNC Nominees (Tempatan) Sdn Bhd (#) Dormant - 100
PAB Property Development Sdn Bhd (#) Dormant - 100
AFFIN-ACF Nominees (Tempatan) Sdn Bhd (#) Dormant - 100
* 80% held by Directors of the Bank, in trust for the Bank.
# Voluntary winding up.
16 INVESTMENT IN JOINT VENTURES
The Group and The Bank 2016 2015 RM’000 RM’000
Unquoted shares at cost 650 650
Group’s share of post acquisition retained losses (650) (650)
- -
The summarised financial information of joint ventures are as follows:
Revenue 60,158 14,268
Loss after tax (3,777) (268)
Total assets 286,991 269,037
Total liabilities 297,038 275,307
103
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
16 INVESTMENT IN JOINT VENTURES
AFFIN-i KLSD 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Net liabilities
At beginning of the financial year (4,155) (2,714) (3,559) (4,732)
Loss for the financial year (328) (1,441) (3,449) 1,173
At end of the financial year (4,483) (4,155) (7,008) (3,559)
Issued and paid up share capital 1,000 1,000 500 500
Interest in joint venture (%) 50 50 30 30
Loss in joint venture (RM’000) (2,242) (2,078) (2,102) (1,068)
Both the joint ventures’ principal activities are property developments.
As the Group’s share of cumulative losses of RM3.7 million (2015: RM2.5 million) as at 31 December 2016 exceeded its profit in the joint ventures, the Group does not recognise further losses in its financial statements.
AFFIN-i Nadayu Sdn Bhd (‘AFFIN-i’)
On 1 April 2008, AFFIN Islamic Bank Berhad (‘AiBB’) and Jurus Positif Sdn Bhd, a subsidiary of Nadayu Properties Berhad entered into a Musharakah Joint Venture Agreement under the Shariah principles (‘Musharakah Agreement’) to joint develop a land into a housing scheme at Bukit Gambir, Pulau Pinang.
The Musharakah Agreement also includes an arrangement whereby Jurus Positif Sdn Bhd may acquire the AiBB’s shares upon the completion of the project at a mutually agreed price, unless if both shareholders decide to continue the joint venture for subsequent projects.
Major strategic operation and financial decisions relating to the activities of AFFIN-i Nadayu requires unanimous consent by both joint venture parties. The Group’s interest in AFFIN-i Nadayu Sdn Bhd has been treated as investment in joint venture, which has been accounted for in the consolidated financial statements using the equity method of accounting.
KL South Development Sdn Bhd (‘KLSD’)
On 2 January 2013, AiBB entered into a Musharakah Joint Venture Agreement (‘Musharakah Agreement’) with Albatha Bukit Kiara Holdings Sdn Bhd (‘Albatha’), a subsidiary of Bukit Kiara Capital Sdn Bhd, to joint develop a property project namely “VERVESuitesKLSouth”atJalanKlangLama,KualaLumpur.
Pursuant to the Musharakah Agreement, AiBB acquired 30% stake in the joint venture company namely KL South Development Sdn Bhd (‘KL South’) by way of subscription of 150,000 shares of RM1.00 each in KL South at par. The remaining stake of 70% in KL South is held by Albatha.
Under the Musharakah structure, AiBB would be the sole banker to KL South, providing financing using the Islamic concept such as Ijarah for the purchase of building and Istisna’ for the bridging financing.
Major strategic operation and financial decisions relating to the activities of KL South requires consent by both joint venture parties. The Group’s interest in KL South has been treated as investment in joint venture, which has been accounted for in the consolidated financial statements using the equity method of accounting.
Block B was launched on 1st July 2013 and its construction was completed with Certificate of Completion and Compliance (CCC) duly issued on 30th August 2016.
Construction of Block A shall complete by April 2017.
AFFIN BANK BERHAD (25046-T)
104
Notes to the Financial Statementsfor the financial year ended 31 December 2016
17 INVESTMENT IN ASSOCIATE
Raeed Holdings Sdn Bhd
Raeed Holdings Sdn Bhd (‘Raeed’) is a consortium formed by six Islamic banking institutions in Malaysia namely Affin Islamic Bank Berhad, Bank Islam Malaysia Berhad, Bank Muamalat Malaysia Berhad, Maybank Islamic Berhad, Bank Kerjasama Rakyat Malaysia and Bank Simpanan Nasional. Raeed has set up a wholly-owned subsidiary, IAP Integrated Sdn Bhd to develop and operate a multi-bank platform known as the Investment Account Platform (‘IAP’).
IAP Integrated started its business in 2015 as an internet based multibank investment portal. The portal will facilitate efficient intermediation by the Sponsoring Banks to match financing requirement of ventures with investment from retail and institutional investors via Investment Account (IA). IAP Integrated aims to be the leading multibank platform for Shariah compliant capital mobilisation, supported by a conducive ecosystem.
The Group and The Bank 2016 2015 RM’000 RM’000
Unquoted share at cost 750 -
The summarised financial information of associate is as follows:
Revenue - -
Loss after tax (1,754) -
Total assets 8,632 -
Total liabilities 6,431 -
As the Group’s share of cumulative losses of RM0.4 million as at 31 December 2016 exceeded its interest in the associate, the Group does not recognise losses in its current financial statements.
105
ANNUAL REPORT 2016
Not
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AFFIN BANK BERHAD (25046-T)
106
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’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
C
ost
A
t beg
inni
ng o
f the
fina
ncia
l yea
r
19,
236
1
2,34
2
5,3
80
26,
368
8
0,98
2
112
,140
5
9,03
8
72,
313
3
,650
9
,164
4
00,6
13
A
dditi
ons
-
-
-
-
-
2
,354
1
,457
3
,192
6
2
78,1
08
285
,117
D
ispo
sals
-
-
-
-
-
(3
) (9
4)
-
(7)
-
(104
)
W
rite-
off
-
-
-
-
-
(1
,910
) (9
35)
(106
) -
-
(2
,951
)
R
ecla
ssifi
catio
n
-
(520
) 5
20
-
-
-
-
-
-
-
-
R
ecla
ssifi
catio
n to
oth
er a
sset
s
(1
62)
-
-
-
-
-
-
-
-
-
(162
)
R
ecla
ssifi
catio
n to
inta
ngib
le a
sset
s
(N
ote
19)
259,
831
-
-
-
-
4
39
141
5
6
-
(272
,111
) (1
1,64
4)
A
t end
of t
he fi
nanc
ial y
ear
27
8,90
5
11,
822
5
,900
2
6,36
8
80,
982
1
13,0
20
59,
607
7
5,45
5
3,6
49
15,
161
6
70,8
69
A
ccum
ulat
ed d
epre
ciat
ion
and
im
pairm
ent l
osse
s
A
t beg
inni
ng o
f the
fina
ncia
l yea
r
140
2
,142
1
,813
1
2,38
5
24,
282
9
9,94
2
42,
558
6
6,14
3
2,0
77
-
251
,482
C
harg
e fo
r th
e fin
anci
al y
ear
-
9
7
128
4
39
1,6
28
5,6
46
3,4
41
3,1
56
509
-
1
5,04
4
D
ispo
sal
-
-
-
-
-
(3
) (9
3)
-
(7)
-
(103
)
W
rite-
off
-
-
-
-
-
(1
,910
) (8
51)
(106
) -
-
(2
,867
)
R
ecla
ssifi
catio
n
-
(137
) 1
37
-
-
-
-
-
-
-
-
A
t end
of t
he fi
nanc
ial y
ear
1
40
2,1
02
2,0
78
12,
824
2
5,91
0
103
,675
4
5,05
5
69,
193
2
,579
-
2
63,5
56
N
et b
ook
valu
e at
end
of t
he
finan
cial
yea
r
27
8,76
5
9,7
20
3,8
22
13,
544
5
5,07
2
9,3
45
14,
552
6
,262
1
,070
1
5,16
1
407
,313
107
ANNUAL REPORT 2016
18
PR
OP
ER
TY
AN
D E
QU
IPM
EN
T
B
uild
ing
s
Bui
ldin
gs
Offi
ce
<--
-Lea
seho
ld la
nd--
>
on
on
eq
uip
men
t
C
apit
al
Fr
eeho
ld
50 y
ears
Le
ss t
han
free
hold
le
aseh
old
and
C
om
put
er
Mo
tor
wo
rk in
T
he B
ank
land
o
r m
ore
50
yea
rs
land
la
nd R
eno
vatio
n fu
rnitu
re
equi
pm
ent
vehi
cles
p
rog
ress
To
tal
20
16
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
C
ost
A
t beg
inni
ng o
f the
fina
ncia
l yea
r
276
,397
9
,932
5
,900
2
5,06
9
80,
074
1
08,4
74
57,
126
7
2,56
4
3,1
49
15,
161
6
53,8
46
A
dditi
ons
-
-
-
-
-
3
,977
1
,652
6
,901
3
32
14,
129
2
6,99
1
D
ispo
sals
-
-
-
-
-
-
(1
6)
-
(867
) -
(8
83)
W
rite-
off
-
-
-
-
-
(3
62)
(584
) (1
30)
-
-
(1,0
76)
R
ecla
ssifi
catio
n
-
-
-
-
-
22
(2
8)
1,1
36
-
(18,
927)
(1
7,79
7)
A
t en
d o
f th
e fi
nanc
ial y
ear
2
76,3
97
9,9
32
5,9
00
25,
069
8
0,07
4
112
,111
5
8,15
0
80,
471
2
,614
1
0,36
3
661
,081
A
ccum
ulat
ed d
epre
ciat
ion
and
im
pai
rmen
t lo
sses
A
t beg
inni
ng o
f the
fina
ncia
l yea
r
-
1,8
43
2,0
78
11,
980
2
5,33
5
99,
847
4
3,65
5
66,
868
2
,327
-
2
53,9
33
C
harg
e fo
r th
e fin
anci
al y
ear
-
9
0
128
4
12
1,6
08
4,5
62
3,2
34
3,41
5
239
-
1
3,68
8
D
ispo
sal
-
-
-
-
-
-
(1
6)
-
(543
) -
(5
59)
W
rite-
off
-
-
-
-
-
(3
55)
(536
) (1
30)
-
-
(1,0
21)
R
ecla
ssifi
catio
n
-
-
-
-
-
1
(7)
329
-
-
3
23
A
t en
d o
f th
e fi
nanc
ial y
ear
-
1
,933
2
,206
1
2,39
2 2
6,94
3
104
,055
4
6,33
0
70,
482
2
,023
-
2
66,3
64
N
et b
oo
k va
lue
at e
nd o
f th
e
fina
ncia
l yea
r
276
,397
7
,999
3
,694
1
2,67
7
53,1
31
8,0
56
11,
820
9
,989
5
91
10,
363
3
94,7
17
Not
es t
o th
e Fi
nanc
ial S
tate
men
tsfo
r the
fina
ncia
l yea
r end
ed 3
1 D
ecem
ber 2
016
AFFIN BANK BERHAD (25046-T)
108
18
PR
OP
ER
TY
AN
D E
QU
IPM
EN
T
B
uild
ings
B
uild
ings
Offi
ce
<--
-Lea
seho
ld la
nd--
>
on
on
eq
uipm
ent
Cap
ital
Free
hold
50
yea
rs
Less
than
fre
ehol
d
leas
ehol
d
and
Com
pute
r M
otor
w
ork
in
The
Ban
k
land
or
mor
e 50
yea
rs
land
la
nd
Ren
ovat
ion
furn
iture
eq
uipm
ent
vehi
cles
pr
ogre
ss
Tota
l
2015
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
C
ost
A
t beg
inni
ng o
f the
fina
ncia
l yea
r
16,
728
1
0,45
2
5,3
80
25,
069
8
0,07
4
107
,674
5
6,56
5
69,
541
3
,152
9
,164
3
83,7
99
A
dditi
ons
-
-
-
-
-
2
,268
1
,435
2
,894
5
2
78,1
08
284
,710
D
ispo
sals
-
-
-
-
-
(3
) (9
3)
-
(8)
-
(104
)
W
rite-
off
-
-
-
-
-
(1
,904
) (9
21)
(106
) -
-
(2
,931
)
R
ecla
ssifi
catio
n
-
(520
) 5
20
-
-
-
-
-
-
-
-
R
ecla
ssifi
catio
n to
oth
er a
sset
s
(1
62)
-
-
-
-
-
-
-
-
-
(162
)
R
ecla
ssifi
catio
n to
inta
ngib
le a
sset
s
(Not
e 19
)
2
59,8
31
-
-
-
-
439
1
41
56
-
(2
72,1
11)
(11,
644)
R
ecla
ssifi
catio
n (to
)/fro
m s
ubsi
diar
y -
-
-
-
-
-
(1
) 1
79
-
-
178
A
t end
of t
he fi
nanc
ial y
ear
2
76,3
97
9,9
32
5,9
00
25,
069
8
0,07
4
108
,474
5
7,12
6
72,
564
3
,149
1
5,16
1 6
53,8
46
A
ccum
ulat
ed d
epre
ciat
ion
and
im
pairm
ent l
osse
s
A
t beg
inni
ng o
f the
fina
ncia
l yea
r
-
1,8
91
1,8
13
11,
567
2
3,72
5
96,
525
4
1,38
2
63,
939
1
,926
-
2
42,7
68
C
harg
e fo
r th
e fin
anci
al y
ear
-
8
9
128
4
13
1,6
10
5,2
29
3,2
10
2,8
72
409
-
1
3,96
0
D
ispo
sal
-
-
-
-
-
(3
) (9
2)
-
(8)
-
(103
)
W
rite-
off
-
-
-
-
-
(1
,904
) (8
45)
(106
) -
-
(2
,855
)
R
ecla
ssifi
catio
n
-
(137
) 1
37
-
-
-
-
-
-
-
-
R
ecla
ssifi
catio
n fro
m s
ubsi
diar
y
-
-
-
-
-
-
-
163
-
-
1
63
A
t end
of t
he fi
nanc
ial y
ear
-
1
,843
2
,078
1
1,98
0
25,
335
9
9,84
7
43,
655
6
6,86
8
2,3
27
-
253
,933
N
et b
ook
valu
e at
end
of t
he
finan
cial
yea
r
276
,397
8
,089
3
,822
1
3,08
9
54,
739
8
,627
1
3,47
1
5,6
96
822
1
5,16
1
399
,913
Not
es t
o th
e Fi
nanc
ial S
tate
men
tsfo
r the
fina
ncia
l yea
r end
ed 3
1 D
ecem
ber 2
016
109
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
19 INTANGIBLE ASSETS
Computer The Group Goodwill Software Total 2016 RM’000 RM’000 RM’000
Cost
At beginning of the financial year 133,430 146,107 279,537
Additions - 2,680 2,680
Write-off - (13) (13)
Reclassification from property and equipment (Note 18) - 17,953 17,953
At end of the financial year 133,430 166,727 300,157
Less: Accumulated amortisation
At beginning of the financial year - (126,400) (126,400)
Amortised during the financial year - (9,681) (9,681)
Write-off - 13 13
At end of the financial year - (136,068) (136,068)
Net book value at end of the financial year 133,430 30,659 164,089
2015
Cost
At beginning of the financial year 133,430 134,479 267,909
Additions - 5 5
Write-off - (21) (21)
Reclassification from property and equipment (Note 18) - 11,644 11,644
At end of the financial year 133,430 146,107 279,537
Less: Accumulated amortisation
At beginning of the financial year - (120,221) (120,221)
Amortised during the financial year - (6,200) (6,200)
Write-off - 21 21
At end of the financial year - (126,400) (126,400)
Net book value at end of the financial year 133,430 19,707 153,137
AFFIN BANK BERHAD (25046-T)
110
Notes to the Financial Statementsfor the financial year ended 31 December 2016
19 INTANGIBLE ASSETS
Computer The Bank Goodwill Software Total 2016 RM’000 RM’000 RM’000
Cost
At beginning of the financial year 137,323 139,705 277,028
Additions - 2,680 2,680
Write-off - (13) (13)
Reclassification from property and equipment (Note 18) - 17,953 17,953
At end of the financial year 137,323 160,325 297,648
Less: Accumulated amortisation
At beginning of the financial year - (120,424) (120,424)
Amortised during the financial year - (9,255) (9,255)
Write-off - 13 13
At end of the financial year - (129,666) (129,666)
Net book value at end of the financial year 137,323 30,659 167,982
2015
Cost
At beginning of the financial year 137,323 128,077 265,400
Additions - 5 5
Write-off - (21) (21)
Reclassification from property and equipment (Note 18) - 11,644 11,644
At end of the financial year 137,323 139,705 277,028
Less: Accumulated amortisation
At beginning of the financial year - (114,710) (114,710)
Amortised during the financial year - (5,735) (5,735)
Write-off - 21 21
At end of the financial year - (120,424) (120,424)
Net book value at end of the financial year 137,323 19,281 156,604
111
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
19 INTANGIBLE ASSETS
Goodwill
The carrying amount of the Group’s and the Bank’s goodwill has been allocated to the following business segments, which represent the Bank’s cash-generating units (‘CGUs’):
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Business banking 119,698 119,698 123,591 123,591
Consumer banking 13,732 13,732 13,732 13,732
133,430 133,430 137,323 137,323
Goodwill is allocated to the Bank’s CGU which are expected to benefit from the synergies of the acquisitions. For annual impairment testing purposes, the recoverable amount of the CGUs are determined based on value-in-use calculations using the cash flow projections based on the 2017 financial budgets approved by the Directors, covering a period of 5 years based on the historical internal growth rate, revised for current economic conditions. The cash flow beyond the fifth year are projected based on the assumption that the Year 5 operating cash flow are assumed to grow on perpetual basis at a growth rate of 4.5% (2015: 4.0%), based on forecasted Gross Domestic Product (‘GDP’) growth rate of Malaysia adjusted for specific risk of the CGUs.
The cash flow projections are derived based on a number of key factors including past performance and management’s expectations of the market developments. The discount rates used are based on the pre-tax weighted average cost of capital plus an appropriate risk premium where applicable, at the date of assessment of the CGUs.
2016 2016 2015 2015 Business Consumer Business Consumer banking banking banking banking % % % %
Pre-tax discount rate 11.67 11.57 8.91 8.91
No impairment charge was required for goodwill arising from all the business segments. Management views that any reasonable possible change to the assumptions applied is not likely to cause the recoverable amount of all the business segments to be lower than its carrying amount.
20 DEPOSITS FROM CUSTOMERS
The Group The Bank (i) By type of deposit 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Demand deposits 7,608,648 7,740,305 5,037,616 5,306,347
Savings deposits 2,043,157 1,951,353 1,565,872 1,538,959
Fixed deposits 26,549,515 28,952,441 19,839,651 22,429,816
Commodity Murabahah 768,412 630,118 - -
Money market deposits 518,016 1,637,103 518,016 1,637,103
Negotiable instruments of deposit (‘NID’) 10,145,308 6,901,893 10,145,308 6,901,893
47,633,056 47,813,213 37,106,463 37,814,118
AFFIN BANK BERHAD (25046-T)
112
Notes to the Financial Statementsfor the financial year ended 31 December 2016
20 DEPOSITS FROM CUSTOMERS
The Group The Bank (ii) Maturity structure of fixed deposits and NID 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Due within six months 29,695,766 29,025,361 24,967,259 24,244,323
Six months to one year 6,283,803 5,640,983 4,490,502 4,010,758
One year to three years 544,151 1,172,330 512,720 1,061,114
Three years to five years 171,103 15,660 14,478 15,514
36,694,823 35,854,334 29,984,959 29,331,709
The Group The Bank (iii) By type of customer 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Government and statutory bodies 6,970,831 8,103,704 3,766,293 5,158,224
Business enterprise 12,855,326 14,538,898 8,536,353 10,534,733
Individuals 12,922,185 12,209,520 11,601,961 10,931,299
Domestic banking institutions 7,399,892 6,944,295 7,399,775 6,943,481
Domestic non-banking financial institutions 6,332,943 4,609,745 5,052,773 3,296,595
Foreign entities 499,655 425,725 425,962 361,141
Other entities 652,224 981,326 323,346 588,645
47,633,056 47,813,213 37,106,463 37,814,118
21 DEPOSITS AND PLACEMENTS OF BANKS AND OTHER FINANCIAL INSTITUTIONS
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Licensed banks 2,211,825 1,583,912 1,611,023 1,031,696
Licensed investment banks 165,173 103,689 165,172 103,689
Bank Negara Malaysia 63,235 - 63,235 -
Other financial institutions 1,106,970 1,047,995 743,805 642,821
3,547,203 2,735,596 2,583,235 1,778,206
Maturity structure of deposits
Due within six months 3,499,664 2,735,596 2,583,235 1,778,206
Six months to one year 47,539 - - -
3,547,203 2,735,596 2,583,235 1,778,206
113
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
22 DERIVATIVE FINANCIAL LIABILITIES
The Group The Group 2016 2015 Contract/ Contract/ notional notional amount Liabilities amount Liabilities RM’000 RM’000 RM’000 RM’000
At fair value
Foreign exchange derivatives:
Currency forwards 411,616 15,223 711,091 13,821
Cross currency swaps 2,952,673 371,016 2,630,163 382,614
Interest rate derivatives:
Interest rate swaps 1,596,773 16,533 1,250,991 17,705
4,961,062 402,772 4,592,245 414,140
The Bank The Bank 2016 2015 Contract/ Contract/ notional notional amount Liabilities amount Liabilities RM’000 RM’000 RM’000 RM’000
At fair value
Foreign exchange derivatives:
Currency forwards 404,467 14,510 745,337 13,625
Cross currency swaps 3,858,921 378,240 2,630,163 382,614
Interest rate derivatives:
Interest rate swaps 1,596,773 16,533 1,250,991 17,705
5,860,161 409,283 4,626,491 413,944
23 RECOURSE OBLIGATION ON LOANS SOLD TO CAGAMAS BERHAD
In the normal course of banking operations, the Bank sells loans to Cagamas Berhad with recourse at values equivalent to the unpaid principal balances of loans and advances due from the borrowers.
The Bank is liable in respect of housing loans and hire purchase portfolio sold directly and indirectly to Cagamas Berhad, under the condition that the Bank undertakes to administer these loans on behalf of Cagamas Berhad and to buy back any loans which are regarded as defective based on an agreed prudential criteria. Such financing transactions and the obligations to buy back the loans are reflected as a liability on the statement of financial position.
AFFIN BANK BERHAD (25046-T)
114
Notes to the Financial Statementsfor the financial year ended 31 December 2016
24 OTHER LIABILITIES
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Bank Negara Malaysia and Credit Guarantee Corporation Funding programmes 38,563 38,536 38,563 38,536
Margin and collateral deposits 149,616 131,678 141,203 118,678
Other creditors and accruals 52,647 54,090 49,165 50,190
Sundry creditors 128,000 98,002 108,502 87,783
Cheque clearing accounts 19,272 50,363 19,272 36,742
Provision for zakat 2,332 2,307 - -
Defined contribution plan (a) 15,437 16,528 14,380 15,385
Accrued employee benefits 33,621 20,071 31,360 18,551
439,488 411,575 402,445 365,865
(a) The Group and the Bank contributes to the Employee Provident Fund (‘EPF’), the national defined contribution plan. Once the contributions have been paid, the Group and the Bank has no further payment obligations.
25 AMOUNT DUE TO SUBSIDIARIES
The amount due to subsidiaries is unsecured, interest-free and repayable on demand.
26 SUBORDINATED TERM LOAN
The Bank has taken subordinated loans as follows:
No Amount Issued (RM’m)
Description Basel Issue Date Maturity Date
Call Date Coupon
1 300 Tier 2 Basel II Subordinated Term Loan 3
Basel II 16/01/2012 16/01/2022 16/01/2017 COF plus 1.00% p.a.
2 400 Tier 2 Basel III Subordinated Term Loan 1
Basel III 30/12/2015 30/12/2025 30/12/2020 COF plus 1.00% p.a.
3 300 Tier 2 Basel III Subordinated Term Loan 2
Basel III 26/05/2016 26/05/2026 26/05/2021 COF plus 1.00% p.a.
4 300 Tier 2 Basel III Subordinated Term Loan 3
Basel III 16/12/2016 16/12/2026 16/12/2021 COF plus 0.725% p.a.
All the subordinated loans were taken with the Bank’s holding company.
The subordinated loans have a prepayment option on the first prepayment date or any interest payment date subsequent to the first prepayment date, giving the Bank the right, subject to Bank Negara Malaysia (‘BNM’) approval, to prepay the loans in whole or in part.
Interest on Tier 2 Basel II Subordinated Term Loan 3 is payable by quarterly and Tier 2 Basel III Subordinated Term Loans 1, 2 and 3 are payable by monthly.
COF refers to rate determined by the lender on an interest determination date falling within the interest duration.
All subordinated loans are unsecured and also qualify for Tier 2 capital for the purpose of determining the capital ratio of the Bank.
Tier 2 Basel II Subordinated Term Loans 3 is subject to gradual phase-out treatment under Basel III.
The Tier 2 Basel III Subordinated Term Loans 1, 2 and 3 may be written-off, either fully or partially, at the discretion of BNM, at the point of non-viability as determined by BNM.
115
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
27 SHARE CAPITAL
Number of ordinary shares of RM1 each The Group and The Bank 2016 2015 2016 2015 ‘000 ’000 RM’000 RM’000
Authorised
At beginning/end of the financial year 2,000,000 2,000,000 2,000,000 2,000,000
Issued and fully paid
At beginning/end of the financial year 1,688,770 1,688,770 1,688,770 1,688,770
28 RESERVES
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Retained profits 1,178,962 1,029,155 913,359 805,289
Share premium 858,904 858,904 858,904 858,904
AFS revaluation reserves (b) 75,229 68,945 93,292 76,852
Statutory reserves (c) 1,721,637 1,577,509 1,416,621 1,328,792
Regulatory reserves (d) 280,204 278,547 207,026 220,148
4,114,936 3,813,060 3,489,202 3,289,985
(a) As at 31 December 2016, the Bank has a tax exempt account balance of RM10,931,988 (2015: RM10,931,988) under Section 12 of the Income Tax (Amendment) Act 1999, subject to agreement by the Inland Revenue Board.
(b) AFS revaluation reserves represent the unrealised gains or losses arising from the change in fair value of investments classified as financial investment available-for-sale. The gains or losses are transferred in the income statement upon disposal or when the securities become impaired.
(c) The statutory reserves of the Group and the Bank are maintained in compliance with Section 47(2)(f) of the Financial Services Act 2013 and Section 57(2)(f) of the Islamic Financial Services Act 2013 and is not distributable as cash dividends.
(d) The Group and the Bank are required to maintain in aggregate collective impairment allowances and regulatory reserves of no less than 1.2% of total outstanding loans, advances and financing, net of individual impairment allowances.
AFFIN BANK BERHAD (25046-T)
116
Notes to the Financial Statementsfor the financial year ended 31 December 2016
29 INTEREST INCOME
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Loans, advances and financing 1,807,744 1,809,124 1,714,508 1,758,650
Money at call and deposit placements with financial institutions 84,450 68,237 175,142 117,339
Financial assets held-for-trading 240 123 240 123
Financial investments:
- Available-for-sale 301,744 293,991 301,744 293,991
- Held-to-maturity 17,776 17,267 17,776 17,267
Interest rate derivatives 115,807 138,074 115,807 138,074
2,327,761 2,326,816 2,325,217 2,325,444
of which:
Interest income earned on impaired loans, advances and financing 8,070 16,358 8,070 16,358
30 INTEREST EXPENSE
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Deposits from customers 1,188,329 1,215,168 1,188,338 1,215,188
Deposits and placements of banks and other financial institutions 113,284 86,344 113,284 86,344
Securities sold under repurchase agreements 33,193 32,485 33,193 32,485
Interest rate derivatives 108,712 127,033 108,712 127,033
Loan sold to Cagamas Berhad 4,931 5,917 4,931 5,917
Subordinated term loan 46,616 28,189 46,616 28,189
Others 614 635 614 635
1,495,679 1,495,771 1,495,688 1,495,791
31 INCOME FROM ISLAMIC BANKING BUSINESS
The Group 2016 2015 RM’000 RM’000
Income derived from investment of depositors’ funds and others 486,809 448,464
Income derived from investment of investment account funds 90,061 60,970
Income derived from investment of shareholders’ funds 44,186 36,402
Total distributable income 621,056 545,836
Income attributable to depositors (348,250) (306,915)
272,806 238,921
of which:
Financing income earned on impaired financing, advances and other financing 409 310
117
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
32 OTHER OPERATING INCOME
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Fee income
Commission 17,695 16,299 17,695 16,299
Service charges and fees 64,324 57,168 64,324 57,168
Guarantee fees 24,355 23,292 24,355 23,292
106,374 96,759 106,374 96,759
Income from financial instruments
Gain/(loss) arising on financial assets held-for-trading:
- net gain on disposal 432 498 432 498
- unrealised gains/(losses) 2 (232) 2 (232)
434 266 434 266
Gain/(loss) on derivatives:
- realised 2,452 4,576 2,452 4,576
- unrealised 4,965 (3,750) 4,965 (3,750)
7,417 826 7,417 826
Gain arising on financial investments available-for-sale:
- net gain on disposal 32,993 10,678 32,993 10,678
- gross dividend income 2,673 2,635 2,673 2,635
35,666 13,313 35,666 13,313
Other income
Foreign exchange gain/(loss):
- realised 30,665 17,053 30,665 17,053
- unrealised 30,226 45,358 30,226 45,358
Rental income 1,556 1,726 1,556 1,726
(Loss)/gain on sale of property and equipment (94) 1 (94) 1
Gain on disposal of foreclosed properties 153 684 153 684
Other non-operating income 7,145 8,591 6,926 8,282
Dividend from subsidiary - - - 800
69,651 73,413 69,432 73,904
219,542 184,577 219,323 185,068
AFFIN BANK BERHAD (25046-T)
118
Notes to the Financial Statementsfor the financial year ended 31 December 2016
33 OTHER OPERATING EXPENSES
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Personnel costs (a) 390,037 357,009 308,736 285,942
Establishment costs (b) 216,274 201,336 180,883 170,535
Marketing expenses (c) 18,583 14,418 16,148 12,128
Administrative and general expenses (d) 69,222 55,595 55,634 45,449
694,116 628,358 561,401 514,054
(a) Personnel costs
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Wages, salaries and bonuses 295,171 272,500 233,311 218,043
Defined contribution plan (‘EPF’) 49,145 45,041 38,754 35,925
Other personnel costs 45,721 39,468 36,671 31,974
390,037 357,009 308,736 285,942
(b) Establishment costs
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Rental of premises 24,977 24,183 20,171 19,986
Equipment rental 682 1,305 563 1,191
Repair and maintenance 34,463 36,007 27,418 30,478
Depreciation of property and equipment 14,724 15,044 13,688 13,960
Amortisation of intangible assets 9,681 6,200 9,255 5,735
IT Consultancy fees 65,111 64,245 54,940 55,292
Dataline rental 7,732 6,380 6,591 5,431
Security services 17,450 16,293 13,653 13,142
Electricity, water and sewerage 11,532 10,558 9,758 8,980
Insurance/Takaful and indemnities 24,970 16,198 24,187 14,738
Other establishment costs 4,952 4,923 659 1,602
216,274 201,336 180,883 170,535
119
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
33 OTHER OPERATING EXPENSES
(c) Marketing expenses
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Business promotion and advertisement 10,312 6,736 9,524 5,967
Entertainment 2,359 2,193 2,040 1,908
Traveling and accommodation 4,017 3,646 3,190 2,873
Other marketing expenses 1,895 1,843 1,394 1,380
18,583 14,418 16,148 12,128
(d) Administration and general expenses
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Telecommunication expenses 5,181 4,587 4,223 3,741
Auditors’ remuneration 1,695 1,440 1,241 1,148
Professional fees 10,751 7,008 9,572 5,918
Property and equipment written-off 57 84 55 76
Mail and courier charges 4,042 3,246 3,342 2,744
Stationery and consumables 10,011 9,247 7,477 6,951
Commissions expenses 7,998 4,306 6,952 3,769
Brokerage expenses 1,981 2,160 831 955
Directors’ fees and allowances 2,097 1,573 2,041 1,445
Donations 2,027 1,586 1,464 1,473
Settlement, clearing and bank charges 10,462 8,751 9,455 7,938
Stamp duties 763 383 763 380
Operational and litigation write-off expenses 1,876 4,922 1,615 4,902
GST input tax-non recoverable 6,268 3,474 4,440 2,444
Other administration and general expenses 4,013 2,828 2,163 1,565
69,222 55,595 55,634 45,449
The expenditure includes the following statutory disclosure:
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Directors’ remuneration (Note 34) 4,290 7,391 4,234 7,263
Auditors’ remuneration:
- statutory audit fees 1,108 925 834 728
- over provision in prior year (30) (33) (17) (22)
- regulatory related fees 411 391 258 245
- tax fees 67 26 27 66
- non audit fees 139 131 139 131
AFFIN BANK BERHAD (25046-T)
120
Notes to the Financial Statementsfor the financial year ended 31 December 2016
34 CEO AND DIRECTORS’ REMUNERATION
The MD/CEO and Directors of the Bank who have held office during the financial year are as follows:
Managing Director/Chief Executive Officer
Kamarul Ariffin Bin Mohd Jamil
Non-Executive Directors
Jen Tan Sri Dato’ Seri Ismail Bin Haji Omar (Bersara) (Chairman)
Tan Sri Dato’ Seri Lodin Bin Wok Kamaruddin (Completion of directorship on 4 October 2016)
Mr Aubrey Li Kwok-Sing
En. Mohd Suffian Bin Haji Haron
Tan Sri Dato’ Seri Mohamed Jawhar
Tan Sri Mohd Ghazali bin Mohd Yusoff
En. Abd Malik Bin A Rahman
Mr Tang Peng Wah (Alternate Director to Mr Aubrey Li Kwok-Sing)
The aggregate amount of remuneration for the Directors of the Bank for the financial year was as follows:
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Managing Director/Chief Executive Officer
Salaries 960 1,215 960 1,215
Bonuses 800 3,498 800 3,498
Defined contribution plan (‘EPF’) 291 883 291 883
Other employee benefits 61 70 61 70
Benefits-in-kind 81 152 81 152
Non-Executive Directors
Fees 2,073 1,547 2,017 1,419
Benefits-in-kind 24 26 24 26
Directors’ remuneration (Note 33) 4,290 7,391 4,234 7,263
121
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
34 CEO AND DIRECTORS’ REMUNERATION
A summary of the total remuneration of the MD/CEO and Directors, distinguishing between Executive and Non-Executive Directors:
Directors’ * Other Benefits- The Group Salaries Bonuses Fees emoluments in-kind Total 2016 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Managing Director/Chief Executive Officer
Kamarul Ariffin Bin Mohd Jamil 960 800 - 352 81 2,193
Total 960 800 - 352 81 2,193
Non-executive Directors
Jen Tan Sri Dato’ Seri Ismail Bin Haji Omar (Bersara) - - 516 96 24 636
Tan Sri Dato’ Seri Lodin Bin Wok Kamaruddin - - 387 - - 387
En. Mohd Suffian Bin Haji Haron - - 540 - - 540
Tan Sri Dato’ Seri Mohamed Jawhar - - 534 - - 534
Total - - 1,977 96 24 2,097
Grand total 960 800 1,977 448 105 4,290
* Executive Director’s other emoluments include allowance and EPF
AFFIN BANK BERHAD (25046-T)
122
Notes to the Financial Statementsfor the financial year ended 31 December 2016
34 CEO AND DIRECTORS’ REMUNERATION
A summary of the total remuneration of the MD/CEO and Directors, distinguishing between Executive and Non-Executive Directors: (continued)
Directors’ * Other Benefits- The Group Salaries Bonuses Fees emoluments in-kind Total 2015 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Managing Director/Chief Executive Officer
Kamarul Ariffin Bin Mohd Jamil 720 80 - 181 57 1,038
Dato’ Zulkiflee Abbas Bin Abdul Hamid 495 3,418 - 772 95 4,780
Total 1,215 3,498 - 953 152 5,818
Non-executive Directors
Jen Tan Sri Dato’ Seri Ismail Bin Haji Omar (Bersara) - - 351 96 26 473
Tan Sri Dato’ Seri Lodin Bin Wok Kamaruddin - - 348 - - 348
En. Mohd Suffian Bin Haji Haron - - 373 - - 373
Tan Sri Dato’ Seri Mohamed Jawhar - - 379 - - 379
Total - - 1,451 96 26 1,573
Grand total 1,215 3,498 1,451 1,049 178 7,391
* Executive Director’s other emoluments include allowance and EPF
123
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
34 CEO AND DIRECTORS’ REMUNERATION
Directors’ * Other Benefits- The Bank Salaries Bonuses Fees emoluments in-kind Total 2016 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Managing Director/Chief Executive Officer
Kamarul Ariffin Bin Mohd Jamil 960 800 - 352 81 2,193
Total 960 800 - 352 81 2,193
Non-executive Directors
Jen Tan Sri Dato’ Seri Ismail Bin Haji Omar (Bersara) - - 296 96 24 416
Tan Sri Dato’ Seri Lodin Bin Wok Kamaruddin - - 217 - - 217
Mr Aubrey Li Kwok-Sing - - 148 - - 148
En. Mohd Suffian Bin Haji Haron - - 341 - - 341
Tan Sri Dato’ Seri Mohamed Jawhar - - 322 - - 322
Tan Sri Mohd Ghazali bin Mohd Yusoff - - 330 - - 330
En. Abd Malik Bin A Rahman - - 241 - - 241
Mr Tang Peng Wah (Alternate Director to Mr Aubrey Li Kwok-Sing) - - 26 - - 26
Total - - 1,921 96 24 2,041
Grand total 960 800 1,921 448 105 4,234
* Executive Director’s other emoluments include allowance and EPF
AFFIN BANK BERHAD (25046-T)
124
Notes to the Financial Statementsfor the financial year ended 31 December 2016
34 CEO AND DIRECTORS’ REMUNERATION
A summary of the total remuneration of the MD/CEO and Directors, distinguishing between Executive and Non-Executive Directors: (continued)
Directors’ * Other Benefits- The Bank Salaries Bonuses Fees emoluments in-kind Total 2015 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Managing Director/Chief Executive Officer
Kamarul Ariffin Bin Mohd Jamil 720 80 - 181 57 1,038
Dato’ Zulkiflee Abbas Bin Abdul Hamid 495 3,418 - 772 95 4,780
Total 1,215 3,498 - 953 152 5,818
Non-executive Directors
Jen Tan Sri Dato’ Seri Ismail Bin Haji Omar (Bersara) - - 199 96 26 321
Tan Sri Dato’ Seri Lodin Bin Wok Kamaruddin - - 191 - - 191
Tan Sri Dato’ Sri Abdul Aziz Bin Abdul Rahman - - 10 - - 10
Mr Aubrey Li Kwok-Sing - - 113 - - 113
En. Mohd Suffian Bin Haji Haron - - 230 - - 230
Tan Sri Dato’ Seri Mohamed Jawhar - - 219 - - 219
Tan Sri Mohd Ghazali bin Mohd Yusoff - - 236 - - 236
En. Abd Malik Bin A Rahman - - 116 - - 116
Mr Tang Peng Wah (Alternate Director to Mr Aubrey Li Kwok-Sing) - - 9 - - 9
Total - - 1,323 96 26 1,445
Grand total 1,215 3,498 1,323 1,049 178 7,263
* Executive Director’s other emoluments include allowance and EPF
125
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
35 ALLOWANCES FOR IMPAIRMENT LOSSES ON LOANS, ADVANCES AND FINANCING
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Individual impairment
- made during the financial year 81,349 257,645 62,010 254,086
- written-back (59,431) (7,293) (23,569) (7,246)
Collective impairment
- net allowance made during the financial year 49,832 17,224 35,935 11,265
Bad debts and financing
- recovered (50,887) (84,192) (49,731) (83,226)
- written-off 2,838 3,603 2,816 3,596
23,701 186,987 27,461 178,475
36 SIGNIFICANT RELATED PARTY TRANSACTIONS AND BALANCES
Related parties that have transactions and their relationship with the Bank are as follows:
Related parties Relationship
Lembaga Tabung Angkatan Tentera (‘LTAT’) Ultimate holding corporate body, which is Government-Linked Investment Company (‘GLIC’) of the Government of Malaysia
AFFIN Holdings Berhad (‘AHB’) Holding company
Subsidiaries and associates of LTAT Subsidiary and associate companies of the ultimate holding corporate body
Subsidiaries and associates of AHB as disclosed in its financial statements
Subsidiary and associate companies of the holding company
Subsidiaries of AFFIN Bank Berhad as disclosed in Note 15
Subsidiaries
Joint ventures as disclosed in Note 16 Joint ventures
Associate as disclosed in Note 17 Associate
Key management personnel The key management personnel of the Group and the Bank consist of:- Directors- Managing Director/Chief Executive Officer- Members of Senior Management team and the company secretary
Related parties of key management personnel (deemed as related to the Bank)
- Close family members and dependents of key management personnel
- Entities that are controlled, jointly controlled or for which significant voting power in such entity resides with, directly or indirectly by key management personnel or its close family members
Key management personnel are those persons having the authority and responsibility for planning, directing and controlling the activities of the Group and the Bank either directly or indirectly. Key management personnel include the Managing Director/Chief Executive Officer of the Bank in office during the financial year and his remuneration for the financial year are disclosed in Note 34.
