5. MARKET RISK (CONTINUED) 5.3 Management of Market Risk (continued) a) Profit rate risk in the banking book portfolio (continued) The Group monitors the sensitivity of EaR and EVE under varying profit rate scenarios and also incorporates internal behavioural assumptions. These scenarios assume no management action and hence, it does not incorporate actions that would be taken by Treasury to mitigate the impact of the profit rate risk. In reality, depending on the view on future market movements, Treasury would proactively manage and strategise to change the profit rate exposure profile to minimise losses and to optimise net revenues. The Bank’s hedging and risk mitigation strategies range from the use of derivative financial instruments, such as profit rate swaps, to more intricate hedging strategies to address inordinate profit rate risk exposures. The table below shows the Group’s profit rate sensitivity to a 150 basis points parallel shift as at reporting date. Group Impact on EaR Currency 31 December 2024 Increase/(Decline) 31 December 2023 Increase/(Decline) +150bps RM million –150bps RM million +150bps RM million –150bps RM million MYR 199.8 (199.8) 225.6 (225.6) USD (0.8) 0.8 (0.8) 0.8 OTHERS* (0.5) 0.5 (0.5) 0.5 TOTAL 198.5 (198.5) 224.3 (224.3) Note: 1. *Inclusive of all other currencies except MYR and USD Group Impact on EVE Currency 31 December 2024 Increase/(Decline) 31 December 2023 Increase/(Decline) +150bps RM million –150bps RM million +150bps RM million –150bps RM million MYR (868.9) 868.9 (423.3) 423.3 USD 3.3 (3.3) 2.2 (2.2) OTHERS* 1.5 (1.5) 1.6 (1.6) TOTAL (864.1) 864.1 (419.4) 419.4 479 w w w . b a n k i s l a m. c o m 01 02 03 04 05 06 07 08 FINANCIAL STATEMENTS 09
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