Page 181 - Exim iar24_Ebook

EXIM BANK MALAYSIA ANNUAL REPORT 2024

7 FINANCIAL STATEMENTS 179
NOTES TO THE FINANCIAL STATEMENTS

42. FINANCIAL RISK MANAGEMENT POLICIES (cont’d)
Without With Without With
Transitional Transitional Transitional Transitional
Arrangement Arrangement Arrangement Arrangement
2024 2024 2023 2023
RM’000 RM’000 RM’000 RM’000
Capital Ratio
- With proposed RCCPS dividend

Core capital ratio 32.67% 32.67% 30.25% 30.25%
RWCR 41.91% 41.91% 40.31% 40.31%

- Without proposed RCCPS dividend

Core capital ratio 33.05% 33.05% 30.62% 30.62%
RWCR 42.28% 42.28% 40.68% 40.68%

# The numbers are based on MFRS 4, in accordance with Capital Regulatory Framework of BNM.

* The loss provision for 2024 is computed based on Para 14.1 (d)(ii) or Capital Adequacy Framework (capital components)
issued by BNM on 9 December 2020. The Tier 2 Capital comprise collective allowance on unimpaired loans, advances and
financing and regulatory reserve.

The Group and the Bank have elected to apply the transitional arrangements in accordance with BNM’s Guidelines on
Transitional Arrangements for Regulatory Capital Treatment of Accounting Provisions for Development Financial Institutions.
For net ECL charge, the addback factor is 0% for 2024 and 50% for 2023. There is no impact on capital ratio as the Group and
the Bank is in net ECL writeback for 2024 and 2023.
Capital monitoring

The Group’s and the Bank’s capital are closely monitored and actively managed. Besides the regulatory capital requirement of
8%, the Group and the Bank have set an internal capital requirement limit that would act as a buffer to the regulatory capital
and as an indicator that affords the Group and the Bank a “well capitalised” status. The MRC shall be responsible in managing
and monitoring both the internal capital limit and regulatory capital requirement.
Market risk management
Approach and risk strategy

The principal objectives of market risk management are to assume an appropriate balance between the level of risk and
the level of return desired in order to maximise the return to shareholders’ funds and to ensure prudent management of the
Group’s and the Bank’s resources to support the growth of the Group’s and the Bank’s economic value.
The Group’s and the Bank’s market risk management strategies are to identify, measure, monitor and manage the Group’s and
the Bank’s earnings and capital against market risk inherent in all activities of the Group and the Bank and ensure all relevant
personnel clearly understand the Group’s and the Bank’s approach in managing market risk.