AFFIN BANK BERHAD (25046-T)
126
36
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and
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Ho
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tere
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2016
20
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2016
20
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2016
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2016
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2016
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Inco
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Inte
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on
corp
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e bo
nds/
suku
k
-
-
-
-
3
8,95
8
29,
786
-
-
-
-
Inte
rest
on
loan
s, a
dvan
ces
and
finan
cing
-
-
-
-
5
3,95
0
63,
086
5
,564
-
2
10
95
Inte
rest
on
depo
sits
and
pla
cem
ents
with
ban
ks a
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finan
cial
inst
itutio
ns
-
-
-
-
338
9
09
-
-
-
-
Oth
er in
com
e
-
-
-
-
8
,569
8
,112
-
-
-
-
-
-
-
-
1
01,8
15
101
,893
5
,564
-
2
10
95
Exp
end
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e
Inte
rest
on
fixed
dep
osits
3
7
34
975
2
,396
1
4,12
7
14,
083
2
,132
-
2
95
199
Inte
rest
on
Neg
otia
ble
inst
rum
ents
of d
epos
it
-
-
-
-
4
,737
5
,884
-
-
-
-
Inte
rest
on
depo
sits
and
pla
cem
ents
of b
anks
and
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r fin
anci
al in
stitu
tions
-
-
-
-
2
23
740
-
-
-
-
Pro
fit p
aid
on c
omm
odity
mur
abah
ah
231
-
-
-
1
,727
3
,485
-
-
-
-
Inte
rest
on
mon
ey m
arke
t dep
osits
2
,968
2
,956
3
96
276
5
,457
7
,905
-
-
-
-
Inte
rest
on
subo
rdin
ated
term
loan
-
-
4
6,61
5
28,
189
-
-
-
-
-
-
Bro
kera
ge fe
es
-
-
-
-
543
5
48
-
-
-
-
Ren
tal
2
97
239
-
-
12
,291
1
2,25
9
-
-
166
1
16
Oth
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ditu
re
-
-
-
-
6,5
93
6,1
45
-
-
-
-
3
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3
,929
4
7,98
6
30,
861
45
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5
1,04
9
2,1
32
-
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3
15
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tate
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1 D
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016
127
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
36 SIGNIFICANT RELATED PARTY TRANSACTIONS AND BALANCES
(a) Related parties transactions and balances (continued)
Ultimate holding Holding Other related corporate body company companies 2016 2015 2016 2015 2016 2015 The Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Amount due from
Corporate bonds/sukuk - - - - 1,009,192 1,089,870
Loans, advances and financing - - - - 1,650,773 1,728,517
Deposits and placements with banks and other financial institutions - - - - 58,310 -
Intercompany balances - - 9 9 47,225 39,936
Security deposits - - - - 3,206 2,997
- - 9 9 2,768,706 2,861,320
Amount due to
Demand and savings deposits 107,492 94,668 997 1,003 957,624 533,117
Fixed deposits - - 27,968 44,856 432,010 876,379
Negotiable instruments of deposit - - - - 419,882 421,482
Deposits and placements of banks and other financial institutions - - - - 65,011 38,818
Commodity Murabahah 7,507 - - - 251,018 99,544
Money market deposits 114,597 43,506 4,136 470 193,241 115,315
Subordinated term loan - - 1,304,592 1,004,446 - -
229,596 138,174 1,337,693 1,050,775 2,318,786 2,084,655
Commitments and contingencies - - - - 1,705,295 1,844,587
Companies in which certain Directors have Key management substantial interest personnel 2016 2015 2016 2015 The Group RM’000 RM’000 RM’000 RM’000
Amount due from
Loans, advances and financing 99,624 - 5,675 2,586
Security deposits - - 29 -
99,624 - 5,704 2,586
Amount due to
Demand and savings deposits 3,493 596 9,210 6,780
Fixed deposits 19,149 - 7,980 7,849
22,642 596 17,190 14,629
Commitments and contingencies 7 - - -
AFFIN BANK BERHAD (25046-T)
128
36
SIG
NIF
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NT
RE
LAT
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PA
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ce
rtai
n D
irec
tors
U
ltim
ate
hold
ing
H
old
ing
Oth
er r
elat
ed
have
sub
stan
tial
K
ey m
anag
emen
t
corp
ora
te b
od
y co
mp
any
Sub
sid
iari
es
com
pan
ies
inte
rest
p
erso
nnel
20
16
2015
20
16
2015
20
16
2015
20
16
2015
20
16
2015
20
16
2015
The
Ban
k R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
Inco
me
Inte
rest
on
depo
sits
and
plac
emen
ts w
ith b
anks
and
othe
r fin
anci
al in
stitu
tions
-
-
-
-
1
,484
1
,256
3
38
909
-
- -
-
Inte
rest
on
rest
ricte
d in
vest
men
t
acco
unts
(RIA
) -
-
-
-
8
9,27
2
47,
846
-
-
-
- -
-
Inte
rest
on
corp
orat
e bo
nds/
suku
k -
-
-
-
-
-
3
8,95
8
29,
786
-
- -
-
Inte
rest
on
loan
s, a
dvan
ces
and
finan
cing
-
-
-
-
-
-
4
4,84
6
56,
497
-
- 1
86
79
Oth
er in
com
e -
-
-
-
8
7,36
5
73,
305
8
,569
8
,112
-
- -
-
-
-
-
-
1
78,1
21
122
,407
9
2,71
1
95,
304
-
- 1
86
79
Exp
end
itur
e
Inte
rest
on
fixed
dep
osits
3
73
4
975
2
,396
1
3
13
9
,627
8
,709
2,
079
- 1
38
84
Inte
rest
on
nego
tiabl
e in
stru
men
ts
of
dep
osit
-
-
-
-
-
-
4,7
37
5,8
84
- -
-
-
Inte
rest
on
depo
sits
and
plac
emen
ts o
f ban
ks a
nd
ot
her
finan
cial
inst
itutio
ns
-
-
-
-
-
-
223
7
40
- -
-
-
Inte
rest
on
mon
ey m
arke
t dep
osits
2,
968
2
,956
3
96
276
-
1
8
5,4
57
7,9
05
- -
-
-
Inte
rest
on
subo
rdin
ated
term
loan
-
-
4
6,61
5
28,
189
-
-
-
-
-
- -
-
Bro
kera
ge fe
es
-
-
-
-
-
-
543
5
48
- -
-
-
Ren
tal
29
7
239
-
-
4
07
407
1
2,29
1
12,
259
-
- 1
66
116
Oth
er e
xpen
ditu
re
-
-
-
-
-
-
6,5
36
6,0
41
- -
-
-
3,
268
3
,929
4
7,98
6
30,
861
4
20
438
3
9,41
4 4
2,08
6
2,07
9 -
304
2
00
Not
es t
o th
e Fi
nanc
ial S
tate
men
tsfo
r the
fina
ncia
l yea
r end
ed 3
1 D
ecem
ber 2
016
129
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
36 SIGNIFICANT RELATED PARTY TRANSACTIONS AND BALANCES
(a) Related parties transactions and balances (continued)
Ultimate holding Holding corporate body company Subsidiaries 2016 2015 2016 2015 2016 2015 The Bank RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Amount due from Restricted investment accounts (RIA) - - - - 2,110,079 1,331,318 Deposits and placements with banks and other financial institutions - - - - 285,026 84,001 Intercompany balances - - 9 9 196,839 62
- - 9 9 2,591,944 1,415,381
Amount due to Demand and savings deposits 102,996 93,496 997 1,003 609 923 Fixed deposits - - 27,968 44,856 416 403 Money market deposits 114,597 43,506 4,136 470 - - Intercompany balances - - - - 41,395 422,166 Subordinated term loan - - 1,304,592 1,004,446 - -
217,593 137,002 1,337,693 1,050,775 42,420 423,492
Commitments and contingencies - - - - - -
Companies which Other related certain Directors have Key management companies substantial interest personnel 2016 2015 2016 2015 2016 2015 The Bank RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Amount due from Corporate bonds/sukuk 1,009,192 1,089,870 - - - - Loans, advances and financing 1,051,172 1,279,775 - - 5,045 2,212 Deposits and placements with banks and other financial institutions 58,310 - - - - - Security deposits 3,206 2,997 - - 29 -
2,121,880 2,372,642 - - 5,074 2,212
Amount due to Demand and savings deposits 578,717 510,506 482 - 6,039 4,153 Fixed deposits 284,090 671,636 19,149 - 5,595 2,524 Negotiable instruments of deposit 419,882 421,482 - - - - Deposits and placements of banks and other financial institutions 65,011 38,818 - - - - Money market deposits 193,241 115,315 - - - -
1,540,941 1,757,757 19,631 - 11,634 6,677
Commitments and contingencies 1,541,228 1,797,375 7 - - -
AFFIN BANK BERHAD (25046-T)
130
Notes to the Financial Statementsfor the financial year ended 31 December 2016
36 SIGNIFICANT RELATED PARTY TRANSACTIONS AND BALANCES
(b) Key management personnel compensation
The remuneration of key management personnel of the Group and the Bank during the year are as follows:
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Directors’ fees and allowances
Fees 2,073 1,547 2,017 1,419
Benefits-in-kind 24 26 24 26
2,097 1,573 2,041 1,445
Short-term employment benefits
Salaries 7,567 7,441 6,769 6,810
Bonuses 3,601 9,859 3,191 9,120
Defined contribution plan (‘EPF’) 1,962 3,038 1,742 2,801
Other employee benefits 1,304 1,176 1,097 1,043
Benefits-in-kind 375 441 318 428
14,809 21,955 13,117 20,202
Included in the above table is the CEO and directors’ remuneration as disclosed in Note 34.
37 TAXATION
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
The taxation charge arising in Malaysia for the financial year
Current tax 143,516 106,824 111,560 78,335
Under provision in prior year 620 6,905 404 6,403
Deferred tax (Note 13) (8,396) (1,855) (7,145) (1,799)
Tax expense for the year 135,740 111,874 104,819 82,939
131
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
37 TAXATION
The Group The Bank 2016 2015 2016 2015 % % % %
Statutory tax rate in Malaysia 24.00 25.00 24.00 25.00
Tax effect in respect of:
Non allowable expenses 0.37 0.42 0.43 0.47
Non taxable income (0.14) (0.29) (0.14) (0.27)
Effect of different tax rate (1.06) (1.22) (1.40) (1.64)
Tax savings arising from income exempt from tax for International Currency Business Unit (‘ICBU’) (0.75) (0.10) - -
Under provision in prior year 0.10 1.50 0.09 1.86
Other temporary differences not recognised in prior years - (1.07) - (1.35)
Change in tax rate - 0.02 - 0.02
Average effective tax rate 22.52 24.26 22.98 24.09
38 EARNINGS PER SHARE
The basic earnings per ordinary share for the Group and the Bank have been calculated based on the net profit attributable to equity holders of the Group and the Bank of RM464,131,000 (2015: RM345,582,000) and RM351,316,000 (2015: RM261,290,000) respectively. The weighted average number of shares in issue during the financial year of 1,688,770,000 (2015: 1,688,770,000) is used for the computation.
39 DIVIDENDS
Dividends recognised as distribution to ordinary equity holders of the Bank:
The Group and The Bank The Group and The Bank 2016 2015 Dividend Amount of Dividend Amount of per share Dividend per share Dividend sen RM’000 sen RM’000
Ordinary shares
Single tier dividend:
- Interim dividend 3.80 64,173 - -
- Final dividend 6.18 104,366 3.91 66,031
9.98 168,539 3.91 66,031
At the forthcoming Annual General Meeting, a single-tier final dividend in respect of the current financial year of 1.39 sen per share amounting to RM23,473,898 will be proposed for shareholders’ approval. These financial statements do not reflect this final dividend which will be accounted for in the shareholder’s equity as an appropriation of retained profits in the financial year ending 31 December 2017 when approved by the shareholder.
AFFIN BANK BERHAD (25046-T)
132
Notes to the Financial Statementsfor the financial year ended 31 December 2016
40 COMMITMENTS AND CONTINGENCIES
In the normal course of business, the Group and the Bank make various commitments and incurs certain contingent liabilities with legal recourse to their customers. No material losses are anticipated as a result of these transactions. These commitment and contingencies are not secured over the assets of the Group and the Bank.
The commitments and contingencies consist of:
The Group The Bank 2016 2015 2016 2015 Principal Principal Principal Principal amount amount amount amount RM’000 RM’000 RM’000 RM’000
Direct credit substitutes (*) 423,565 408,318 390,178 398,935
Transaction-related contingent items 2,252,924 2,027,954 1,970,056 1,879,994
Short-term self-liquidating trade-related contingencies 496,339 470,476 183,789 101,909
Irrevocable commitments to extend credit: 9,178,584 9,211,778 7,579,320 7,476,032
- maturity less than one year 7,663,856 7,494,453 6,534,578 6,107,115
- maturity more than one year 1,514,728 1,717,325 1,044,742 1,368,917
Foreign exchange related contracts (#): 7,092,677 6,918,839 8,062,513 7,086,226
- less than one year 6,667,157 6,497,779 7,636,993 6,665,166
- one year to less than five years 383,035 421,060 383,035 421,060
- more than five years 42,485 - 42,485 -
Interest rate related contracts (#): 2,610,273 2,861,139 2,610,273 2,861,139
- less than one year 593,125 652,116 593,125 652,116
- one year to less than five years 1,187,148 1,612,023 1,187,148 1,612,023
- more than five years 830,000 597,000 830,000 597,000
Any commitments that are unconditionally cancelled at any time by the bank without prior notice or that effectively provide for automatic cancellation due to deterioration in a borrower’s creditworthiness 198,586 215,113 159,049 199,792
Unutilised credit card lines 230,550 188,328 230,550 188,328
22,483,498 22,301,945 21,185,728 20,192,355
* Included in direct credit substitutes as above are financial guarantee contracts of RM423.4 million and RM390.0 million at the Group and the Bank, respectively (2015: RM408.2 million and RM398.8 million at the Group and the Bank, respectively), of which fair value at the time of issuance is zero.
# Thefairvalueofthesederivativeshavebeenrecognisedas“derivativefinancialassets”and“derivativefinancialliabilities”inthe statement of financial position and disclosed in Note 5 and 22 to the financial statements.
133
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
41 FINANCIAL RISK MANAGEMENT
(i) Credit risk
Credit risk is the potential financial loss resulting from the failure of the customer to settle financial and contractual obligations through lending/financing, hedging, trading and investing activities. It includes both pre-settlement and settlement risks of trading counterparties. Credit risk emanates mainly from loans, advances and financing, loan/financing commitments arising from such lending activities, as well as through financial transaction with counterparties including interbank money market activities as well as derivative instruments used for hedging and debt securities.
The management of credit risk in the Bank is governed by the Credit Risk Management Framework which is supported by a set of approved credit policies, guidelines and procedures. Approval authorities are delegated to Senior Management and Group Management Loan Committee (‘GMLC’) to implement the credit policies and ensure sound credit granting standards. Board Loan Review and Recovery Committee (‘BLRRC’) has review/veto power.
An independent Group Credit Management function is headed by Group Chief Credit Officer (‘GCCO’) with direct reporting line to MD/CEO to ensure sound credit appraisal and approval process. Group Risk Management (‘GRM’) with direct reporting line to Board Risk Management Committee (‘BRMC’) has functional responsibilities for the management of credit risk, to ensure adherence to risk standards and discipline.
Credit guidelines and procedures are incorporated within the Credit Policy. The Credit Authority Framework facilitates the approval of all new, restructured and continuing credit facilities. New and existing businesses are governed by Credit Plan which is developed as part of the annual business planning and budgeting process. The Credit Plan is reviewed at least annually to ensure the guidelines and criteria reflect portfolio strategy and market environment.
Credit risk measurement
Loans, advances and financing
Credit evaluation is the process of analysing the creditworthiness of the prospective customer against the Bank’s underwriting criteria and the ability of the Bank to make a return commensurate with the level of risk undertaken. Assessment and quantification of credit risk are supported by the use of internal rating models, scorecards and decision support tools.
The Bank adopts a credit risk grading methodology encompassing probability of default (‘PD’) driven scorecards for business loans, advances and financing. Separate scorecards have been developed for two categories of business borrowers, Large Corporate (‘LC’) and Small Medium Enterprise (‘SME’).
For consumer mass market products, statistically developed application scorecards are used to assess the risks associated with the credit application as a decision support tool at loans, advances and financing origination.
Stress Testing supplements the overall assessment of credit risk across the Bank.
Over-the-Counter (‘OTC’) Derivatives
The OTC Derivatives credit exposure is computed using the Current Exposure Method. Under the Current Exposure Method, computation of credit equivalent exposure for interest rate and exchange rate related contracts is derived from the summation of the two elements; the replacement costs (obtained by marking-to-market) of all contracts and the potential future exposure of outstanding contracts (Add On charges depending on the specific remaining tenor to maturity).
AFFIN BANK BERHAD (25046-T)
134
Notes to the Financial Statementsfor the financial year ended 31 December 2016
41 FINANCIAL RISK MANAGEMENT
(i) Credit risk (continued)
Risk limit control and mitigation policies
The Bank employs various policies and practices to control and mitigate credit risk.
Lending limits
The Bank establishes internal limits and related lending guidelines to manage large exposures and avoid undue concentration of credit risk in its credit portfolio. The limits include single customer groupings, connected parties, geographical and industry segments. These risks are monitored regularly and the limits reviewed annually or sooner depending on changing market and economic conditions.
The credit risk exposure for derivative and loans, advances and financing books is managed as part of the overall lending limits with customers together with potential exposure from market movements.
Collateral
Credits are established against borrower’s capacity to repay rather than rely solely on security. However, collateral may be taken to mitigate credit risk. The main collateral types accepted and given value by the Bank are:
- mortgage over residential properties;
- charges over commercial real estate or vehicles financed;
- charges over business assets such as business premises, inventory and accounts receivable; and
- charges over financial instruments such as marketable securities.
Documentary and commercial letters of credit are collateralised by the underlying shipments of goods to which they relate and therefore carry less risk than a direct loan.
Credit related commitments
Commitment to extend credit represents unutilised portion of approved credit in the form of loans/financing, guarantees or letters of credit. In terms of credit risk, the Bank is potentially exposed to loss in an amount equal to the total unutilised commitments. However, the potential amount of loss is less than the total unutilised commitments, as most commitments to extend credit are contingent upon customers maintaining specific minimum credit standards.
The Bank monitors the term to maturity of credit commitments because longer-term commitments generally have a greater degree of credit risk than short-term commitments.
Credit risk monitoring
Corporate credits and large individual accounts are reviewed by the Business Units at least once a year using updated financial and other relevant information. This is to ensure that the credit grades remain appropriate and any signs of weaknesses or deterioration in the credit quality are detected. Remedial action is taken where evidence of deterioration emanates.
Retail credits are actively monitored and managed on a portfolio basis by product type. A collection management system is in place to promptly identify, monitor and manage delinquent accounts at early stages of delinquency.
An Early Alert Process is adopted to pro-actively identify, report, and manage warning signs of potential credit deterioration. Watchlist accounts are closely reviewed and monitored with corrective measures initiated to prevent them from turning impaired. As a rule, watchlist accounts are either worked up or worked out within a period of twelve months.
Active portfolio monitoring as well as exceptions reporting is in place to manage the overall risk profile, identify, analyse and mitigate adverse trends or specific areas of risk concerns.
135
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
41 FINANCIAL RISK MANAGEMENT
(i) Credit risk (continued)
Maximum exposure to credit risk
For financial assets recognised on the statement of financial position, the exposure to credit risk equals their carrying amount. For financial guarantees granted, the maximum exposure to credit risk is the maximum amount that the Group and the Bank would have to pay if the guarantee was to be called upon. For loan commitments and other commitments, the maximum exposure to credit risk is the full amount of the undrawn credit facilities granted to customers.
All financial assets of the Group and the Bank are subject to credit risk except for cash in hand, equity securities held as financial assets held-for-trading or financial investments available-for-sale, as well as non-financial assets.
The exposure to credit risk of the Group and the Bank equals their carrying amount in the statement of financial position as at reporting date, except for the followings:
The Group The Bank 2016 2015 2016 2015 Maximum Maximum Maximum Maximum Credit Credit Credit Credit Exposure Exposure Exposure Exposure RM’000 RM’000 RM’000 RM’000
Credit risk exposures of on-balance sheet assets:
Short-term funds (*) 4,151,994 3,866,154 3,125,334 1,998,466
Financial investments available-for-sale (#) 10,063,405 10,081,927 8,229,997 8,607,079
Other assets (@) 39,212 62,990 33,910 59,649
Credit risk exposure of off-balance sheet items:
Financial guarantees 423,415 408,168 390,028 398,785
Loan commitments and other credit related commitments 12,357,133 12,113,799 10,122,914 9,846,205
Total maximum credit risk exposure 27,035,159 26,533,038 21,902,183 20,910,184
The following have been excluded for the purpose of maximum credit risk exposure calculation:
* cash in hand
# investment in unquoted shares
@ prepayment
Whilst the Group and the Bank’s maximum exposure to credit risk is the carrying value of the assets, or in the case of off-balance sheet items, the amount guaranteed, committed or accepted, in most cases the likely exposure is far less due to collateral, credit enhancements and other actions taken to mitigate the credit exposure.
The financial effect of collateral held for loans, advances and financing of the Group and the Bank are 74% (2015: 69%) and 73% (2015: 67%) respectively. The financial effects of collateral for the other financial assets are insignificant.
AFFIN BANK BERHAD (25046-T)
136
41
FIN
AN
CIA
L R
ISK
MA
NA
GE
ME
NT
(i)
C
red
it r
isk
(co
ntin
ued
)
Cre
dit
ris
k co
ncen
trat
ion
Cre
dit r
isk
is th
e ris
k of
fina
ncia
l los
s fro
m th
e fa
ilure
of c
usto
mer
s to
mee
t the
ir ob
ligat
ions
. Exp
osur
e to
cre
dit r
isk
is m
anag
ed th
roug
h po
rtfo
lio m
anag
emen
t. Th
e cr
edit
port
folio
’s
risk
profi
les
and
expo
sure
s ar
e re
view
ed a
nd m
onito
red
regu
larly
to e
nsur
e th
at a
n ac
cept
able
leve
l of r
isk
dive
rsifi
catio
n is
mai
ntai
ned.
Exp
osur
e to
cre
dit r
isk
is a
lso
man
aged
in
part
by
obta
inin
g co
llate
ral s
ecur
ity a
nd c
orpo
rate
and
per
sona
l gua
rant
ees.
The
cred
it ris
k co
ncen
trat
ions
of t
he G
roup
and
the
Ban
k, b
y in
dust
ry c
once
ntra
tion,
are
set
out
in th
e fo
llow
ing
tabl
es:
D
epo
sits
and
pla
cem
ents
wit
h b
anks
Fina
ncia
l Fi
nanc
ial
Loan
s,
O
n
an
d o
ther
D
eriv
ativ
e in
vest
men
ts i
nves
tmen
ts
adva
nces
bal
ance
Co
mm
itm
ents
Sho
rt-t
erm
fi
nanc
ial
fina
ncia
l av
aila
ble
- he
ld-t
o-
and
O
ther
sh
eet
and
The
Gro
up
fund
s in
stit
utio
ns
asse
ts
for-
sale
m
atur
ity
fina
ncin
g
asse
ts
tota
l co
ntin
gen
cies
2016
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
Agr
icul
ture
-
-
6
47
-
-
894
,335
-
8
94,9
82
184
,465
Min
ing
and
quar
ryin
g
-
-
-
-
-
8
60,3
08
-
860
,308
34
3,84
2
Man
ufac
turin
g
-
-
8
,261
2
05,7
37
-
2,0
85,5
41
-
2,2
99,5
39
2,1
24,0
54
Ele
ctric
ity, g
as a
nd w
ater
sup
ply
-
-
58
3
14,4
28
-
182
,170
-
4
96,6
56
11,3
61
Con
stru
ctio
n
-
-
1
0
-
180
,886
2
,461
,925
-
2
,642
,821
2
,619
,711
Rea
l est
ate
-
-
-
20,
390
-
7
,803
,959
-
7
,824
,349
1,
082,
628
Tran
spor
t, st
orag
e an
d co
mm
unic
atio
n
-
-
-
171
,075
-
2
,074
,137
-
2
,245
,212
68
0,79
5
Fina
nce,
insu
ranc
e an
d bu
sine
ss s
ervi
ces
3
86,6
06
152
,234
1
39,2
51
4,2
95,1
35
172
,736
2
,762
,022
-
7
,907
,984
1,
187,
903
Gov
ernm
ent a
nd g
over
nmen
t age
ncie
s
3,7
65,3
88
-
-
5,0
20,8
39
-
1,4
67,4
88
-
10,2
53,7
15
1,32
9,53
7
Who
lesa
le &
reta
il tra
de a
nd re
stau
rant
s &
hot
els
-
-
2
,975
3
5,80
1
19,
902
2
,757
,124
-
2
,815
,802
1,
676,
223
Oth
ers
-
-
1
6,10
2
-
-
19,3
19,2
88
39,
212
19,
374,
602
1,
540,
029
Tota
l ass
ets
4,1
51,9
94
152
,234
1
67,3
04
10,
063,
405
3
73,5
24
42,6
68,2
97
39,
212
57,
615,
970
1
2,78
0,54
8
Not
es t
o th
e Fi
nanc
ial S
tate
men
tsfo
r the
fina
ncia
l yea
r end
ed 3
1 D
ecem
ber 2
016
137
ANNUAL REPORT 2016
41
FIN
AN
CIA
L R
ISK
MA
NA
GE
ME
NT
(i)
C
red
it r
isk
(co
ntin
ued
)
Cre
dit
ris
k co
ncen
trat
ions
(co
ntin
ued
)
D
epos
its a
nd
plac
emen
ts
with
ban
ks
Fina
ncia
l
Fina
ncia
l Fi
nanc
ial
Loan
s,
O
n
and
othe
r as
sets
D
eriv
ativ
e in
vest
men
ts
inve
stm
ents
ad
vanc
es
ba
lanc
e C
omm
itmen
ts
S
hort
-ter
m
fina
ncia
l he
ld-f
or-
finan
cial
av
aila
ble-
he
ld-t
o-
and
Oth
er
shee
t an
d
Th
e G
roup
fund
s in
stitu
tions
tr
adin
g as
sets
fo
r-sa
le
mat
urity
fin
anci
ng
asse
ts
tota
l co
ntin
genc
ies
2015
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
Agr
icul
ture
-
-
-
12
-
-
6
89,2
96
-
689
,308
2
44,6
63
Min
ing
and
quar
ryin
g
-
-
-
-
-
-
721
,713
-
7
21,7
13
280
,336
Man
ufac
turin
g
-
-
-
1,6
82
220
,849
4
3,76
9
2,2
31,7
14
-
2,4
98,0
14
2,42
8,38
1
Elec
tric
ity, g
as a
nd w
ater
sup
ply
-
-
-
2
9
172
,090
-
1
73,3
43
-
345
,462
4
,482
Con
stru
ctio
n
-
-
-
-
44,
844
1
85,0
32
3,4
52,2
89
-
3,6
82,1
65
3,18
4,72
6
Rea
l est
ate
-
-
-
-
-
-
6
,830
,513
-
6
,830
,513
1,
159,
430
Tran
spor
t, st
orag
e an
d
co
mm
unic
atio
n
-
-
-
46
2
31,0
27
-
2,0
63,9
19
-
2,2
94,9
92
697,
346
Fina
nce,
insu
ranc
e an
d bu
sine
ss
se
rvic
es
8
84,5
27
351
,687
1
50,1
21
120
,692
4
,185
,438
1
28,4
14
4,1
23,4
39
-
9,9
44,3
18
1,0
35,3
36
Gov
ernm
ent a
nd g
over
nmen
t
agen
cies
2,9
81,6
27
-
-
-
5,2
27,6
79
-
1,1
37,6
74
-
9,3
46,9
80
812
,967
Who
lesa
le &
reta
il tr
ade
and
rest
aura
nts
& h
otel
s
-
-
-
170
-
2
3,43
9
2,4
11,8
00
-
2,4
35,4
09
1,72
6,00
5
Oth
ers
-
-
-
51,
406
-
-
18
,268
,897
6
2,99
0 1
8,38
3,29
3
948,
295
Tota
l ass
ets
3
,866
,154
3
51,6
87
150
,121
1
74,0
37
10,
081,
927
3
80,6
54
42,1
04,5
97
62,
990
57,
172,
167
12
,521
,967
Not
es t
o th
e Fi
nanc
ial S
tate
men
tsfo
r the
fina
ncia
l yea
r end
ed 3
1 D
ecem
ber 2
016
AFFIN BANK BERHAD (25046-T)
138
41
FIN
AN
CIA
L R
ISK
MA
NA
GE
ME
NT
(i)
C
red
it r
isk
(co
ntin
ued
)
Cre
dit
ris
k co
ncen
trat
ions
(co
ntin
ued
)
Dep
osi
ts a
nd I
nves
tmen
ts
pla
cem
ents
ac
coun
ts
wit
h b
anks
d
ue f
rom
Fina
ncia
l Fi
nanc
ial
Loan
s,
O
n
and
oth
er
des
igna
ted
D
eriv
ativ
e in
vest
men
ts i
nves
tmen
ts
adva
nces
bal
ance
Co
mm
itm
ents
S
hort
-ter
m
fina
ncia
l fi
nanc
ial
fina
ncia
l av
aila
ble
- he
ld-t
o-
and
O
ther
sh
eet
and
The
Ban
k
fund
s in
stit
utio
ns
inst
itut
ions
as
sets
fo
r-sa
le
mat
urit
y fi
nanc
ing
as
sets
to
tal
cont
ing
enci
es
20
16
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
Agr
icul
ture
-
-
-
647
-
-
4
92,6
98
-
493
,345
1
24,4
87
Min
ing
and
quar
ryin
g
-
-
-
-
-
-
849
,015
-
8
49,0
15
331,
554
Man
ufac
turin
g
-
-
-
8,2
61
165
,514
-
1
,751
,385
-
1
,925
,160
1,
880,
678
Elec
tric
ity, g
as a
nd w
ater
sup
ply
-
-
-
5
8
264
,356
-
1
18,1
11
-
382
,525
8,
403
Con
stru
ctio
n
-
-
-
10
-
1
80,8
86
1,9
41,5
76
-
2,1
22,4
72
2,11
3,27
9
Rea
l est
ate
-
-
-
-
2
0,39
0
-
6,3
68,3
56
-
6,3
88,7
46
948,
879
Tran
spor
t, st
orag
e an
d
co
mm
unic
atio
n
-
-
-
-
140
,973
-
1
,791
,098
-
1
,932
,071
58
9,91
6
Fina
nce,
insu
ranc
e an
d
bu
sine
ss s
ervi
ces
4
12,9
65
406
,075
2
,110
,079
1
38,1
87
4,0
02,0
28
100
,614
2
,302
,275
-
9
,472
,223
77
4,16
6
Gov
ernm
ent a
nd g
over
nmen
t
agen
cies
2,7
12,3
69
-
-
-
3,6
00,9
35
-
85,
570
-
6
,398
,874
86
4,69
8
Who
lesa
le &
reta
il tr
ade
and
rest
aura
nts
& h
otel
s
-
-
-
2,9
75
35,
801
1
9,90
2
2,3
51,0
04
-
2,4
09,6
82
1,63
0,45
3
Oth
ers
-
-
-
16,
102
-
-
12
,702
,266
3
3,91
0 1
2,75
2,27
8 1,
246,
429
Tota
l ass
ets
3
,125
,334
4
06,0
75
2,1
10,0
79
166
,240
8
,229
,997
3
01,4
02
30,7
53,3
54
33,
910
45,
126,
391
10,5
12,9
42
Not
es t
o th
e Fi
nanc
ial S
tate
men
tsfo
r the
fina
ncia
l yea
r end
ed 3
1 D
ecem
ber 2
016
139
ANNUAL REPORT 2016
41
FIN
AN
CIA
L R
ISK
MA
NA
GE
ME
NT
(i)
C
red
it r
isk
(co
ntin
ued
)
Cre
dit
ris
k co
ncen
trat
ions
(co
ntin
ued
)
Dep
osits
and
In
vest
men
ts
pl
acem
ents
ac
coun
ts
w
ith b
anks
du
e fro
m
Fina
ncia
l
Fina
ncia
l Fi
nanc
ial
Loan
s,
O
n
an
d ot
her
desi
gnat
ed
inve
stm
ents
D
eriv
ativ
e in
vest
men
ts
inve
stm
ents
ad
vanc
es
ba
lanc
e C
omm
itmen
ts
Sho
rt-t
erm
fi
nanc
ial
finan
cial
he
ld-f
or-
finan
cial
av
aila
ble-
he
ld-t
o-
and
Oth
er
shee
t an
d
Th
e B
ank
fu
nds
inst
itutio
ns
inst
itutio
ns
trad
ing
asse
ts
for-
sale
m
atur
ity
finan
cing
as
sets
to
tal
cont
inge
ncie
s
20
15
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
Agr
icul
ture
-
-
-
-
1
2
-
-
410
,691
-
4
10,7
03
215,
236
Min
ing
and
quar
ryin
g -
-
-
-
-
-
-
7
08,7
15
-
708
,715
26
9,72
6
Man
ufac
turin
g -
-
-
-
1
,682
1
40,2
75
43,
769
2
,006
,988
-
2
,192
,714
2,
107,
601
Elec
tric
ity, g
as a
nd
w
ater
sup
ply
-
-
-
-
29
1
72,0
90
-
116
,138
-
2
88,2
57
3,23
2
Con
stru
ctio
n -
-
-
-
-
4
4,84
4
185
,032
2
,900
,594
-
3
,130
,470
2,
759,
889
Rea
l est
ate
-
-
-
-
-
-
-
5,6
96,5
45
-
5,6
96,5
45
1,05
5,52
8
Tran
spor
t, st
orag
e
and
com
mun
icat
ion
-
-
-
-
46
1
85,3
58
-
1,8
58,7
67
-
2,0
44,1
71
451,
634
Fina
nce,
insu
ranc
e an
d
busi
ness
ser
vice
s 9
27,9
09
349
,772
1
,331
,318
1
50,1
21
121
,400
3
,928
,321
5
2,13
2
3,5
57,6
87
-
10,4
18,6
60
919,
371
Gov
ernm
ent a
nd
go
vern
men
t age
ncie
s 1
,070
,557
-
-
-
-
4
,136
,191
-
5
34,6
04
-
5,7
41,3
52
144,
837
Who
lesa
le &
reta
il tr
ade
and
rest
aura
nts
& h
otel
s -
-
-
-
1
70
-
23,
439
2
,195
,262
-
2
,218
,871
1,
535,
407
Oth
ers
-
-
-
-
5
1,40
6
-
-
12,9
16,6
97
59,
649
13,
027,
752
78
2,52
9
Tota
l ass
ets
1,9
98,4
66
349
,772
1
,331
,318
1
50,1
21
174
,745
8
,607
,079
3
04,3
72
32,9
02,6
88
59,
649
45,
878,
210
10
,244
,990
Not
es t
o th
e Fi
nanc
ial S
tate
men
tsfo
r the
fina
ncia
l yea
r end
ed 3
1 D
ecem
ber 2
016
AFFIN BANK BERHAD (25046-T)
140
Notes to the Financial Statementsfor the financial year ended 31 December 2016
41 FINANCIAL RISK MANAGEMENT
(i) Credit risk (continued)
Collaterals
The main collateral types accepted and given value by the Bank are:
• Mortgagesoverresidentialproperties;
• Chargesovercommercialrealestateorvehiclesfinanced;
• Chargesoverbusinessassetssuchasbusinesspremises,inventoryandaccountreceivables;and
• Chargesoverfinancialinstrumentssuchasmarketablesecurities
Total loans, advances and financing - credit quality
Allloans,advancesandfinancingarecategorisedinto“neitherpastduenorimpaired”,“pastduebutnotimpaired”and“impaired”.
Past due loans/financing refer to loans, advances and financing that are overdue by one day or more.
Loans, advances and financing are classified impaired when they fulfill any of the following criteria:
i) the principal or interest/profit or both is past due more than 90 days or 3 months from the first day of default
ii) where the account is in arrears for less than 90 days or 3 months, there is evidence of impairment to indicate that the borrower/customeris“unlikelytorepay”itscreditobligations
iii) the loan/financing is classified as rescheduled and restructured in Central Credit Reference Information System (CCRIS).
Distribution of loans, advances and financing by credit quality
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Neither past due nor impaired (a) 39,828,268 39,181,976 28,593,953 30,574,217
Past due but not impaired (b) 2,536,213 2,654,372 1,890,088 2,126,743
Impaired (c) 687,946 767,847 590,447 626,139
Gross loans, advances and financing 43,052,427 42,604,195 31,074,488 33,327,099
less: Allowance for impairment
- Individual (149,499) (270,137) (131,497) (231,621)
- Collective (234,631) (229,461) (189,637) (192,790)
Net loans, advances and financing 42,668,297 42,104,597 30,753,354 32,902,688
141
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
41 FINANCIAL RISK MANAGEMENT
(i) Credit risk (continued)
Total loans, advances and financing - credit quality (continued)
(a) Loans/financing neither past due nor impaired
Analysis of loans, advances and financing that are neither past due nor impaired analysed based on the Group and the Bank’s internal credit grading system is as follows:
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Quality classification
Satisfactory 38,177,186 38,594,431 27,220,848 30,022,816
Special mention 1,651,082 587,545 1,373,105 551,401
39,828,268 39,181,976 28,593,953 30,574,217
Quality classification definitions
Satisfactory: Exposures demonstrate a strong capacity to meet financial commitments, with negligible or low probability of default and/or levels of expected loss.
Special mention: Exposures require varying degrees of special attention and default risk is of greater concern which are under the monitoring of Group Early Alert Committee (‘GEAC’).
(b) Loans/financing past due but not impaired
Certain loans, advances and financing are past due but not impaired as the collateral values of these loans/financing are in excess of the principal and profit outstanding. Allowances for these loans/financing may have been set aside on a portfolio basis. The Bank’s loans, advances and financing which are past due but not impaired are as follows:
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Past due up to 30 days 1,208,874 1,498,813 1,016,374 1,257,382
Past due 31-60 days 953,657 819,181 588,648 606,202
Past due 61-90 days 373,682 336,378 285,066 263,159
2,536,213 2,654,372 1,890,088 2,126,743
AFFIN BANK BERHAD (25046-T)
142
Notes to the Financial Statementsfor the financial year ended 31 December 2016
41 FINANCIAL RISK MANAGEMENT
(i) Credit risk (continued)
Total loans, advances and financing - credit quality (continued)
(c) Loans/financing impaired
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Analysis of impaired assets:
Gross impaired loans/financing 687,946 767,847 590,447 626,139
Individually impaired loans/financing 426,348 527,128 381,384 424,929
Collateral and other credit enhancements obtained
The Group and the Bank obtained assets by taking possession of collateral held as security or calling upon other credit enhancements.
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Nature of assets
Industrial and residential properties 7,970 4,906 5,329 4,315
Foreclosed properties are sold as soon as practicable, with the proceeds used to reduce the outstanding indebtedness. The carrying amount of foreclosed properties held by the Group and the Bank as at reporting date has been classified as Other assets as disclosed in Note 9.
Deposits and short-term funds, corporate bonds/sukuk, treasury bills and derivatives - credit quality
Corporate bonds/sukuk, treasury bills and other eligible bills included in financial assets held-for-trading and financial investments available-for-sale are measured on a fair value basis. The fair value will reflect the credit risk of the issuer.
Most listed and some unlisted securities are rated by external rating agencies. The Group and the Bank mainly uses external credit ratings provided by RAM, MARC, Standard & Poors’ or Moody’s.
