Page 262 - Bank-Muamalat-AR2020

260 BANK MUAMALAT MALAYSIA BERHAD About Us Our Leadership Our Strategy
ANNUAL REPORT FY2020

Notes to the fiNaNcial statemeNts
31 December 2020 (16 JamaDil awal 1442h)

26. rESErvES (CONT’D.)
(a) regulatory reserve

Regulatory reserve is maintained in aggregate, loss allowance for non-credit impaired exposures (commonly known as
Stage 1 and Stage 2 provisions) that has been assessed and recognised in accordance with MFRS and which has been
transferred from the retained profits, in accordance with BNM’s Revised Financial Reporting Policy Document issued on
27 September 2019.
Banking institutions are allowed with immediate effect to :
(a) Drawdown the capital conservation buffer of (2.5%);

(b) Operate below the minimum Liquidity Coverage Ratio (“LCR”) of 100%;
(c) Reduce the regulotary reserves held against expected losses to 0%; and

(d) Minimum Net Stable Funding Ratio (“NSFR”) which was effective on 1 July 2020 is lowered to 80% from 100%.
However, banking institutions are required to rebuild the said buffers after 31 December 2020 and restore them to the
minimum regulatory requirements by 30 September 2021. BNM will review this timeline if current expectations change
materially. As at the reporting date, the Bank has not drawn any of prudential buffers.

(b) retained profits
The Bank may distribute dividends out of its entire retained profits as at 31 December 2020 under the single tier system.
(c) Exchange fluctuation reserve

The exchange fluctuation reserve represents exchange differences arising from the translation of the financial statements
of foreign operations whose functional currencies are different from that of the Group’s presentation currency.

(d) Fair value through other comprehensive income
This represent the cumulative fair value changes, net of tax, of fair value through other comprehensive income financial
assets until they are disposed or impaired.

27. INCOME DErIvED FrOM INvESTMENT OF DEPOSITOrS’ FuNDS AND OThErS
Group Bank
31 December 31 December 31 December 31 December
2020 2019 2020 2019
rM’000 rM’000 rM’000 rM’000

Income derived from investment off
(i) Fixed term accounts 180,685 487,151 180,685 487,151
(ii) Other deposits 954,163 458,757 954,163 458,757
1,134,848 945,908 1,134,848 945,908