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) Impaired financing of which rescheduled and restructured financing 2019 2018 RM’000 RM’000 Consumer 17,120 16,855 Business 61,786 6,859 78,906 23,714 Rescheduled and restructured financings are financings that have been rescheduled or restructured due to deterioration in the customers’ financial positions and the Bank has made concessions that it would not otherwise consider. Once the financing is rescheduled or restructured, its satisfactory performance is monitored for a period of six months before it can be reclassified to performing. Key macroeconomic variables The following table shows certain key macroeconomic variables used in modelling the allowance for credit losses for Stages 1 and 2. For the base, upside and downside scenarios, the projections are provided for the next 12 months and for the remaining forecast period, which represents a medium-term view. Base scenario Upside scenario Downside scenario Remaining Remaining Remaining Next 12 forecast Next 12 forecast Next 12 forecast months period months period months period Kuala Lumpur Composite Index (“KLCI”) 1,700.0 1,900.0 1,800.0 2,000.0 1,600.0 1,800.0 House Price Index (“HPI”) 1.47% 3.16% 2.86% 4.91% 0.77% 2.11% Consumer Price Index (“CPI”) 1.26% 1.07% 1.09% 0.67% 1.77% 1.35% Unemployment Rate 3.48% 3.42% 3.22% 3.12% 3.79% 3.66% Industrial Production Index (“IPI”) 1.97 3.61 3.0 4.64 1.46 3.10 An increase in unemployment rate or CPI will generally correlate with higher allowances for credit losses, whereas an increase in the other macroeconomic factors (KLCI, HPI and IPI) will generally correlate with lower allowances for credit losses. (iv) Credit quality of takaful receivables Impairment loss of takaful receivables A reconciliation of the allowance for impairment losses for takaful receivables was as follows: RM’000 At 1 January 2018 8,980 Net remeasurement of allowance for impairment (2,837) Bad debts written off against impairment allowance (36) At 31 December 2018/1 January 2019 6,107 Net remeasurement of allowance for impairment 484 At 31 December 2019 6,591 Note 9 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 (CONTINUED) 280 Integrated Annual Report 2019 Group Overview Sustaining The Group Management Discussion & Analysis Group Governance