143
ANNUAL REPORT 2016
41
FIN
AN
CIA
L R
ISK
MA
NA
GE
ME
NT
(i)
C
red
it r
isk
(co
ntin
ued
)
The
tabl
e be
low
pre
sent
s th
e de
posi
ts a
nd s
hort
-ter
m fu
nds,
cor
pora
te b
onds
/suk
uk, t
reas
ury
bills
and
oth
er e
ligib
le b
ills th
at n
eith
er p
ast d
ue n
or im
paire
d an
d im
paire
d, a
naly
sed
by r
atin
g:
A
A-
Lo
wer
The
Gro
up
S
ove
reig
ns
AA
A
to
AA
+
A-
to A
+
than
A-
Unr
ated
*
Imp
aire
d
Tota
l
2016
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
Sho
rt-t
erm
fund
s
3
,765
,387
1
97,6
89
174
,736
3
,906
1
0,27
6
-
-
4,1
51,9
94
Dep
osits
and
pla
cem
ents
with
ban
ks a
nd o
ther
fina
ncia
l ins
titut
ions
-
41,
289
1
10,9
45
-
-
-
-
152
,234
Der
ivat
ive
finan
cial
ass
ets
-
1
2,21
6
8,2
03
621
2
,190
1
44,0
74
-
167
,304
Fina
ncia
l inv
estm
ents
ava
ilabl
e-fo
r-sa
le
M
alay
sian
Gov
ernm
ent s
ecur
ities
90,
237
-
-
-
-
-
-
9
0,23
7
M
alay
sian
Gov
ernm
ent i
nves
tmen
t iss
ues
1
,527
,767
-
-
-
-
-
-
1
,527
,767
S
ukuk
Per
umah
an K
eraj
aan
406
,288
-
-
-
-
-
-
4
06,2
88
N
egot
iabl
e In
stru
men
ts o
f Dep
osit
and
Isla
mic
Deb
t Cer
tifica
tes
-
-
2,0
14,2
00
500
,268
-
-
-
2
,514
,468
K
haza
nah
Bon
ds/S
ukuk
4
39,2
19
- -
- -
- -
439
,219
C
orpo
rate
bon
ds/s
ukuk
2
,557
,328
1
,120
,103
95
6,27
5 1
89,3
62
143
,475
1
18,8
83
-
5,0
85,4
26
Fina
ncia
l inv
estm
ents
hel
d-to
-mat
urity
C
orpo
rate
bon
ds/s
ukuk
-
-
-
-
-
3
67,2
84
6,2
40
373
,524
8
,786
,226
1
,371
,297
3
,264
,359
6
94,1
57
155
,941
6
30,2
41
6,2
40
14,9
08,4
61
* N
et o
f allo
wan
ce fo
r im
pairm
ent.
C
olla
tera
l is
not
gene
rally
obt
aine
d di
rect
ly fr
om t
he is
suer
s of
deb
t se
curit
ies.
Cer
tain
deb
t se
curit
ies
may
be
colla
tera
lised
by
spec
ifica
lly id
entifi
ed a
sset
s by
tha
t w
ould
be
obta
inab
le in
the
even
t of d
efau
lt.
D
epos
its a
nd s
hort
-ter
m fu
nds,
cor
pora
te b
onds
/suk
uk, t
reas
ury
bills
and
der
ivat
ives
whi
ch a
re p
ast d
ue b
ut n
ot im
paire
d is
not
sig
nific
ant.
Not
es t
o th
e Fi
nanc
ial S
tate
men
tsfo
r the
fina
ncia
l yea
r end
ed 3
1 D
ecem
ber 2
016
AFFIN BANK BERHAD (25046-T)
144
41
FIN
AN
CIA
L R
ISK
MA
NA
GE
ME
NT
(i)
C
red
it r
isk
(co
ntin
ued
)
A
A-
Lo
wer
The
Gro
up
Sov
erei
gns
AA
A
to A
A+
A
- to
A+
th
an A
- U
nrat
ed
* Im
paire
d
Tota
l
2015
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
Sho
rt-t
erm
fund
s
2
,981
,627
9
5,79
5
761
,577
2
3,84
8
3,3
01
6
-
3,8
66,1
54
Dep
osits
and
pla
cem
ents
with
ban
ks a
nd o
ther
fina
ncia
l ins
titut
ions
-
115
,459
2
36,2
28
-
-
-
-
351
,687
Fina
ncia
l ass
ets
held
-for
-tra
ding
N
egot
iabl
e In
stru
men
ts o
f Dep
osit
-
-
-
150
,121
-
-
-
1
50,1
21
Der
ivat
ive
finan
cial
ass
ets
-
3
4,17
5
32,
539
(6
) 1
,647
1
05,6
82
-
174
,037
Fina
ncia
l inv
estm
ents
ava
ilabl
e-fo
r-sa
le
M
alay
sian
Gov
ernm
ent s
ecur
ities
39,9
97
-
-
-
-
-
-
39,
997
M
alay
sian
Gov
ernm
ent i
nves
tmen
t iss
ues
1,
863,
822
-
-
-
-
-
-
1
,863
,822
S
ukuk
Per
umah
an K
eraj
aan
655
,690
-
-
-
-
-
-
6
55,6
90
N
egot
iabl
e In
stru
men
ts o
f Dep
osit
and
Isla
mic
Deb
t Cer
tifica
tes
-
-
2,0
84,5
72
50,
040
-
-
-
2
,134
,612
K
haza
nah
Bon
ds/S
ukuk
43
7,81
9
- -
- -
- -
437
,819
C
orpo
rate
bon
ds/s
ukuk
2,
230,
351
1
,107
,456
1
,132
,880
3
81,7
13
67,
542
3
0,04
5
-
4,9
49,9
87
Fina
ncia
l inv
estm
ents
hel
d-to
-mat
urity
C
orpo
rate
bon
ds/s
ukuk
-
-
-
-
-
3
57,2
15
23,
439
3
80,6
54
8
,209
,306
1
,352
,885
4
,247
,796
6
05,7
16
72,
490
4
92,9
48
23,
439
15,
004,
580
* N
et o
f allo
wan
ce fo
r im
pairm
ent.
C
olla
tera
l is
not
gene
rally
obt
aine
d di
rect
ly fr
om t
he is
suer
s of
deb
t se
curit
ies.
Cer
tain
deb
t se
curit
ies
may
be
colla
tera
lised
by
spec
ifica
lly id
entifi
ed a
sset
s by
tha
t w
ould
be
obta
inab
le in
the
even
t of d
efau
lt.
D
epos
its a
nd s
hort
-ter
m fu
nds,
cor
pora
te b
onds
/suk
uk, t
reas
ury
bills
and
der
ivat
ives
whi
ch a
re p
ast d
ue b
ut n
ot im
paire
d is
not
sig
nific
ant.
Not
es t
o th
e Fi
nanc
ial S
tate
men
tsfo
r the
fina
ncia
l yea
r end
ed 3
1 D
ecem
ber 2
016
145
ANNUAL REPORT 2016
41
FIN
AN
CIA
L R
ISK
MA
NA
GE
ME
NT
(i)
C
red
it r
isk
(co
ntin
ued
)
A
A-
Lo
wer
The
Ban
k
So
vere
igns
A
AA
t
o A
A+
A
- to
A+
th
an A
- U
nrat
ed
* Im
pai
red
To
tal
2016
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
Sho
rt-t
erm
fund
s
2
,712
,369
1
97,6
88
173
,816
-
4
1,46
1
-
-
3,1
25,3
34
Dep
osits
and
pla
cem
ents
with
ban
ks a
nd o
ther
fina
ncia
l ins
titut
ions
-
41,
289
1
10,9
45
-
253
,841
-
-
4
06,0
75
Inve
stm
ent a
ccou
nts
due
from
des
igna
ted
finan
cial
inst
itutio
ns
-
-
-
-
-
2
,110
,079
-
2
,110
,079
Der
ivat
ive
finan
cial
ass
ets
-
1
2,21
6
6,4
52
621
2
,877
1
44,0
74
-
166
,240
Fina
ncia
l inv
estm
ents
ava
ilabl
e-fo
r-sa
le
M
alay
sian
Gov
ernm
ent s
ecur
ities
90,2
37
-
-
-
-
-
-
90,
237
M
alay
sian
Gov
ernm
ent i
nves
tmen
t iss
ues
8
98,9
82
-
-
-
-
-
-
898
,982
S
ukuk
Per
umah
an K
eraj
aan
276
,858
-
-
-
-
-
-
2
76,8
58
N
egot
iabl
e In
stru
men
ts o
f Dep
osit
and
Isla
mic
Deb
t Cer
tifica
tes
-
-
2,0
14,2
00
500
,268
-
-
-
2,5
14,4
68
K
haza
nah
Bon
ds/S
ukuk
2
65,9
31
- -
- -
- -
265
,931
C
orpo
rate
bon
ds/s
ukuk
2
,068
,928
79
7,99
0 8
64,8
83
189
,362
1
43,4
75
118
,883
-
4
,183
,521
Fina
ncia
l inv
estm
ents
hel
d-to
-mat
urity
C
orpo
rate
bon
ds/s
ukuk
-
-
-
-
-
2
95,1
62
6,2
40
301
,402
6
,313
,305
1
,049
,183
3
,170
,296
6
90,2
51
441
,654
2
,668
,198
6
,240
14
,339
,127
* N
et o
f allo
wan
ce fo
r im
pairm
ent.
C
olla
tera
l is
not
gene
rally
obt
aine
d di
rect
ly f
rom
the
issu
ers
of d
ebt
secu
ritie
s. C
erta
in d
ebt
secu
ritie
s m
ay b
e co
llate
ralis
ed b
y sp
ecifi
cally
iden
tified
ass
ets
that
wou
ld b
e ob
tain
able
in th
e ev
ent o
f def
ault.
D
epos
its a
nd s
hort
-ter
m fu
nds,
cor
pora
te b
onds
/suk
uk, t
reas
ury
bills
and
der
ivat
ives
whi
ch a
re p
ast d
ue b
ut n
ot im
paire
d is
not
sig
nific
ant.
Not
es t
o th
e Fi
nanc
ial S
tate
men
tsfo
r the
fina
ncia
l yea
r end
ed 3
1 D
ecem
ber 2
016
AFFIN BANK BERHAD (25046-T)
146
41
FIN
AN
CIA
L R
ISK
MA
NA
GE
ME
NT
(i)
C
red
it r
isk
(co
ntin
ued
)
A
A-
Lo
wer
The
Ban
k
Sov
erei
gns
AA
A
to A
A+
A
- to
A+
th
an A
- U
nrat
ed
* Im
paire
d
Tota
l
2015
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
Sho
rt-t
erm
fund
s
1
,070
,558
9
5,80
1
761
,315
1
6,60
8
54,
184
-
-
1
,998
,466
Dep
osits
and
pla
cem
ents
with
ban
ks a
nd o
ther
fina
ncia
l ins
titut
ions
-
115
,460
2
01,1
94
-
33,
118
-
-
3
49,7
72
Inve
stm
ent a
ccou
nts
due
from
des
igna
ted
finan
cial
inst
itutio
ns
-
-
-
-
-
1
,331
,318
-
1
,331
,318
Fina
ncia
l ass
ets
held
-for
-tra
ding
N
egot
iabl
e In
stru
men
ts o
f Dep
osit
-
-
-
150
,121
-
-
-
1
50,1
21
Der
ivat
ive
finan
cial
ass
ets
-
3
4,17
5
32,
533
(6
) 2
,361
1
05,6
82
-
174
,745
Fina
ncia
l inv
estm
ents
ava
ilabl
e-fo
r-sa
le
M
alay
sian
Gov
ernm
ent s
ecur
ities
39,
997
-
-
-
-
-
-
3
9,99
7
M
alay
sian
Gov
ernm
ent i
nves
tmen
t iss
ues
1
,249
,964
-
-
-
-
-
-
1
,249
,964
S
ukuk
Per
umah
an K
eraj
aan
468,
472
-
-
-
-
-
-
4
68,4
72
N
egot
iabl
e In
stru
men
ts o
f Dep
osit
and
Isla
mic
Deb
t Cer
tifica
tes
-
-
2,0
84,5
72
50,
040
-
-
-
2,1
34,6
12
K
haza
nah
Bon
ds/S
ukuk
27
2,53
8
- -
- -
- -
272
,538
C
orpo
rate
bon
ds/s
ukuk
2,
105,
220
7
95,4
56
1,0
61,5
20
381
,713
6
7,54
2
30,
045
-
4
,441
,496
Fina
ncia
l inv
estm
ents
hel
d-to
-mat
urity
C
orpo
rate
bon
ds/s
ukuk
-
-
-
-
-
2
80,9
33
23,
439
3
04,3
72
5
,206
,749
1
,040
,892
4
,141
,134
5
98,4
76
157
,205
1
,747
,978
2
3,43
9 1
2,91
5,87
3
* N
et o
f allo
wan
ce fo
r im
pairm
ent.
C
olla
tera
l is
not
gene
rally
obt
aine
d di
rect
ly f
rom
the
issu
ers
of d
ebt
secu
ritie
s. C
erta
in d
ebt
secu
ritie
s m
ay b
e co
llate
ralis
ed b
y sp
ecifi
cally
iden
tified
ass
ets
that
wou
ld b
e ob
tain
able
in th
e ev
ent o
f def
ault.
D
epos
its a
nd s
hort
-ter
m fu
nds,
cor
pora
te b
onds
/suk
uk, t
reas
ury
bills
and
der
ivat
ives
whi
ch a
re p
ast d
ue b
ut n
ot im
paire
d is
not
sig
nific
ant.
Not
es t
o th
e Fi
nanc
ial S
tate
men
tsfo
r the
fina
ncia
l yea
r end
ed 3
1 D
ecem
ber 2
016
147
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
41 FINANCIAL RISK MANAGEMENT
(i) Credit risk (continued)
Other financial assets - credit quality
Other financial assets of the Group and the Bank are neither past due nor impaired are summarised as below:
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Other assets 39,212 62,990 33,910 59,649
Amount due from subsidiaries - - 196,839 61
Amount due from joint ventures 46,725 39,936 - -
Amount due from associate 500 - - -
Other financial assets that are past due but not impaired or impaired are not significant.
(ii) Market risk
Market risk is the risk of losses in on and off-balance-sheet positions arising from movements in market prices. The Bank’s exposure to market risk results largely from interest rate and foreign exchange rate risks.
The Market Risk Management Framework governs the market risk activities of the Bank which is supported by a set of approved market risk management policies, guidelines and procedures.
Risk control parameters are established based on risk appetite, market liquidity and business strategies as well as macroeconomic conditions. These parameters are reviewed at least annually.
Market risk arising from the Trading Book is primarily controlled through the imposition of Stop-loss and Value-at-Risk (‘VaR’) risk control parameters.
Interest rate risk is quantified by analysing the mismatches in timing repricing of the rate sensitive assets and rate sensitive liabilities. Earnings-at-Risk (‘EaR’) or Net Interest Income simulation is conducted to assess the variation in short term earnings under various rates scenarios. The potential long term effect of the overall exposure is tracked by assessing the impact on Economic Value of Equity (‘EVE’), also known as Economic Value-at-Risk (‘EVaR’). Thresholds are set for EaR and EVaR as management triggers.
Periodic stress tests are conducted to quantify market risk arising from probability of abnormal market movements.
Value-at-risk (‘VaR’)
Value-at-Risk (‘VaR’) is used to compute the maximum potential loss amount over a specified holding period of the Trading portfolio.
It measures the risk of losses arising from potential adverse movements in interest rates and foreign exchange rates that could affect values of financial instruments.
The Bank adopts Historical Pricing Simulation Method (‘HPS’) to compute potential loss or Value-at-Risk (‘VaR’) amount. The HPS Method uses the relative change of historical prices to estimate future potential changes in the market value of outstanding positions. The Bank currently adopts 250 simulated business days for its HPS VaR computation. After applying these price changes to the outstanding portfolios, 250 simulated market values for the portfolio are generated and the change in the day-to-day market value is taken as simulated Profit & Loss (‘P&L’) for the portfolio. As VaR calculates the worst expected loss over a given day horizon and confidence level under normal market condition, the 250 values are sorted from the lowest to the highest simulated P&L. The VaR focuses on the tail of the distribution (i.e. the loss figures) at the 99th percentile.
Backtesting of the VaR computation system is conducted regularly to gauge the accuracy of the risk measurement system.
AFFIN BANK BERHAD (25046-T)
148
Notes to the Financial Statementsfor the financial year ended 31 December 2016
41 FINANCIAL RISK MANAGEMENT
(ii) Market risk (continued)
Value-at-risk (‘VaR’) (continued)
Average for the The Group and The Bank Balance financial year Minimum Maximum 2016 RM’000 RM’000 RM’000 RM’000
Instruments
FX swap 369 820 162 3,353
FX spot (Metro Desk) 214 402 40 1,285
FX option 2 175 2 1,474
Government securities, Corporate bonds/sukuk - 16 - 278
Average for the The Group and The Bank Balance financial year Minimum Maximum 2015 RM’000 RM’000 RM’000 RM’000
Instruments
FX swap 472 605 253 3,128
FX spot (Metro Desk) 466 330 48 3,240
Fix option 77 362 5 932
Government securities, Corporate bonds/sukuk 1 - - 17
Other risk measures
• Mark-to-market
Mark-to-market valuation tracks the current market value of the outstanding financial instruments.
• Stresstesting
Stress tests are conducted to attempt to quantify market risk arising from abnormal market movements. Stress tests measure the changes in values arising from extreme movements in interest rates and foreign exchange rates based on past experiences and simulated stress scenarios.
Interest/profit rate sensitivity
The table below shows the sensitivity for the financial assets and financial liabilities held as at reporting date.
Impact on profit after tax is measured using Repricing Gap Simulation methodology based on 100 basis point parallel shifts in interest rate.
Impact on equity represents the changes in fair value of fixed income instruments held in available-for-sale portfolio arising from the shifts in interest/profit rate.
149
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
41 FINANCIAL RISK MANAGEMENT
(ii) Market risk (continued)
Interest/profit rate sensitivity (continued)
The Group The Bank 2016 2016 2016 2016 +100 -100 +100 -100 basis point basis point basis point basis point RM million RM million RM million RM million
Impact on profit after tax (28.3) 28.3 (15.0) 15.0
Impact on equity (248.6) 265.4 (182.1) 194.0
The Group The Bank 2015 2015 2015 2015 +100 -100 +100 -100 basis point basis point basis point basis point RM million RM million RM million RM million
Impact on profit after tax (49.9) 49.9 (36.1) 36.1
Impact on equity (261.0) 261.2 (215.8) 213.1
Foreign exchange risk sensitivity analysis
An analysis of the exposure to assess the impact of a one per cent change in exchange rate to the profit after tax are as follows:
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
+1%
Euro 2,877 1,512 4,967 1,143
United States Dollar 44,218 39,731 46,368 37,697
Great Britain Pound 1,571 2,347 1,585 2,215
Australian Dollar 41 (56) 39 3
Japanese Yen 480 184 479 178
Others 2,309 4,600 2,300 3,577
51,496 48,318 55,738 44,813
-1%
Euro (2,877) (1,512) (4,967) (1,143)
United States Dollar (44,218) (39,731) (46,368) (37,697)
Great Britain Pound (1,571) (2,347) (1,585) (2,215)
Australian Dollar (41) 56 (39) (3)
Japanese Yen (480) (184) (479) (178)
Others (2,309) (4,600) (2,300) (3,577)
(51,496) (48,318) (55,738) (44,813)
AFFIN BANK BERHAD (25046-T)
150
41
FIN
AN
CIA
L R
ISK
MA
NA
GE
ME
NT
(ii
) M
arke
t ri
sk (c
ont
inue
d)
Fore
ign
exch
ang
e ri
sk
The
Ban
k is
exp
osed
to th
e ef
fect
s of
fluc
tuat
ions
in th
e pr
evai
ling
fore
ign
curr
ency
exc
hang
e ra
tes
on it
s fin
anci
al p
ositi
on a
nd c
ash
flow
s. T
he ri
sk o
f fluc
tuat
ions
in fo
reig
n cu
rren
cy
exch
ange
rat
es is
man
aged
via
set
ting
of th
resh
olds
on
the
leve
l of e
xpos
ure
by c
urre
ncy
and
in a
ggre
gate
for
both
ove
rnig
ht a
nd in
tra-
day
posi
tions
, whi
ch a
re m
onito
red
daily
.
The
follo
win
g ta
ble
sum
mar
ises
the
Ban
k’s
expo
sure
to fo
reig
n cu
rren
cy e
xcha
nge
rate
ris
k at
repo
rtin
g da
te. I
nclu
ded
in th
e ta
ble
are
the
Ban
k’s
finan
cial
inst
rum
ents
at c
arry
ing
amou
nts,
cat
egor
ised
by
curr
ency
.
U
nite
d
Gre
at
Sta
tes
Bri
tain
A
ustr
alia
n Ja
pan
ese
The
Gro
up
E
uro
D
olla
r P
oun
d
Do
llar
Yen
Oth
ers
Tota
l
20
16
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
Ass
ets
Cas
h an
d sh
ort-
term
fund
s
395
186
,378
1
,483
1
,385
1
,055
8
,385
19
9,08
1
D
eriv
ativ
e fin
anci
al a
sset
s
5,27
2
136
,611
2
,260
1
8
3
2,1
09
146
,273
Fi
nanc
ial i
nves
tmen
ts a
vaila
ble-
for-
sale
4
7,49
0
226
,021
-
-
-
1
48,1
64
421
,675
Lo
ans,
adv
ance
s an
d fin
anci
ng
-
1,1
71,2
84
-
-
-
-
1,1
71,2
84
Oth
er a
sset
s
-
1,7
39
-
-
-
-
1,7
39
Tota
l fina
ncia
l ass
ets
53
,157
1
,722
,033
3
,743
1
,403
1
,058
1
58,6
58
1,9
40,0
52
Liab
iliti
es
D
epos
its fr
om c
usto
mer
s
602,
713
2
28,6
30
7,1
78
6,1
40
803
4
1,38
2
886
,846
D
epos
its a
nd p
lace
men
ts o
f ban
ks a
nd o
ther
fina
ncia
l ins
titut
ions
-
1
7,24
3
-
-
-
-
17,
243
Der
ivat
ive
finan
cial
liab
ilitie
s
4,41
3
2,8
56
11,
116
3
93
156
1
,437
2
0,37
1
O
ther
liab
ilitie
s
1
6
5,79
9 -
-
-
-
5,
815
Tota
l fina
ncia
l lia
bili
ties
607,
142
25
4,52
8 1
8,29
4
6,5
33
959
4
2,81
9
930
,275
Net
on-
bala
nce
shee
t fina
ncia
l pos
ition
(5
53,9
85)
1,4
67,5
05
(14,
551)
(5
,130
) 9
9
115,
839
1,0
09,7
77
O
ff ba
lanc
e sh
eet c
omm
itmen
ts
932,
581
4
,350
,680
2
21,2
96
10,
560
6
3,02
6
187,
936
5,7
66,0
79
Not
es t
o th
e Fi
nanc
ial S
tate
men
tsfo
r the
fina
ncia
l yea
r end
ed 3
1 D
ecem
ber 2
016
151
ANNUAL REPORT 2016
41
FIN
AN
CIA
L R
ISK
MA
NA
GE
ME
NT
(ii
) M
arke
t ri
sk (c
ont
inue
d)
Fore
ign
exch
ang
e ri
sk (c
ont
inue
d)
U
nite
d
Gre
at
Sta
tes
Brit
ain
Aus
tral
ian
Japa
nese
The
Gro
up
E
uro
Dol
lar
Pou
nd
Dol
lar
Yen
Oth
ers
Tota
l
20
15
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
Ass
ets
Cas
h an
d sh
ort-
term
fund
s
1,7
94
840
,080
4
,186
1
,293
5
72
10,
152
8
58,0
77
Dep
osits
and
pla
cem
ents
with
ban
ks a
nd o
ther
fina
ncia
l ins
titut
ions
-
3
3,11
8
-
-
-
-
33,
118
Der
ivat
ive
finan
cial
ass
ets
49
2
113
,475
3
1,53
7
39
9
3
747
1
46,3
83
Fina
ncia
l inv
estm
ents
ava
ilabl
e-fo
r-sa
le
46,9
55
297
,472
-
-
-
1
59,3
93
503
,820
Loan
s, a
dvan
ces
and
finan
cing
-
1
,131
,490
-
-
-
2
22,7
25
1,3
54,2
15
Oth
er a
sset
s
-
1,6
72
-
-
-
-
1,6
72
Tota
l fina
ncia
l ass
ets
4
9,24
1
2,4
17,3
07
35,
723
1
,332
6
65
393
,017
2
,897
,285
Liab
ilitie
s
Dep
osits
from
cus
tom
ers
52
6,84
1
373
,221
1
0,37
7
7,9
56
603
1
0,88
9
929
,887
Dep
osits
and
pla
cem
ents
of b
anks
and
oth
er fi
nanc
ial i
nstit
utio
ns
-
200
,617
-
8
14
-
-
201
,431
Der
ivat
ive
finan
cial
liab
ilitie
s
2,11
7
14,
080
1
17
-
-
495
1
6,80
9
Oth
er li
abilit
ies
16
7
8
-
-
-
-
94
Tota
l fina
ncia
l lia
bilit
ies
52
8,97
4
587
,996
1
0,49
4
8,7
70
603
1
1,38
4
1,1
48,2
21
Net
on-
bala
nce
shee
t fina
ncia
l pos
ition
(4
79,7
33)
1,8
29,3
11
25,
229
(7
,438
) 6
2
381
,633
1
,749
,065
Off
bala
nce
shee
t com
mitm
ents
68
1,38
3
3,4
68,1
59
287
,647
-
2
4,47
3
231
,704
4
,693
,366
Not
es t
o th
e Fi
nanc
ial S
tate
men
tsfo
r the
fina
ncia
l yea
r end
ed 3
1 D
ecem
ber 2
016
AFFIN BANK BERHAD (25046-T)
152
41
FIN
AN
CIA
L R
ISK
MA
NA
GE
ME
NT
(ii
) M
arke
t ri
sk (c
ont
inue
d)
Fore
ign
exch
ang
e ri
sk (c
ont
inue
d)
U
nite
d
Gre
at
Sta
tes
Bri
tain
A
ustr
alia
n Ja
pan
ese
The
Ban
k
Eur
o
Do
llar
Po
und
D
olla
r Ye
n O
ther
s To
tal
2016
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
Ass
ets
Cas
h an
d sh
ort-
term
fund
s
- 2
14,6
19
1,0
85
1,0
67
890
7
,779
2
25,4
40
Dep
osits
and
pla
cem
ents
with
ban
ks a
nd o
ther
fina
ncia
l ins
titut
ions
-
5
3,20
7
-
-
-
-
53,
207
Der
ivat
ive
finan
cial
ass
ets
5
,684
1
35,1
26
2,2
67
18
3
2
,109
1
45,2
07
Fina
ncia
l inv
estm
ents
ava
ilabl
e-fo
r-sa
le
47,4
90
226,
021
-
-
-
148
,164
4
21,6
75
Loan
s, a
dvan
ces
and
finan
cing
-
1
,105
,742
-
-
-
-
1
,105
,742
Oth
er a
sset
s
-
1,7
39
-
-
-
-
1,7
39
Tota
l fina
ncia
l ass
ets
53
,174
1
,736
,454
3
,352
1
,085
8
93
158
,052
1
,953
,010
Liab
iliti
es
Dep
osits
from
cus
tom
ers
24
4,25
5
206
,078
6
,929
6
,121
7
98
41,
382
5
05,5
63
Dep
osits
and
pla
cem
ents
of b
anks
and
oth
er fi
nanc
ial i
nstit
utio
ns
-
17,
243
-
-
-
-
1
7,24
3
Der
ivat
ive
finan
cial
liab
ilitie
s
4,52
4
6,2
71
11,
116
3
93
156
1
,437
2
3,89
7
Oth
er li
abilit
ies
16
5,
799
-
-
-
-
5,81
5
Tota
l fina
ncia
l lia
bili
ties
248,
795
2
35,3
91
18,
045
6
,514
9
54
42,
819
5
52,5
18
Net
on-
bala
nce
shee
t fina
ncia
l pos
ition
(1
95,6
21)
1,5
01,0
63
(14,
693)
(5
,429
) (6
1)
115,
233
1,40
0,49
2
Off
bala
nce
shee
t com
mitm
ents
84
9,15
5
4,5
99,9
47
223
,221
1
0,56
0
63,
026
1
87,3
54
5,93
3,26
3
Not
es t
o th
e Fi
nanc
ial S
tate
men
tsfo
r the
fina
ncia
l yea
r end
ed 3
1 D
ecem
ber 2
016
153
ANNUAL REPORT 2016
41
FIN
AN
CIA
L R
ISK
MA
NA
GE
ME
NT
(ii
) M
arke
t ri
sk (c
ont
inue
d)
Fore
ign
exch
ang
e ri
sk (c
ont
inue
d)
U
nite
d
Gre
at
Sta
tes
Brit
ain
Aus
tral
ian
Japa
nese
The
Ban
k
E
uro
Dol
lar
Pou
nd
Dol
lar
Yen
Oth
ers
Tota
l
20
15
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
Ass
ets
Cas
h an
d sh
ort-
term
fund
s
561
8
37,2
52
2,3
03
1,0
32
749
8
,680
8
50,5
77
Dep
osits
and
pla
cem
ents
with
ban
ks a
nd o
ther
fina
ncia
l ins
titut
ions
-
3
3,11
8
-
-
-
-
33,
118
Der
ivat
ive
finan
cial
ass
ets
4
92
113
,354
3
1,53
7
38
9
3
746
1
46,2
60
Fina
ncia
l inv
estm
ents
ava
ilabl
e-fo
r-sa
le
46,9
55
297
,472
-
-
-
1
59,3
93
503
,820
Loan
s, a
dvan
ces
and
finan
cing
-
1
,047
,046
-
-
-
2
22,7
25
1,2
69,7
71
Oth
er a
sset
s
-
1,6
72
-
-
-
-
1,6
72
Tota
l fina
ncia
l ass
ets
48
,008
2
,329
,914
3
3,84
0
1,0
70
842
3
91,5
44
2,8
05,2
18
Liab
ilitie
s
Dep
osits
from
cus
tom
ers
51
7,48
1
360
,437
1
0,37
0
7,9
52
598
8
,297
9
05,1
35
Dep
osits
and
pla
cem
ents
of b
anks
and
oth
er fi
nanc
ial i
nstit
utio
ns
-
116
,616
-
8
14
-
-
117
,430
Der
ivat
ive
finan
cial
liab
ilitie
s
2,0
89
13,
504
7
3
-
-
495
1
6,16
1
Oth
er li
abilit
ies
16
7
8
-
-
-
-
94
Tota
l fina
ncia
l lia
bilit
ies
51
9,58
6
490
,635
1
0,44
3
8,7
66
598
8
,792
1
,038
,820
Net
on-
bala
nce
shee
t fina
ncia
l pos
ition
(4
71,5
78)
1,8
39,2
79
23,
397
(7
,696
) 2
44
382
,752
1
,766
,398
Off
bala
nce
shee
t com
mitm
ents
6
23,9
50
3,1
86,9
71
271
,994
8
,112
2
3,53
9
94,
121
4
,208
,687
Not
es t
o th
e Fi
nanc
ial S
tate
men
tsfo
r the
fina
ncia
l yea
r end
ed 3
1 D
ecem
ber 2
016
AFFIN BANK BERHAD (25046-T)
154
Notes to the Financial Statementsfor the financial year ended 31 December 2016
41 FINANCIAL RISK MANAGEMENT
(ii) Market risk (continued)
Interest/profit rate risk
Interest rate risk is the risk to earnings and capital arising from exposure to adverse movements in interest rates mainly due to mismatches in timing repricing of assets and liabilities. These mismatches are actively managed from an earnings and economic value perspective.
The objective of interest rate risk management is to achieve a stable and sustainable net interest income from the following perspectives:
(1) Next 12 months’ Earnings - Interest rate risk from the earnings perspective is the impact based on changes to the net interest (‘NII’) over the next 12 months. This risk is measured through sensitivity analysis including the application of an instantaneous 100 basis point parallel shock in interest rates across the yield curve.
(2) Economic Value - Measuring the change in the economic value of equity (‘EVE’) is an assessment of the long term impact to the Bank’s capital. This is assessed through the application of relevant duration factors to capture the net economic value impact over the long term or total life of all balance sheet assets and liabilities to adverse changes in interest rates.
Interest rate risk thresholds are established in line with the Group’s strategy and risk appetite. These thresholds are reviewed regularly to ensure relevance in the context of prevailing market conditions.
The following table represents the Group’s and the Bank’s assets and liabilities at carrying amounts, categorised by the earlier of contractual repricing or maturity dates as at reporting date.
155
ANNUAL REPORT 2016
41
FIN
AN
CIA
L R
ISK
MA
NA
GE
ME
NT
(ii
) M
arke
t ri
sk (c
ont
inue
d)
Inte
rest
/pro
fit
rate
ris
k (c
ont
inue
d)
N
on-
trad
ing
bo
ok
No
n-
in
tere
st /
U
p t
o 1
>
1-3
>3-
12
>1-
5 O
ver
5 p
rofi
t Tr
adin
g
T
he G
roup
m
ont
h m
ont
hs
mo
nths
ye
ars
year
s se
nsit
ive
bo
ok
Tota
l
20
16
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
Ass
ets
Cas
h an
d sh
ort-
term
fund
s
4,
069,
728
-
-
-
-
294
,762
-
4
,364
,490
Dep
osits
and
pla
cem
ents
with
ban
ks a
nd o
ther
fina
ncia
l ins
titut
ions
40,0
00
50,
000
6
0,00
0
-
-
2,2
34
-
152
,234
Der
ivat
ive
finan
cial
ass
ets
-
-
-
-
-
-
167
,304
1
67,3
04
Fina
ncia
l inv
estm
ents
ava
ilabl
e-fo
r-sa
le
8
54,9
65
1,4
65,9
59
871,
412
2,5
55,6
69
4,2
27,9
49
304
,043
-
10
,279
,997
Fina
ncia
l inv
estm
ent h
eld-
to-m
atur
ity
1
78,1
44
-
72,
065
5
0,00
0
50,
000
2
3,31
5 -
3
73,5
24
Loan
s, a
dvan
ces
and
finan
cing
- no
n-im
paire
d
24
,537
,597
2
,723
,113
3
,129
,917
8
,950
,311
2
,788
,912
-
-
42
,129
,850
- im
paire
d
-
-
-
-
-
5
38,4
47 #
-
5
38,4
47
Oth
ers
(1)
-
-
26,
931
-
-
7
4,25
6
-
101
,187
Sta
tuto
ry d
epos
its w
ith B
ank
Neg
ara
Mal
aysi
a
-
-
-
-
-
1
,482
,000
-
1
,482
,000
Tota
l ass
ets
29,6
80,4
34
4,2
39,0
72
4,1
60,3
25
11,5
55,9
80
7,0
66,8
61
2,7
19,0
57
167
,304
59
,589
,033
# N
et o
f ind
ivid
ual i
mpa
irmen
t allo
wan
ce.
(1)
Oth
ers
incl
ude
othe
r as
sets
and
am
ount
due
from
join
t ven
ture
s an
d as
soci
ate.
Not
es t
o th
e Fi
nanc
ial S
tate
men
tsfo
r the
fina
ncia
l yea
r end
ed 3
1 D
ecem
ber 2
016
AFFIN BANK BERHAD (25046-T)
156
41
FIN
AN
CIA
L R
ISK
MA
NA
GE
ME
NT
(ii
) M
arke
t ri
sk (c
ont
inue
d)
Inte
rest
/pro
fit
rate
ris
k (c
ont
inue
d)
N
on-
trad
ing
bo
ok
No
n-
in
tere
st /
U
p t
o 1
>
1-3
>3-
12
>1-
5 O
ver
5 p
rofi
t Tr
adin
g
T
he G
roup
m
ont
h m
ont
hs
mo
nths
ye
ars
year
s se
nsit
ive
bo
ok
Tota
l
20
16
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
Liab
iliti
es
Dep
osits
from
cus
tom
ers
17,4
19,2
87
11,6
85,7
08
14,3
56,7
36
702
,512
-
3,
468,
813
-
47,6
33,0
56
Dep
osits
and
pla
cem
ents
of b
anks
and
oth
er fi
nanc
ial i
nstit
utio
ns
1
,963
,246
1
,299
,470
2
66,6
25
-
-
17,
862
-
3
,547
,203
Obl
igat
ion
on s
ecur
ities
sol
d un
der
repu
rcha
se a
gree
men
ts
87
6,30
9 12
0,63
7 -
-
-
2
,794
-
9
99,7
40
Der
ivat
ive
finan
cial
liab
ilitie
s
-
-
-
-
-
-
4
02,7
72
402
,772
Bills
and
acc
epta
nces
pay
able
-
-
-
-
-
37,
726
-
3
7,72
6
Sub
ordi
nate
d te
rm lo
an
1,3
00,0
00
-
-
-
-
4,5
92
-
1,3
04,5
92
Oth
er li
abilit
ies
-
-
-
-
-
4
39,4
88
-
439
,488
Tota
l lia
bili
ties
21
,558
,842
13
,105
,815
14
,623
,361
7
02,5
12
-
3,97
1,27
5 40
2,77
2 5
4,36
4,57
7
Net
inte
rest
/pro
fit
sens
itiv
ity
gap
8,12
1,59
2 (8
,866
,743
) (10
,463
,036
) 10,
853,
468
7,
066,
861
Not
es t
o th
e Fi
nanc
ial S
tate
men
tsfo
r the
fina
ncia
l yea
r end
ed 3
1 D
ecem
ber 2
016
157
ANNUAL REPORT 2016
41
FIN
AN
CIA
L R
ISK
MA
NA
GE
ME
NT
(ii
) M
arke
t ri
sk (c
ont
inue
d)
Inte
rest
/pro
fit
rate
ris
k (c
ont
inue
d)
N
on-t
radi
ng b
ook
Non
-
in
tere
st /
U
p to
1
> 1
-3
>3-
12
>1-
5 O
ver
5 pr
ofit
Trad
ing
The
Gro
up
mon
th
mon
ths
mon
ths
year
s ye
ars
sens
itive
bo
ok
Tota
l
20
15
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
Ass
ets
Cas
h an
d sh
ort-
term
fund
s
3
,229
,394
-
-
-
-
8
41,3
16
-
4,0
70,7
10
Dep
osits
and
pla
cem
ents
with
ban
ks a
nd o
ther
fina
ncia
l ins
titut
ions
90,
000
1
20,0
00
140
,000
-
-
1
,687
-
3
51,6
87
Fina
ncia
l ass
ets
held
-for
-tra
ding
-
-
-
-
-
-
150
,121
1
50,1
21
Der
ivat
ive
finan
cial
ass
ets
-
-
-
-
-
-
174
,037
1
74,0
37
Fina
ncia
l inv
estm
ents
ava
ilabl
e-fo
r-sa
le
1
03,1
68
1,0
25,2
62
903
,260
3
,916
,863
4
,044
,836
2
93,9
61
-
10,2
87,3
50
Fina
ncia
l inv
estm
ent h
eld-
to-m
atur
ity
1
85,0
32
43,
741
7
6,22
3
-
51,
525
2
4,13
3
-
380
,654
Loan
s, a
dvan
ces
and
finan
cing
- no
n-im
paire
d
23
,829
,062
2
,045
,372
4
,029
,505
8
,933
,778
2
,769
,170
-
-
41
,606
,887
- im
paire
d
-
-
-
-
-
4
97,7
10 #
-
4
97,7
10
Oth
ers
(1)
-
-
22,
237
-
-
9
7,44
8
-
119
,685
Sta
tuto
ry d
epos
its w
ith B
ank
Neg
ara
Mal
aysi
a
-
-
-
-
-
1
,604
,600
-
1
,604
,600
Tota
l ass
ets
27,4
36,6
56
3,2
34,3
75
5,1
71,2
25
12,8
50,6
41
6,8
65,5
31
3,3
60,8
55
324
,158
59
,243
,441
# N
et o
f ind
ivid
ual i
mpa
irmen
t allo
wan
ce.
(1)
Oth
ers
incl
ude
othe
r as
sets
and
am
ount
due
from
join
t ven
ture
s.
