42. FINANCIAL RISK MANAGEMENT (CONTINUED) Overview (continued) (c) Market risk (continued) Foreign exchange risk (continued) Sensitivity Analysis Assuming that other risk variables remain constant, the foreign currency revaluation sensitivity for the 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’): Sensitivity analysis on profit after tax – Increase/(Decrease) Bank 2024 2023 –1% Depreciation RM’000 +1% Appreciation RM’000 –1% Depreciation RM’000 +1% Appreciation RM’000 US Dollar vs RM (4,696) 4,696 (4,195) 4,195 Euro vs RM 4,269 (4,269) 5,122 (5,122) Others vs RM (235) 235 (318) 318 (d) Liquidity risk Overview Liquidity risk is the potential inability (or perceived inability) of the Group and the Bank to meet its funding needs and/or unexpected higher cost to meet its obligation. Liquidity risk governance The management of liquidity risk is principally carried out by using sets of policies and guidelines approved by ALCO and/or BRC, guided by the Board’s approved Risk Appetite Statement. The ALCO is responsible under the authority delegated by the BRC for managing liquidity risk at a strategic level. Management of liquidity risk The Group and the Bank maintain a diversified and stable funding base comprising of retail and corporate customer deposits. The primary source of fundings includes customer deposits, investment account, interbank deposits, debts securities and sukuk issuance. The Group and the Bank also maintain some buffers of liquidity throughout the year to ensure safe and sound operations from a strategic, structural and tactical perspective. Bank Islam Malaysia Berhad ◆ Integrated Annual Report 2024 404 Notes to the Financial Statements for the financial year ended 31 December 2024
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