Page 398 - Bank Muamalat_AR24

396 BANK MUAMALAT MALAYSIA BERHAD

BASEL II
PILLAR 3 DISCLOSURE

6.0 CREDIT RISK MITIGATION (“CRM”) DISCLOSURES UNDER THE STANDARDISED APPROACH

Upon assessment of a customer’s credit standing and payment capacity and identification of the proposed financing’s
source of payment, the Bank may provide a financing facility on a secured, partially secured or unsecured basis.
In mitigating its credit exposure, the Group and the Bank may employ Credit Risk Mitigants in the form of collaterals and
other supports. Examples of these CRMs include charges over residential and commercial properties being financed;
pledge over shares and marketable securities, ownership claims over vehicles being financed, and supports in the form of
debentures, assignments and guarantees.
The Bank utilise specific techniques to identify eligible collaterals and securities and ascertain their value, and subsequently,
implement adequate monitoring process to ensure continued coverage and enforceability.

Credit documentation, administration and disbursement are carried out under clear guidelines and procedures to ensure
protection and enforceability of collaterals and other credit risk mitigants. Valuation updates of collaterals are concurrently
done during the periodic review of the financing facilities to reflect current market value and ensure adequacy and continued
coverage.
The following tables present the credit exposures covered by eligible financial collateral and financial guarantees as defined
under the Standardised Approach. Eligible financial collateral consists primarily of cash, securities from listed exchange,
unit trust or marketable securities. The Group and the Bank do not have any credit exposure, which is reduced through the
application of other eligible collateral.
Table 17: Credit risk mitigation on credit exposures
Total
Exposures
Covered by
Eligible
Gross Financial *Net
Group Exposures Collateral Exposures
31 December 2024 RM’000 RM’000 RM’000
Credit Risk
(a) On Balance sheet exposures
Sovereign/Central banks 5,434,138 - 5,434,138
Public sector entities 1,131,027 - 1,131,027
Banks, Development Financial Institution & MDBs 1,700,787 - 1,700,787
Takaful Cos, Securities Firms & Fund Managers 177,691 - 177,691
Corporates 11,128,047 - 11,128,047
Regulatory retail 12,735,194 - 12,735,194
Residential real estate 10,669,536 - 10,669,536
Higher risk assets 45,714 - 45,714
Other assets 366,681 - 366,681
Defaulted exposure 242,989 - 242,989

43,631,804 - 43,631,804
(b) Off-Balance Sheet Exposures
Credit-related off-balance sheet exposure 1,899,211 - 1,899,211
Islamic derivative financial instruments 45,625 - 45,625
1,944,836 - 1,944,836
Total Credit Exposures 45,576,640 - 45,576,640

* After netting and credit risk mitigation