Not
es t
o th
e Fi
nanc
ial S
tate
men
tsfo
r the
fina
ncia
l yea
r end
ed 3
1 D
ecem
ber 2
016
AFFIN BANK BERHAD (25046-T)
158
41
FIN
AN
CIA
L R
ISK
MA
NA
GE
ME
NT
(ii
) M
arke
t ri
sk (c
ont
inue
d)
Inte
rest
/pro
fit
rate
ris
k (c
ont
inue
d)
N
on-t
radi
ng b
ook
Non
-
in
tere
st /
U
p to
1
>1-
3 >
3-12
>
1-5
Ove
r 5
profi
t Tr
adin
g
Th
e G
roup
m
onth
m
onth
s m
onth
s ye
ars
year
s se
nsiti
ve
book
To
tal
2015
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
Liab
ilitie
s
Dep
osits
from
cus
tom
ers
16,7
08,2
90
11,8
80,2
60
14,4
71,9
10
1,1
26,8
40
-
3,6
25,9
13
-
47,8
13,2
13
Dep
osits
and
pla
cem
ents
of b
anks
and
oth
er fi
nanc
ial i
nstit
utio
ns
1
,573
,027
8
94,1
40
262
,132
-
-
6
,297
-
2
,735
,596
Obl
igat
ion
on s
ecur
ities
sol
d un
der
repu
rcha
se a
gree
men
ts
9
4,59
0
1,6
37,2
30
-
-
-
9,1
26
-
1,7
40,9
46
Der
ivat
ive
finan
cial
liab
ilitie
s
-
-
-
-
-
-
4
14,1
40
414
,140
Bills
and
acc
epta
nces
pay
able
-
-
-
-
-
77,
114
-
7
7,11
4
Rec
ours
e ob
ligat
ion
on lo
ans
sold
to C
agam
as B
erha
d
-
-
-
1
33,7
79
-
806
-
1
34,5
85
Sub
ordi
nate
d te
rm lo
an
1,0
00,0
00
-
-
-
-
4,4
46
-
1,0
04,4
46
Oth
er li
abilit
ies
-
-
-
-
-
4
11,5
75
-
411
,575
Tota
l lia
bilit
ies
19,3
75,9
07
14,4
11,6
30
14,7
34,0
42
1,2
60,6
19
-
4,1
35,2
77
414
,140
54
,331
,615
Net
inte
rest
/pro
fit s
ensi
tivity
gap
8,0
60,7
49 (
11,1
77,2
55)
(9,5
62,8
17)
11,5
90,0
22
6,8
65,5
31
Not
es t
o th
e Fi
nanc
ial S
tate
men
tsfo
r the
fina
ncia
l yea
r end
ed 3
1 D
ecem
ber 2
016
159
ANNUAL REPORT 2016
41
FIN
AN
CIA
L R
ISK
MA
NA
GE
ME
NT
(ii
) M
arke
t ri
sk (c
ont
inue
d)
Inte
rest
/pro
fit
rate
ris
k (c
ont
inue
d)
N
on-
trad
ing
bo
ok
No
n-
in
tere
st /
U
p t
o 1
>
1-3
>3-
12
>1-
5 O
ver
5 p
rofi
t Tr
adin
g
T
he B
ank
mo
nth
mo
nths
m
ont
hs
year
s ye
ars
sens
itiv
e b
oo
k To
tal
2016
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
Ass
ets
Cas
h an
d sh
ort-
term
fund
s
3
,051
,910
-
-
-
-
2
85,9
21
-
3,3
37,8
31
Dep
osits
and
pla
cem
ents
with
ban
ks a
nd o
ther
fina
ncia
l ins
titut
ions
40,
000
3
03,1
63
60,
000
-
-
2
,912
-
4
06,0
75
Inve
stm
ent a
ccou
nts
due
from
des
igna
ted
finan
cial
inst
itutio
ns
-
697,
210
130,
481
439,
947
835,
426
7,01
5 -
2
,110
,079
Der
ivat
ive
finan
cial
ass
ets
-
-
-
-
-
-
166
,240
1
66,2
40
Fina
ncia
l inv
estm
ents
ava
ilabl
e-fo
r-sa
le
8
49,9
66
1,4
60,9
60
789,
048
1,9
92,1
53
3,0
69,4
97
284
,965
-
8
,446
,589
Fina
ncia
l inv
estm
ent h
eld-
to-m
atur
ity
1
78,1
44
-
-
50,
000
5
0,00
0
23,
258
-
301
,402
Loan
s, a
dvan
ces
and
finan
cing
- no
n-im
paire
d
18
,813
,079
1
,437
,720
2
,424
,936
6
,143
,831
1
,474
,838
-
-
30
,294
,404
- im
paire
d
-
-
-
-
-
4
58,9
50 #
-
4
58,9
50
Oth
er a
sset
s
-
-
-
-
-
4
8,61
2
-
48,
612
Am
ount
due
from
sub
sidi
arie
s
-
-
-
-
-
196
,839
-
1
96,8
39
Sta
tuto
ry d
epos
its w
ith B
ank
Neg
ara
Mal
aysi
a
-
-
-
-
-
1
,150
,000
-
1
,150
,000
Tota
l ass
ets
22,9
33,0
99
3,8
99,0
53
3,40
4,46
5 8
,625
,931
5,
429,
761
2,45
8,47
2 1
66,2
40
46,9
17,0
21
# N
et o
f ind
ivid
ual i
mpa
irmen
t allo
wan
ce.
Not
es t
o th
e Fi
nanc
ial S
tate
men
tsfo
r the
fina
ncia
l yea
r end
ed 3
1 D
ecem
ber 2
016
AFFIN BANK BERHAD (25046-T)
160
41
FIN
AN
CIA
L R
ISK
MA
NA
GE
ME
NT
(ii
) M
arke
t ri
sk (c
ont
inue
d)
Inte
rest
/pro
fit
rate
ris
k (c
ont
inue
d)
N
on-
trad
ing
bo
ok
No
n-
in
tere
st /
U
p t
o 1
>
1-3
>3-
12
>1-
5 O
ver
5 p
rofi
t Tr
adin
g
T
he B
ank
mo
nth
mo
nths
m
ont
hs
year
s ye
ars
sens
itiv
e b
oo
k To
tal
2016
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
Liab
iliti
es
Dep
osits
from
cus
tom
ers
12,9
43,3
91
9,9
59,7
25
10,3
09,1
53
514
,914
-
3
,379
,280
-
37
,106
,463
Dep
osits
and
pla
cem
ents
of b
anks
and
oth
er fi
nanc
ial i
nstit
utio
ns
1
,497
,747
8
49,4
70
219
,500
-
-
1
6,51
8
-
2,5
83,2
35
Obl
igat
ion
on s
ecur
ities
sol
d un
der
repu
rcha
se a
gree
men
ts
87
6,31
0 12
0,63
7 -
-
-
2
,793
-
9
99,7
40
Der
ivat
ive
finan
cial
liab
ilitie
s
-
-
-
-
-
-
4
09,2
83
409
,283
Bills
and
acc
epta
nces
pay
able
-
-
-
-
-
37,
726
-
3
7,72
6
Sub
ordi
nate
d te
rm lo
an
1,3
00,0
00
-
-
-
-
4,5
92
-
1,3
04,5
92
Oth
er li
abilit
ies
-
-
-
-
-
4
02,4
45
-
402
,445
Am
ount
due
to s
ubsi
diar
ies
-
-
-
-
-
41,
395
-
4
1,39
5
Tota
l lia
bili
ties
16
,617
,448
10
,929
,832
10
,528
,653
5
14,9
14
-
3,88
4,74
9 4
09,2
83
42,8
84,8
79
Net
inte
rest
sen
siti
vity
gap
6,31
5,65
1 (7
,030
,779
) (7
,124
,188
) 8
,111
,017
5,
429,
761
Not
es t
o th
e Fi
nanc
ial S
tate
men
tsfo
r the
fina
ncia
l yea
r end
ed 3
1 D
ecem
ber 2
016
161
ANNUAL REPORT 2016
41
FIN
AN
CIA
L R
ISK
MA
NA
GE
ME
NT
(ii
) M
arke
t ri
sk (c
ont
inue
d)
Inte
rest
/pro
fit
rate
ris
k (c
ont
inue
d)
N
on-t
radi
ng b
ook
Non
-
in
tere
st /
U
p to
1
>1-
3 >
3-12
>
1-5
Ove
r 5
profi
t Tr
adin
g
Th
e B
ank
m
onth
m
onth
s m
onth
s ye
ars
year
s se
nsiti
ve
book
To
tal
2015
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
Ass
ets
Cas
h an
d sh
ort-
term
fund
s
1
,372
,582
-
-
-
-
8
30,4
40
-
2,2
03,0
22
Dep
osits
and
pla
cem
ents
with
ban
ks a
nd o
ther
fina
ncia
l ins
titut
ions
90,
000
1
18,1
18
140
,000
-
-
1
,654
-
3
49,7
72
Inve
stm
ent a
ccou
nts
due
from
des
igna
ted
finan
cial
inst
itutio
ns
-
- 19
7,21
0 26
9,94
6 84
5,62
9 1
8,53
3
-
1,3
31,3
18
Fina
ncia
l ass
ets
held
-for
-tra
ding
-
-
-
-
-
-
150
,121
1
50,1
21
Der
ivat
ive
finan
cial
ass
ets
-
-
-
-
-
-
174
,745
1
74,7
45
Fina
ncia
l inv
estm
ents
ava
ilabl
e-fo
r-sa
le
1
03,1
68
1,0
20,2
57
792
,522
3
,314
,495
3
,303
,044
2
78,4
91
-
8,8
11,9
77
Fina
ncia
l inv
estm
ent h
eld-
to-m
atur
ity
1
85,0
32
43,
741
-
-
5
1,52
5
24,
074
-
3
04,3
72
Loan
s, a
dvan
ces
and
finan
cing
- no
n-im
paire
d
19
,201
,934
1
,721
,024
3
,256
,453
6
,931
,840
1
,396
,919
-
-
32
,508
,170
- im
paire
d
-
-
-
-
-
3
94,5
18 #
-
3
94,5
18
Oth
er a
sset
s
-
-
-
-
-
7
6,08
8
-
76,
088
Am
ount
due
from
sub
sidi
arie
s
-
-
-
-
-
61
-
6
1
Sta
tuto
ry d
epos
its w
ith B
ank
Neg
ara
Mal
aysi
a
-
-
-
-
-
1
,345
,000
-
1
,345
,000
Tota
l ass
ets
20,9
52,7
16
2,90
3,14
0 4
,386
,185
10
,516
,281
5
,597
,117
2
,968
,859
3
24,8
66
47,6
49,1
64
# N
et o
f ind
ivid
ual i
mpa
irmen
t allo
wan
ce.
Not
es t
o th
e Fi
nanc
ial S
tate
men
tsfo
r the
fina
ncia
l yea
r end
ed 3
1 D
ecem
ber 2
016
AFFIN BANK BERHAD (25046-T)
162
41
FIN
AN
CIA
L R
ISK
MA
NA
GE
ME
NT
(ii
) M
arke
t ri
sk (c
ont
inue
d)
Inte
rest
/pro
fit
rate
ris
k (c
ont
inue
d)
N
on-t
radi
ng b
ook
Non
-
in
tere
st /
U
p to
1
>1-
3 >
3-12
>
1-5
Ove
r 5
profi
t Tr
adin
g
Th
e B
ank
m
onth
m
onth
s m
onth
s ye
ars
year
s se
nsiti
ve
book
To
tal
2015
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
Liab
ilitie
s
Dep
osits
from
cus
tom
ers
11,6
28,4
40
10,1
22,1
75
11,4
85,2
69
1,0
16,8
99
-
3,5
61,3
35
-
37,8
14,1
18
Dep
osits
and
pla
cem
ents
of b
anks
and
oth
er fi
nanc
ial i
nstit
utio
ns
1
,354
,424
1
58,7
63
262
,132
-
-
2
,887
-
1
,778
,206
Obl
igat
ion
on s
ecur
ities
sol
d un
der
repu
rcha
se a
gree
men
ts
9
4,59
0
1,6
37,2
30
-
-
-
9,1
26
-
1,7
40,9
46
Der
ivat
ive
finan
cial
liab
ilitie
s
-
-
-
-
-
-
4
13,9
44
413
,944
Bills
and
acc
epta
nces
pay
able
-
-
-
-
-
77,
114
-
7
7,11
4
Rec
ours
e ob
ligat
ion
on lo
ans
sold
to C
agam
as B
erha
d
-
-
-
1
33,7
79
-
806
-
1
34,5
85
Sub
ordi
nate
d te
rm lo
an
1,0
00,0
00
-
-
-
-
4,4
46
-
1,0
04,4
46
Oth
er li
abilit
ies
-
-
-
-
-
365
,865
-
3
65,8
65
Am
ount
due
to s
ubsi
diar
ies
-
-
-
-
-
422
,166
-
4
22,1
66
Tota
l lia
bilit
ies
14,0
77,4
54
11,9
18,1
68
11,7
47,4
01
1,1
50,6
78
-
4,4
43,7
45
413
,944
43
,751
,390
Net
inte
rest
sen
sitiv
ity g
ap
6,8
75,2
62
(9,0
15,0
28)
(7,3
61,2
16)
9,1
65,6
03
5,5
97,1
17
Not
es t
o th
e Fi
nanc
ial S
tate
men
tsfo
r the
fina
ncia
l yea
r end
ed 3
1 D
ecem
ber 2
016
163
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
41 FINANCIAL RISK MANAGEMENT
(iii) Liquidity risk
Liquidity risk is the risk of inability of a bank to fund increases in assets and meet obligations as they come due, without incurring unacceptable losses. Liquidity risk includes the inability to manage sudden decreases or changes in funding sources. Liquidity risk also arises from the failure to recognise changes in market conditions that affect the ability to liquidate assets quickly and with minimal loss in value.
The Liquidity Risk Management Framework governs the liquidity risk management activities of the Group. The objective of liquidity risk management is to ensure that there are sufficient funds to meet contractual and regulatory obligations without incurring unacceptable losses as well as to undertake new transactions. The Group’s liquidity management process involves establishing liquidity risk management policies and prudential thresholds, liquidity risk threshold monitoring, stress testing and establishing contingency funding plans. These building blocks of liquidity risk management are subject to regular reviews to ensure relevance in the context of prevailing market conditions.
The Group’s short term liquidity risk management is premised on BNM’s Liquidity Coverage Ratio (‘LCR’) final standards. The LCR is a quantitative requirement which seeks to ensure that the Bank holds sufficient high-quality liquid assets (‘HQLA’) to withstand a significant liquidity stress scenario over a 30-day horizon.
Long term liquidity risk profile is assessed via the Net Stable Funding Ratio (‘NSFR’) which promotes resilience over a longer time horizon for the Bank to fund its activities with more stable sources of funding on an ongoing basis.
The LCR and NSFR are tracked to assess the short term and long term liquidity risk profile of the Bank, in line with BNM’s Liquidity Coverage Ratio (‘LCR’) final standards re-issued on 25th August 2016 as well as BNM’s revised Basel III Observation Period reporting for Net Stable Funding Ratio (‘NSFR’) and Leverage Ratio (‘LR’) issued on 7 August 2015.
The Group also employs a set of liquidity risk indicators as an early alert of any structural change for liquidity risk management. The liquidity risk indicators include internal and external qualitative as well as quantitative indicators.
Liquidity stress tests are conducted periodically and on ad-hoc basis to gauge the Group’s resilience in the event of a liquidity disruption.
The Contingency Funding Plan provides a systematic approach in handling liquidity disruption. The document encompasses strategies, decision-making authorities, and courses of action to be taken in the event of liquidity crisis and emergencies, enabling the Group to respond to an unexpected liquidity disruption in an effective and efficient manner.
The Board Risk Management Committee (‘BRMC’) is responsible for the Bank’s liquidity policy and the strategic management of liquidity has been delegated to the Group Asset Liability Management Committee (‘GALCO’). The Liquidity Management Committee (‘LMC’), which is a sub-committee of GALCO, augments the functions of GALCO by directing its focus specifically to liquidity issues. The BRMC is informed regularly on the liquidity position of the Bank.
AFFIN BANK BERHAD (25046-T)
164
Notes to the Financial Statementsfor the financial year ended 31 December 2016
41 FINANCIAL RISK MANAGEMENT
(iii) Liquidity risk (continued)
Liquidity risk disclosure table which is based on contractual undiscounted cash flow
The table below provides analysis of cash flow payables for financial liabilities based on remaining contractual maturities on undiscounted basis. The balances in the table below do not agree directly to the balances reported in the statement of financial position as the table incorporates all contractual cash flows, on an undiscounted basis, relating to both principal and interest payments.
Up to 1 >1-3 >3-12 >1-5 Over 5 The Group month months months years years Total 2016 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Deposits from customers 20,555,858 11,923,838 14,822,567 780,116 - 48,082,379
Deposits and placements of banks and other financial institutions 1,973,803 1,315,056 271,519 - - 3,560,378
Obligation on securities sold under repurchase agreements 879,770 121,323 - - - 1,001,093
Bills and acceptances payable 37,726 - - - - 37,726
Other liabilities 439,488 - - - - 439,488
Subordinated term loan 304,292 7,139 33,275 176,781 1,202,145 1,723,632
24,190,937 13,367,356 15,127,361 956,897 1,202,145 54,844,696
Up to 1 >1-3 >3-12 >1-5 Over 5 The Group month months months years years Total 2015 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Deposits from customers 20,067,223 12,061,467 14,898,900 1,249,343 - 48,276,933
Deposits and placements of banks
and other financial institutions 1,577,348 901,469 265,323 - - 2,744,140
Obligation on securities sold under repurchase agreements 95,424 1,652,019 - - - 1,747,443
Bills and acceptances payable 77,114 - - - - 77,114
Recourse obligation on loans sold to Cagamas Berhad - 2,560 136,965 - - 139,525
Other liabilities 411,575 - - - - 411,575
Subordinated term loan 2,870 5,458 35,531 188,969 1,119,574 1,352,402
22,231,554 14,622,973 15,336,719 1,438,312 1,119,574 54,749,132
165
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
41 FINANCIAL RISK MANAGEMENT
(iii) Liquidity risk (continued)
Liquidity risk disclosure table which is based on contractual undiscounted cash flow (continued)
Up to 1 >1-3 >3-12 >1-5 Over 5 The Bank month months months years years Total 2016 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Deposits from customers 16,072,622 10,159,568 10,634,918 555,578 - 37,422,686
Deposits and placements of banks and other financial institutions 1,507,183 862,296 222,697 - - 2,592,176
Obligation on securities sold under repurchase agreements 879,770 121,323 - - - 1,001,093
Bills and acceptances payable 37,726 - - - - 37,726
Other liabilities 402,445 - - - - 402,445
Amount due to subsidiaries 41,395 - - - - 41,395
Subordinated term loan 304,292 7,139 33,275 176,781 1,202,145 1,723,632
19,245,433 11,150,326 10,890,890 732,359 1,202,145 43,221,153
Up to 1 >1-3 >3-12 >1-5 Over 5 The Bank month months months years years Total 2015 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Deposits from customers 14,972,708 10,267,337 11,806,369 1,131,899 - 38,178,313
Deposits and placements of banks and other financial institutions 1,357,452 160,221 265,323 - - 1,782,996
Obligation on securities sold under repurchase agreements 95,424 1,652,019 - - - 1,747,443
Bills and acceptances payable 77,114 - - - - 77,114
Recourse obligation on loans sold to Cagamas Berhad - 2,560 136,965 - - 139,525
Other liabilities 365,865 - - - - 365,865
Amount due to subsidiaries 422,166 - - - - 422,166
Subordinated term loan 2,870 5,458 35,531 188,969 1,119,574 1,352,402
17,293,599 12,087,595 12,244,188 1,320,868 1,119,574 44,065,824
AFFIN BANK BERHAD (25046-T)
166
Notes to the Financial Statementsfor the financial year ended 31 December 2016
41 FINANCIAL RISK MANAGEMENT
(iii) Liquidity risk (continued)
Derivative financial liabilities
Derivative financial liabilities based on contractual undiscounted cash flow:
Up to 1 >1-3 >3-12 >1-5 Over 5 The Group month months months years years Total 2016 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Derivatives settled on net basis
Interest rate derivatives (424) (1,194) (3,930) (8,461) (2,685) (16,694)
Derivatives settled on gross basis
Foreign exchange derivatives:
Outflow (1,969,654) (280,116) (1,935,333) (274,066) - (4,459,169)
Inflow 1,969,768 280,403 1,937,099 201,077 - 4,388,347
114 287 1,766 (72,989) - (70,822)
Up to 1 >1-3 >3-12 >1-5 Over 5 The Bank month months months years years Total 2016 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Derivatives settled on net basis
Interest rate derivatives (424) (1,194) (3,930) (8,461) (2,685) (16,694)
Derivatives settled on gross basis
Foreign exchange derivatives:
Outflow (1,859,028) (280,116) (1,935,333) (274,066) - (4,348,543)
Inflow 1,859,129 280,403 1,937,099 201,077 - 4,277,708
101 287 1,766 (72,989) - (70,835)
167
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
41 FINANCIAL RISK MANAGEMENT
(iii) Liquidity risk (continued)
Derivative financial liabilities (continued)
Derivative financial liabilities based on contractual undiscounted cash flow:
Up to 1 >1-3 >3-12 >1-5 Over 5 The Group month months months years years Total 2015 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Derivatives settled on net basis
Interest rate derivatives (200) (63) (663) (364) 948 (342)
Derivatives settled on gross basis
Foreign exchange derivatives:
Outflow (842,774) (764,282) (1,913,243) (538,917) - (4,059,216)
Inflow 842,714 765,846 1,919,957 429,666 - 3,958,183
(60) 1,564 6,714 (109,251) - (101,033)
Up to 1 >1-3 >3-12 >1-5 Over 5 The Bank month months months years years Total 2015 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Derivatives settled on net basis
Interest rate derivatives (200) (63) (663) (364) 948 (342)
Derivatives settled on gross basis
Foreign exchange derivatives:
Outflow (705,298) (763,215) (1,890,916) (538,917) - (3,898,346)
Inflow 705,298 764,779 1,897,630 429,666 - 3,797,373
- 1,564 6,714 (109,251) - (100,973)
AFFIN BANK BERHAD (25046-T)
168
41
FIN
AN
CIA
L R
ISK
MA
NA
GE
ME
NT
(ii
i) Li
qui
dit
y ri
sk (c
ont
inue
d)
Liq
uid
ity
risk
fo
r as
sets
and
liab
iliti
es b
ased
on
rem
aini
ng c
ont
ract
ual m
atur
itie
s
The
mat
uriti
es o
f on
-bal
ance
she
et a
sset
s an
d lia
bilit
ies
as w
ell a
s ot
her
off-
bala
nce
shee
t as
sets
and
liab
ilitie
s, c
omm
itmen
ts a
nd c
ount
er-g
uara
ntee
s ar
e im
port
ant
fact
ors
in
asse
ssin
g th
e liq
uidi
ty o
f the
Gro
up a
nd th
e B
ank.
The
tabl
e be
low
pro
vide
s an
alys
is o
f ass
ets
and
liabi
litie
s in
to re
leva
nt m
atur
ity te
nure
s ba
sed
on re
mai
ning
con
trac
tual
mat
uriti
es.
Mat
uriti
es o
f ass
ets
and
liabi
litie
s of
the
Gro
up a
nd th
e B
ank
by re
mai
ning
con
trac
tual
mat
uriti
es p
rofil
e ar
e as
follo
ws:
Up
to
1
>1-
3 >
3-12
>
1-5
Ove
r 5
No
The
Gro
up
m
ont
h m
ont
hs
mo
nths
ye
ars
year
s sp
ecifi
c To
tal
2016
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
mat
urit
y R
M’0
00
Ass
ets
Cas
h an
d sh
ort-
term
fund
s
4,3
64,4
90
-
-
-
-
-
4,3
64,4
90
Dep
osits
and
pla
cem
ents
with
ban
ks a
nd o
ther
fina
ncia
l ins
titut
ions
-
-
-
1
01,5
07
50,
727
-
1
52,2
34
Der
ivat
ive
finan
cial
ass
ets
2
8,97
8
32,
064
9
6,52
8
1,9
03
7,8
31
-
167
,304
Fina
ncia
l inv
estm
ents
ava
ilabl
e-fo
r-sa
le
836
,723
1
,407
,041
8
55,4
18
2,7
06,2
74
4,2
27,9
49
246
,592
10
,279
,997
Fina
ncia
l inv
estm
ents
hel
d-to
-mat
urity
-
-
6
,676
9
0,19
0
256
,756
1
9,90
2
373
,524
Loan
s, a
dvan
ces
and
finan
cing
3
,858
,511
2
,344
,564
1
,821
,611
11
,374
,252
23
,269
,359
-
42
,668
,297
Oth
er a
sset
s
30,
436
2
,102
1
4,13
3
6,1
46
1,1
45
7,9
70
61,
932
Am
ount
due
from
join
t ven
ture
s
4
6,72
5
-
-
-
-
-
46,
725
Am
ount
due
from
ass
ocia
te
5
00
-
-
-
-
-
500
Sta
tuto
ry d
epos
its w
ith B
ank
Neg
ara
Mal
aysi
a
1,4
82,0
00
-
-
-
-
-
1,4
82,0
00
Oth
er n
on-fi
nanc
ial a
sset
s (1
)
-
-
-
-
-
5
90,1
86
590
,186
10,6
48,3
63
3,7
85,7
71
2,7
94,3
66
14,2
80,2
72
27,8
13,7
67
864
,650
60
,187
,189
(1)
Oth
er n
on-fi
nanc
ial a
sset
s in
clud
e ta
x re
cove
rabl
e, d
efer
red
tax
asse
ts, i
nves
tmen
t in
asso
ciat
e, p
rope
rty
and
equi
pmen
t and
inta
ngib
le a
sset
s.
Not
es t
o th
e Fi
nanc
ial S
tate
men
tsfo
r the
fina
ncia
l yea
r end
ed 3
1 D
ecem
ber 2
016
169
ANNUAL REPORT 2016
41
FIN
AN
CIA
L R
ISK
MA
NA
GE
ME
NT
(ii
i) Li
qui
dit
y ri
sk (c
ont
inue
d)
Liq
uid
ity
risk
fo
r as
sets
and
liab
iliti
es b
ased
on
rem
aini
ng c
ont
ract
ual m
atur
itie
s (c
ont
inue
d)
Up
to
1
>1-
3 >
3-12
>
1-5
Ove
r 5
No
The
Gro
up
m
ont
h m
ont
hs
mo
nths
ye
ars
year
s sp
ecifi
c To
tal
2016
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
mat
urit
y R
M’0
00
Liab
iliti
es
Dep
osits
from
cus
tom
ers
20
,539
,928
11
,849
,312
14
,528
,885
7
14,9
31
-
-
47,6
33,0
56
Dep
osits
and
pla
cem
ents
of b
anks
and
oth
er fi
nanc
ial i
nstit
utio
ns
1,9
71,6
29
1,3
07,3
01
268
,273
-
-
-
3
,547
,203
Obl
igat
ion
on s
ecur
ities
sol
d un
der
repu
rcha
se a
gree
men
ts
878
,754
1
20,9
86
-
-
-
-
999
,740
Der
ivat
ive
finan
cial
liab
ilitie
s
44,
928
2
8,00
5
164
,636
1
59,7
64
5,4
39
-
402
,772
Bills
and
acc
epta
nces
pay
able
3
7,72
6
-
-
-
-
-
37,
726
Oth
er li
abilit
ies
4
39,4
88
-
-
-
-
-
439
,488
Sub
ordi
nate
d te
rm lo
an
3
04,5
92
-
-
-
1,0
00,0
00
-
1,3
04,5
92
Oth
er n
on-fi
nanc
ial l
iabi
litie
s (2
)
-
-
-
-
-
1
8,90
6
18,
906
24,2
17,0
45
13,3
05,6
04
14,9
61,7
94
874
,695
1
,005
,439
1
8,90
6 5
4,38
3,48
3
Net
liq
uid
ity
gap
(
13,5
68,6
82)
(9,5
19,8
33) (
12,1
67,4
28) 1
3,40
5,57
7 2
6,80
8,32
8
845
,744
(2)
Oth
er n
on-fi
nanc
ial l
iabi
litie
s in
clud
e de
ferr
ed ta
x lia
bilit
ies
and
prov
isio
n fo
r ta
xatio
n.
Not
es t
o th
e Fi
nanc
ial S
tate
men
tsfo
r the
fina
ncia
l yea
r end
ed 3
1 D
ecem
ber 2
016
AFFIN BANK BERHAD (25046-T)
170
Not
es t
o th
e Fi
nanc
ial S
tate
men
tsfo
r the
fina
ncia
l yea
r end
ed 3
1 D
ecem
ber 2
016
41
FIN
AN
CIA
L R
ISK
MA
NA
GE
ME
NT
(ii
i) Li
qui
dit
y ri
sk (c
ont
inue
d)
Liq
uid
ity
risk
fo
r as
sets
and
liab
iliti
es b
ased
on
rem
aini
ng c
ont
ract
ual m
atur
itie
s (c
ont
inue
d)
Up
to 1
>
1-3
>3-
12
>1-
5 O
ver
5 N
o
The
Gro
up
m
onth
m
onth
s m
onth
s ye
ars
year
s sp
ecifi
c To
tal
2015
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
mat
urity
R
M’0
00
Ass
ets
Cas
h an
d sh
ort-
term
fund
s
4,07
0,71
0
-
-
-
-
-
4,0
70,7
10
Dep
osits
and
pla
cem
ents
with
ban
ks a
nd o
ther
fina
ncia
l ins
titut
ions
-
3
5,03
4
-
286
,619
3
0,03
4
-
351
,687
Fina
ncia
l ass
ets
held
-for
-tra
ding
1
50,1
21
-
-
-
-
-
150
,121
Der
ivat
ive
finan
cial
ass
ets
1
7,92
5
75,
530
7
2,92
9
4,9
11
2,7
42
-
174
,037
Fina
ncia
l inv
estm
ents
ava
ilabl
e-fo
r-sa
le
88,
162
9
66,6
99
889
,346
4
,062
,884
4
,044
,836
2
35,4
23
10,2
87,3
50
Fina
ncia
l inv
estm
ents
hel
d-to
-mat
urity
-
-
4
8,59
4
32,
336
2
76,2
86
23,
438
3
80,6
54
Loan
s, a
dvan
ces
and
finan
cing
3
,640
,851
1
,530
,550
2
,205
,474
11
,005
,462
23
,722
,260
-
42
,104
,597
Oth
er a
sset
s
54,
214
2
,091
1
6,59
5
5,7
69
1,0
80
4,9
06
84,
655
Am
ount
due
from
join
t ven
ture
s
3
9,93
6
-
-
-
-
-
39,
936
Sta
tuto
ry d
epos
its w
ith B
ank
Neg
ara
Mal
aysi
a
1,6
04,6
00
-
-
-
-
-
1,6
04,6
00
Oth
er n
on-fi
nanc
ial a
sset
s (1
)
-
-
-
-
-
6
10,2
54
610
,254
9,6
66,5
19
2,6
09,9
04
3,2
32,9
38
15,3
97,9
81
28,0
77,2
38
874
,021
59
,858
,601
(1)
Oth
er n
on-fi
nanc
ial a
sset
s in
clud
e ta
x re
cove
rabl
e, d
efer
red
tax
asse
ts, p
rope
rty
and
equi
pmen
t and
inta
ngib
le a
sset
s.
171
ANNUAL REPORT 2016
41
FIN
AN
CIA
L R
ISK
MA
NA
GE
ME
NT
(ii
i) Li
qui
dit
y ri
sk (c
ont
inue
d)
Liq
uid
ity
risk
fo
r as
sets
and
liab
iliti
es b
ased
on
rem
aini
ng c
ont
ract
ual m
atur
itie
s (c
ont
inue
d)
Up
to 1
>
1-3
>3-
12
>1-
5 O
ver
5 N
o
The
Gro
up
m
onth
m
onth
s m
onth
s ye
ars
year
s sp
ecifi
c To
tal
2015
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
mat
urity
R
M’0
00
Liab
ilitie
s
Dep
osits
from
cus
tom
ers
20
,053
,169
11
,973
,746
14
,598
,308
1
,187
,990
-
-
47
,813
,213
Dep
osits
and
pla
cem
ents
of b
anks
and
oth
er fi
nanc
ial i
nstit
utio
ns
1,5
75,9
70
897
,088
2
62,5
38
-
-
-
2,7
35,5
96
Obl
igat
ion
on s
ecur
ities
sol
d un
der
repu
rcha
se a
gree
men
ts
95,
370
1
,645
,576
-
-
-
-
1
,740
,946
Der
ivat
ive
finan
cial
liab
ilitie
s
57,8
60
87,
441
1
25,1
10
138
,835
4
,894
-
4
14,1
40
Bills
and
acc
epta
nces
pay
able
7
7,11
4
-
-
-
-
-
77,
114
Rec
ours
e ob
ligat
ion
on lo
ans
sold
to C
agam
as B
erha
d
-
806
-
1
33,7
79
-
-
134
,585
Oth
er li
abilit
ies
4
11,5
75
-
-
-
-
-
411
,575
Sub
ordi
nate
d te
rm lo
an
3
,065
1
,381
-
-
1
,000
,000
-
1
,004
,446
Oth
er n
on-fi
nanc
ial l
iabi
litie
s (2
)
-
-
-
-
-
2
5,15
6
25,
156
22,2
74,1
23
14,6
06,0
38
14,9
85,9
56
1,4
60,6
04
1,0
04,8
94
25,
156
54,
356,
771
Net
liqu
idity
gap
(
12,6
07,6
04) (
11,9
96,1
34) (
11,7
53,0
18) 1
3,93
7,37
7 2
7,07
2,34
4
848
,865
(2)
Oth
er n
on-fi
nanc
ial l
iabi
litie
s in
clud
e de
ferr
ed ta
x lia
bilit
ies
and
prov
isio
n fo
r ta
xatio
n.
Not
es t
o th
e Fi
nanc
ial S
tate
men
tsfo
r the
fina
ncia
l yea
r end
ed 3
1 D
ecem
ber 2
016
AFFIN BANK BERHAD (25046-T)
172
41
FIN
AN
CIA
L R
ISK
MA
NA
GE
ME
NT
(ii
i) Li
qui
dit
y ri
sk (c
ont
inue
d)
Liq
uid
ity
risk
fo
r as
sets
and
liab
iliti
es b
ased
on
rem
aini
ng c
ont
ract
ual m
atur
itie
s (c
ont
inue
d)
Up
to
1
>1-
3 >
3-12
>
1-5
Ove
r 5
No
The
Ban
k
mo
nth
mo
nths
m
ont
hs
year
s ye
ars
spec
ific
Tota
l
2016
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
mat
urit
y R
M’0
00
Ass
ets
Cas
h an
d sh
ort-
term
fund
s
3,3
37,8
31
-
-
-
-
-
3,3
37,8
31
Dep
osits
and
pla
cem
ents
with
ban
ks a
nd o
ther
fina
ncia
l ins
titut
ions
-
2
53,8
41
-
101
,508
5
0,72
6
-
406
,075
Inve
stm
ent a
ccou
nts
due
from
des
igna
ted
finan
cial
inst
itutio
ns
7,0
15
697
,210
1
30,4
81
439
,947
8
35,4
26
-
2,1
10,0
79
Der
ivat
ive
finan
cial
ass
ets
2
7,91
3
32,
065
9
6,52
8
1,9
03
7,8
31
-
166
,240
Fina
ncia
l inv
estm
ents
ava
ilabl
e-fo
r-sa
le
823
,164
1
,395
,251
7
69,3
27
2,1
42,7
58
3,0
69,4
97
246
,592
8
,446
,589
Fina
ncia
l inv
estm
ents
hel
d-to
-mat
urity
-
-
6
14
50,
000
2
30,8
86
19,
902
3
01,4
02
Loan
s, a
dvan
ces
and
finan
cing
3
,235
,415
1
,341
,106
1
,694
,028
9
,053
,005
15
,429
,800
-
30
,753
,354
Oth
er a
sset
s
26,
153
1
,506
1
3,98
2
5,8
68
1,1
03
5,3
29
53,
941
Am
ount
due
from
sub
sidi
arie
s
1
96,8
39
-
-
-
-
-
196
,839
Sta
tuto
ry d
epos
its w
ith B
ank
Neg
ara
Mal
aysi
a
1,1
50,0
00
-
-
-
-
-
1,1
50,0
00
Oth
er n
on-fi
nanc
ial a
sset
s (1
)
-
-
-
-
-
1
,153
,385
1
,153
,385
8,8
04,3
30
3,7
20,9
79
2,7
04,9
60
11,7
94,9
89
19,6
25,2
69
1,4
25,2
08
48,0
75,7
35
(1)
Oth
er n
on-fi
nanc
ial a
sset
s in
clud
e ta
x re
cove
rabl
e, d
effe
red
tax
asse
ts, i
nves
tmen
t in
subs
idia
ries,
pro
pert
y an
d eq
uipm
ent a
nd in
tang
ible
ass
ets.
Not
es t
o th
e Fi
nanc
ial S
tate
men
tsfo
r the
fina
ncia
l yea
r end
ed 3
1 D
ecem
ber 2
016
173
ANNUAL REPORT 2016
Not
es t
o th
e Fi
nanc
ial S
tate
men
tsfo
r the
fina
ncia
l yea
r end
ed 3
1 D
ecem
ber 2
016
41
FIN
AN
CIA
L R
ISK
MA
NA
GE
ME
NT
(ii
i) Li
qui
dit
y ri
sk (c
ont
inue
d)
Liq
uid
ity
risk
fo
r as
sets
and
liab
iliti
es b
ased
on
rem
aini
ng c
ont
ract
ual m
atur
itie
s (c
ont
inue
d)
Up
to
1
>1-
3 >
3-12
>
1-5
Ove
r 5
No
The
Ban
k
mo
nth
mo
nths
m
ont
hs
year
s ye
ars
spec
ific
Tota
l
2016
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
mat
urit
y R
M’0
00
Liab
iliti
es
Dep
osits
from
cus
tom
ers
16
,058
,046
10
,097
,111
10
,424
,430
5
26,8
76
-
-
37,1
06,4
63
Dep
osits
and
pla
cem
ents
of b
anks
and
oth
er fi
nanc
ial i
nstit
utio
ns
1,5
05,5
55
856
,946
2
20,7
34
-
-
-
2,5
83,2
35
Obl
igat
ion
on s
ecur
ities
sol
d un
der
repu
rcha
se a
gree
men
ts
878
,754
1
20,9
86
-
-
-
-
999
,740
Der
ivat
ive
finan
cial
liab
ilitie
s
5
1,43
9
28,
005
1
64,6
36
159
,764
5
,439
-
4
09,2
83
Bills
and
acc
epta
nces
pay
able
3
7,72
6
-
-
-
-
-
37,
726
Oth
er li
abilit
ies
4
02,4
45
-
-
-
-
-
402
,445
Am
ount
due
to s
ubsi
diar
ies
4
1,39
5
-
-
-
-
-
41,
395
Sub
ordi
nate
d te
rm lo
an
3
04,5
92
-
-
-
1,0
00,0
00
-
1,3
04,5
92
Oth
er n
on-fi
nanc
ial l
iabi
litie
s (2
)
-
-
-
-
-
1
2,88
4
12,
884
19,2
79,9
52
11,1
03,0
48
10,8
09,8
00
686
,640
1
,005
,439
1
2,88
4 4
2,89
7,76
3
Net
liqu
idity
gap
(
10,4
75,6
22)
(7,3
82,0
69)
(8,1
04,8
40)
11,1
08,3
49
18,6
19,8
30
1,4
12,3
24
(2)
Oth
er n
on-fi
nanc
ial l
iabi
litie
s in
clud
e de
ferr
ed ta
x lia
bilit
ies
and
prov
isio
n fo
r ta
xatio
n.
AFFIN BANK BERHAD (25046-T)
174
Not
es t
o th
e Fi
nanc
ial S
tate
men
tsfo
r the
fina
ncia
l yea
r end
ed 3
1 D
ecem
ber 2
016
41
FIN
AN
CIA
L R
ISK
MA
NA
GE
ME
NT
(ii
i) Li
qui
dit
y ri
sk (c
ont
inue
d)
Liq
uid
ity
risk
fo
r as
sets
and
liab
iliti
es b
ased
on
rem
aini
ng c
ont
ract
ual m
atur
itie
s (c
ont
inue
d)
Up
to 1
>
1-3
>3-
12
>1-
5 O
ver
5 N
o
The
Ban
k
m
onth
m
onth
s m
onth
s ye
ars
year
s sp
ecifi
c To
tal
2015
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
mat
urity
R
M’0
00
Ass
ets
Cas
h an
d sh
ort-
term
fund
s
2,20
3,02
2
-
-
-
-
-
2,2
03,0
22
Dep
osits
and
pla
cem
ents
with
ban
ks a
nd o
ther
fina
ncia
l ins
titut
ions
-
3
3,11
8
-
286
,619
3
0,03
5
-
349
,772
Inve
stm
ent a
ccou
nts
due
from
des
igna
ted
finan
cial
inst
itutio
ns
1,1
30
722
2
02,6
65
269
,947
8
56,8
54
-
1,3
31,3
18
Fina
ncia
l ass
ets
held
-for
-tra
ding
1
50,1
21
-
-
-
-
-
150
,121
Der
ivat
ive
finan
cial
ass
ets
18
,633
7
5,53
0
72,
929
4
,911
2
,742
-
1
74,7
45
Fina
ncia
l inv
estm
ents
ava
ilabl
e-fo
r-sa
le
80,
692
9
56,9
62
775
,866
3
,460
,515
3
,303
,044
2
34,8
98
8,8
11,9
77
Fina
ncia
l inv
estm
ents
hel
d-to
-mat
urity
-
-
4
4,37
6
-
236
,557
2
3,43
9
304
,372
Loan
s, a
dvan
ces
and
finan
cing
3
,182
,982
1
,331
,179
1
,844
,673
9
,555
,493
16
,988
,361
-
32
,902
,688
Oth
er a
sset
s
51,
672
1
,592
1
6,27
9
5,4
92
1,0
53
4,3
15
80,
403
Am
ount
due
from
sub
sidi
arie
s
6
1
-
-
-
-
-
61
Sta
tuto
ry d
epos
its w
ith B
ank
Neg
ara
Mal
aysi
a
1,3
45,0
00
-
-
-
-
-
1,3
45,0
00
Oth
er n
on-fi
nanc
ial a
sset
s (1
)
-
-
-
-
-
1
,091
,770
1
,091
,770
7,0
33,3
13
2,3
99,1
03
2,9
56,7
88
13,5
82,9
77
21,4
18,6
46
1,3
54,4
22
48,7
45,2
49
(1)
Oth
er n
on-fi
nanc
ial a
sset
s in
clud
e ta
x re
cove
rabl
e, d
efer
red
tax
asse
ts, i
nves
tmen
t in
subs
idia
ries,
pro
pert
y an
d eq
uipm
ent a
nd in
tang
ible
ass
ets.
