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NOTES TO THE
FINANCIAL STATEMENTS

for the financial year ended 31 december 2020 (continUed)

49 FINANCIAL RISk MANAGEMENT POLICIES (CONTINUED)
49.4 Market risk (continued)
(a) Banking (continued)
Management of market risk

the objective is to manage market risk exposures in order to optimise return on risk while maintaining a market
inteGrated annUal rePort 2020 bank islam’s market risk exposures are managed by its treasury, who have the necessary skills, tools, management
risk profile consistent with the bank’s approved risk appetite.

and governance to manage such risks. the management of market risk is guided by comprehensive limits, policies
and guidelines which are periodically reviewed.

the bank’s market risk management department (“mrmd”) is the independent risk control function that is
responsible for the implementation of market risk management framework. the bank’s mrmd is also responsible
for developing and reviewing the bank’s market risk management guidelines and policies, monitoring tools,
behavioural assumptions and limit setting methodologies. escalation procedures are documented and approved
by the alco and/or brc. in addition, the market risk exposures and limits are reported to the bank’s alco
294 and brc.
other controls to ensure market risk exposures remain within tolerable levels include regular stress testing, adhoc
simulations and rigorous new product approval procedures. Stress test results are produced regularly to determine
bimb holdinGS berhad 199701008362 (423858-X) (i) profit rate risk
the impact of changes in profit rates, foreign exchange rates and other risk factors on the bank’s profitability,
capital adequacy and liquidity. the stress test provides the bank’s management and the brc with an assessment of
the financial impact of identified extreme events on the market risk exposures of the bank.

the table below summarises the bank’s exposure to profit rate risk. the table indicates average profit rates at
the reporting date and the period in which the financial instruments reprice or mature, whichever is earlier.