BIMB Integrated Annual Report 2019

48 FINANCIAL RISK MANAGEMENT POLICIES (CONTINUED) 48.3 Credit risk (continued) (iii) Credit quality of financing, advances and others (continued) No significant changes to estimation techniques or assumptions were made during the year. The Bank internal credit risk rating are defined as follows: • Excellent to Good: Sound financial position with no difficulty in meeting its obligations. • Satisfactory: Adequate safety of meeting its current obligations but more time is required to meet the entire obligation in full. • Fair: Higher risks on payment obligations. Financial performance may continue to deteriorate. Financing, advances and others of the main subsidiary, Bank Islam, are classified as follows: • Neither past due nor impaired financing Financing for which the borrower has not missed a contractual payment (profit or principal) when contractually due and is not impaired and there is no objective evidence of impairment. • Past due but not impaired financing Financing for which its contractual profit or principal payments are past due, but the Bank believes that impairment is not appropriate on the basis of the level of collateral available and/or the stage of collection amounts owed to the Bank. • Impaired financing Financing is classified as impaired: – where the principal or profit or both are past due for three months or more; – in the case of revolving credit facilities, where the outstanding amount has remained in excess of the approved limit for a period of three months or more; – where the amount is past due or the outstanding amount has been in excess of the approved limit for three months or less and the financing exhibits indications of significant credit weakness; – as soon as default occurs where the principal and/or profit repayments are schedule on intervals of 3 months or longer. The ageing analysis of Bank Islam’s financing and advances as at the end of the reporting period was as follows: 2019 2018 RM’000 RM’000 Past due but not impaired financing Month-in-arrears 1 360,615 357,420 Month-in-arrears 2 198,355 234,089 558,970 591,509 Impaired financing Month-in-arrears 0 49,828 33,379 Month-in-arrears 1 10,731 8,806 Month-in-arrears 2 5,446 6,344 Month-in-arrears 3 and above 366,996 377,408 433,001 425,937 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 (CONTINUED) 279 BIMB HOLDINGS BERHAD 199701008362 (423858-X) Shareholders’ Information Financial Statements Additional Information Disclosure Summary