Page 185 - Bank-Muamalat_Annual-Report-2023

ANNUAL REPORT 2023
OUR NUMBERS

(c) As at the date of this report, the Directors are not aware of any circumstances which have arisen which would render
adherence to the existing method of valuation of assets or liabilities of the Group and of the Bank misleading or
inappropriate.

(d) As at the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in this report or
financial statements of the Group and of the Bank which would render any amount stated in the financial statements
misleading.
(e) As at the date of this report, there does not exist:

(i) any charge on the assets of the Group or of the Bank which has arisen since the end of the financial year which
secures the liabilities of any other person; or
(ii) any contingent liability of the Group and of the Bank which has arisen since the end of the financial year other than those
arising in the normal course of business of the Group and of the Bank.
(f) In the opinion of the Directors:

(i) no contingent or other liability has become enforceable or is likely to become enforceable within the period of
twelve (12) months after the end of the financial year which will or may affect the ability of the Group or of the Bank
to meet their obligations when they fall due; and

(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the
financial year and the date of this report which is likely to affect substantially the results of the operations of
the Group and of the Bank for the financial year in which this report is made.

COMPLIANCE WITH BANK NEGARA MALAYSIA’S POLICY DOCUMENTS ON FINANCIAL REPORTING
In the preparation of the financial statements, the Directors have taken reasonable steps to ensure that the preparation of
the financial statements of the Group and of the Bank are in compliance with the Bank Negara Malaysia’s Policy Documents
on Financial Reporting for Islamic Banking Institutions and the Policy Documents on Classification and Impairment Provisions
for Loans/Financing.

BUSINESS REVIEW 2023

For the financial year ended 31 December 2023, the Group recorded a Profit Before Zakat and Taxation of RM295.6 million,
a decrease of RM11.1 million or 3.6% as compared to the previous corresponding financial year end.
The Group’s Total Distributable Income increased by RM436.8 million or 34.4% mainly from a 30.3% increase in financing
income, on the back of strong financing growth and improved yield. Non-Fund Based Income has also improved by
RM49.2 million or 53.0%, mostly driven by higher net gain from sale of financial investments at FVOCI, increased Wealth
income driven by higher disbursement of Retail Financing and Gold products, and higher volume of foreign exchange
transactions.
The net income for the financial year ended 31 December 2023 increased, albeit at a lower pace of 7.1% compared to the preceding
corresponding financial year. The bank experienced an increase in its funding cost resulted from higher Income Attributable to
Depositors which increased 83.6% or RM378.8 million. This is driven by intense competition in the market for deposit, which led
to compression of net profit margin.

Despite the increasing trend of credit cost across the banking industry, the Bank has placed successful pre-emptive strategy
and increasing focus on secured Government-backed financing resulting in a lower Allowance for Impairment Losses on
Financing by RM7.8 million or 18.9%. The Gross Impaired Financing Ratio which stood at 0.93% at the end of the current
reporting year, is well below industry level of 1.69%.

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