175
ANNUAL REPORT 2016
41
FIN
AN
CIA
L R
ISK
MA
NA
GE
ME
NT
(ii
i) Li
qui
dit
y ri
sk (c
ont
inue
d)
Liq
uid
ity
risk
fo
r as
sets
and
liab
iliti
es b
ased
on
rem
aini
ng c
ont
ract
ual m
atur
itie
s (c
ont
inue
d)
Up
to 1
>
1-3
>3-
12
>1-
5 O
ver
5 N
o
The
Ban
k
m
onth
m
onth
s m
onth
s ye
ars
year
s sp
ecifi
c To
tal
2015
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
mat
urity
R
M’0
00
Liab
ilitie
s
Dep
osits
from
cus
tom
ers
14
,961
,225
10
,201
,186
11
,575
,079
1
,076
,628
-
-
37
,814
,118
Dep
osits
and
pla
cem
ents
of b
anks
and
oth
er fi
nanc
ial i
nstit
utio
ns
1,3
56,3
50
159
,318
2
62,5
38
-
-
-
1,7
78,2
06
Obl
igat
ion
on s
ecur
ities
sol
d un
der
repu
rcha
se a
gree
men
ts
95,
370
1
,645
,576
-
-
-
-
1
,740
,946
Der
ivat
ive
finan
cial
liab
ilitie
s
5
7,86
2
87,
432
1
24,9
21
138
,835
4
,894
-
4
13,9
44
Bills
and
acc
epta
nces
pay
able
7
7,11
4
-
-
-
-
-
77,
114
Rec
ours
e ob
ligat
ion
on lo
ans
sold
to C
agam
as B
erha
d
-
806
-
1
33,7
79
-
-
134
,585
Oth
er li
abilit
ies
3
65,8
65
-
-
-
-
-
365
,865
Am
ount
due
to s
ubsi
diar
ies
42
2,16
6
-
-
-
-
-
422
,166
Oth
er n
on-fi
nanc
ial l
iabi
litie
s (2
)
-
-
-
-
-
1
5,10
4
15,
104
Sub
ordi
nate
d te
rm lo
an
3
,065
1
,381
-
-
1
,000
,000
-
1
,004
,446
17,3
39,0
17
12,0
95,6
99
11,9
62,5
38
1,3
49,2
42
1,0
04,8
94
15,
104
43,
766,
494
Net
liqu
idity
gap
(
10,3
05,7
04)
(9,6
96,5
96)
(9,0
05,7
50)
12,2
33,7
35
20,4
13,7
52
1,3
39,3
18
(2)
Oth
er n
on-fi
nanc
ial l
iabi
litie
s in
clud
e pr
ovis
ion
for
taxa
tion.
Not
es t
o th
e Fi
nanc
ial S
tate
men
tsfo
r the
fina
ncia
l yea
r end
ed 3
1 D
ecem
ber 2
016
AFFIN BANK BERHAD (25046-T)
176
Notes to the Financial Statementsfor the financial year ended 31 December 2016
41 FINANCIAL RISK MANAGEMENT
(iv) Operational risk management
Operational risk is defined as the risk of direct or indirect loss resulting from inadequate or failed internal processes, people and systems or external events. The definition includes legal risk, and exposure to litigation from all aspects of the Bank’s activities, but excludes strategic business, reputational and systemic risks.
The Group Operational Risk Management Framework governs the management of operational risk across the Group.
BRMC approves all policies/policy changes relating to operational risk. GORMC supports BRMC in the review and monitoring of operational risk and provides the forum to discuss and manage all aspects of operational risk including control lapses.
The operational risk management (‘ORM’) function within GRM operates in independent capacity to manage the risks in activities associated with the operational function of the Bank.
The Bank adopts the Basic Indicator Approach for the purpose of calculating the capital requirement for operational risk. The capital requirement is calculated by taking 15% of the Bank’s average annual gross income over the previous three years.
Operational risks are managed daily through established systems and processes to ensure compliance with policies, guidelines and control procedures.
To identify and assess operational risk issues and exposure, the following tools are employed:
• RiskControlSelfAssessment(‘RCSA’)
• KeyControlStandards(‘KCS’)
• KeyRiskIndicator(‘KRI’)
• LossEventDatabase(‘LED’)
Information Technology (‘IT’) and cyber risks are managed as part of the operational risk activities. The IT systems and processes are assessed and tested regularly for resilience and continuity, and that they are secure from internal and external threats.
Introduction of new products or services are evaluated to assess suitability, potential risks and operational readiness.
Operational Risk Coordinators (ORC) are appointed at business and support units as champions of ORM activities within respective units. The ORC is responsible for the reporting of ORM activities and to liaise with Group Operational Risk Management on all operational defects and results. As an internal requirement, all Operational Risk Coordinators must satisfy an Internal Operational Risk (including business continuity management) Certification Program. These coordinators will first go through an on-line self learning exercise before attempting on-line assessments to measure their skills and knowledge level. This will enable Group Risk Management to prescribe appropriate training and development activities for the coordinators.
177
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
41 FINANCIAL RISK MANAGEMENT
(v) Shariah Non-Compliance Risk
Shariah non-compliance is the risk of failure to comply with the Shariah rules and principles as determined by SC and/or any other relevant bodies, such as BNM Shariah Advisory Council.
The Shariah Governance Framework for Islamic Financial Institutions issued by BNM is the main reference for the Shariah governance process and oversight within AiBB.
Shariah Committee (‘SC’) is established to deliberate on Shariah issues and provide resolution as well as guidance. GORMC together with BRMC and GBRMC assist in the overall oversight of Shariah risk management of the Group.
Shariah Risk Management is part of an integrated risk management control function to identify all possible risks of Shariah non-compliance and where appropriate, to provide mitigating measures that need to be taken to reduce the risk. The scope covers overall business activities and operations, commencing from Islamic product origination until maturity.
Each business and support unit is responsible to identify and assess potential Shariah Non-Compliance Risk using the RCSA process. Half yearly RCSA checklist is performed to gauge the level of Shariah compliance.
All Islamic products, services and strategies related matters must be approved by the SC.
Shariah Resolutions/Circulars are issued and training on Shariah Compliance is conducted by the Shariah Review Team on a regular basis.
Shariah non-compliance reports are regularly submitted for further deliberation, decision and remedial action.
(vi) Business Continuity Risk
Business continuity risk is the risk of losses in assets, revenue, reputation and stakeholder/customer confidence due to the discontinuation of services in both business and technology operations.
The Business Continuity Management Framework governs the management of business continuity issues, in line with BNM Guidelines on Business Continuity Management (‘BCM’).
BRMC approves all policies and its changes relating to business continuity management. It also reviews, monitors and discusses business continuity management reports tabled at its meetings. GORMC supports BRMC in the review and monitoring of Business Continuity Risk and provides the forum to discuss and manage all aspects of operational risk including control lapses.
The BCM function is an independent body overseeing the management of the overall business continuity risk.
Annual Risk Assessment and Business Impact Analysis are made compulsory for each business and support unit in the Bank to undertake. The outcome of this assessment will translate into a risks listing that require business and support units to derive action plans to address the risks.
Risk control is established through adherence with established BCM guidelines and standards throughout the implementation of BCM programs. Rigorous testing on business continuity and disaster recovery plans are diligently performed to ensure effective and smooth execution of the plan for resumption and recovery of disrupted business.
Policies and processes are in place to support the monitoring and reporting of business continuity risks.
AFFIN BANK BERHAD (25046-T)
178
Notes to the Financial Statementsfor the financial year ended 31 December 2016
41 FINANCIAL RISK MANAGEMENT
(vii) Fair value of financial instruments
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The Group and the Bank measure fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3: Valuations derived from valuation techniques in which one or more significant inputs are not based on observable market data.
Financial instruments are classified as Level 1 if their value is observable in an active market. Such instruments are valued by reference to unadjusted quoted prices for identical assets or liabilities in active markets where the quoted prices is readily available, and the price represents actual and regularly occurring market transactions. An active market is one in which transactions occur with sufficient volume and frequency to provide pricing information on an on-going basis. These would include actively traded listed equities and actively exchange-traded derivatives.
Where fair value is determined using unquoted market prices in less active markets or quoted prices for similar assets and liabilities, such instruments are generally classified as Level 2. In cases where quoted prices are generally not available, the Group and the Bank then determine fair value based upon valuation techniques that use as inputs, market parameters including but not limited to yield curves, volatilities and foreign exchange rates. The majority of valuation techniques employ only observable market data and so reliability of the fair value measurement is high.
Financial instruments are classified as Level 3 if their valuation incorporates significant inputs that are not based on observable market data (unobservable inputs). Such inputs are generally determined based on observable inputs of a similar nature, historical observations on the level of the input or other analytical techniques.
This category includes unquoted shares held for socio economic reasons. Fair values for shares held for socio economic reasons are based on the net tangible assets of the affected companies. The Group’s and the Bank’s exposure to financial instruments classified as Level 3 comprised a small number of financial instruments which constitute an insignificant component of the Group’s and the Bank’s portfolio of financial instruments. Hence, changing one or more of the inputs to reasonable alternative assumptions would not change the value significantly for the financial assets in Level 3 of the fair value hierarchy.
The Group and the Bank recognise transfers between levels of the fair value hierarchy at the end of the reporting period during which the transfer has occurred. Transfers between fair value hierarchy primarily due to change in the level of trading activity, change in observable market activity related to an input, reassessment of available pricing information and change in the significance of the unobservable input. There were no transfers between Level 1, 2 and 3 of the fair value hierarchy during the financial year (2015: Nil).
179
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
41 FINANCIAL RISK MANAGEMENT
(vii) Fair value of financial instruments (continued)
The following table presents assets and liabilities measured at fair value and classified by level of the following fair value measurement hierarchy:
The Group Level 1 Level 2 Level 3 Total
2016 RM’000 RM’000 RM’000 RM’000
Assets
Derivative financial assets - 167,304 - 167,304
Financial investments available-for-sale *
- Money market instruments - 4,977,979 - 4,977,979
- Equity securities - - 216,592 216,592
- Corporate bonds/Sukuk - 5,055,381 30,045 5,085,426
Total - 10,200,664 246,637 10,447,301
Liabilities
Derivative financial liabilities - 402,772 - 402,772
Total - 402,772 - 402,772
The Group Level 1 Level 2 Level 3 Total
2015 RM’000 RM’000 RM’000 RM’000
Assets
Financial assets held-for-trading - 150,121 - 150,121
Derivative financial assets - 174,037 - 174,037
Financial investments available-for-sale *
- Money market instruments - 5,131,940 - 5,131,940
- Equity securities - - 205,423 205,423
- Corporate bonds/Sukuk - 4,949,987 - 4,949,987
Total - 10,406,085 205,423 10,611,508
Liabilities
Derivative financial liabilities - 414,140 - 414,140
Total - 414,140 - 414,140
* Net of allowance for impairment.
AFFIN BANK BERHAD (25046-T)
180
Notes to the Financial Statementsfor the financial year ended 31 December 2016
41 FINANCIAL RISK MANAGEMENT
(vii) Fair value of financial instruments (continued)
The Bank Level 1 Level 2 Level 3 Total
2016 RM’000 RM’000 RM’000 RM’000
Assets
Derivative financial assets - 166,240 - 166,240
Financial investments available-for-sale *
- Money market instruments - 4,046,476 - 4,046,476
- Equity securities - - 216,592 216,592
- Corporate bonds/Sukuk - 4,153,476 30,045 4,183,521
Total - 8,366,192 246,637 8,612,829
Liabilities
Derivative financial liabilities - 409,283 - 409,283
Total - 409,283 - 409,283
The Bank Level 1 Level 2 Level 3 Total
2015 RM’000 RM’000 RM’000 RM’000
Assets
Financial assets held-for-trading - 150,121 - 150,121
Derivative financial assets - 174,745 - 174,745
Financial investments available-for-sale *
- Money market instruments - 4,165,583 - 4,165,583
- Equity securities - - 204,898 204,898
- Corporate bonds/Sukuk - 4,441,496 - 4,441,496
Total - 8,931,945 204,898 9,136,843
Liabilities
Derivative financial liabilities - 413,944 - 413,944
Total - 413,944 - 413,944
* Net of allowance for impairment.
181
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
41 FINANCIAL RISK MANAGEMENT
(vii) Fair value of financial instruments (continued)
The following table present the changes in Level 3 instruments for the financial year ended:
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
At beginning of the financial year 205,423 130,678 204,898 130,652
Purchases 30,045 500 30,045 -
Sales (25) - - -
Reclassify to investment in associate (500) - - -
Total gains recognised in other comprehensive income 12,012 74,245 12,012 74,246
Allowance for impairment losses (318) - (318) -
At end of the financial year 246,637 205,423 246,637 204,898
Effect of changes in significant unobservable assumptions to reasonably possible alternatives
As at reporting date, financial instruments measured with valuation techniques using significant unobservable inputs (Level 3) mainly include unquoted shares held for socio economic purposes.
Qualitative information about the fair value measurements using significant unobservable inputs (Level 3):
Inter-relationship Fair value assets between significant 2016 2015 Valuation Unobservable unobservable inputs and Description RM’000 RM’000 techniques inputs fair value measurement
Financial investments available-for-sale
The Group Net tangible Net tangible Higher net tangible assets
Unquoted shares 216,592 205,423 assets assets results in higher fair value
The Bank Net tangible Net tangible Higher net tangible assets
Unquoted shares 216,592 204,898 assets assets results in higher fair value
In estimating its significance, the Group and the Bank used an approach that is currently based on methodologies used for fair value adjustments. These adjustments reflects the values that the Group and the Bank estimate are appropriate to adjust from the valuations produced to reflect for uncertainties in the inputs used. The methodologies used can be a statistical or other relevant approved techniques.
AFFIN BANK BERHAD (25046-T)
182
Notes to the Financial Statementsfor the financial year ended 31 December 2016
41 FINANCIAL RISK MANAGEMENT
(vii) Fair value of financial instruments (continued)
The following tables analyse within the fair value hierarchy of the Group’s and the Bank’s assets and liabilities not measured at fair value as at reporting date but for which fair value is disclosed:
Carrying Fair value The Group value Level 1 Level 2 Level 3 Total 2016 RM’000 RM’000 RM’000 RM’000 RM’000
Financial assets
Financial investments held-to-maturity 373,524 - 373,524 - 373,524
Loans, advances and financing 42,668,297 - 41,856,606 - 41,856,606
43,041,821 - 42,126,879 - 42,126,879
Financial liabilities
Deposits from customers 47,633,056 - 47,644,913 - 47,644,913
47,633,056 - 47,644,913 - 47,644,913
Carrying Fair value The Group value Level 1 Level 2 Level 3 Total 2015 RM’000 RM’000 RM’000 RM’000 RM’000
Financial assets
Financial investments held-to-maturity 380,654 - 380,654 - 380,654
Loans, advances and financing 42,104,597 - 41,821,977 - 41,821,977
42,485,251 - 42,185,567 - 42,185,567
Financial liabilities
Deposits from customers 47,813,213 - 47,832,486 - 47,832,486
Recourse obligation on loans sold to Cagamas Berhad 134,585 - 136,065 - 136,065
47,947,798 - 47,968,551 - 47,968,551
183
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
41 FINANCIAL RISK MANAGEMENT
(vii) Fair value of financial instruments (continued)
Carrying Fair value The Bank value Level 1 Level 2 Level 3 Total 2016 RM’000 RM’000 RM’000 RM’000 RM’000
Financial assets
Financial investments held-to-maturity 301,402 - 301,402 - 301,402
Loans, advances and financing 30,753,354 - 30,244,399 - 30,244,399
31,054,756 - 30,443,469 - 30,443,469
Financial liabilities
Deposits from customers 37,106,463 - 37,113,009 - 37,113,009
37,106,463 - 37,113,009 - 37,113,009
Carrying Fair value The Bank value Level 1 Level 2 Level 3 Total 2015 RM’000 RM’000 RM’000 RM’000 RM’000
Financial assets
Deposits and placements with banks and other financial institutions 1,310,764 - 1,336,046 - 1,336,046
Financial investments held-to-maturity 304,372 - 304,372 - 304,372
Loans, advances and financing 32,902,688 - 32,658,990 - 32,658,990
34,517,824 - 34,283,615 - 34,283,615
Financial liabilities
Deposits from customers 37,814,118 - 37,828,091 - 37,828,091
Recourse obligation on loans sold to Cagamas Berhad 134,585 - 136,065 - 136,065
37,948,703 - 37,964,156 - 37,964,156
Other than as disclosed above, the total fair value of each financial assets and liabilities presented on the statements of financial position as at reporting date of the Group and the Bank approximates the total carrying amount.
The fair value estimates were determined by application of the methodologies and assumptions described below.
Short-term funds and placements with banks and other financial institutions
For short-term funds and placements with banks and other financial institutions with maturity of less than six months, the carrying amount is a reasonable estimate of fair value.
For amounts with maturities of six months or more, fair values have been estimated by reference to current rates at which similar deposits and placements would be made to banks with similar credit ratings and maturities.
AFFIN BANK BERHAD (25046-T)
184
Notes to the Financial Statementsfor the financial year ended 31 December 2016
41 FINANCIAL RISK MANAGEMENT
(vii) Fair value of financial instruments (continued)
Financial investments held-to-maturity
The fair values of financial investments held-to-maturity are reasonable estimates based on quoted market prices. In the absence of such quoted prices, the fair values are based on the expected cash flows of the instruments discounted by indicative market yields for the similar instruments as at reporting date or the audited net tangible asset of the invested company.
Loans, advances and financing
Loans, advances and financing of the Group comprise of floating rate loans/financing and fixed rate loans/financing. For performing floating rate loans/financing, the carrying amount is a reasonable estimate of their fair values.
The fair values of performing fixed rate loans/financing are arrived at using the discounted cash flows based on the prevailing market rates of loans, advances and financing with similar credit ratings and maturities.
The fair values of impaired loans, advances and financing, whether fixed or floating are represented by their carrying values, net of individual and collective allowances, being the reasonable estimate of recoverable amount.
Other assets and liabilities
The carrying value less any estimated allowance for financial assets and liabilities included in other assets and other liabilities are assumed to approximate their fair values.
Deposits from customers, banks and other financial institutions, bills and acceptances payable
The carrying values of deposits and liabilities with maturities of six months or less are assumed to be reasonable estimates of their fair values. Where the remaining maturities of deposits and liabilities are above six months, their estimated fair values are arrived at using the discounted cash flows based on prevailing market rates currently offered for similar remaining maturities.
The estimated fair value of deposits with no stated maturity, which include non-interest bearing deposits, approximates carrying amount which represents the amount repayable on demand.
Recourse obligation on loans sold to Cagamas Berhad
For floating rate loans sold to Cagamas Berhad, the carrying value is generally a reasonable estimate of their fair values.
The fair values of fixed rate loans sold to Cagamas Berhad are arrived at using the discounted cash flow methodology at prevailing market rates of similarly profiled loans.
Subordinated term loan
For fixed rate borrowings, the estimate of fair value is based on discounted cash flow model using prevailing lending rates for borrowings with similar risks and remaining term to maturity.
For floating rate borrowings, the carrying value is generally a reasonable estimate of their fair values.
185
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
42 OFFSETTING FINANCIAL ASSETS AND FINANCIAL LIABILITIES
In accordancewithMFRS132 “Financial Instruments: Presentation”, theGroup and theBank report financial assets andfinancial liabilities on a net basis on the statements of financial position only if there is a legally enforceable right to set off the recognised amounts and there is intention to settle on a net basis, or to realise the asset and settle the liability simultaneously. The following table shows the impact of netting arrangement on:
• Allfinancialassetsandliabilitiesthatarereportednetonstatementsoffinancialposition;and
• Allderivativefinancialinstrumentsandreverserepurchaseandrepurchasedagreementsandothersimilarsecuredlendingand borrowing agreements that are subject to enforceable master netting arrangements or similar agreements, but do not qualify for statements of financial position netting.
The table identifies the amounts that have been offset in the statements of financial position and also those amounts that are covered by enforceable netting arrangements (offsetting arrangements and financial collateral) but do not qualify for netting under the requirements of MFRS 132 described above.
The“Netamounts”presentedbelowarenotintendedtorepresenttheGroup’sandtheBank’sactualexposuretocreditrisk,as a variety of credit mitigation strategies are employed in addition to netting and collateral arrangements.
Related amount not offset
Derivative financial assets and liabilities
The ‘Financial instruments’ column identifies financial assets and liabilities that are subject to set off under netting agreements, such as the ISDA Master Agreement or derivative exchange or clearing counterparty agreements, whereby all outstanding transactions with the same counterparty can be offset and close-out netting applied across all outstanding transaction covered by the agreements if an event of default or other predetermined events occur.
Financial collateral refers to cash and non-cash collateral obtained, typically daily or weekly, to cover the net exposure between counterparties by enabling the collateral to be realised in an event of default or if other predetermined events occur.
Obligation on securities sold under repurchase agreements
The ‘Financial instruments’ column identifies financial assets and liabilities that are subject to set-off under netting agreements, such as global master repurchase agreements, whereby all outstanding transactions with the same counterparty can be offset and close-out netting applied across all outstanding transaction covered by the agreements if an event of default or other predetermined events occur.
AFFIN BANK BERHAD (25046-T)
186
Notes to the Financial Statementsfor the financial year ended 31 December 2016
42 OFFSETTING FINANCIAL ASSETS AND FINANCIAL LIABILITIES
Effects of offsetting on the statements of financial position Related amounts not offset
Net amount reported on statement Gross Amount of financial Financial Financial Net The Group amount offset position instruments collateral amount 2016 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Financial assets
Derivative financial assets 167,304 - 167,304 (38,960) - 128,344
Total assets 167,304 - 167,304 (38,960) - 128,344
Financial liabilities
Obligation on securities sold under repurchase agreements 999,740 - 999,740 (999,740) - -
Derivative financial liabilities 402,772 - 402,772 (38,960) - 363,812
Total liabilities 1,402,512 - 1,402,512 (1,038,700) - 363,812
Effects of offsetting on the statements of financial position Related amounts not offset
Net amount reported on statement Gross Amount of financial Financial Financial Net The Group amount offset position instruments collateral amount 2015 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Financial assets
Derivative financial assets 174,037 - 174,037 (74,365) - 99,672
Total assets 174,037 - 174,037 (74,365) - 99,672
Financial liabilities
Obligation on securities sold under repurchase agreements 1,740,946 - 1,740,946 (1,740,946) - -
Derivative financial liabilities 414,140 - 414,140 (74,365) - 339,775
Total liabilities 2,155,086 - 2,155,086 (1,815,311) - 339,775
187
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
42 OFFSETTING FINANCIAL ASSETS AND FINANCIAL LIABILITIES
Effects of offsetting on the statements of financial position Related amounts not offset
Net amount reported on statement Gross Amount of financial Financial Financial Net The Bank amount offset position instruments collateral amount 2016 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Financial assets
Derivative financial assets 166,240 - 166,240 (39,647) - 126,593
Total assets 166,240 - 166,240 (39,647) - 126,593
Financial liabilities
Obligation on securities sold under repurchase agreements 999,740 - 999,740 (999,740) - -
Derivative financial liabilities 409,283 - 409,283 (39,647) - 369,636
Total liabilities 1,409,023 - 1,409,023 (1,039,387) - 369,636
Effects of offsetting on the statements of financial position Related amounts not offset
Net amount reported on statement Gross Amount of financial Financial Financial Net The Bank amount offset position instruments collateral amount 2015 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Financial assets
Derivative financial assets 174,745 - 174,745 (74,491) - 100,254
Total assets 174,745 - 174,745 (74,491) - 100,254
Financial liabilities
Obligation on securities sold under repurchase agreements 1,740,946 - 1,740,946 (1,740,946) - -
Derivative financial liabilities 413,944 - 413,944 (74,491) - 339,453
Total liabilities 2,154,890 - 2,154,890 (1,815,437) - 339,453
AFFIN BANK BERHAD (25046-T)
188
Notes to the Financial Statementsfor the financial year ended 31 December 2016
43 LEASE COMMITMENTS
The Group and the Bank have lease commitments in respect of rented premises and hired equipment, all of which are classified as operating leases. A summary of the future minimum lease payments under non-cancellable operating leases commitments are as follows:
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Within one year 22,844 22,745 22,153 22,056
One year to five years 22,986 33,468 22,304 33,219
44 CAPITAL AND OPERATING COMMITMENTS
Capital commitments
Capital expenditure for property and equipment approved by the Directors but not provided for in the financial statements amounted to approximately:
The Bank 2016 2015 RM’000 RM’000
Authorised and contracted for 13,384 13,058
Operating commitment
Operating expenditure approved by the Directors but not provided for in the financial statements amounted to approximately:
The Bank 2016 2015 RM’000 RM’000
Authorised and contracted for 47,518 79,263
189
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
45 CAPITAL MANAGEMENT
The total capital and capital adequacy ratios of the Group and the Bank are computed in accordance with BNM’s Capital Adequacy Framework (Capital Components).
The Group and the Bank are currently adopting the Standardised Approach for Credit Risk and Market Risk and the Basic Indicator Approach for Operational Risk. In line with the transitional arrangements under the BNM Capital Adequacy Framework (Capital Components), the minimum capital adequacy requirement for Common Equity Tier 1 Capital Ratio (‘CET 1’) and Tier 1 Capital Ratio are 5.125% (2015: 4.5%) and 6.625% (2015: 6.0%) respectively for year 2016. The minimum regulatory capital adequacy requirement is 8.625% (2015: 8.0%) for total capital ratio.
The Group and the Bank’s objectives when managing capital are:
• TocomplywiththecapitalrequirementssetbytheregulatorsofthebankingmarketswheretheentitieswithintheGroupand the Bank operates;
• TosafeguardtheGroupandtheBank’sabilitytocontinueasagoingconcernsothatitcancontinuetoprovidereturnsfor shareholders and benefits for other stakeholders; and
• Tomaintainastrongcapitalbasetosupportthedevelopmentofitsbusiness.
The Group and the Bank maintain a ratio of total regulatory capital to its risk-weighted assets above a minimum level agreed with the management which takes into account the risk profile of the Group and the Bank.
The table in Note 46 below summarises the composition of regulatory capital and the ratios of the Group and the Bank for the financial year ended 31 December 2016.
46 CAPITAL ADEQUACY
The capital adequacy ratios are as follows:
The Group (#) The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Paid-up share capital 1,688,770 1,688,770 1,688,770 1,688,770
Share premium 858,904 858,904 858,904 858,904
Statutory reserves 1,721,637 1,577,509 1,416,621 1,328,792
Retained profits 1,178,962 1,029,155 913,359 805,289
Unrealised gains and losses on AFS 98,985 90,983 122,753 101,388
5,547,258 5,245,321 5,000,407 4,783,143
Less:
Goodwill and other intangibles (164,089) (153,137) (167,982) (156,604)
55% of cumulative unrealised gains of AFS (54,442) (50,041) (67,514) (55,763)
Investment in associate/subsidiaries (450) - (345,134) (195,630)
CET1 capital 5,328,277 5,042,143 4,419,777 4,375,146
Tier I capital 5,328,277 5,042,143 4,419,777 4,375,146
AFFIN BANK BERHAD (25046-T)
190
Notes to the Financial Statementsfor the financial year ended 31 December 2016
46 CAPITAL ADEQUACY
The Group (#) The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Subordinated term loan 1,180,000 820,000 1,180,000 820,000
Collective impairment @ 137,903 133,809 109,362 110,058
Regulatory adjustments 280,204 278,547 207,026 220,148
Less:
Investment in associate/subsidiaries (300) - (230,090) (293,444)
Tier II capital 1,597,807 1,232,356 1,266,298 856,762
Total capital 6,926,084 6,274,499 5,686,075 5,231,908
CET1 capital ratio 12.201% 11.878% 12.595% 12.230%
Tier 1 capital ratio 12.201% 11.878% 12.595% 12.230%
Total capital ratio 15.860% 14.781% 16.204% 14.625%
CET1 capital ratio (net of proposed dividends)^ 12.147% 11.632% 12.528% 11.938%
Tier 1 capital ratio (net of proposed dividends)^ 12.147% 11.632% 12.528% 11.938%
Total capital ratio (net of proposed dividends)^ 15.806% 14.535% 16.137% 14.333%
Risk-weighted assets for:
Credit risk 40,928,681 39,766,072 32,838,523 33,498,227
Market risk 333,445 327,504 296,191 323,855
Operational risk 2,408,896 2,355,261 1,956,481 1,951,219
Total risk-weighted assets 43,671,022 42,448,837 35,091,195 35,773,301
@ Qualifying collective impairment is restricted to allowances on unimpaired portion of the loans, advances and financing.
# The Group comprises the banking and non-banking subsidiaries.
^ Net proposed dividends of RM23,473,898 (2015: RM104,366,000).
In accordance with BNM’s Guidelines on Investment Account, the credit and market risk weighted on the assets funded by the RIA are included in calculation of capital adequacy for the Bank. As at 31 December 2016, RIA assets included in the Total Capital Ratio calculation amounted to RM2,112,242,742 (2015: RM1,316,026,354).
The capital adequacy ratios of the AFFIN Islamic Bank Berhad is as follows:
Economic Entity The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
(Before and after deducting proposed dividend)
CET1 capital ratio 12.421% 13.197% 12.424% 13.203%
Tier 1 capital ratio 12.421% 13.197% 12.424% 13.203%
Total capital ratio 13.598% 14.415% 13.598% 14.415%
191
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
47 LITIGATION AGAINST THE BANK
(a) AclaimbythePlaintiffagainsttheBankvideWritofSummonsandStatementofClaimdated22January2016(“Writ”)forthe following:
i) RM56,885,317.82 together with interest at 5% per annum from 1999 till full settlement as alleged damages;
ii) SGD9,928,473.75 together with interest at 5% per annum from 2013 till full settlement as alleged losses;
iii) RM776,331.00 being alleged losses of Plaintiffs’ shares in Berlian Ferries Pte. Ltd which was transferred out as a result of his bankruptcy in 2013 with interest at 5% per annum from 2013 till full settlement as alleged losses; and
iv) RM500,000 as cost in respect of legal proceedings in Singapore.
TheBankhadon25January1996givenSuriaBarisan(M)SdnBhd(“Suria”)acreditfacilityofRM21.6million(“Facility”)against security of unquoted shares belongs to Naval Dockyard Sdn Bhd and guarateed by the Plaintiff and Puan NorashikinBintiAbdulLatiff(“Guarantor”).
Suria,thePlaintiffandGuarantor(“All”)defaultedintheFacilitywhichledtotheBankfilingadebtrecoveryactionagainstAll of them in 1999. Judgement was obtained against All on 8 July 2004.
The Plaintiff was made bankrupt on 17 January 2013. The bankruptcy was set aside in September 2015 on the grounds that hewas solventdue to a thirdparty,Chenet FinanceLtd (“Chenet”) beingorderedby aSingaporeCourt topaydamagestotheDirectorGeneralofInsolvencyMalaysia(“DGI”)asreceiverofPlaintiff’sEstate.TheBankhasappealedandCaseManagement(“CM”)hasbeenfixedon24June2016.
ThePlaintiff’sclaim(“Claim”)ispremisedonallegedwrongfulactsbyABBasfollows:
• failuretosell7.2millionsharesinNavalDockyardSdnBhd(“NDSBshares”)whichwaspledgedbySuriatotheBankas security for the Facility on a timely basis. On this claim, Plantiff claims damages under (i) above;
• allowedthereleaseoftheGuarantor fromher liabilityuponpaymentofacertainsumpursuanttoherGuaranteewithout giving the same opportunity to the Plaintiff;
• theBankhadcorrespondedwiththeopponentofPlantiffinSingaporetopreventthePlaintifffromclaiminghisassetsin Singapore.
Plantiff has alleged conspiracy between the Bank and the opponent of the Plantiff in Singapore. On this claim, Plantiff claims losses under (ii) above;
• theBankhadwrongfullymadePlantiffabankruptin2013whichbankruptcywassetasidein2015.Onthisclaim,Plantiff claims losses under (iii) above;
• ThePlantiffisalsoclaimingtheamountof(iv)abovebeingcostofproceedingsincurredbyhiminSingapore.
TheBankhasagooddefence(“Defence”)onthemeritswithregardtoeachoftheallegedwrongfulactasfollows:
• thesaleofNDSBShareswassubjecttotheapprovalfromtherelevantauthoritiesasperthetermsoftheFacilityAgreement and the price has to be based on the offer from the approved prospective buyer;
• thereleaseoftheGuarantoristheprerogativeoftheBankpursuanttothetermsoftheGuaranteeAgreement;
• thePlantiff’sbankruptcyisbasedonajudgementofCourt;
• theBank’slegalfirmhadcorrespondedwiththelegalfirmofthePlantiff’sopponentinSingaporeonlytoinformthestatus of the Plantiff proceedings in Malaysia and any alleged conspiracy is denied; and
• theclaimforcostisunreasonableastheBankwasnotinanywayinvolvedintheSingaporeproceedings.
AFFIN BANK BERHAD (25046-T)
192
Notes to the Financial Statementsfor the financial year ended 31 December 2016
47 LITIGATION AGAINST THE BANK
(a) AclaimbythePlaintiffagainsttheBankvideWritofSummonsandStatementofClaimdated22January2016(“Writ”)forthe following (continued):
The above Claim against the Bank by the Plaintiff is a result of the Debt Recovery Action against the Plaintiff which was commenced in the ordinary course of business.
On 15 August 2016, the matter came up for hearing for the Plaintiff’s Application for Discovery of Documents whereby the Court fixed the said matter for decision on 1 November 2016. The Court has also fixed the full trial dates on 13 February to 16 February 2017.
The Plaintiff’s Stay Application was dismissed by the Court on 20 September 2016 with a cost of RM5,000.00. The hearing for the Bank’s appeal against the annulment of the Adjudicting Order Receiving Order (‘AORO’) has been fixed on 10 November 2016.
The Board of Directors of the Bank are of the view that save for the orders, cost and other relief sought by the Plaintiff, which will materialize only if the Court rules in the Plaintiff’s favour, the Writ and Statement of Claim is not expected to result in any immediate losses, material, financial and operational impact on the Bank for the current financial year ended 31 December 2016.
(b) Other than the above, there are various legal suits against the Bank in respect of claims and counter claims of approximately RM71.8 million (31 December 2015: RM68.1 million). Based on legal advice, the Directors of the Bank are of the opinion that no provision for damages need to be made in the financial statements, as the probability of adverse adjudication against the Bank is remote.
48 CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
The Group and the Bank make estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. To enhance the information content of the estimates, certain variables that are anticipated to have material impact to the Group’s and the Bank’s results and financial position are tested for sensitivity to changes in the underlying parameters. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are discussed below.
Allowance for impairment losses on loans, advances and financing
The accounting estimates and judgments related to the impairment of loans and provision for off-balance sheet positions are critical accounting estimate because the underlying assumptions used for both the individually and collectively assessed impairment can change from period to period and may significantly affect the Group and the Bank’s results of operations.
In assessing assets for impairment, management judgment is required. The determination of the impairment allowance required for loans which are deemed to be individually significant often requires the use of considerable management judgment concerning such matters as local economic conditions, the financial performance of the counterparty and the value of any collateral held, for which there may not be a readily accessible market. The actual amount of the future cash flows and their timing may differ from the estimates used by management and consequently may cause actual losses to differ from the reported allowances.
The impairment allowance for portfolios of smaller-balance homogenous loans/financing, such as those to individuals and small business customers of the private and retail business, and for those loans/financing which are individually significant but for which no objective evidence of impairment exists, is determined on a collective basis. The collective impairment allowance is calculated on a portfolio basis using statistical models which incorporate numerous estimates and judgments, and therefore is subject to estimation uncertainty. The Group and the Bank perform a regular review of the models and underlying data and assumptions as far as possible to reflect the current economic circumstances. The probability of default, loss given defaults, and loss identification period, amongst other things, are all taken into account during this review.
193
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
49 CREDIT EXPOSURES ARISING FROM TRANSACTIONS WITH CONNECTED PARTIES
The following credit exposures are based on Bank Negara Malaysia’s revised Guidelines on Credit Transaction and Exposures with Connected Parties, which are effective 1 January 2008.
The Bank 2016 2015 RM’000 RM’000
(i) The aggregate value of outstanding credit exposures with connected parties (RM’000) 2,990,808 2,319,413
(ii) The percentage of outstanding credit exposures to connected parties as a proportion of total credit exposures 6% 5%
(iii) The percentage of outstanding credit exposures with connected parties which is impaired or in default Nil Nil
50 SIGNIFICANT EVENT AFTER YEAR END
(a) The Bank has disposed the entire share capital of ABB Trustee Berhad (‘ABBT’) comprising 100,000 ordinary shares of RM10 each (of which RM5 is uncalled) for a total consideration of RM662,208. The entire share capital of ABBT is acquired by five shareholders in equal proportion, namely AFFIN Hwang Investment Bank Berhad, AFFIN Hwang Nominees (Tempatan) Sdn Bhd, AFFIN Hwang Nominess (Asing) Sdn Bhd, AHC Global Sdn Bhd and AHC Associates Sdn Bhd, each holding 20% equity interest in ABBT. The disposal was completed on 9 January 2017.
(b) The Bank has obtained approval from Bank Negara Malaysia to prepay the Tier 2 Basel II Subordinated Term Loan 3 amounting to RM300 million on 16 January 2017.
(c) On 16 February 2017, AFFIN Hwang Investment Bank Berhad (‘AHIB’) had on behalf of the Board of Directors of AFFIN Holdings Berhad (‘AHB’) announced that AHB and the Bank intend to undertake the Proposed Reorganisation of the AHB Group of companies as follows:
(i) Proposed transfer by AHB of the following identified companies to the Bank:
• AHIB,awholly-ownedsubsidiaryofAHB;
• AFFINMoneybrokersSdnBhd,awholly-ownedsubsidiaryofAHB(‘AMB’);
• AXAAFFINLifeInsuranceBerhad,a51.00%-ownedjointventurecompanyofAHB(‘AALI’);and
• AXAAFFINGeneralInsuranceBerhad,a37.07%-ownedassociatecompanyofAHB(‘AAGI’),
(AHIB, AMB, AALI and AAGI shall collectively be referred to as the ‘’Identified Companies’’ and item (i) above shall be referredtoasthe“ProposedReorganisation”);
(ii) Proposed distribution of the entire shareholdings in the Bank held by AHB to the entitled shareholders of AHB whose names appear in AHB’s Record of Depositors on an entitlement date to be determined and announced by the Board at a later date (‘Entitlement Date’) (‘Entitled Shareholders’), after the completion of the Proposed Reorganisation, on the Entitlement Date by way of a distribution-in-specie via a reduction of the following:
• theentireconsolidatedcapitalofAHB(whichincludestheentireissuedandpaid-upsharecapitalofAHBandthe entire share premium account of AHB); and
• theretainedprofitsofAHB,
(item(ii)aboveshallbereferredtoasthe“ProposedDistribution”);
AFFIN BANK BERHAD (25046-T)
194
Notes to the Financial Statementsfor the financial year ended 31 December 2016
50 SIGNIFICANT EVENT AFTER YEAR END
(iii) Proposed subscription by the Bank of 2 new ordinary shares in AHB (‘AHB Shares’) which will be undertaken simultaneouslywiththeProposedDistribution(“ProposedSubscription”);
(iv) Proposed amendments of the Memorandum and Articles of Association (‘M&A’) of AHB and the Bank to facilitate the ProposedTransferofListingStatus(“ProposedAmendments”);
(v) Proposed transfer of the listing status from AHB to the Bank on the Main Market of Bursa Malaysia Securities Berhad (‘Bursa Securities’) (‘’Proposed Transfer of Listing Status’’); and
(vi) Proposed members’ voluntary winding-up of AHB in accordance with the Companies Act, 2016 (‘Act’) (‘’Proposed Winding-up’’)
(theaboveshallcollectivelybereferredtoasthe“Proposals”).
