Page 216 - Bank-Muamalat-Annual-Report-2021

214 bank MuaMalat Malaysia berhaD
ABOUT US OUR LEADERSHIP OUR STRATEGY OUR PERFORMANCE

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMbEr 2021 (26 JAMADIL AwAL 1443H)

6. IsLAMIc DeRIvATIve fINANcIAL AsseTs/(LIABILITIes)

The table below shows the fair values of Islamic derivative financial instruments, recorded as assets or liabilities, together with
their notional amounts. The notional amounts, recorded gross, is the amount of a derivative’s underlying asset, reference rate
or index and is the basis upon which changes in the value of derivatives are measured. The notional amounts indicate the
volume of transactions outstanding at the year end and are indicative of neither the market risk nor the credit risk.
2021 2020
contract/ contract/
notional fair value notional fair value
amount Assets Liabilities amount Assets Liabilities
Group and Bank RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

foreign exchange contracts:
- Currency forwards Less than one year 778,535 1,362 (3,463) 1,509,931 4,084 (43,920)
- Currency swaps Less than one year 841,155 4,074 (697) 1,679,710 40,343 (15,826)
- Currency spot Less than one year 10,907 1 (7) 136,881 3,393 (73)
1,630,597 5,437 (4,167) 3,326,522 47,820 (59,819)
Islamic profit rate swap (“IPRS”)
Hedging IPRS 1,200,000 - (57,376) 1,200,000 - (107,515)
Total 2,830,597 5,437 (61,543) 4,526,522 47,820 (167,334)

Included within hedging derivatives are derivatives where the Group and the Bank apply hedge accounting. The principal
amount and fair value of derivative where hedge accounting is applied by the Group and Bank are as follows:

2021 2020
contract/ contract/
notional fair value notional fair value
amount Assets Liabilities amount Assets Liabilities
rM’000 rM’000 rM’000 rM’000 rM’000 rM’000

IPRS 1,200,000 - (57,376) 1,200,000 - (107,515)

fair value hedges
Fair value hedges are used by the Group and the Bank to protect against changes in the fair value of financial assets due to
movements in profit rates. The financial instruments hedged for profit rate risk include the Group’s and the Bank’s financing
of customers and investment securities.
For the year ended 31 December 2021, the Group and the Bank:

(i) recognised a net gain of RM50,139,069 (31 December 2020: net loss of RM54,337,986) on the hedging instrument.
The total net loss on the hedged items attributable to the hedged risk amounted to RM57,692,261 (2020: net gain of
RM59,900,904) (Note 29); and

(ii) There is no recorded gain from derecognition of fair value of hedged items attributable to hedged risk (2020: nil) as a
result of derecognition of the hedged items.