42. FINANCIAL RISK MANAGEMENT (CONTINUED) Overview (continued) (b) Credit risk (continued) Maximum exposure to credit risk (continued) Note Bank 2024 RM’000 2023 RM’000 Cash and short-term funds and deposits and placements with financial institutions 4,312,392 4,678,243 Financial assets at FVTPL* 1,657,591 907,249 Derivative financial assets (a) 92,471 68,412 Financial assets at FVOCI^ 13,899,358 12,430,426 Financial assets at AC 4,607,947 3,120,230 Financing, advances and others (b) 69,494,752 66,817,115 Other financial assets at AC@ 552,632 726,892 Sub-total 94,617,143 88,748,567 Credit related obligation: Financial guarantee contracts (c) 2,084,435 2,034,712 Financing commitments# (d) 13,168,023 10,792,547 Sub-total 15,252,458 12,827,259 Total credit exposures 109,869,601 101,575,826 * Excludes unit trust ^ Excludes equity instruments @ Excludes prepayment # Excludes derivative financial instruments (a) Derivative financial assets In mitigating the counterparty credit risks from foreign exchange and derivatives transactions, the Group and the Bank enter into master agreements that provide for closeout netting with counterparties, whenever possible. A master agreement that governs all transactions between two parties, creates the greater legal certainty that the netting of outstanding obligations can be enforced upon termination of outstanding transactions if an event of default occurs. (b) Financing, advances and others Business and retail Financing, advances and others will have levels of collateralisation depending on the nature of the product. The general creditworthiness of a corporate, commercial and retail customer tends to be the most relevant indicator of credit quality of a financing extended to it. The Group manages its exposures to these customers by completing a credit evaluation to assess the customer's character, industry, business model and capacity to meet their commitments in a timely manner. The Group may take collateral in the form of a first charge over real estate, floating charges over all corporate assets and other liens and guarantees. Bank Islam Malaysia Berhad ◆ Integrated Annual Report 2024 376 Notes to the Financial Statements for the financial year ended 31 December 2024
RkJQdWJsaXNoZXIy NDgzMzc=