Page 307 - Full Book_24.4.2021

NOTES TO THE
FINANCIAL STATEMENTS in retrospect

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for the financial year ended 31 december 2020 (continUed)
the Will to Suceed

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49 FINANCIAL RISk MANAGEMENT POLICIES (CONTINUED)
49.4 Market risk (continued)
(a) Banking (continued) achieving a leading repute
(iv) Foreign exchange risk

the bank manages and controls the trading book portfolio’s foreign exchange risk by limiting the net open |
exposure to individual currencies and on an aggregate basis. the bank also has in place the sensitivity limit.
for the bank-wide (trading book and banking book portfolios) foreign exchange risk, the bank manages
and controls by limiting the net open exposure on an aggregate basis.
Sensitivity Analysis Paving the Way for a Sustainable future

assuming that other risk variables remain constant, the foreign currency revaluation sensitivity for the bank
as at reporting date is summarised as follows (only net open position for major currencies are shown in its
specific currency in the table below. for other currencies, these exposures are grouped as ‘others’):

2020 2019
-1% +1% -1% +1% 301
Depreciation Appreciation Depreciation Appreciation
Bank Islam RM’000 RM’000 RM’000 RM’000
US dollar 8,844 (8,844) 11,611 (11,611)
euro 5,072 (5,072) 4,591 (4,591)
others (194) 194 (279) 279

(b) Takaful adhering to the best Governance Practices
the key features of takaful malaysia’s market risk management practices and policies are as follows:
– a group-wide market risk policy setting out the evaluation and determination of components of market risk for
the takaful malaysia Group. compliance with the policy is monitored and reported monthly to takaful malaysia’s |
risk management committee (“rmc”) and exposures and breaches are reported as soon as practicable.
– Set asset allocation, portfolio limit structure and diversification benchmark to ensure that assets back specific
contract liabilities and that assets are held to deliver income and gains for certificate holders in line with terms
of the respective contracts expectations of policies. takaful malaysia’s policies on asset allocation, portfolio limit Laying the Foundation for Financial Growth
structure and diversification benchmark have been set in line with takaful malaysia’s risk management policy
after taking cognisance of the regulatory requirements in respect of maintenance of assets and solvency.

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additional information & disclosure Summary

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24 th aGm information