(1) Details of the Proposed Reorganisation
AHB will enter into a conditional share sale agreement (‘SSA’) with the Bank to undertake the Proposed Reorganisation where the entire shareholdings held by AHB in the Identified Companies at a cut-off date to be determined later (‘Cut-Off Date’) will be transferred from AHB to the Bank. The SSA will be entered into between the transacting parties after the approval of Bank Negara Malaysia (‘BNM’) has been obtained.
The Cut-Off Date shall be the last day of the calendar month immediately prior to the calendar month in which the conditions precedents are fulfilled in accordance with the terms of the SSA.
(2) Transfer consideration and mode of satisfaction
The transfer consideration for each of the Identified Companies shall be based on their respective carrying value recorded by AHB in its management accounts as at the Cut-Off Date (‘Transfer Consideration’). Carrying value comprised AHB’s cost of investment in the said Identified Companies and its share of post-acquisition profits recorded by the respective Identified Companies.
The mode of satisfaction for the Transfer Consideration are proposed to be as follows:
• forAHIB,AMB,andAALI-issuanceof254,178,931newordinarysharesintheBank(‘BankShares’);and
• forAAGI-tobefullysatisfiedincashtobepaidbytheBanktoAHB
AHB and the Bank have decided to fix the number of new Bank Shares the Bank will issue to AHB to satisfy part of the Transfer Consideration to facilitate the exchange ratio for the Proposed Distribution. As at the date of announcement, the Bank has 1,688,769,616 Bank Shares in issue whilst AHB has 1,942,948,547 AHB Shares in issue. The Bank intends to issue 254,178,931 new Bank Shares for the Transfer Consideration of AHIB, AMB and AALI. This will result in both AHB and the Bank having the same resultant number of shares in issue, being 1,942,948,547 shares.
With the equal amount number of shares in issue, AHB will be able to undertake a distribution-in-specie of 1 Bank Share for each existing AHB Share held pursuant to the Proposed Distribution, minimising the incidence of odd lots for its shareholders when undertaking the Proposed Distribution.
195
ANNUAL REPORT 2016
Notes to the Financial Statementsfor the financial year ended 31 December 2016
50 SIGNIFICANT EVENT AFTER YEAR END
(3) Approvals required
The Proposals are subject to the following approvals being obtained:
(a) BNM and the Ministry of Finance, Malaysia (on recommendation of BNM) for the Proposed Reorganisation, Proposed Distribution and Proposed Subscription.
(b) SC for the following:
(i) change in controller of AHIB, AFFIN Hwang Asset Management Berhad (‘AHAM’) and AIIMAN Asset Management Sdn Bhd (‘AIIMAN’), being holders of the Capital Markets and Services License issued by the SC, pursuant to the proposed transfer of AHIB under the Proposed Reorganisation; and
(ii) exemption to LTAT and its persons acting in concert under Paragraph 4.13(1)(c) of the Rules from the obligation to make a mandatory take-over offer to acquire all the Bank Shares not held by LTAT and its persons acting in concert upon completion of the Proposed Distribution.
(c) Bursa Malaysia Securites Berhad (‘Bursa Securities’) for the following:
(i) the withdrawal of AHB’s listing status from the Main Market of Bursa Securities, pursuant to the Proposed Transfer of Listing Status; and
(ii) admission to the Official List and the listing of and quotation for the entire enlarged issued and paid-up share capital of the Bank on the Main Market of Bursa Securities, pursuant to the Proposed Transfer of Listing Status.
(d) sanction of the High Court of Malaya under Section 116(4) of the Act for the Proposed Distribution;
(e) shareholders of AHB at an EGM to be convened for the Proposed Distribution, Proposed Subscription, Proposed Amendments and Proposed Transfer of Listing Status;
(f) shareholder of the Bank for the Proposed Reorganisation, proposed issuance of new Bank Shares to settle the transfer consideration for AHIB, AMB and AALI under the Proposed Reorganisation, Proposed Subscription, Proposed Amendments and Proposed Winding-Up;
(g) approvals of the lenders of AHB Group and the Identified Companies, if required; and
(h) approval, waiver and/or consent of any other relevant authority or party, if required.
(4) Inter-conditionality of the Proposals
The Proposed Reorganisation is not conditional upon any of the other Proposals.
The Proposed Distribution, Proposed Subscription, Proposed Amendments and Proposed Transfer of Listing Status are inter-conditional upon each other and are also conditional upon the Proposed Reorganisation.
Save as disclosed above, the Proposals are not conditional upon any other proposal undertaken or to be undertaken by AHB or the Bank.
On 20 February 2017, AHB had submitted an application to Bank Negara Malaysia (‘BNM’) to seek the approval of BNM and/or its recommendations to Ministry of Finance, Malaysia for approval for the Proposed Reorganisation, Proposed Distribution and Proposed Subscription. AHB had on the same day submitted an application to the Securities Commission Malaysia (‘SC’) to seek the approval of the SC for the change in controller of AHIB, AHAM and AIIMAN pursuant to the Proposed Reorganisation.
51 APPROVAL OF FINANCIAL STATEMENTS
The financial statements have been approved for issue in accordance with a resolution of the Board of Directors on 21 March 2017.
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196
Statement by DirectorsPursuant to Section 169 (15) of the Companies Act, 1965
Statutory DeclarationPursuant to Section 169 (16) of the Companies Act, 1965
We, MOHD SUFFIAN BIN HAJI HARON and TAN SRI MOHD GHAZALI BIN MOHD YUSOFF, two of the Directors of AFFIN BANK BERHAD, state that, in the opinion of the Directors, the accompanying financial statements set out on pages 64 to 196 are drawn up so as to give a true and fair view of the state of affairs of the Group and the Bank as at 31 December 2016 and of the results and cash flows of the Group and the Bank for the financial year ended on the date in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.
In accordance with a resolution of the Board of Directors dated 21 March 2017.
MOHD SUFFIAN BIN HAJI HARON
Director
TAN SRI MOHD GHAZALI BIN MOHD YUSOFF
Director
I, RAMANATHAN RAJOO, the officer of AFFIN BANK BERHAD primarily responsible for the financial management of the Group and the Bank, do solemnly and sincerely declare that, in my opinion, the accompanying financial statements set out on pages 64 to 196, are correct and I make this solemn declaration conscientiously believing the same to be true, by virtue of the provisions of the Statutory Declarations Act, 1960.
RAMANATHAN RAJOO
Subscribed and solemnly declared by the above named RAMANATHAN RAJOO at Kuala Lumpur in Malaysia on 21 March 2017, before me.
Commissioner for Oaths
197
ANNUAL REPORT 2016
Independent Auditors’ Reportto the Member of AFFIN Bank Berhad (Incorporated in Malaysia)
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
Our opinion
Inouropinion,thefinancialstatementsofAFFINBankBerhad(“theBank”)anditssubsidiaries(“theGroup”)giveatrueandfairview of the financial position of the Group and of the Bank as at 31 December 2016, and of their financial performance and their cash flows for the year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.
What we have audited
We have audited the financial statements of the Group and of the Bank, which comprise the statements of financial position as at 31 December 2016 of the Group and of the Bank, and the income statements, statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Bank for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 64 to 196.
Basis for opinion
We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our responsibilities under those standards are further described in the “Auditors’ responsibilities for the audit of the financialstatements”sectionofourreport.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence and other ethical responsibilities
We are independent of the Group and of the Bank in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) oftheMalaysianInstituteofAccountants(“By-Laws”)andtheInternationalEthicsStandardsBoardforAccountants’CodeofEthicsforProfessionalAccountants(“IESBACode”),andwehavefulfilledourotherethicalresponsibilitiesinaccordancewiththeBy-Lawsand the IESBA Code.
Information other than the financial statements and auditors’ report thereon
The directors of the Bank are responsible for the other information. The other information comprises
• ManagementDiscussionandAnalysis,
• FinancialHighlights,
• StatementonCorporateGovernance,
• StatementonRiskManagementandInternalControl,
• BoardAuditCommitteeReport,
• Directors’Report
• BaselIIPillar3Disclosures
but does not include the financial statements of the Group and of the Bank and our auditors’ report thereon.
Our opinion on the financial statements of the Group and of the Bank does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements of the Group and of the Bank, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements of the Group and of the Bank or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
AFFIN BANK BERHAD (25046-T)
198
Independent Auditors’ Reportto the Member of AFFIN Bank Berhad (Incorporated in Malaysia)
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
Responsibilities of the directors for the financial statements
The directors of the Bank are responsible for the preparation of the financial statements of the Group and of the Bank that give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of financial statements of the Group and of the Bank that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements of the Group and of the Bank, the directors are responsible for assessing the Group’s and the Bank’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the Bank or to cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements of the Group and of the Bank as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on auditing in Malaysia and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
(a) Identify and assess the risks of material misstatement of the financial statements of the Group and of the Bank, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
(b) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s and Bank’s internal control.
(c) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
(d) Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s or Bank’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements of the Group and of the Bank or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group or Bank to cease to continue as a going concern.
(e) Evaluate the overall presentation, structure and content of the financial statements of the Group and of the Bank, including the disclosures, and whether the financial statements of the Group and of the Bank represent the underlying transactions and events in a manner that achieves fair presentation.
(f) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial statements of the Group. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
199
ANNUAL REPORT 2016
Independent Auditors’ Reportto the Member of AFFIN Bank Berhad (Incorporated in Malaysia)
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:
(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Bank and its subsidiaries have been properly kept in accordance with the provisions of the Act.
(b) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Bank’s financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes.
(c) Our auditors’ reports on the financial statements of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act.
OTHER MATTERS
This report is made solely to the members of the Bank, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.
PRICEWATERHOUSECOOPERS NG YEE LING (No. AF: 1146) 03032/01/2019 JChartered Accountants Chartered Accountant
Kuala Lumpur, Malaysia21 March 2017
AFFIN BANK BERHAD (25046-T)
200
Notes to the Financial Statementsfor the financial year ended 31 December 2016
202 1. Introduction202 1.1 Background
202 1.2 Scope of Application
202 2. Risk Governance Structure202 2.1 Overview
203 2.2 Board Committees
204 2.3 Management Committees
205 2.4 Group Risk Management Function
205 2.5 Internal Audit and Internal Control Activities
205 3. Capital Management205 3.1 Internal Capital Adequacy Assessment
Process (‘ICAAP’)
205 3.2 Capital Structure
207 3.3 Capital Adequacy
207 4. Risk Management Objectives and Policies
207 5. Credit Risk207 5.1 Credit Risk Management Objectives and
Policies
208 5.2 Application of Standardised Approach for Credit Risk
208 5.3 Credit Risk Measurement
209 5.4 Risk Limit Control and Mitigation Policies
209 5.5 Credit Risk Monitoring
210 5.6 Impairment Provisioning
215 6. Market Risk215 6.1 Market Risk Management Objectives
and Policies
215 6.2 Application of Standardised Approach for Market Risk
215 6.3 Market Risk Measurement, Control and Monitoring
216 6.4 Value-at-Risk (‘VaR’)
216 6.5 Foreign Exchange Risk
216 7. Liquidity Risk216 7.1 Liquidity Risk Management Objectives
and Policies
217 7.2 Liquidity Risk Measurement, Control and Monitoring
217 8. Operational Risk217 8.1 Operational Risk Management
Objectives and Policies
217 8.2 Application of Basic Indicator Approach for Operational Risk
218 8.3 Operational Risk Measurement, Control and Monitoring
218 8.4 Certification
218 9. Shariah Non-Compliance Risk218 9.1 Shariah Non-Compliance Risk
Objectives and Policies
218 9.2 Shariah Non-Compliance Risk Measurement, Control and Monitoring
219 10. Business Continuity Risk219 10.1 Business Continuity Risk Management
Objectives and Policies
219 10.2 Business Continuity Risk Measurement, Control and Monitoring
220 Appendices
Basel II Pillar 3 Disclosures
Basel II Pillar 3 Disclosuresas at 31 December 2016
1 INTRODUCTION
1.1 Background
TheCapitalAdequacyFramework(BaselII–Risk-WeightedAssets)issuedbyBankNegaraMalaysia(‘BNM’),whichistheequivalant of the Basel II issued by the Basel Committee of Banking Supervision and the Islamic Financial Services Board is structured around three fundamental pillars:
- Pillar 1 defines the minimum capital requirement to ensure that financial institutions hold sufficient to cover their exposure to credit, market and operational risks.
- Pillar 2 requires financial institutions to have a process for assessing their overall capital adequacy relation to their risk profile and a strategy for maintaining their capital levels.
- Pillar 3 requires financial institutions to establish and implement an appropriate disclosure promotes transparency regarding their risk management practices and capital adequacy positions.
Pillar 3 disclosure is required under the BNM Risk Weighted Capital Adequacy Framework (Basel II) – DisclosureRequirements (Pillar 3).
AffinBankBerhad(‘theBank”)adoptsthefollowingapproachesunderPillar1requirements:
- Standardised Approach for Credit Risk
- Basic Indicator Approach for Operational Risk
- Standardised Approach for Market Risk
1.2 Scope of Application
This document contains the disclosure requirements under Pillar 3 for the Bank for the year ended 31 December 2016. The disclosures are made in line with the Pillar 3 disclosure requirements under the Basel II framework as laid out by BNM.
The disclosures should be read in conjunction with the Bank’s 2016 Annual Report for the year ended 31 December 2016.
The Group’s capital requirements are generally based on the principles of consolidation adopted in the preparation of its financial statements. The Group’s consolidated entities comprise the Bank and the Bank’s subsidiary, AFFIN Islamic Bank Berhad (‘AiBB’).
2 RISK GOVERNANCE STRUCTURE
2.1 Overview
The Board of Directors of the Bank is ultimately responsible for the overall performance of the Bank. The Board’s responsibilities are congruent with the framework of BNM Guidelines. The Board also exercises great care to ensure that high ethical standards are upheld, and that the interests of stakeholders are not compromised. These include responsibility for determining the Bank’s general policies and strategies for the short, medium and long term, approving business plans, including targets and budgets, and approving major strategic decisions.
The Board has overall responsibility for maintaining the proper management and protection of the Bank’s interests by ensuring effective implementation of the risk management policy and process, as well as adherence to a sound system of internal control. The Board also recognises that risks cannot be eliminated completely. As such, the inherent system of internal control is designed to provide a reasonable though not absolute assurance against the risk of material errors, fraud or losses occurring. The system of internal controls encompasses controls relating to financial, operational, risk management and compliance with applicable laws, regulations, policies and guidelines.
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Basel II Pillar 3 Disclosuresas at 31 December 2016
2 RISK GOVERNANCE STRUCTURE
2.1 Overview (continued)
The terms of reference of the Board Committees as disclosed in the Annual Report provide an outline of respective roles and functions. In carrying out its functions, the Board has delegated specific responsibilities to other Board Committees, which operate under approved terms of reference, to assist the Board in discharging their duties. The Chairmen of the various Committees report on the outcome of their Committee meetings to the Board and any further deliberation is made at Board level, if required. These reports and deliberations are incorporated into the Minutes of the Board meetings. The Board meets on a monthly basis.
2.2 Board Committees
Board Remuneration Committee (‘BRC’)
The BRC is responsible for providing a formal and transparent procedure for developing the remuneration policy for Directors, Managing Director/Chief Executive Officer and key senior management officers and ensuring that compensation is competitive and consistent with the Bank’s culture, objectives and strategy.
The Committee obtains advice from experts in compensation and benefits, both internally and externally.
Board Nominating Committee (‘BNC’)
The BNC is responsible for providing a formal and transparent procedure for the appointment of Directors and Managing Director/Chief Executive Officer, assessing the effectiveness of individual Directors, the Board as a whole and the performance of the Managing Director/Chief Executive Officer as well as key senior management personnel.
Board Risk Management Committee (‘BRMC’)
BRMC is responsible for overseeing management activities in managing credit, market, liquidity, operational, legal, reputational and other material risks as well as ensuring that the risk management process is in place and functioning effectively.
It is responsible for setting the overall tone of the Bank’s strategy and ensuring effective communication and integration of risk appetite within the business strategy, operations and culture.
The Committee also assists the Board in oversight responsibilities on internal controls, and risk management strategies, policies, processes, frameworks and other risk related matters. It has the responsibility of reviewing and/or approving risk management policies, guidelines and reports.
Board Loan Review and Recovery Committee (‘BLRRC’)
The BLRRC is responsible for providing critical review of loans and other credit facilities with high risk implications and vetoing loan/financing applications that have been approved by the Group Management Loan Committee as appropriate.
Board Audit Committee (‘BAC’)
The BAC is responsible for providing oversight and reviewing the adequacy and integrity of the internal control systems as well as oversees the work of the internal and external auditors.
Reliance is placed on the results of independent audits performed primarily by internal auditors, the outcome of statutory audits on financial statements conducted by external auditors and on representations by Management based on their control self-assessment of all areas of their responsibility.
Minutes of Audit & Examination Committee meetings, which provide a summary of the proceedings, are circulated to Board members for notation and discussion. The Bank has an established Group Internal Audit Division (GIA) which reports functionally to the Audit Committee and administratively to the Managing Director/Chief Executive Officer.
203
ANNUAL REPORT 2016
Basel II Pillar 3 Disclosuresas at 31 December 2016
2 RISK GOVERNANCE STRUCTURE
2.2 Board Committees (continued)
Shariah Committee
The Shariah Committee is formed as legislated under the Islamic Financial Services Act 2013 and as per the Shariah Governance Framework for Islamic Financial Institutions.
The roles and responsibilities of the Shariah Committee include advising the Board on Shariah matters to ensure that the business operations of the Bank comply with Shariah principles at all times. SC is also responsible for endorsing and validating relevant documentations of the Bank’s products to ensure that the products comply with Shariah principles, and advising the Bank on matters to be referred to the Shariah Advisory Council.
2.3 Management Committees
Management Committee (‘MCM’)
MCM comprises the senior management team chaired by Group Managing Director/Chief Executive Officer (Group MD/CEO). MCM is responsible for assisting the Board in managing the day-to-day operations, formulating tactical plans and business strategies while monitoring the banking entities’ overall performance, and ensuring all business activities conducted are in accordance with the Bank’s corporate objectives, strategies, policies as well as Annual Business Plan and Budget.
Group Management Loan Committee (‘GMLC’)
GMLC is established within senior management to approve complex and large loans/financing and workout/recovery proposals beyond the delegated authority of the individual approvers.
Group Asset and Liability Management Committee (‘GALCO’)
GALCO comprising the senior management team chaired by the MD/CEO, manages the Bank’s asset and liability position by identifying, managing and controlling balance sheet risks and capital management in the execution of the business strategy, while implementing asset liability strategy and policy for the balance sheet of the respective subsidiary.
Liquidity Management Committee (‘LMC’)
The LMC is a sub-committee of the GALCO. The role of LMC is to augment the functions of GALCO by directing its focus specifically to liquidity issues.
Group Operational Risk Management Committee (‘GORMC’)
GORMC is a senior management committee chaired by the Group Chief Risk Officer, established to oversee the management of operational risks issues and control lapses while supporting BRMC in its review and monitoring of operational risk. It is also responsible for reviewing and ensuring that the operational risk programme, process and framework are implemented in accordance with regulatory requirement and manage loss incidents to an acceptable level.
Group Early Alert Committee (‘GEAC’)
GEAC is a senior management committee, established to monitor credit quality through monthly reviews of the Early Alert, Watchlist and Exit Accounts as well as to review the actions taken to address the emerging risks and issues in these accounts.
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Basel II Pillar 3 Disclosuresas at 31 December 2016
2 RISK GOVERNANCE STRUCTURE
2.4 Group Risk Management Function
Group Risk Management (‘GRM’), headed by the Group Chief Risk Officer (‘GCRO’) is segregated from the lines of business, with direct reporting line to BRMC to ensure independence of risk management function.
The independence of risk function is critical towards controlling and managing the Bank’s risk taking activities to achieve an optimum return in line with the subsidiaries’ risk appetite, with consideration to variations required due to differences in each subsidiary’s business model.
Committees namely BLRRC, SC, MCM, GMLC, GALCO, LMC, GORMC and GEAC assist BRMC in managing credit, market, liquidity, operational and other material risks in the Bank. The responsibilities of these Committees include risk identification, risk assessment and measurement, risk control and mitigation and risk monitoring and reporting.
2.5 Internal Audit and Internal Control Activities
In accordance with BNM’s guidelines on Corporate Governance for Licensed Institutions, GIA conducts continuous reviews on auditable areas within the Bank. The reviews by GIA are focused on areas of significant risks and effectiveness of internal control in accordance with the audit plan approved by the BAC.
Based on GIA’s review, identification and assessment of risk, testing and evaluation of controls, GIA will provide an opinion on the effectiveness of internal controls maintained by each entity. The risks highlighted on the respective auditable areas as well as recommendation made by the GIA are addressed at BAC and Management meetings on bi-monthly basis. The BAC also conducts annual reviews on the adequacy of internal audit function, scope of work, resources and budget of GIA.
3 CAPITAL MANAGEMENT
3.1 Internal Capital Adequacy Assessment Process (‘ICAAP’)
In line with the BNM guidelines on Risk-Weighted Capital Adequacy Framework - Internal Capital Adequacy Assessment Process (Pillar 2), the Bank has put in place the ICAAP Framework to assess the capital adequacy to ensure that the level of capital maintained by the Bank is adequate at all times, taking into consideration the Bank’s risk profile and business strategies.
The Bank’s capital management approach is focused on maintaining an appropriate level of capital to meet its business needs and regulatory requirements as capital adequacy and risk management are closely aligned. The Bank operates within an agreed risk appetite whilst optimising the use of shareholders’ funds to deliver sustainable returns.
3.2 Capital structure
The total capital and capital adequacy ratios of the Group and the Bank are computed in accordance with BNM’s Capital Adequacy Framework (Capital Components).
The Group and the Bank are currently adopting the Standardised Approach for Credit Risk and Market Risk and the Basic Indicator Approach for Operational Risk. In line with the transitional arrangements under the BNM Capital Adequacy Framework (Capital Components), the minimum capital adequacy requirement for Common Equity Tier 1 Capital Ratio (‘CET 1’) and Tier 1 Capital Ratio are 5.125% (2015: 4.5%) and 6.625% (2015: 6.0%) respectively for year 2016. The minimum regulatory capital adequacy requirement is 8.625% (2015: 8.0%) for total capital ratio.
The following table sets forth further details on the capital resources and capital adequacy ratios for the Group and the Bank as at 31 December 2016.
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3.2 Capital structure (continued)
The Group The Bank 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Paid-up share capital 1,688,770 1,688,770 1,688,770 1,688,770
Share premium 858,904 858,904 858,904 858,904
Statutory reserves 1,721,637 1,577,509 1,416,621 1,328,792
Retained profits 1,178,962 1,029,155 913,359 805,289
Unrealised gains and losses on AFS 98,985 90,983 122,753 101,388
5,547,258 5,245,321 5,000,407 4,783,143
Less:
Goodwill (164,089) (153,137) (167,982) (156,604)
55% of cumulative unrealised gains of AFS (54,442) (50,041) (67,514) (55,763)
Investment in associate/subsidiaries (450) - (345,134) (195,630)
CET1 capital 5,328,277 5,042,143 4,419,777 4,375,146
Tier I capital 5,328,277 5,042,143 4,419,777 4,375,146
Subordinated term loan 1,180,000 820,000 1,180,000 820,000
Collective impairment 137,903 133,809 109,362 110,058
Regulatory adjustments 280,204 278,547 207,026 220,148
Less:
Investment in associate/subsidiaries (300) - (230,090) (293,444)
Tier II capital 1,597,807 1,232,356 1,266,298 856,762
Total capital 6,926,084 6,274,499 5,686,075 5,231,908
CET1 capital ratio 12.201% 11.878% 12.595% 12.230%
Tier 1 capital ratio 12.201% 11.878% 12.595% 12.230%
Total capital ratio 15.860% 14.781% 16.204% 14.625%
CET1 capital ratio (net of proposed dividends) 12.147% 11.632% 12.528% 11.938%
Tier 1 capital ratio (net of proposed dividends) 12.147% 11.632% 12.528% 11.938%
Total capital ratio (net of proposed dividends) 15.806% 14.535% 16.137% 14.333%
Risk-weighted assets for:
Credit risk 40,928,681 39,766,072 32,838,523 33,498,227
Market risk 333,445 327,504 296,191 323,855
Operational risk 2,408,896 2,355,261 1,956,481 1,951,219
Total risk-weighted assets 43,671,022 42,448,837 35,091,195 35,773,301
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3.3 Capital adequacy
The Group and the Bank have in place an internal limit for its CET1 capital ratio, Tier I capital ratio and Total capital ratio, which is guided by the need to maintain a prudent relationship between available capital and the risks of its underlying businesses. The capital management process is monitored by senior management through periodic reviews.
Refer to Appendix I.
4 RISK MANAGEMENT OBJECTIVES AND POLICIES
The Bank is principally engaged in all aspects of banking and related financial services. The principal activities of the Bank’s subsidiaries are Islamic banking business, property management services, nominee and trustee services. There have been no significant changes in these principal activities during the financial year.
The Bank’s business activities involve the analysis, measurement, acceptance, and management of risks and which operates within well defined risk acceptance criteria covering customer segments, industries and products. The Bank does not enter into risk it cannot administer, book, monitor or value, or deal with persons of questionable integrity.
The Bank’s risk management policies are established to identify, assess, measure, control and mitigate all key risks as well as manage and monitor the risk positions.
The Bank regularly reviews its risk management policies and systems to reflect changes in markets, products and best practice in risk management processes. The Bank’s aim is to achieve an appropriate balance between risk and return as well as minimise any potential adverse effects.
5 CREDIT RISK
5.1 Credit risk management objectives and policies
Credit risk is the potential financial loss resulting from the failure of the customer to settle financial and contractual obligations through lending/financing, hedging, trading and investing activities. It includes both pre-settlement and settlement risks of trading counterparties. Credit risk emanates mainly from loans/financing and advances, loan/financing commitments arising from such lending activities, as well as through financial transaction with counterparties including interbank money market activities as well as derivative instruments used for hedging and debt securities.
The management of credit risk in the Bank is governed by the Credit Risk Management Framework which is supported by a set of approved credit policies, guidelines and procedures. Approval authorities are delegated to Senior Management and GMLC to implement the credit policies and ensure sound credit granting standards. BLRRC has review/veto power.
An independent Group Credit Management function is headed by Group Chief Credit Officer (‘GCCO’) with direct reporting line to MD/CEO to ensure sound credit appraisal and approval process. GRM with direct reporting line to BRMC has functional responsibilities for the management of credit risk, to ensure adherence to risk standards and discipline.
Credit guidelines and procedures are incorporated within the Credit Policy. The Credit Authority Framework facilitates the approval of all new, restructured and continuing credit facilities. New and existing businesses are governed by Credit Plan which is developed as part of the annual business planning and budgeting process. The Credit Plan is reviewed at least annually to ensure the guidelines and criteria reflect portfolio strategy and market environment.
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5.2 Application of Standardised Approach for credit risk
The Bank uses the following External Credit Assessment Institutions (‘ECAIs’) to determine the risk weights for the rated credit exposures:-
• RAMRatingServicesBerhad
• MalaysianRatingCorporationBerhad
• Standard&Poor’sRatingServices
• Moody’sInvestorsService
• FitchRatings
The external ratings of the ECAIs are used to determine the risk weights of the following types of exposure: sovereigns, banks, public sector entities and corporates.
The mapping of the rating categories of different ECAIs to the risk weights is in accordance with BNM guidelines. In cases where there is no issuer or issue rating, the exposures are treated as unrated and accorded a risk weight appropriate for unrated exposure in the respective category.
Refer to Appendix II and Appendices III (i) to III (ii).
5.3 Credit risk measurement
Loans, advances and financing
Credit evaluation is the process of analysing the creditworthiness of the prospective customer against the Bank’s underwriting criteria and the ability of the Bank to make a return commensurate with the level of risk undertaken. Assessment and quantification of credit risk are supported by the use of internal rating models, scorecards and decision support tools.
The Bank adopts a credit risk grading methodology encompassing probability of default (‘PD’) driven scorecards for business lo loans, advances and financing. Separate scorecards have been developed for two categories of business borrowers, Large Corporate (‘LC’) and Small Medium Enterprise (‘SME’).
For consumer mass market products, statistically developed application scorecards are used to assess the risks associated with the credit application as a decision support tool at loans, advances and financing origination.
Stress Testing supplements the overall assessment of credit risk across the Bank.
Over-the-Counter (‘OTC’) Derivatives
The OTC Derivatives credit exposure is computed using the Current Exposure Method. Under the Current Exposure Method, computation of credit equivalent exposure for interest rate and exchange rate related contracts is derived from the summation of the two elements; the replacement costs (obtained by marking-to-market) of all contracts and the potential future exposure of outstanding contracts (Add On charges depending on the specific remaining tenor to maturity).
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5.4 Risk limit control and mitigation policies
The Bank employs various policies and practices to control and mitigate credit risk.
Lending limits
The Bank establishes internal limits and related lending guidelines to manage large exposures and avoid undue concentration of credit risk in its credit portfolio. The limits include single customer groupings, connected parties, geographical and industry segments. These risks are monitored regularly and the limits reviewed annually or sooner depending on changing market and economic conditions.
The credit risk exposure for derivative and loans, advances and financing books is managed as part of the overall lending limits with customers together with potential exposure from market movements.
Collateral
Credits are established against borrower’s capacity to repay rather than rely solely on security. However, collateral may be taken to mitigate credit risk. The main collateral types accepted and given value by the Bank are:
• Mortgagesoverresidentialproperties;
• Chargesovercommercialrealestateorvehiclesfinanced;
• Chargesoverbusinessassetssuchasbusinesspremises,inventoryandaccountreceivables;and
• Chargesoverfinancialinstrumentssuchasmarketablesecurities
Credit related commitments
Commitment to extend credit represents unutilised portion of approved credit in the form of loans, advances and financing, guarantees or letters of credit. In terms of credit risk, the Bank is potentially exposed to loss in an amount equal to the total unutilised commitments. However, the potential amount of loss is less than the total unutilised commitments, as most commitments to extend credit are contingent upon customers maintaining specific minimum credit standards.
The Bank monitors the term to maturity of credit commitments because longer-term commitments generally have a greater degree of credit risk than short-term commitments.
Refer to Appendix IV (a) to (b).
5.5 Credit risk monitoring
Corporate credits and large individual accounts are reviewed by the Business Units at least once a year using updated financial and other relevant information. This is to ensure that the credit grades remain appropriate and any signs of weaknesses or deterioration in the credit quality are detected. Remedial action is taken where evidence of deterioration emanates.
Retail credits are actively monitored and managed on a portfolio basis by product type. A collection management system is in place to promptly identify, monitor and manage delinquent accounts at early stages of delinquency.
An Early Alert Process is adopted to pro-actively identify, report, and manage warning signs of potential credit deterioration. Watchlist accounts are closely reviewed and monitored with corrective measures initiated to prevent them from turning impaired. As a rule, watchlist accounts are either worked up or worked out within a period of twelve months.
Active portfolio monitoring as well as exceptions reporting is in place to manage the overall risk profile, identify, analyse and mitigate adverse trends or specific areas of risk concerns.
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5.6 Impairment provisioning
Individual impairment provisioning
All significant loans, advances and financing exposures, with or without past due status, are subject to individual assessment for impairment when an evidence of impairment surfaces, or at the very least once annually during the Annual Review process.
If impaired, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate/rate of return (i.e. the effective interest rate/rate of return computed at initial recognition). The level of impairment allowance on loans, advances and financing is to be reviewed at least quarterly, and more frequently when individual circumstances require. The review covers the collateral held (including reconfirmation of its enforceability) and an assessment of actual and expected receipts.
All significant loans, advances and financing which are deemed not impaired after individual assessment and all loans, advances and financing which are deemed impaired but do not result in impairment allowance after individual assessment are included in the collective impairment assessment.
Significant loans that are deemed not impaired after individual assessment are included in a group of loans with similar characteristics and collectively assessed for impairment.
Collective impairment provisioning
All loans, advances and financing are grouped in respective business segments according to similar credit risk characteristics and is generally based on industry, asset or collateral type, credit grade and past due status.
Collective assessment for impairment allowance is conducted in accordance with the impairment methodologies approved by the Board for all loans, advances and financing not covered under the individual impairment assessment.
Impairment allowance will be determined for each segment based on its respective loss probabilities (history) and other information relevant to estimation of the future cash flows.
The Bank is required to maintain, in aggregate, collective impairment allowances and regulatory reserves of no less than 1.2% of total outstanding loans/financing (excluding loans/financing with explicit guarantee from Government of Malaysia), net of individual impairment.
Total loans, advances and financing - credit quality
Allloans,advancesandfinancingarecategorisedinto“neitherpastduenorimpaired”,“pastduebutnotimpaired”and“impaired”.
Past due loans refer to loans, advances and financing that are overdue by one day or more.
Loans, advances and financing are classified impaired when they fulfill any of the following criteria:
i) the principal or interest/profit or both is past due more than 90 days or 3 months from the first day of default
ii) where the account is in arrears for less than 90 days or 3 months, there is evidence of impairment to indicate that the borrower/customeris“unlikelytorepay”itscreditobligations
iii) the loan/financing is classified as rescheduled and restructured in Central Credit Reference Information System (CCRIS).
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5.6 Impairment provisioning (continued)
Analysed by economic sectors
The Group The Bank 2016 2015 2016 2015 Past due loans RM’000 RM’000 RM’000 RM’000
Primary agriculture 11,794 36,912 10,640 36,047
Mining and quarrying 1,286 1,788 1,154 1,568
Manufacturing 40,385 45,369 38,086 43,470
Electricity, gas and water supply 974 1,140 438 497
Construction 106,594 168,155 85,530 142,659
Real estate 119,137 276,752 98,494 275,737
Wholesale & retail trade and restaurants & hotels 193,688 112,400 182,830 106,091
Transport, storage and communication 95,456 41,771 92,444 39,362
Finance, insurance and business services 70,082 58,783 64,277 54,930
Education, health and others 22,641 83,093 14,081 64,689
Household 1,874,177 1,828,209 1,302,114 1,361,693
2,536,214 2,654,372 1,890,088 2,126,743
The Group The Bank 2016 2015 2016 2015 Individual impairment RM’000 RM’000 RM’000 RM’000
Primary agriculture 197 426 197 426
Manufacturing 8,698 13,821 8,684 13,821
Construction 26,001 45,659 25,867 45,659
Real estate 18,998 35,032 1,585 43
Wholesale & retail trade and restaurants & hotels 16,737 11,735 16,737 10,658
Transport, storage and communication - 610 - 610
Finance, insurance and business services 65,241 151,508 65,241 151,509
Education, health and others - 1,926 - 1,926
Household 13,627 9,420 13,186 6,969
149,499 270,137 131,497 231,621
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5.6 Impairment provisioning (continued)
Analysed by economic sectors (continued)
The Group The Bank 2016 2015 2016 2015 Individual impairment charged RM’000 RM’000 RM’000 RM’000
Primary agriculture 1 321 1 321
Manufacturing 2,584 8,267 2,272 8,242
Electricity, gas and water supply 942 - 942 -
Construction 26,361 54,171 26,226 54,171
Real estate 19,396 768 2,280 768
Wholesale & retail trade and restaurants & hotels 11,890 11,414 11,421 10,253
Transport, storage and communication 58 104 58 104
Finance, insurance and business services 6,741 168,289 6,741 168,289
Education, health and others - 2,922 - 2,922
Household 13,376 11,389 12,069 9,016
81,349 257,645 62,010 254,086
The Group The Bank 2016 2015 2016 2015 Individual impairment written-off RM’000 RM’000 RM’000 RM’000
Primary agriculture - 2,227 - 2,227
Manufacturing - 11,793 - 9,411
Construction 37,007 148,771 37,007 148,771
Wholesale & retail trade and restaurants & hotels 3,331 2,938 1,787 2,938
Transport, storage and communication 668 - 668 -
Finance, insurance and business services 88,978 26,386 88,978 26,386
Household 2,605 850 - 850
132,589 192,965 128,440 190,583
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5.6 Impairment provisioning (continued)
Analysed by economic sectors (continued)
The Group The Bank 2016 2015 2016 2015 Collective impairment RM’000 RM’000 RM’000 RM’000
Primary agriculture 2,389 2,404 1,908 2,102
Mining and quarrying 1,234 1,454 1,179 1,415
Manufacturing 8,592 9,406 8,017 8,312
Electricity, gas and water supply 635 545 325 379
Construction 21,289 23,183 18,681 20,718
Real estate 22,381 20,165 19,988 18,524
Wholesale & retail trade and restaurants & hotels 17,696 13,896 16,167 13,009
Transport, storage and communication 8,842 7,622 7,665 6,772
Finance, insurance and business services 8,105 10,286 6,869 9,159
Education, health and others 7,132 7,368 4,247 4,931
Household 136,336 133,132 104,591 107,469
234,631 229,461 189,637 192,790
Analysed by geographical area
The Group The Bank 2016 2015 2016 2015 Past due loans RM’000 RM’000 RM’000 RM’000
Perlis 4,573 4,178 2,965 3,335
Kedah 118,870 122,883 70,337 80,482
Pulau Pinang 117,259 97,462 95,865 82,776
Perak 126,871 127,279 67,975 70,476
Selangor 724,499 768,553 523,592 614,302
Wilayah Persekutuan 449,176 455,527 356,151 379,398
Negeri Sembilan 111,709 104,328 73,443 77,869
Melaka 94,182 96,081 75,000 83,208
Johor 242,796 262,571 191,625 230,486
Pahang 61,984 69,963 42,208 48,519
Terengganu 66,538 60,213 3,882 4,617
Kelantan 29,392 32,780 6,719 7,053
Sarawak 151,651 155,101 149,113 152,260
Sabah 236,484 297,380 231,080 291,889
Labuan - 73 - 73
Outside Malaysia 230 - 133 -
2,536,214 2,654,372 1,890,088 2,126,743
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5.6 Impairment provisioning (continued)
Analysed by geographical area (continued)
The Group The Bank 2016 2015 2016 2015 Individual impairment RM’000 RM’000 RM’000 RM’000
Kedah 949 1,484 927 1,484
Pulau Pinang 14,020 12,386 14,020 12,386
Perak 1,436 59 1,436 59
Selangor 76,241 181,327 75,786 178,904
Wilayah Persekutuan 24,082 28,378 24,082 27,273
Negeri Sembilan 2,174 - 2,174 -
Melaka 140 - 140 -
Johor 4,650 1,533 4,650 1,533
Pahang 72 38 72 38
Kelantan 3 - 3 -
Sarawak 229 - - -
Sabah 8,207 9,944 8,207 9,944
Outside Malaysia 17,296 34,988 - -
149,499 270,137 131,497 231,621
The Group The Bank 2016 2015 2016 2015 Collective impairment RM’000 RM’000 RM’000 RM’000
Perlis 861 901 475 492
Kedah 10,167 10,201 7,371 8,315
Pulau Pinang 11,069 9,670 9,703 8,722
Perak 12,576 12,685 8,565 8,976
Selangor 73,047 70,220 58,803 58,436
Wilayah Persekutuan 46,569 46,984 38,648 40,840
Negeri Sembilan 8,892 7,814 6,991 6,570
Melaka 6,503 7,594 5,720 7,093
Johor 20,785 21,283 18,325 19,524
Pahang 5,043 6,352 3,553 4,830
Terengganu 5,577 4,718 1,486 1,652
Kelantan 3,373 3,733 839 642
Sarawak 9,973 9,280 9,531 9,009
Sabah 18,932 15,966 18,630 15,689
Labuan 1,188 1,504 994 1,504
Outside Malaysia 76 556 3 496
234,631 229,461 189,637 192,790
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6 MARKET RISK
6.1 Market risk management objectives and policies
Market risk is the risk of losses in on and off-balance-sheet positions arising from movements in market prices. The Bank’s exposure to market risk results largely from interest rate and foreign exchange rate risks.
The Market Risk Management Framework governs the market risk activities of the Bank which is supported by a set of approved market risk management policies, guidelines and procedures.
Risk control parameters are established based on risk appetite, market liquidity and business strategies as well as macroeconomic conditions. These parameters are reviewed at least annually.
Market risk arising from the Trading Book is primarily controlled through the imposition of Stop-loss and Value-at-Risk (‘VaR’) risk control parameters.
