Page 314 - Bank-Muamalat_Annual-Report-2023

BANK MUAMALAT MALAYSIA BERHAD

NOTES TO THE
FINANCIAL STATEMENTS
31 DECEMBER 2023 (18 JAMADIL AKHIR 1445H)

47. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D.)
(a) Credit risk (cont’d.)

(iii) Analysis of inputs to the ECL model under multiple economic scenarios
An overview of the approach to estimating ECLs is set out in Note 2.3 Summary of significant accounting
policies and in Note 3 Significant accounting judgements, estimates and assumptions.

The probability weights for each scenario are determined using forecasted GDP growth rate as GDP reflects the
overall condition of the economy. The information is sourced internally from the Bank’s Economics Department.

The following table shows the forecast of the key forward-looking economic variables used in each of the economic
scenarios for the ECL calculations for financial year ended 31 December 2023.

Assigned 2023 2024 2025
Key Variable ECL Scenario Probabilities (Actual) (Forecast) (Forecast)
(%)
Consumer Price Index (Y-o-Y%) Base case 70.00% 1.95% 2.70% 2.50%
Upside 20.00% 1.95% 3.00% 3.50%

Downside 10.00% 1.95% 6.00% 5.50%
Unemployment Rate (%) Base case 70.00% 3.40% 3.60% 3.40%
Upside 20.00% 3.40% 3.30% 3.20%
Downside 10.00% 3.40% 4.60% 4.40%
Overnight Policy Rate (%) Base case 70.00% 3.00% 2.75% 3.00%

Upside 20.00% 3.00% 3.25% 3.75%
Downside 10.00% 3.00% 1.50% 2.50%
Private Consumption (YOY %) Base case 70.00% 4.60% 5.77% 6.23%
Upside 20.00% 4.60% 7.00% 8.00%
Downside 10.00% 4.60% 3.30% 4.00%
Public Consumption (YOY %) Base case 70.00% 5.80% 2.89% 2.07%

Upside 20.00% 5.80% 5.00% 6.20%
Downside 10.00% 5.80% 2.60% 3.00%
Gold Price (USD/oz) Base case 70.00% 1848.49 2050.00 2100.00
Upside 20.00% 1848.49 2147.86 2252.75

Downside 10.00% 1848.49 1758.60 1485.10

312