Interest rate risk is quantified by analyzing the mismatches in timing repricing of the rate sensitive assets and rate sensitive liabilities. Earnings-at-Risk (‘EaR’) or Net Interest Income simulation is conducted to assess the variation in short term earnings under various rates scenarios. The potential long term effect of the overall exposure is tracked by assessing the impact on Economic Value of Equity (‘EVE’), also known as Economic Value-at-Risk (‘EVaR’). Thresholds are set for EaR and EVaR as management triggers.
Periodic stress tests are conducted to quantify market risk arising from probability of abnormal market movements.
6.2 Application of Standardised Approach for market risk
The Bank adopts the Standardised Approach for the purpose of calculating the capital requirement for market risk.
Refer to Appendix I.
6.3 Market risk measurement, control and monitoring
The Bank’s market risk management control parameters are established based on its risk appetite, market liquidity and business strategies as well as macroeconomic conditions. These parameters are reviewed at least on an annual basis.
Market risk arising from the Trading Book is primarily controlled through the imposition of Stop-loss and Value-at-Risk (‘VaR’) risk control parameters.
The Bank quantifies interest rate risk by analyzing the mismatches in timing repricing of the rate sensitive assets and rate sensitive liabilities. Earnings-at-Risk (‘EaR’) or Net Interest Income simulation is conducted to assess the variation in short term earnings under various rates scenarios. The potential long term effect of the overall exposure is tracked by assessing the impact on Economic Value of Equity (‘EVE’), also known as Economic Value-at-Risk (‘EVaR’). Thresholds are set for EaR and EVaR as management triggers.
In addition, periodic stress tests are conducted to quantify market risk arising from probability of abnormal market movements.
The GALCO and BRMC are regularly kept informed of the Bank’s risk profile and positions.
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6.4 Value-at-Risk (‘VaR’)
Value-at-Risk (‘VaR’) is used to compute the maximum potential loss amount over a specified holding period of the Trading portfolio.
It measures the risk of losses arising from potential adverse movements in interest rates and foreign exchange rates that could affect values of financial instruments.
The Bank adopts Historical Pricing Simulation Method (‘HPS’) to compute potential loss or Value-at-Risk (‘VaR’) amount. The HPS Method uses the relative change of historical prices to estimate future potential changes in the market value of outstanding positions. The Bank currently adopts 250 simulated business days for its HPS VaR computation. After applying these price changes to the outstanding portfolios, 250 simulated market values for the portfolio are generated and the change in the day-to-day market value is taken as simulated Profit & Loss (‘P&L’) for the portfolio. As VaR calculates the worst expected loss over a given day horizon and confidence level under normal market condition, the 250 values are sorted from the lowest to the highest simulated P&L. The VaR focuses on the tail of the distribution (i.e. the loss figures) at the 99th percentile.
Backtesting of the VaR computation system is conducted regularly to gauge the accuracy of the risk measurement system.
Other risk measures include the following:
(i) Mark-to-market valuation tracks the current market value of the outstanding financial instruments.
(ii) Stress tests are conducted to attempt to quantify market risk arising from abnormal market movements. Stress tests measure the changes in values arising from extreme movements in interest rates and foreign exchange rates based on past experiences and simulated stress scenarios.
6.5 Foreign exchange risk
The Bank is exposed to the effects of fluctuations in the prevailing foreign currency exchange rates on its financial position and cash flows. The risk of fluctuations in foreign currency exchange rates is managed via setting of thresholds on the level of exposure by currency and in aggregate for both overnight and intra-day positions, which are monitored daily.
7 LIQUIDITY RISK
7.1 Liquidity risk management objectives and policies
Liquidity risk is the risk of inability of a bank to fund increases in assets and meet obligations as they come due, without incurring unacceptable losses. Liquidity risk includes the inability to manage sudden decreases or changes in funding sources. Liquidity risk also arises from the failure to recognise changes in market conditions that affect the ability to liquidate assets quickly and with minimal loss in value.
The Liquidity Risk Management Framework governs the liquidity risk management activities of the Bank. The objective of liquidity risk management is to ensure that there are sufficient funds to meet contractual and regulatory obligations without incurring unacceptable losses as well as to undertake new transactions. The Bank’s liquidity management process involves establishing liquidity risk management policies and prudential thresholds, liquidity risk threshold monitoring, stress testing and establishing contingency funding plans. These building blocks of liquidity risk management are subject to regular reviews to ensure relevance in the context of prevailing market conditions.
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7.2 Liquidity risk measurement, control and monitoring
The Bank’s short term liquidity risk management is premised on BNM’s Liquidity Coverage Ratio (‘LCR’) final standards. The LCR is a quantitative requirement which seeks to ensure that the Bank holds sufficient high-quality liquid assets (‘HQLA’) to withstand a significant liquidity stress scenario over a 30-day horizon. Long term liquidity risk profile is assessed via the Net Stable Funding Ratio (‘NSFR’) which promotes resilience over a longer time horizon for the Bank to fund its activities with more stable sources of funding on an ongoing basis.
The LCR and NSFR are tracked to assess the short term and long term liquidity risk profile of the Bank, in line with BNM’s Liquidity Coverage Ratio (‘LCR’) final standards re-issued on 25th August 2016 as well as BNM’s revised Basel III Observation Period reporting for Net Stable Funding Ratio (‘NSFR’) and Leverage Ratio (‘LR’) issued on 7th August 2015.
The Bank also employs a set of liquidity risk indicators as an early alert of any structural change for liquidity risk management. The liquidity risk indicators include internal and external qualitative as well as quantitative indicators.
Liquidity stress tests are conducted periodically and on ad-hoc basis to gauge the Group’s resilience in the event of a liquidity disruption.
The Contingency Funding Plan provides a systematic approach in handling liquidity disruption. The document encompasses strategies, decision-making authorities, and courses of action to be taken in the event of liquidity crisis and emergencies, enabling the Group to respond to an unexpected liquidity disruption in an effective and efficient manner.
The Board Risk Management Committee (‘BRMC’) is responsible for the Bank’s liquidity policy and the strategic management of liquidity has been delegated to the Group Asset Liability Management Committee (‘GALCO’). The Liquidity Management Committee (‘LMC’), which is a sub-committee of GALCO, augments the functions of GALCO by directing its focus specifically to liquidity issues. The BRMC is informed regularly on the liquidity position of the Bank.
8 OPERATIONAL RISK
8.1 Operational risk management objectives and policies
Operational risk is defined as the risk of direct or indirect loss resulting from inadequate or failed internal processes, people and systems or external events. The definition includes legal risk, and exposure to litigation from all aspects of the Bank’s activities, but excludes strategic business, reputational and systemic risks.
The Group Operational Risk Management Framework governs the management of operational risk across the Group.
BRMC approves all policies/policy changes relating to operational risk. GORMC supports BRMC in the review and monitoring of operational risk and provides the forum to discuss and manage all aspects of operational risk including control lapses.
The operational risk management (‘ORM’) function within GRM operates in independent capacity to manage the risks in activities associated with the operational function of the Bank.
8.2 Application of Basic Indicator Approach for operational risk
The Bank adopts the Basic Indicator Approach for the purpose of calculating the capital requirement for operational risk. The capital requirement is calculated by taking 15% of the Bank’s average annual gross income over the previous three years.
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8.3 Operational risk measurement, control and monitoring
Operational risks are managed daily through established systems and processes to ensure compliance with policies, guidelines and control procedures.
To identify and assess operational risk issues and exposure, the following tools are employed:
• RiskControlSelfAssessment(‘RCSA’)
• KeyControlStandards(‘KCS’)
• KeyRiskIndicator(‘KRI’)
• LossEventDatabase(‘LED’)
Information Technology (‘IT’) and cyber risks are managed as part of the operational risk activities. The IT systems and processes are assessed and tested regularly for resilience and continuity, and that they are secure from internal and external threats.
Introduction of new products or services are evaluated to assess suitability, potential risks and operational readiness.
Operational Risk Coordinators (‘ORC’) are appointed at business and support units as champions of ORM activities within respective units. The ORC is responsible for the reporting of ORM activities and to liaise with Group Operational Risk Management on all operational defects and results.
8.4 Certification
As an internal requirement, all Operational Risk Coordinators must satisfy an Internal Operational Risk (including business continuity management) Certification Program. These coordinators will first go through an on-line self learning exercise before attempting on-line assessments to measure their skills and knowledge level. This will enable Group Risk Management to prescribe appropriate training and development activities for the coordinators
9 SHARIAH NON-COMPLIANCE RISK
9.1 Shariah non-compliance risk objectives and policies
Shariah non-compliance is the risk of failure to comply with the Shariah rules and principles as determined by SC and/or any other relevant bodies, such as BNM Shariah Advisory Council.
The Shariah Governance Framework for Islamic Financial Institutions issued by BNM is the main reference for the Shariah governance process and oversight within AiBB.
Shariah Committee (‘SC’) is established to deliberate on Shariah issues and provide resolution as well as guidance. GORMC together with BRMC assist in the overall oversight of Shariah risk management of the Group.
Shariah Risk Management is part of an integrated risk management control function to identify all possible risks of Shariah non-compliance and where appropriate, to provide mitigating measures that need to be taken to reduce the risk. The scope covers overall business activities and operations, commencing from Islamic product origination until maturity.
9.2 Shariah non-compliance risk measurement, control and monitoring
Each business and support unit is responsible to identify and assess potential Shariah Non-Compliance Risk using the RCSA process. Half yearly RCSA checklist is performed to gauge the level of Shariah compliance.
All Islamic products, services and strategies related matters must be approved by the SC.
Shariah Resolutions/Circulars are issued and training on Shariah Compliance is conducted by the Shariah Review Team on a regular basis.
Shariah non-compliance reports are regularly submitted for further deliberation, decision and remedial action.
AFFIN BANK BERHAD (25046-T)
218
Basel II Pillar 3 Disclosuresas at 31 December 2016
10 BUSINESS CONTINUITY RISK
10.1 Business continuity risk management objectives and policies
Business continuity risk is the risk of losses in assets, revenue, reputation and stakeholder/customer confidence due to the discontinuation of services in both business and technology operations.
The Business Continuity Management Framework governs the management of business continuity issues, in line with BNM Guidelines on Business Continuity Management (‘BCM’).
BRMC approves all policies and its changes relating to business continuity management. It also reviews, monitors and discusses business continuity management reports tabled at its meetings. GORMC supports BRMC in the review and monitoring of Business Continuity Risk and provides the forum to discuss and manage all aspects of operational risk including control lapses.
The BCM function is an independent body overseeing the management of the overall business continuity risk.
10.2 Business continuity risk measurement, control and monitoring
Annual Risk Assessment and Business Impact Analysis are made compulsory for each business and support unit in the Bank to undertake. The outcome of this assessment will translate into a risks listing that require business and support units to derive action plans to address the risks.
Risk control is established through adherence with established BCM guidelines and standards throughout the implementation of BCM programs. Rigorous testing on business continuity and disaster recovery plans are diligently performed to ensure effective and smooth execution of the plan for resumption and recovery of disrupted business.
Policies and processes are in place to support the monitoring and reporting of business continuity risks.
219
ANNUAL REPORT 2016
Bas
el II
Pill
ar 3
Dis
clos
ures
as a
t 31
Dec
embe
r 201
6
The
Gro
up a
nd th
e B
ank
have
ado
pted
Bas
el II
- R
isk
Wei
ghte
d A
sset
s co
mpu
tatio
n un
der t
he B
NM
’s R
isk-
Wei
ghte
d C
apita
l Ade
quac
y Fr
amew
ork
with
effe
ct fr
om 1
Jan
uary
200
8. T
he G
roup
an
d th
e B
ank
have
ado
pted
the
Sta
ndar
dise
d A
ppro
ach
for c
redi
t ris
k an
d m
arke
t ris
k, a
nd B
asic
Indi
cato
r App
roac
h fo
r ope
ratio
n ris
k co
mpu
tatio
n.
The
follo
win
g in
form
atio
n co
ncer
ning
the
Gro
up a
nd th
e B
ank’
s ris
k ex
posu
res
are
disc
lose
d as
acc
ompa
nyin
g in
form
atio
n to
the
annu
al re
port
, and
doe
s no
t for
m p
art o
f the
aud
ited
acco
unts
.
Dis
clo
sure
on
Cap
ital
Ad
equa
cy u
nder
the
Sta
ndar
dis
ed A
pp
roac
h (R
M’0
00)
Gro
up20
16
Exp
osu
re C
lass
Gro
ss
Exp
osu
res/
E
AD
bef
ore
C
RM
Net
E
xpo
sure
s/
EA
D a
fter
C
RM
Ris
k W
eig
hted
A
sset
s
To
tal R
isk
Wei
ght
ed
Ass
ets
afte
r E
ffec
ts o
f P
SIA
Min
imum
C
apit
al
Req
uire
men
ts
at 8
%
1C
RE
DIT
RIS
KO
n B
alan
ce S
heet
Exp
osur
esC
orpo
rate
s 2
4,93
4,62
7 2
3,92
9,04
4 1
9,79
8,58
0 1
9,79
8,58
0 1
,583
,886
R
egul
ator
y R
etai
l 1
3,51
0,76
8 1
3,28
1,51
9 9
,987
,739
9
,987
,739
7
99,0
19
Oth
er A
sset
s 2
,852
,930
2
,852
,930
7
94,0
52
794
,052
6
3,52
5 S
over
eign
s/C
entr
al B
anks
7,2
99,4
95
7,2
99,4
95
- -
- B
anks
, Dev
elop
men
t Fin
anci
al In
stitu
tions
& M
DB
s 3
,886
,803
3
,896
,577
1
,123
,205
1
,123
,205
8
9,85
7 In
sura
nce
Com
pani
es, S
ecur
ities
Firm
s &
Fun
d M
anag
ers
311
,931
3
11,9
31
288
,154
2
88,1
54
23,
052
Res
iden
tial M
ortg
ages
5,8
52,5
10
5,8
20,7
44
2,4
96,3
94
2,4
96,3
94
199
,712
H
ighe
r R
isk
Ass
ets
211
,986
2
11,5
29
308
,243
3
08,2
43
24,
659
Equ
ity E
xpos
ure
19,
902
19,
902
19,
902
19,
902
1,5
92
Def
aulte
d E
xpos
ures
1,6
57,5
38
1,6
23,8
62
2,3
32,5
83
2,3
32,5
83
186
,607
To
tal f
or
On-
Bal
ance
She
et E
xpo
sure
s 6
0,53
8,49
0 5
9,24
7,53
3 3
7,14
8,85
2 3
7,14
8,85
2 2
,971
,909
Off
Bal
ance
She
et E
xpos
ures
Off
Bal
ance
She
et E
xpos
ures
oth
er th
an O
TC d
eriv
ativ
es o
r cr
edit
deriv
ativ
es 4
,322
,780
4
,155
,553
3
,719
,288
3
,719
,288
2
97,5
43
Def
aulte
d E
xpos
ures
46,
818
40,
533
60,
541
60,
541
4,8
43
Tota
l fo
r O
ff-B
alan
ce S
heet
Exp
osu
res
4,3
69,5
98
4,1
96,0
86
3,7
79,8
29
3,7
79,8
29
302
,386
Tota
l fo
r O
n an
d O
ff-B
alan
ce S
heet
Exp
osu
res
64,
908,
088
63,
443,
619
40,
928,
681
40,
928,
681
3,2
74,2
95
2M
AR
KE
T R
ISK
Lo
ng P
osi
tio
n S
hort
Po
siti
on
Inte
rest
Rat
e R
isk
11,
406,
492
11,
690,
327
(283
,835
) 2
25,6
25
- 1
8,05
0 Fo
reig
n C
urre
ncy
Ris
k 4
2,86
2 7
0,57
4 (2
7,71
2) 1
07,8
20
- 8
,626
3
OP
ER
AT
ION
AL
RIS
KO
pera
tiona
l Ris
k 2
,408
,896
1
92,7
12
Tota
l RW
A a
nd C
apit
al R
equi
rem
ents
43,
671,
022
40,
928,
681
3,4
93,6
83
PSIA“ProfitSharingInvestmentAccount”
OTC“OverTheCounter”
App
endi
x I
AFFIN BANK BERHAD (25046-T)
220
Bas
el II
Pill
ar 3
Dis
clos
ures
as a
t 31
Dec
embe
r 201
6
Dis
clo
sure
on
Cap
ital
Ad
equa
cy u
nder
the
Sta
ndar
dis
ed A
pp
roac
h (R
M’0
00) (
cont
inue
d)
Gro
up20
15 E
xpos
ure
Cla
ssG
ross
E
xpos
ures
/ E
AD
bef
ore
CR
M
Net
E
xpos
ures
/ E
AD
afte
r C
RM
Ris
k W
eigh
ted
Ass
ets
Tot
al R
isk
Wei
ghte
d A
sset
s af
ter
Effe
cts
of P
SIA
Min
imum
C
apita
l R
equi
rem
ents
at
8%
1
CR
ED
IT R
ISK
On
Bal
ance
She
et E
xpos
ures
Cor
pora
tes
25,
813,
553
24,
905,
986
19,
578,
957
19,
578,
957
1,5
66,3
16
Reg
ulat
ory
Ret
ail
13,
493,
458
13,
338,
914
10,
026,
116
10,
026,
116
802
,089
O
ther
Ass
ets
3,3
93,5
98
3,3
93,6
39
864
,940
8
64,9
40
69,
195
Sov
erei
gns/
Cen
tral
Ban
ks 6
,297
,843
6
,297
,843
4
,116
4
,116
3
30
Ban
ks, D
evel
opm
ent F
inan
cial
Inst
itutio
ns &
MD
Bs
3,7
57,9
58
3,7
59,5
22
1,2
19,2
36
1,2
19,2
36
97,
539
Insu
ranc
e C
ompa
nies
, Sec
uriti
es F
irms
& F
und
Man
ager
s 3
95,2
68
395
,268
3
71,5
80
371
,580
2
9,72
7 R
esid
entia
l Mor
tgag
es 5
,014
,762
4
,986
,564
1
,929
,536
1
,929
,536
1
54,3
18
Hig
her
Ris
k A
sset
s 1
97,9
93
197
,993
2
96,9
90
296
,990
2
3,75
9 E
quity
Exp
osur
e 2
3,43
9 2
3,43
9 2
3,43
9 2
3,43
9 1
,875
D
efau
lted
Exp
osur
es 1
,276
,975
1
,255
,857
1
,765
,280
1
,765
,280
1
41,2
68
Tota
l for
On-
Bal
ance
She
et E
xpos
ures
59,
664,
847
58,
555,
025
36,
080,
190
36,
080,
190
2,8
86,4
16
Off
Bal
ance
She
et E
xpos
ures
Off
Bal
ance
She
et E
xpos
ures
oth
er th
an O
TC d
eriv
ativ
es o
r cr
edit
deriv
ativ
es 4
,274
,047
4
,091
,769
3
,616
,906
3
,616
,906
2
89,3
52
Def
aulte
d E
xpos
ures
50,
013
46,
171
68,
976
68,
976
5,5
18
Tota
l for
Off-
Bal
ance
She
et E
xpos
ures
4,3
24,0
60
4,1
37,9
40
3,6
85,8
82
3,6
85,8
82
294
,870
Tota
l for
On
and
Off-
Bal
ance
She
et E
xpos
ures
63,
988,
907
62,
692,
965
39,
766,
072
39,
766,
072
3,1
81,2
86
2M
AR
KE
T R
ISK
Lon
g P
ositi
on
Sho
rt P
ositi
on
Inte
rest
Rat
e R
isk
9,9
25,7
78
10,
011,
694
(85,
916)
274
,432
-
2
1,95
5 Fo
reig
n C
urre
ncy
Ris
k 2
9,62
0 4
3,39
9 (1
3,78
0) 4
6,72
6 -
3
,738
O
ptio
n R
isk
1,4
28
1,4
40
(12)
6,3
46
-
508
3
OP
ER
ATIO
NA
L R
ISK
Ope
ratio
nal R
isk
2,3
55,2
61
188
,421
Tota
l RW
A a
nd C
apita
l Req
uire
men
ts 4
2,44
8,83
7 3
9,76
6,07
2 3
,395
,908
PSIA“ProfitSharingInvestmentAccount”
OTC“OverTheCounter”
App
endi
x I
221
ANNUAL REPORT 2016
Dis
clo
sure
on
Cap
ital
Ad
equa
cy u
nder
the
Sta
ndar
dis
ed A
pp
roac
h (R
M’0
00) (
cont
inue
d)
Ban
k20
16
Exp
osu
re C
lass
Gro
ss
Exp
osu
res/
E
AD
bef
ore
C
RM
Net
E
xpo
sure
s/
EA
D a
fter
C
RM
Ris
k W
eig
hted
A
sset
s
To
tal R
isk
Wei
ght
ed
Ass
ets
afte
r E
ffec
ts o
f P
SIA
Min
imum
C
apit
al
Req
uire
men
ts
at 8
%
1C
RE
DIT
RIS
KO
n B
alan
ce S
heet
Exp
osur
esC
orpo
rate
s 2
0,51
7,21
7 1
9,59
6,67
1 1
6,37
0,19
4 1
6,37
0,19
4 1
,309
,616
R
egul
ator
y R
etai
l 1
0,06
9,03
3 9
,856
,100
7
,418
,580
7
,418
,580
5
93,4
86
Oth
er A
sset
s 2
,572
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2
,572
,816
7
51,5
52
751
,552
6
0,12
4 S
over
eign
s/C
entr
al B
anks
5,3
34,6
82
5,3
34,6
82
-
-
-
Ban
ks, D
evel
opm
ent F
inan
cial
Inst
itutio
ns &
MD
Bs
3,8
66,9
95
3,8
66,9
95
1,1
21,2
37
1,1
21,2
37
89,
699
Insu
ranc
e C
ompa
nies
, Sec
uriti
es F
irms
& F
und
Man
ager
s 3
11,8
66
311
,866
2
88,0
89
288
,089
2
3,04
7 R
esid
entia
l Mor
tgag
es 3
,111
,099
3
,089
,793
1
,216
,333
1
,216
,333
9
7,30
7 H
ighe
r R
isk
Ass
ets
188
,984
1
88,9
84
283
,476
2
83,4
76
22,
678
Equ
ity E
xpos
ure
19,
902
19,
902
19,
902
19,
902
1,5
92
Def
aulte
d E
xpos
ures
1,5
09,6
18
1,4
79,1
44
2,1
42,7
46
2,1
42,7
46
171
,420
To
tal f
or
On-
Bal
ance
She
et E
xpo
sure
s 4
7,50
2,21
2 4
6,31
6,95
3 2
9,61
2,10
9 2
9,61
2,10
9 2
,368
,969
Off
Bal
ance
She
et E
xpos
ures
Off
Bal
ance
She
et E
xpos
ures
oth
er th
an O
TC d
eriv
ativ
es o
r cr
edit
deriv
ativ
es 3
,629
,653
3
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,360
3
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3
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,997
2
55,0
40
Def
aulte
d E
xpos
ures
31,
882
25,
764
38,
417
38,
417
3,0
73
Tota
l fo
r O
ff-B
alan
ce S
heet
Exp
osu
res
3,6
61,5
35
3,4
98,1
24
3,2
26,4
14
3,2
26,4
14
258
,113
Tota
l fo
r O
n an
d O
ff-B
alan
ce S
heet
Exp
osu
res
51,
163,
747
49,
815,
077
32,
838,
523
32,
838,
523
2,6
27,0
82
2M
AR
KE
T R
ISK
Lo
ng P
osi
tio
n S
hort
Po
siti
on
Inte
rest
Rat
e R
isk
10,
354,
955
10,
646,
498
(291
,543
) 2
25,6
17
-
18,
049
Fore
ign
Cur
renc
y R
isk
5,6
17
70,
574
(64,
958)
70,
574
-
5,6
46
3O
PE
RA
TIO
NA
L R
ISK
Ope
ratio
nal R
isk
1,9
56,4
81
156
,518
Tota
l RW
A a
nd C
apit
al R
equi
rem
ents
35,
091,
195
32,
838,
523
2,8
07,2
95
PSIA“ProfitSharingInvestmentAccount”
OTC“OverTheCounter”
Bas
el II
Pill
ar 3
Dis
clos
ures
as a
t 31
Dec
embe
r 201
6A
ppen
dix
I
AFFIN BANK BERHAD (25046-T)
222
Dis
clo
sure
on
Cap
ital
Ad
equa
cy u
nder
the
Sta
ndar
dis
ed A
pp
roac
h (R
M’0
00) (
cont
inue
d)
Ban
k20
15 E
xpos
ure
Cla
ssG
ross
E
xpos
ures
/ E
AD
bef
ore
CR
M
Net
E
xpos
ures
/ E
AD
afte
r C
RM
Ris
k W
eigh
ted
Ass
ets
Tot
al R
isk
Wei
ghte
d A
sset
s af
ter
Effe
cts
of P
SIA
Min
imum
C
apita
l R
equi
rem
ents
at
8%
1
CR
ED
IT R
ISK
On
Bal
ance
She
et E
xpos
ures
Cor
pora
tes
22,
142,
913
21,
505,
321
16,
922,
764
16,
922,
764
1,3
53,8
21
Reg
ulat
ory
Ret
ail
10,
589,
267
10,
448,
661
7,8
58,2
88
7,8
58,2
88
628
,663
O
ther
Ass
ets
3,0
16,7
51
3,0
16,7
51
795
,251
7
95,2
51
63,
620
Sov
erei
gns/
Cen
tral
Ban
ks 3
,560
,909
3
,560
,909
4
,116
4
,116
3
29
Ban
ks, D
evel
opm
ent F
inan
cial
Inst
itutio
ns &
MD
Bs
3,7
39,8
99
3,7
39,8
99
1,2
19,2
37
1,2
19,2
37
97,
539
Insu
ranc
e C
ompa
nies
, Sec
uriti
es F
irms
& F
und
Man
ager
s 3
95,2
68
395
,268
3
71,5
81
371
,581
2
9,72
6 R
esid
entia
l Mor
tgag
es 3
,040
,556
3
,022
,893
1
,129
,760
1
,129
,760
9
0,38
1 H
ighe
r R
isk
Ass
ets
191
,648
1
91,6
48
287
,472
2
87,4
72
22,
998
Equ
ity E
xpos
ure
23,
439
23,
439
23,
439
23,
439
1,8
75
Def
aulte
d E
xpos
ures
1,1
98,6
72
1,1
77,5
95
1,6
62,6
61
1,6
62,6
61
133
,013
To
tal f
or O
n-B
alan
ce S
heet
Exp
osur
es 4
7,89
9,32
2 4
7,08
2,38
4 3
0,27
4,56
9 3
0,27
4,56
9 2
,421
,965
Off
Bal
ance
She
et E
xpos
ures
Off
Bal
ance
She
et E
xpos
ures
oth
er th
an O
TC d
eriv
ativ
es o
r cr
edit
deriv
ativ
es 3
,674
,067
3
,508
,797
3
,169
,145
3
,169
,145
2
53,5
32
Def
aulte
d E
xpos
ures
40,
347
36,
505
54,
513
54,
513
4,3
61
Tota
l for
Off-
Bal
ance
She
et E
xpos
ures
3,7
14,4
14
3,5
45,3
02
3,2
23,6
58
3,2
23,6
58
257
,893
Tota
l for
On
and
Off-
Bal
ance
She
et E
xpos
ures
51,
613,
736
50,
627,
686
33,
498,
227
33,
498,
227
2,6
79,8
58
2M
AR
KE
T R
ISK
Lon
g P
ositi
on
Sho
rt P
ositi
on
Inte
rest
Rat
e R
isk
9,8
75,0
89
9,9
60,8
00
(85,
711)
274
,110
-
2
1,92
9 Fo
reig
n C
urre
ncy
Ris
k 2
6,29
2 4
3,39
9 (1
7,10
7) 4
3,39
9 -
3
,472
O
ptio
n R
isk
1,4
28
1,4
40
(12)
6,3
46
-
508
3
OP
ER
ATIO
NA
L R
ISK
Ope
ratio
nal R
isk
1,9
51,2
19
156
,098
Tota
l RW
A a
nd C
apita
l Req
uire
men
ts 3
5,77
3,30
1 3
3,49
8,22
7 2
,861
,865
PSIA“ProfitSharingInvestmentAccount”
OTC“OverTheCounter”
Bas
el II
Pill
ar 3
Dis
clos
ures
as a
t 31
Dec
embe
r 201
6A
ppen
dix
I223
ANNUAL REPORT 2016
Basel II Pillar 3 Disclosuresas at 31 December 2016
Disclosure on Capital Adequacy under the Standardised Approach (continued)
Market risk is defined as the risk of losses in on and off-balance sheet positions arising from movements in market prices. The Bank’s Capital-at-Risk (‘CaR’) is defined as the amount of the Bank’s capital that is exposed to the risk of unexpected losses arising particularly from movements in interest and foreign exchange rates. A CaR reference threshold is set as a management trigger to ensure that the Bank’s capital adequacy is not impinged upon in the event of adverse market movements. The Bank currently adopts BNM’s Standardised Approach for the computation of market risk capital charges. The market risk capital charge addresses among others, capital requirement for market risk which includes the interest rate risk in the Bank’s Trading Book as well as foreign exchange risk in the Trading and Banking Books.
The computation of market risk capital charge covers the following outstanding financial instruments:
a) Foreign Exchange (‘FX’)
b) Interest Rate Swap (‘IRS’)
c) Cross Currency Swap (‘CCS’)
d) Fixed Income Instruments (i.e. Corporate Bonds / Sukuk and Government Securities)
e) FX Options
The Bank’s Trading Book Policy Statement stipulates the policies and procedures for including or excluding exposures from the Trading Book for the purpose of calculating regulatory market risk capital.
Appendix I
AFFIN BANK BERHAD (25046-T)
224
Dis
clo
sure
on
Cre
dit
Ris
k: D
iscl
osu
res
on
Ris
k W
eig
hts
und
er t
he S
tand
ard
ised
Ap
pro
ach
(RM
’000
)
Gro
up20
16Ex
posu
res
afte
r Net
ting
and
Cred
it Ri
sk M
itiga
tion
Risk
W
eigh
ts
Sove
reig
ns
& C
entr
al
Bank
s PS
Es
Bank
s,
MDB
s an
d FD
Is
Insu
ranc
e Co
mpa
nies
, Se
curit
ies
Firm
s &
Fun
d M
anag
ers
Corp
orat
es
Regu
lato
ry
Reta
il Re
side
ntia
l M
ortg
ages
High
er
Risk
As
sets
Ot
her
Asse
ts
Spec
ialis
ed
Fina
ncin
g /
Inve
stm
ent
Secu
ritis
atio
n Eq
uity
Tota
l Ex
posu
re
afte
r Ne
tting
&
Cred
it Ri
sk
Miti
gatio
n
Tota
l Ris
k W
eigh
ted
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ts
0%7,
339,
819
-
213
,631
-
2,
204,
247
-
-
-
1,91
3,99
0 -
-
-
11
,671
,687
-
10
%-
-
-
-
-
-
-
-
-
-
-
-
-
-
20%
51,
369
10
2,58
0,44
2 2
9,72
2 2,
342,
675
805
-
-
18
1,10
9 -
-
-
5,
186,
132
1,03
7,22
6 35
% -
-
-
-
-
-
4,
694,
295
-
-
-
-
-
4,69
4,29
5 1,
643,
003
50%
-
-
1,35
9,92
8 -
3
56,8
78
1,1
90
551
,612
9
,051
-
-
-
-
2,
278,
659
1,13
9,32
9 75
% -
-
-
-
-
13
,429
,685
1
3,86
5 -
-
-
-
-
13
,443
,550
10
,082
,663
90
% -
-
-
-
-
-
-
-
-
-
-
-
-
-
10
0% -
-
6
,686
3
00,4
29
22,5
70,3
99
128
,482
6
71,2
39
-
757
,831
-
-
1
9,90
2 24
,454
,968
24
,454
,968
11
0% -
-
-
-
-
-
-
-
-
-
-
-
-
-
12
5% -
-
-
-
-
-
-
-
-
-
-
-
-
-
13
5% -
-
-
-
-
-
-
-
-
-
-
-
-
-
15
0% -
-
4
,852
-
1,
243,
109
136
,994
1
21,4
25
207
,948
-
-
-
-
1,
714,
328
2,57
1,49
2 27
0% -
-
-
-
-
-
-
-
-
-
-
-
-
-
35
0% -
-
-
-
-
-
-
-
-
-
-
-
-
-
40
0% -
-
-
-
-
-
-
-
-
-
-
-
-
-
62
5% -
-
-
-
-
-
-
-
-
-
-
-
-
-
93
8% -
-
-
-
-
-
-
-
-
-
-
-
-
-
12
50%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Ave
rag
e R
isk
Wei
ght
-
-
-
Ded
ucti
on
fro
m
Cap
ital
B
ase
-
-
-
-
-
-
-
-
-
-
-
-
-
PSE“PublicSectorEntities”
MDB“MultilateralDevelopmentBanks”
FDI“FinancialDevelopmentInstitutions”
Bas
el II
Pill
ar 3
Dis
clos
ures
as a
t 31
Dec
embe
r 201
6A
ppen
dix
II225
ANNUAL REPORT 2016
Dis
clo
sure
on
Cre
dit
Ris
k: D
iscl
osu
res
on
Ris
k W
eig
hts
und
er t
he S
tand
ard
ised
Ap
pro
ach
(RM
’000
) (co
ntin
ued
)
Gro
up20
15Ex
posu
res
afte
r Net
ting
and
Cred
it Ri
sk M
itiga
tion
Risk
Wei
ghts
Sove
reig
ns
& Ce
ntra
l Ba
nks
PSEs
Ba
nks,
MDB
s an
d FD
Is
Insu
ranc
e Co
mpa
nies
, Se
curit
ies
Firm
s &
Fund
M
anag
ers
Corp
orat
es
Regu
lato
ry
Reta
il Re
side
ntia
l M
ortg
ages
Hi
gher
Ris
k As
sets
Ot
her A
sset
s
Spec
ialis
ed
Fina
ncin
g /
Inve
stm
ent
Secu
ritis
atio
n Eq
uity
Tota
l Ex
posu
re
afte
r Ne
tting
&
Cred
it Ri
sk
Miti
gatio
n
Tota
l Ris
k W
eigh
ted
Asse
ts
0% 6
,335
,218
-
2
13,5
18
-
2,5
07,2
53
-
-
-
2,0
54,9
69
-
-
-
11,1
10,9
58
-
10%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
20%
80,
265
1,6
10
2,0
46,1
39
29,
609
3,1
84,3
08
760
-
-
5
92,1
63
-
-
-
5,9
34,8
54
1,1
86,9
71
35%
-
-
-
-
-
-
4,4
28,9
37
-
-
-
-
-
4,4
28,9
37
1,5
50,1
28
50%
-
-
1,8
13,8
02
-
747
,158
2
,230
3
54,5
37
-
-
-
-
-
2,9
17,7
27
1,4
58,8
64
75%
-
-
-
-
-
13,4
98,3
51
10,
106
-
-
-
-
-
13,5
08,4
57
10,1
31,3
42
90%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100%
-
-
4,2
25
379
,455
21
,929
,025
9
6,66
7 3
19,2
44
-
746
,507
-
-
2
3,43
9 23
,498
,562
23
,498
,561
11
0% -
-
-
-
-
-
-
-
-
-
-
-
-
-
12
5% -
-
-
-
-
-
-
-
-
-
-
-
-
-
13
5% -
-
-
-
-
-
-
-
-
-
-
-
-
-
15
0% -
-
-
-
8
10,1
03
176
,220
1
03,4
78
203
,669
-
-
-
-
1
,293
,470
1
,940
,206
27
0% -
-
-
-
-
-
-
-
-
-
-
-
-
-
35
0% -
-
-
-
-
-
-
-
-
-
-
-
-
-
40
0% -
-
-
-
-
-
-
-
-
-
-
-
-
-
62
5% -
-
-
-
-
-
-
-
-
-
-
-
-
-
93
8% -
-
-
-
-
-
-
-
-
-
-
-
-
-
12
50%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Ave
rage
R
isk
Wei
ght
-
-
-
Ded
uctio
n fro
m
Cap
ital
Bas
e
-
-
-
-
-
-
-
-
-
-
-
-
-
PSE“PublicSectorEntities”
MDB“MultilateralDevelopmentBanks”
FDI“FinancialDevelopmentInstitutions”
Bas
el II
Pill
ar 3
Dis
clos
ures
as a
t 31
Dec
embe
r 201
6A
ppen
dix
II
AFFIN BANK BERHAD (25046-T)
226
Dis
clo
sure
on
Cre
dit
Ris
k: D
iscl
osu
res
on
Ris
k W
eig
hts
und
er t
he S
tand
ard
ised
Ap
pro
ach
(RM
’000
) (co
ntin
ued
)
Ban
k20
16Ex
posu
res
afte
r Net
ting
and
Cred
it Ri
sk M
itiga
tion
Risk
W
eigh
ts
Sove
reig
ns
& C
entr
al
Bank
s PS
Es
Bank
s,
MDB
s an
d FD
Is
Insu
ranc
e Co
mpa
nies
, Se
curit
ies
Firm
s &
Fun
d M
anag
ers
Corp
orat
es
Regu
lato
ry
Reta
il Re
side
ntia
l M
ortg
ages
High
er
Risk
As
sets
Ot
her
Asse
ts
Spec
ialis
ed
Fina
ncin
g /
Inve
stm
ent
Secu
ritis
atio
n Eq
uity
Tota
l Ex
posu
re
afte
r Ne
tting
&
Cred
it Ri
sk
Miti
gatio
n
Tota
l Ris
k W
eigh
ted
Asse
ts
0% 5
,334
,682
-
1
93,8
90
-
1,7
23,5
68
-
-
-
1,5
22,7
76
-
-
-
8,7
74,9
16
-
10%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
20%
3,9
53
10
2,5
56,4
36
29,
722
1,8
38,1
20
805
-
-
3
73,1
11
-
-
-
4,8
02,1
57
960
,431
35
% -
-
-
-
-
-
2
,716
,549
-
-
-
-
-
2
,716
,549
9
50,7
92
50%
-
-
1,3
59,9
28
-
197
,597
1
,190
2
20,6
85
-
-
-
-
-
1,7
79,4
00
889
,700
75
% -
-
-
-
-
9
,963
,087
1
3,57
6 -
-
-
-
-
9
,976
,663
7
,482
,498
90
% -
-
-
-
-
-
-
-
-
-
-
-
-
-
10
0% -
-
6
,686
3
00,3
64
18,8
30,6
97
123
,216
2
28,1
77
-
676
,929
-
-
1
9,90
2 20
,185
,971
20
,185
,971
11
0% -
-
-
-
-
-
-
-
-
-
-
-
-
-
12
5% -
-
-
-
-
-
-
-
-
-
-
-
-
-
13
5% -
-
-
-
-
-
-
-
-
-
-
-
-
-
15
0% -
-
4
,852
-
1
,163
,476
1
24,8
15
92,
227
194
,051
-
-
-
-
1
,579
,421
2
,369
,131
27
0% -
-
-
-
-
-
-
-
-
-
-
-
-
-
35
0% -
-
-
-
-
-
-
-
-
-
-
-
-
-
40
0% -
-
-
-
-
-
-
-
-
-
-
-
-
-
62
5% -
-
-
-
-
-
-
-
-
-
-
-
-
-
93
8% -
-
-
-
-
-
-
-
-
-
-
-
-
-
12
50%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Ave
rag
e R
isk
Wei
ght
-
-
-
Ded
ucti
on
fro
m
Cap
ital
B
ase
-
-
-
-
-
-
-
-
-
-
-
-
-
PSE“PublicSectorEntities”
MDB“MultilateralDevelopmentBanks”
FDI“FinancialDevelopmentInstitutions”
Bas
el II
Pill
ar 3
Dis
clos
ures
as a
t 31
Dec
embe
r 201
6A
ppen
dix
II227
ANNUAL REPORT 2016
Dis
clo
sure
on
Cre
dit
Ris
k: D
iscl
osu
res
on
Ris
k W
eig
hts
und
er t
he S
tand
ard
ised
Ap
pro
ach
(RM
’000
) (co
ntin
ued
)
Ban
k20
15Ex
posu
res
afte
r Net
ting
and
Cred
it Ri
sk M
itiga
tion
Risk
Wei
ghts
Sove
reig
ns
& Ce
ntra
l Ba
nks
PSEs
Ba
nks,
MDB
s an
d FD
Is
Insu
ranc
e Co
mpa
nies
, Se
curit
ies
Firm
s &
Fund
M
anag
ers
Corp
orat
es
Regu
lato
ry
Reta
il Re
side
ntia
l M
ortg
ages
Hi
gher
Ris
k As
sets
Ot
her A
sset
s
Spec
ialis
ed
Fina
ncin
g /
Inve
stm
ent
Secu
ritis
atio
n Eq
uity
Tota
l Ex
posu
re
afte
r Ne
tting
&
Cred
it Ri
sk
Miti
gatio
n
Tota
l Ris
k W
eigh
ted
Asse
ts
0% 3
,540
,329
-
1
93,8
95
-
2,2
36,9
99
-
-
-
1,7
53,9
12
-
-
-
7,7
25,1
35
-
10%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
20%
20,
580
1,6
10
2,0
40,7
53
29,
609
2,5
84,0
63
760
-
-
5
84,4
85
-
-
-
5,2
61,8
60
1,0
52,3
72
35%
-
-
-
-
-
-
2,7
93,8
50
-
-
-
-
-
2,7
93,8
50
977
,848
50
% -
-
1
,813
,802
-
7
21,3
98
1,6
22
152
,128
-
-
-
-
-
2
,688
,950
1
,344
,475
75
% -
-
-
-
-
10
,583
,478
9
,861
-
-
-
-
-
10
,593
,339
7
,945
,005
90
% -
-
-
-
-
-
-
-
-
-
-
-
-
-
10
0% -
-
4
,225
3
79,4
55
18,9
90,3
69
92,
701
168
,051
-
6
78,3
54
-
-
23,
439
20,3
36,5
94
20,3
36,5
93
110%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
125%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
135%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
150%
-
-
-
-
792
,150
1
61,9
71
77,
027
196
,808
-
-
-
-
1
,227
,956
1
,841
,934
27
0% -
-
-
-
-
-
-
-
-
-
-
-
-
-
35
0% -
-
-
-
-
-
-
-
-
-
-
-
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-
40
0% -
-
-
-
-
-
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-
-
-
-
-
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-
62
5% -
-
-
-
-
-
-
-
-
-
-
-
-
-
93
8% -
-
-
-
-
-
-
-
-
-
-
-
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-
12
50%
-
-
-
-
-
-
-
-
-
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-
Ave
rage
R
isk
Wei
ght
-
-
-
Ded
uctio
n fro
m
Cap
ital
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e
-
-
-
-
-
-
-
-
-
-
-
-
-
PSE“PublicSectorEntities”
MDB“MultilateralDevelopmentBanks”
FDI“FinancialDevelopmentInstitutions”
Bas
el II
Pill
ar 3
Dis
clos
ures
as a
t 31
Dec
embe
r 201
6A
ppen
dix
II
AFFIN BANK BERHAD (25046-T)
228
(i)
Dis
clo
sure
s o
n R
ated
Exp
osu
res
acco
rdin
g t
o R
atin
gs
by
EC
AIs
(RM
’000
)
G
roup
20
16
Exp
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lass
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f C
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vest
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nrat
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heet
Exp
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Cre
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tor
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ities
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licab
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titie
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k w
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r ex
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-
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5 In
sura
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, Sec
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irms
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Man
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-
3
30,1
51
Cor
pora
tes
1,0
38,6
75
246
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-
-
2
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9 To
tal
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38,6
75
246
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-
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roup
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15
Exp
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Rat
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Insu
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e C
os, S
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ities
Firm
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d M
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ers
-
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411
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C
orpo
rate
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-
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Tota
l 1
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5
31,8
97
-
-
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042,
935
Bas
el II
Pill
ar 3
Dis
clos
ures
as a
t 31
Dec
embe
r 201
6A
ppen
dix
III229
ANNUAL REPORT 2016
(i)
Dis
clo
sure
s o
n R
ated
Exp
osu
res
acco
rdin
g t
o R
atin
gs
by
EC
AIs
(RM
’000
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ntin
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)
B
ank
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16
Exp
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lass
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s o
f C
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titie
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k w
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gs a
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5 In
sura
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Cos
, Sec
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irms
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Man
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-
-
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86
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pora
tes
804
,331
1
55,5
80
-
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055,
926
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l 8
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31
155
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ank
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15
Exp
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411
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C
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s 7
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tal
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5
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97
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-
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921
Bas
el II
Pill
ar 3
Dis
clos
ures
as a
t 31
Dec
embe
r 201
6A
ppen
dix
III
AFFIN BANK BERHAD (25046-T)
230
(ii)
Dis
clo
sure
s o
n R
ated
Exp
osu
res
acco
rdin
g t
o R
atin
gs
by
EC
AIs
(RM
’000
) (co
ntin
ued
)
G
roup
20
16
Exp
osu
re C
lass
Rat
ing
s o
f S
ove
reig
ns a
nd C
entr
al B
anks
by
Ap
pro
ved
EC
AIs
Mo
od
ysA
aa t
o A
a3A
1 to
A3
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1 to
Baa
3B
a1 t
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3C
aa1
to C
Unr
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PA
AA
to
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nrat
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hA
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Inc
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ated
On
and
Off
-Bal
ance
-She
et E
xpo
sure
s
Sov
erei
gns
and
Cen
tral
Ban
ks -
7
,391
,986
-
-
-
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Tota
l -
7
,391
,986
-
-
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Exp
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Rat
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f B
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stit
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sure
s
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ks, M
DB
s an
d FD
Is 1
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6
28,4
91
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82
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86
4,8
52
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11,3
09
Tota
l 1
,611
,619
6
28,4
91
2,5
82
6,6
86
4,8
52
1,9
11,3
09
Bas
el II
Pill
ar 3
Dis
clos
ures
as a
t 31
Dec
embe
r 201
6A
ppen
dix
III231
ANNUAL REPORT 2016
(ii)
Dis
clo
sure
s o
n R
ated
Exp
osu
res
acco
rdin
g t
o R
atin
gs
by
EC
AIs
(RM
’000
) (co
ntin
ued
)
G
roup
20
15
Exp
osur
e C
lass
Rat
ings
of S
over
eign
s an
d C
entr
al B
anks
by
App
rove
d E
CA
Is
Moo
dys
Aaa
to A
a3A
1 to
A3
Baa
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Baa
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B3
Caa
1 to
CU
nrat
ed
S&
PA
AA
to A
A-
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+ to
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B-
BB
+ to
B-
CC
C+
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hA
AA
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BB
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CC
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Inve
stm
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BB
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CC
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ated
On
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Off-
Bal
ance
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et E
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ures
Sov
erei
gns
and
Cen
tral
Ban
ks -
6
,415
,487
-
-
-
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Tota
l -
6
,415
,487
-
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ks, M
DB
s an
d FD
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26,8
53
526
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1
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2 5
6,76
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2
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Tota
l 6
26,8
53
526
,513
1
1,42
2 5
6,76
3 -
2
,856
,133
Bas
el II
Pill
ar 3
Dis
clos
ures
as a
t 31
Dec
embe
r 201
6A
ppen
dix
III
AFFIN BANK BERHAD (25046-T)
232
(ii)
Dis
clo
sure
s o
n R
ated
Exp
osu
res
acco
rdin
g t
o R
atin
gs
by
EC
AIs
(RM
’000
) (co
ntin
ued
)
B
ank
20
16
Exp
osu
re C
lass
Rat
ing
s o
f S
ove
reig
ns a
nd C
entr
al B
anks
by
Ap
pro
ved
EC
AIs
Mo
od
ysA
aa t
o A
a3A
1 to
A3
Baa
1 to
Baa
3B
a1 t
o B
3C
aa1
to C
Unr
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S&
PA
AA
to
AA
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+ t
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nrat
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hA
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Inc
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On
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Off
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gns
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Cen
tral
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ks -
5
,339
,434
-
-
-
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Tota
l -
5
,339
,434
-
-
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Exp
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re C
lass
Rat
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f B
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ng In
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ns b
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rove
d E
CA
Is
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Unr
ated
On
and
Off
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ance
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et E
xpo
sure
s
Ban
ks, M
DB
s an
d FD
Is 1
,599
,205
6
28,4
91
2,5
82
6,6
86
4,8
52
1,8
79,9
76
Tota
l 1
,599
,205
6
28,4
91
2,5
82
6,6
86
4,8
52
1,8
79,9
76
Bas
el II
Pill
ar 3
Dis
clos
ures
as a
t 31
Dec
embe
r 201
6A
ppen
dix
III233
ANNUAL REPORT 2016
(ii)
Dis
clo
sure
s o
n R
ated
Exp
osu
res
acco
rdin
g t
o R
atin
gs
by
EC
AIs
(RM
’000
) (co
ntin
ued
)
B
ank
20
15
Exp
osur
e C
lass
Rat
ings
of S
over
eign
s an
d C
entr
al B
anks
by
App
rove
d E
CA
Is
Moo
dys
Aaa
to A
a3A
1 to
A3
Baa
1 to
Baa
3B
a1 to
B3
Caa
1 to
CU
nrat
ed
S&
PA
AA
to A
A-
A+
to A
-B
BB
+ to
BB
B-
BB
+ to
B-
CC
C+
to D
Unr
ated
Fitc
hA
AA
to A
A-
A+
to A
-B
BB
+ to
BB
B-
BB
+ to
B-
CC
C+
to D
Unr
ated
Rat
ing
&
Inve
stm
ent I
ncA
AA
to A
A-
A+
to A
-B
BB
+ to
BB
B-
BB
+ to
B-
CC
C+
to C
Unr
ated
On
and
Off-
Bal
ance
-She
et E
xpos
ures
Sov
erei
gns
and
Cen
tral
Ban
ks -
3
,560
,913
-
-
-
-
Tota
l -
3
,560
,913
-
-
-
-
Exp
osur
e C
lass
Rat
ings
of B
anki
ng In
stitu
tions
by
App
rove
d E
CA
Is
Moo
dys
Aaa
to A
a3A
1 to
A3
Baa
1 to
Baa
3B
a1 to
B3
Caa
1 to
CU
nrat
ed
S&
PA
AA
to A
A-
A+
to A
-B
BB
+ to
BB
B-
BB
+ to
B-
CC
C+
to D
Unr
ated
Fitc
hA
AA
to A
A-
A+
to A
-B
BB
+ to
BB
B-
BB
+ to
B-
CC
C+
to D
Unr
ated
RA
MA
AA
to A
A3-
A1
to A
3B
BB
1+ to
BB
B3
BB
1 to
B3
C1+
to D
Unr
ated
MA
RC
AA
A to
AA
-A
+ to
A-
BB
B+
to B
BB
-B
B+
to B
-C
+ to
DU
nrat
ed
Rat
ing
&
Inve
stm
ent I
ncA
AA
to A
A-
A+
to A
-B
BB
+ to
BB
B-
BB
+ to
B-
CC
C+
to C
Unr
ated
On
and
Off-
Bal
ance
-She
et E
xpos
ures
Ban
ks, M
DB
s an
d FD
Is 6
21,5
43
526
,513
1
1,42
2 5
6,76
3 -
2
,836
,434
Tota
l 6
21,5
43
526
,513
1
1,42
2 5
6,76
3 -
2
,836
,434
Bas
el II
Pill
ar 3
Dis
clos
ures
as a
t 31
Dec
embe
r 201
6A
ppen
dix
III
AFFIN BANK BERHAD (25046-T)
234
a)
Dis
clo
sure
s o
n C
red
it R
isk
Mit
igat
ion
(RM
’000
)
G
roup
20
16
Exp
osu
re C
lass
Exp
osu
res
bef
ore
CR
M
Exp
osu
res
Co
vere
d b
y G
uara
ntee
s/C
red
it
Der
ivat
ives
Exp
osu
res
Co
vere
d
by
Elig
ible
Fi
nanc
ial
Co
llate
ral
Exp
osu
res
Co
vere
d b
y O
ther
Elig
ible
C
olla
tera
l
Cre
dit
Ris
k
On-
Bal
ance
She
et E
xpo
sure
s
Sov
erei
gns/
Cen
tral
Ban
ks 7
,299
,495
-
-
-
Ban
ks, D
evel
opm
ent F
inan
cial
Inst
itutio
ns &
MD
Bs
3,8
86,8
03
-
-
-
Insu
ranc
e C
os, S
ecur
ities
Firm
s &
Fun
d M
anag
ers
311
,931
-
-
-
Cor
pora
tes
24,
934,
627
57,
602
1,1
39,9
80
-
Reg
ulat
ory
Ret
ail
13,
510,
768
710
2
62,0
61
-
Res
iden
tial M
ortg
ages
5,8
52,5
10
-
31,
768
-
Hig
her
Ris
k A
sset
s 2
11,9
86
9,0
51
457
-
Oth
er A
sset
s 2
,852
,930
-
-
-
Equ
ity E
xpos
ure
19,
902
-
-
-
Def
aulte
d E
xpos
ures
1,6
57,5
38
95
39,
962
-
Tota
l fo
r O
n-B
alan
ce S
heet
Exp
osu
res
60,
538,
490
67,
458
1,4
74,2
28
-
Off
-Bal
ance
She
et E
xpo
sure
s
Off-
Bal
ance
She
et e
xpos
ures
oth
er th
an O
TC d
eriv
ativ
es o
r cr
edit
deriv
ativ
es 4
,322
,780
-
1
5 -
Def
aulte
d E
xpos
ures
46,
818
-
-
-
Tota
l fo
r O
ff-B
alan
ce S
heet
Exp
osu
res
4,3
69,5
98
-
15
-
Tota
l On
and
Off
-Bal
ance
She
et E
xpo
sure
s 6
4,90
8,08
8 6
7,45
8 1
,474
,243
-
Bas
el II
Pill
ar 3
Dis
clos
ures
as a
t 31
Dec
embe
r 201
6A
ppen
dix
IV235
ANNUAL REPORT 2016
a)
Dis
clo
sure
s o
n C
red
it R
isk
Mit
igat
ion
(RM
’000
) (co
ntin
ued
)
G
roup
20
15
Exp
osur
e C
lass
Exp
osur
es
befo
re C
RM
Exp
osur
es
Cov
ered
by
Gua
rant
ees/
Cre
dit
Der
ivat
ives
Exp
osur
es
Cov
ered
by
Elig
ible
Fin
anci
al
Col
late
ral
Exp
osur
es
Cov
ered
by
Oth
er E
ligib
le
Col
late
ral
Cre
dit R
isk
On-
Bal
ance
She
et E
xpos
ures
Sov
erei
gns/
Cen
tral
Ban
ks 6
,297
,843
-
3
-
Ban
ks, D
evel
opm
ent F
inan
cial
Inst
itutio
ns &
MD
Bs
3,7
57,9
58
-
-
-
Insu
ranc
e C
os, S
ecur
ities
Firm
s &
Fun
d M
anag
ers
395
,268
-
2
,165
-
Cor
pora
tes
25,
813,
553
129
,448
1
,055
,450
-
Reg
ulat
ory
Ret
ail
13,
493,
458
666
1
86,7
56
-
Res
iden
tial M
ortg
ages
5,0
14,7
62
-
28,
200
-
Hig
her
Ris
k A
sset
s 1
97,9
93
-
-
-
Oth
er A
sset
s 3
,393
,598
-
-
-
Equ
ity E
xpos
ure
23,
439
-
-
-
Def
aulte
d E
xpos
ures
1,2
76,9
75
95
24,
918
-
Tota
l for
On-
Bal
ance
She
et E
xpos
ures
59,
664,
847
130
,209
1
,297
,492
-
Off-
Bal
ance
She
et E
xpos
ures
Off-
Bal
ance
She
et e
xpos
ures
oth
er th
an O
TC d
eriv
ativ
es o
r cr
edit
deriv
ativ
es 4
,274
,047
-
1
5 -
Def
aulte
d E
xpos
ures
50,
013
-
-
-
Tota
l for
Off-
Bal
ance
She
et E
xpos
ures
4,3
24,0
60
-
15
-
Tota
l On
and
Off-
Bal
ance
She
et E
xpos
ures
63,
988,
907
130
,209
1
,297
,507
-
Bas
el II
Pill
ar 3
Dis
clos
ures
as a
t 31
Dec
embe
r 201
6A
ppen
dix
IV
AFFIN BANK BERHAD (25046-T)
236
a)
Dis
clo
sure
s o
n C
red
it R
isk
Mit
igat
ion
(RM
’000
) (co
ntin
ued
)
B
ank
20
16
Exp
osu
re C
lass
Exp
osu
res
bef
ore
CR
M
Exp
osu
res
Co
vere
d b
y G
uara
ntee
s/C
red
it
Der
ivat
ives
Exp
osu
res
Co
vere
d
by
Elig
ible
Fi
nanc
ial
Co
llate
ral
Exp
osu
res
Co
vere
d b
y O
ther
Elig
ible
C
olla
tera
l
Cre
dit
Ris
k
On-
Bal
ance
She
et E
xpo
sure
s
Sov
erei
gns/
Cen
tral
Ban
ks 5
,334
,682
-
-
-
Ban
ks, D
evel
opm
ent F
inan
cial
Inst
itutio
ns &
MD
Bs
3,8
66,9
95
-
-
-
Insu
ranc
e C
os, S
ecur
ities
Firm
s &
Fun
d M
anag
ers
311
,866
-
-
-
Cor
pora
tes
20,
517,
217
3,9
70
1,0
49,4
29
-
Reg
ulat
ory
Ret
ail
10,
069,
033
710
2
41,3
26
-
Res
iden
tial M
ortg
ages
3,1
11,0
99
-
21,
308
-
Hig
her
Ris
k A
sset
s 1
88,9
84
-
-
-
Oth
er A
sset
s 2
,572
,816
-
-
-
Equ
ity E
xpos
ure
19,
902
-
-
-
Def
aulte
d E
xpos
ures
1,5
09,6
18
95
36,
592
-
Tota
l fo
r O
n-B
alan
ce S
heet
Exp
osu
res
47,
502,
212
4,7
75
1,3
48,6
55
-
Off
-Bal
ance
She
et E
xpo
sure
s
Off-
Bal
ance
She
et e
xpos
ures
oth
er th
an O
TC d
eriv
ativ
es o
r cr
edit
deriv
ativ
es 3
,629
,653
-
1
5 -
Def
aulte
d E
xpos
ures
31,
882
-
-
-
Tota
l fo
r O
ff-B
alan
ce S
heet
Exp
osu
res
3,6
61,5
35
-
15
-
Tota
l On
and
Off
-Bal
ance
She
et E
xpo
sure
s 5
1,16
3,74
7 4
,775
1
,348
,670
-
Bas
el II
Pill
ar 3
Dis
clos
ures
as a
t 31
Dec
embe
r 201
6A
ppen
dix
IV237
ANNUAL REPORT 2016
a)
Dis
clo
sure
s o
n C
red
it R
isk
Mit
igat
ion
(RM
’000
) (co
ntin
ued
)
B
ank
20
15
Exp
osur
e C
lass
Exp
osur
es
befo
re C
RM
Exp
osur
es
Cov
ered
by
Gua
rant
ees/
Cre
dit
Der
ivat
ives
Exp
osur
es
Cov
ered
by
Elig
ible
Fin
anci
al
Col
late
ral
Exp
osur
es
Cov
ered
by
Oth
er E
ligib
le
Col
late
ral
Cre
dit R
isk
On-
Bal
ance
She
et E
xpos
ures
Sov
erei
gns/
Cen
tral
Ban
ks 3
,560
,909
-
3
-
Ban
ks, D
evel
opm
ent F
inan
cial
Inst
itutio
ns &
MD
Bs
3,7
39,8
99
-
-
-
Insu
ranc
e C
os, S
ecur
ities
Firm
s &
Fun
d M
anag
ers
395
,268
-
2
,165
-
Cor
pora
tes
22,
142,
913
100
,488
7
76,1
91
-
Reg
ulat
ory
Ret
ail
10,
589,
267
666
1
65,0
93
-
Res
iden
tial M
ortg
ages
3,0
40,5
56
-
17,
665
-
Hig
her
Ris
k A
sset
s 1
91,6
48
-
-
-
Oth
er A
sset
s 3
,016
,751
-
-
-
Equ
ity E
xpos
ure
23,
439
-
-
-
Def
aulte
d E
xpos
ures
1,1
98,6
72
95
24,
918
-
Tota
l for
On-
Bal
ance
She
et E
xpos
ures
47,
899,
322
101
,249
9
86,0
35
-
Off-
Bal
ance
She
et E
xpos
ures
Off-
Bal
ance
She
et e
xpos
ures
oth
er th
an O
TC d
eriv
ativ
es o
r cr
edit
deriv
ativ
es 3
,674
,067
-
1
5 -
Def
aulte
d E
xpos
ures
40,
347
-
-
-
Tota
l for
Off-
Bal
ance
She
et E
xpos
ures
3,7
14,4
14
-
15
-
Tota
l On
and
Off-
Bal
ance
She
et E
xpos
ures
51,
613,
736
101
,249
9
86,0
50
-
Bas
el II
Pill
ar 3
Dis
clos
ures
as a
t 31
Dec
embe
r 201
6A
ppen
dix
IV
AFFIN BANK BERHAD (25046-T)
238
b)
Dis
clo
sure
on
Off
-Bal
ance
She
et a
nd C
oun
terp
arty
Cre
dit
Ris
k (R
M’0
00)
C
ount
erpa
rty
Cre
dit
Ris
k is
the
ris
k th
at t
he c
ount
erpa
rty
to a
tra
nsac
tion
coul
d de
faul
t be
fore
the
fina
l set
tlem
ent
of t
he t
rans
actio
n’s
cash
flow
s. A
n ec
onom
ic lo
ss c
ould
occ
ur if
the
tr
ansa
ctio
ns w
ith th
e co
unte
rpar
ty h
as a
pos
itive
eco
nom
ic v
alue
for
the
Ban
k at
the
time
of d
efau
lt.
In
con
tras
t to
the
expo
sure
to c
redi
t ris
k th
roug
h a
loan
, whe
re th
e ex
posu
re to
cre
dit r
isk
is u
nila
tera
l and
onl
y th
e le
ndin
g ba
nk fa
ces
the
risk
of lo
ss, C
ount
erpa
rty
Cre
dit R
isk
crea
tes
a bi
late
ral r
isk
of lo
ss w
here
the
mar
ket v
alue
for
man
y ty
pes
of tr
ansa
ctio
ns c
an b
e po
sitiv
e or
neg
ativ
e to
eith
er c
ount
erpa
rty.
In
res
pect
of
off-
bala
nce
shee
t ite
ms,
the
cre
dit
risk
inhe
rent
in e
ach
off-
bala
nce
shee
t in
stru
men
t is
tra
nsla
ted
into
an
on-b
alan
ce s
heet
exp
osur
e eq
uiva
lent
(cr
edit
equi
vale
nt)
by
mul
tiply
ing
the
nom
inal
prin
cipa
l am
ount
with
a c
redi
t con
vers
ion
fact
or (‘
CC
F’) a
s pr
escr
ibed
by
the
Sta
ndar
dise
d A
ppro
ach
unde
r the
Ris
k W
eigh
ted
Cap
ital A
dequ
acy
Fram
ewor
k. T
he
resu
lting
am
ount
is th
en w
eigh
ted
agai
nst t
he ri
sk w
eigh
t of t
he c
ount
erpa
rty.
In a
dditi
on, c
ount
erpa
rty
risk
wei
ghts
for o
ver-
the-
coun
ter (
‘OTC
’) de
rivat
ive
tran
sact
ions
will
be d
eter
min
ed
base
d on
the
exte
rnal
rat
ing
of th
e co
unte
rpar
ty a
nd w
ill no
t be
subj
ect t
o an
y sp
ecifi
c ce
iling.
G
roup
20
16
Des
crip
tio
nP
rinc
ipal
Am
oun
t
Po
siti
ve F
air
Valu
e o
f D
eriv
ativ
e C
ont
ract
sC
red
it E
qui
vale
nt
Am
oun
tR
isk
Wei
ght
ed
Am
oun
tD
irect
Cre
dit S
ubst
itute
s 4
23,5
65
423
,565
3
72,8
67
Tran
sact
ion
rela
ted
cont
inge
nt It
ems
2,2
52,9
24
1,1
26,4
62
1,0
71,9
60
Sho
rt T
erm
Sel
f Liq
uida
ting
trad
e re
late
d co
ntin
genc
ies
496
,339
9
9,26
8 4
1,34
1 Fo
reig
n ex
chan
ge re
late
d co
ntra
cts
O
ne y
ear
or le
ss 6
,667
,157
1
46,7
30
254
,057
1
80,4
66
O
ver
one
year
to fi
ve y
ears
383
,035
1
,532
2
7,97
0 9
,928
Ove
r fiv
e ye
ars
42,
485
1,4
42
9,6
66
1,9
33
Inte
rest
/Pro
fit r
ate
rela
ted
cont
ract
s
One
yea
r or
less
593
,125
2
,185
8
59
287
Ove
r on
e ye
ar to
five
yea
rs 1
,187
,148
5
,727
2
1,27
2 5
,532
Ove
r fiv
e ye
ars
830
,000
9
,688
6
0,46
2 1
5,67
6 O
ther
com
mitm
ents
, suc
h as
form
al s
tand
by fa
cilit
ies
and
cred
it lin
es, w
ith a
n or
igin
al
mat
urity
of o
ver
one
year
1,5
14,7
28
757
,364
7
27,7
77
Oth
er c
omm
itmen
ts, s
uch
as fo
rmal
sta
ndby
faci
litie
s an
d cr
edit
lines
, with
an
orig
inal
m
atur
ity o
f up
to o
ne y
ear
7,6
63,8
56
1,5
32,7
71
1,3
13,2
06
Any
com
mitm
ents
that
are
unc
ondi
tiona
lly c
ance
lled
at a
ny ti
me
by th
e ba
nk w
ithou
t pr
ior
notic
e or
that
effe
ctiv
ely
prov
ide
for
auto
mat
ic c
ance
llatio
n du
e to
det
erio
ratio
n in
a
borr
ower
's c
redi
twor
thin
ess
198
,586
-
-
U
nutil
ised
cre
dit c
ard
lines
230
,550
4
6,11
0 3
4,31
2 To
tal
22,
483,
498
167
,304
4
,359
,826
3
,775
,285
Bas
el II
Pill
ar 3
Dis
clos
ures
as a
t 31
Dec
embe
r 201
6A
ppen
dix
IV239
ANNUAL REPORT 2016
b)
Dis
clo
sure
on
Off
-Bal
ance
She
et a
nd C
oun
terp
arty
Cre
dit
Ris
k (R
M’0
00) (
cont
inue
d)
G
roup
20
15
Des
crip
tion
Prin
cipa
l Am
ount
Pos
itive
Fai
r Va
lue
of D
eriv
ativ
e C
ontr
acts
Cre
dit E
quiv
alen
t A
mou
ntR
isk
Wei
ghte
d A
mou
nt
Dire
ct C
redi
t Sub
stitu
tes
408
,318
4
08,3
18
384
,992
Tran
sact
ion
rela
ted
cont
inge
nt It
ems
2,0
27,9
54
1,0
13,9
77
946
,957
Sho
rt T
erm
Sel
f Liq
uida
ting
trad
e re
late
d co
ntin
genc
ies
470
,476
9
4,09
5 4
5,98
7
Fore
ign
exch
ange
rela
ted
cont
ract
s
O
ne y
ear
or le
ss 6
,497
,779
1
53,3
03
286
,022
1
80,5
35
O
ver
one
year
to fi
ve y
ears
421
,060
4
,402
4
3,29
1 1
7,53
6
Inte
rest
/Pro
fit r
ate
rela
ted
cont
ract
s
O
ne y
ear
or le
ss 6
52,1
16
3,4
30
2,2
61
617
O
ver
one
year
to fi
ve y
ears
1,6
12,0
23
8,0
10
33,
020
9,3
38
O
ver
five
year
s 5
97,0
00
4,8
92
46,
292
13,
237
Oth
er c
omm
itmen
ts, s
uch
as fo
rmal
sta
ndby
faci
litie
s an
d cr
edit
lines
, with
an
orig
inal
m
atur
ity o
f ove
r on
e ye
ar 1
,717
,325
8
58,6
63
770
,894
Oth
er c
omm
itmen
ts, s
uch
as fo
rmal
sta
ndby
faci
litie
s an
d cr
edit
lines
, with
an
orig
inal
m
atur
ity o
f up
to o
ne y
ear
7,4
94,4
53
1,4
98,8
91
1,2
87,3
90
Any
com
mitm
ents
that
are
unc
ondi
tiona
lly c
ance
lled
at a
ny ti
me
by th
e ba
nk w
ithou
t pr
ior
notic
e or
that
effe
ctiv
ely
prov
ide
for
auto
mat
ic c
ance
llatio
n du
e to
det
erio
ratio
n in
a
borr
ower
's c
redi
twor
thin
ess
215
,113
-
-
Unu
tilis
ed c
redi
t car
d lin
es 1
88,3
28
37,
666
28,
011
Tota
l 2
2,30
1,94
5 1
74,0
37
4,3
22,4
96
3,6
85,4
94
Bas
el II
Pill
ar 3
Dis
clos
ures
as a
t 31
Dec
embe
r 201
6A
ppen
dix
IV
AFFIN BANK BERHAD (25046-T)
240
b)
Dis
clo
sure
on
Off
-Bal
ance
She
et a
nd C
oun
terp
arty
Cre
dit
Ris
k (R
M’0
00) (
cont
inue
d)
B
ank
20
16
Des
crip
tio
nP
rinc
ipal
Am
oun
t
Po
siti
ve F
air
Valu
e o
f D
eriv
ativ
e C
ont
ract
sC
red
it E
qui
vale
nt
Am
oun
tR
isk
Wei
ght
ed
Am
oun
t
Dire
ct C
redi
t Sub
stitu
tes
390
,178
3
90,1
78
347
,390
Tran
sact
ion
rela
ted
cont
inge
nt It
ems
1,9
70,0
56
985
,028
9
26,8
04
Sho
rt T
erm
Sel
f Liq
uida
ting
trad
e re
late
d co
ntin
genc
ies
183
,789
3
6,75
8 2
3,80
8
Fore
ign
exch
ange
rela
ted
cont
ract
s
O
ne y
ear
or le
ss 7
,636
,993
1
45,6
66
253
,946
1
80,4
42
O
ver
one
year
to fi
ve y
ears
383
,035
1
,532
2
7,97
0 9
,928
O
ver
five
year
s 4
2,48
5 1
,442
9
,666
1
,933
Inte
rest
/Pro
fit r
ate
rela
ted
cont
ract
s
O
ne y
ear
or le
ss 5
93,1
25
2,1
85
859
2
87
O
ver
one
year
to fi
ve y
ears
1,1
87,1
48
5,7
27
21,
272
5,5
32
O
ver
five
year
s 8
30,0
00
9,6
88
60,
462
15,
676
Oth
er c
omm
itmen
ts, s
uch
as fo
rmal
sta
ndby
faci
litie
s an
d cr
edit
lines
, with
an
orig
inal
m
atur
ity o
f ove
r on
e ye
ar 1
,044
,742
5
22,3
71
501
,319
Oth
er c
omm
itmen
ts, s
uch
as fo
rmal
sta
ndby
faci
litie
s an
d cr
edit
lines
, with
an
orig
inal
m
atur
ity o
f up
to o
ne y
ear
6,5
34,5
78
1,3
06,9
16
1,1
76,4
16
Any
com
mitm
ents
that
are
unc
ondi
tiona
lly c
ance
lled
at a
ny ti
me
by th
e ba
nk w
ithou
t pr
ior
notic
e or
that
effe
ctiv
ely
prov
ide
for
auto
mat
ic c
ance
llatio
n du
e to
det
erio
ratio
n in
a
borr
ower
's c
redi
twor
thin
ess
159
,049
-
-
Unu
tilis
ed c
redi
t car
d lin
es 2
30,5
50
46,
110
34,
312
Tota
l 2
1,18
5,72
8 1
66,2
40
3,6
61,5
36
3,2
23,8
47
Bas
el II
Pill
ar 3
Dis
clos
ures
as a
t 31
Dec
embe
r 201
6A
ppen
dix
IV241
ANNUAL REPORT 2016
b)
Dis
clo
sure
on
Off
-Bal
ance
She
et a
nd C
oun
terp
arty
Cre
dit
Ris
k (R
M’0
00) (
cont
inue
d)
B
ank
20
15
Des
crip
tion
Prin
cipa
l Am
ount
Pos
itive
Fai
r Va
lue
of D
eriv
ativ
e C
ontr
acts
Cre
dit E
quiv
alen
t A
mou
ntR
isk
Wei
ghte
d A
mou
nt
Dire
ct C
redi
t Sub
stitu
tes
398
,935
3
98,9
35
375
,608
Tran
sact
ion
rela
ted
cont
inge
nt It
ems
1,8
79,9
94
939
,997
8
72,5
58
Sho
rt T
erm
Sel
f Liq
uida
ting
trad
e re
late
d co
ntin
genc
ies
101
,909
2
0,38
2 2
0,12
4
Fore
ign
exch
ange
rela
ted
cont
ract
s
O
ne y
ear
or le
ss 6
,665
,166
1
54,0
11
286
,689
1
80,4
67
O
ver
one
year
to fi
ve y
ears
421
,060
4
,402
4
3,29
1 1
7,53
6
Inte
rest
/Pro
fit r
ate
rela
ted
cont
ract
s
O
ne y
ear
or le
ss 6
52,1
16
3,4
30
2,2
61
617
O
ver
one
year
to fi
ve y
ears
1,6
12,0
23
8,0
10
33,
020
9,3
38
O
ver
five
year
s 5
97,0
00
4,8
92
46,
292
13,
237
Oth
er c
omm
itmen
ts, s
uch
as fo
rmal
sta
ndby
faci
litie
s an
d cr
edit
lines
, with
an
orig
inal
m
atur
ity o
f ove
r on
e ye
ar 1
,368
,917
6
84,4
59
599
,595
Oth
er c
omm
itmen
ts, s
uch
as fo
rmal
sta
ndby
faci
litie
s an
d cr
edit
lines
, with
an
orig
inal
m
atur
ity o
f up
to o
ne y
ear
6,1
07,1
15
1,2
21,4
23
1,1
06,5
67
Any
com
mitm
ents
that
are
unc
ondi
tiona
lly c
ance
lled
at a
ny ti
me
by th
e ba
nk w
ithou
t pr
ior
notic
e or
that
effe
ctiv
ely
prov
ide
for
auto
mat
ic c
ance
llatio
n du
e to
det
erio
ratio
n in
a
borr
ower
's c
redi
twor
thin
ess
199
,792
-
-
Unu
tilis
ed c
redi
t car
d lin
es 1
88,3
28
37,
666
28,
011
Tota
l 2
0,19
2,35
5 1
74,7
45
3,7
14,4
15
3,2
23,6
58
Bas
el II
Pill
ar 3
Dis
clos
ures
as a
t 31
Dec
embe
r 201
6A
ppen
dix
IV
AFFIN BANK BERHAD (25046-T)
242
c)
Dis
clo
sure
s o
n M
arke
t R
isk
- In
tere
st R
ate
Ris
k/R
ate
of
Ret
urn
Ris
k in
the
Ban
king
Bo
ok
In
tere
st r
ate
risk
is t
he r
isk
to e
arni
ngs
and
capi
tal a
risin
g fro
m e
xpos
ure
to a
dver
se m
ovem
ents
in in
tere
st r
ates
mai
nly
due
to m
ism
atch
es in
tim
ing
repr
icin
g of
ass
ets
and
liabi
litie
s.
Thes
e m
ism
atch
es a
re a
ctiv
ely
man
aged
from
an
earn
ings
and
eco
nom
ic v
alue
per
spec
tive.
Th
e ob
ject
ive
of in
tere
st r
ate
risk
man
agem
ent i
s to
ach
ieve
a s
tabl
e an
d su
stai
nabl
e ne
t int
eres
t inc
ome
from
the
follo
win
g pe
rspe
ctiv
es:
(1
) Nex
t 12
mon
ths’
Ear
ning
s -
Inte
rest
rat
e ris
k fro
m t
he e
arni
ngs
pers
pect
ive
is t
he im
pact
bas
ed o
n ch
ange
s to
the
net
inte
rest
inco
me
(‘NII’
) ove
r th
e ne
xt 1
2 m
onth
s. T
his
risk
is
mea
sure
d th
roug
h se
nsiti
vity
ana
lysi
s in
clud
ing
the
appl
icat
ion
of a
n in
stan
tane
ous
100
basi
s po
int p
aral
lel s
hock
in in
tere
st r
ates
acr
oss
the
yiel
d cu
rve.
(2
) E
cono
mic
Val
ue -
Mea
surin
g th
e ch
ange
in t
he e
cono
mic
val
ue o
f eq
uity
(‘E
VE
’) is
an
asse
ssm
ent
of t
he lo
ng t
erm
impa
ct t
o th
e B
ank’
s ca
pita
l. Th
is is
ass
esse
d th
roug
h th
e ap
plic
atio
n of
rele
vant
dur
atio
n fa
ctor
s to
cap
ture
the
net e
cono
mic
val
ue im
pact
ove
r th
e lo
ng te
rm o
r to
tal l
ife o
f all
bala
nce
shee
t ass
ets
and
liabi
litie
s to
adv
erse
cha
nges
in in
tere
st
rate
s.
In
tere
st r
ate
risk
thre
shol
ds a
re e
stab
lishe
d in
line
with
the
Gro
up’s
str
ateg
y an
d ris
k ap
petit
e. T
hese
thr
esho
lds
are
revi
ewed
reg
ular
ly t
o en
sure
rel
evan
ce in
the
con
text
of p
reva
iling
mar
ket c
ondi
tions
.
20
16
Typ
e o
f C
urre
ncy
(RM
mill
ion)
Gro
upB
ank
Imp
act
on
Po
siti
ons
(100
bas
is p
oin
ts)
Par
alle
l Shi
ftIm
pac
t o
n P
osi
tio
ns (1
00 b
asis
po
ints
) P
aral
lel S
hift
Incr
ease
/(D
eclin
e)
in E
arni
ngs
Incr
ease
/(D
eclin
e)
in E
cono
mic
Val
ueIn
crea
se/(
Dec
line)
in
Ear
ning
sIn
crea
se/(
Dec
line)
in
Eco
nom
ic V
alue
Rin
ggit
Mal
aysi
a (4
3.2)
355
.5
(30.
0) 2
63.6
US
Dol
lar
11.
2 8
.7
12.
0 8
.7
Eur
o (2
.0)
0.1
(2
.0)
0.1
Gre
at B
ritai
n P
ound
(0.1
) -
(0
.1)
-
Aus
tral
ian
Dol
lar
(0.1
) -
(0
.1)
-
Sin
gapo
re D
olla
r 0
.4
0.2
0
.4
0.2
Oth
ers
(#)
(3.5
) 1
.4
0.1
1
.4
Tota
l (3
7.3)
365
.9
(19.
7) 2
74.0
#
Oth
ers
com
pris
e of
CN
H, N
ZD, H
KD
and
AE
D c
urre
ncie
s w
here
the
amou
nt o
f eac
h cu
rren
cy is
rela
tivel
y sm
all.
Bas
el II
Pill
ar 3
Dis
clos
ures
as a
t 31
Dec
embe
r 201
6A
ppen
dix
IV243
ANNUAL REPORT 2016
c)
Dis
clo
sure
s o
n M
arke
t R
isk
- In
tere
st R
ate
Ris
k/R
ate
of
Ret
urn
Ris
k in
the
Ban
king
Bo
ok
(co
ntin
ued
)
20
15
Type
of C
urre
ncy
(RM
milli
on)
Gro
upB
ank
Impa
ct o
n P
ositi
ons
(100
bas
is p
oint
s)
Par
alle
l Shi
ftIm
pact
on
Pos
ition
s (1
00 b
asis
poi
nts)
P
aral
lel S
hift
Incr
ease
/(Dec
line)
in
Ear
ning
sIn
crea
se/(D
eclin
e) in
E
cono
mic
Val
ueIn
crea
se/(D
eclin
e) in
E
arni
ngs
Incr
ease
/(Dec
line)
in
Eco
nom
ic V
alue
Rin
ggit
Mal
aysi
a (7
1.4)
405
.0
(53.
7) 3
32.0
US
Dol
lar
7.8
1
4.0
8.4
1
4.0
Eur
o (4
.6)
(0.1
) (4
.6)
(0.1
)
Gre
at B
ritai
n P
ound
(0.1
) -
(0
.1)
-
Aus
tral
ian
Dol
lar
(0.1
) -
(0
.1)
-
Sin
gapo
re D
olla
r 0
.6
0.6
0
.6
0.6
Oth
ers
(#)
1.3
3
.1
1.5
3
.1
Tota
l (6
6.5)
422
.6
(48.
0) 3
49.6
#
Oth
ers
com
pris
e of
CN
H, N
ZD, H
KD
and
AE
D c
urre
ncie
s w
here
the
amou
nt o
f eac
h cu
rren
cy is
rela
tivel
y sm
all.
Bas
el II
Pill
ar 3
Dis
clos
ures
as a
t 31
Dec
embe
r 201
6A
ppen
dix
IV
AFFIN BANK BERHAD (25046-T)
244
AFFIN Bank Berhad (25046-T)Tingkat 17, Menara AFFIN,
80, Jalan Raja Chulan,50200 Kuala Lumpur
T +603 2055 9000F +603 2026 1415
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