Page 317 - Bank-Muamalat_Annual-Report-2023

ANNUAL REPORT 2023
OUR NUMBERS

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

(iv) Credit quality for financial investments (cont’d.)
Set out below are the credit quality for financial investments (non-money market instruments - debt securities)
analysed by ratings from external credit ratings agencies: (cont’d.)

Financial investments
at amortised cost Financial investments
Non-Money at FVOCI Non-Money
Market Instruments Market Instruments
- Debt Securities - Debt Securities
Domestic Domestic
Ratings Total Ratings Total
Bank RM’000 RM’000 RM’000 RM’000

2023
AAA+ to AA- - - 672,206 672,206
BBB+ to BB- - - 10,218 10,218
Unrated 116,871 116,871 78,904 78,904
Defaulted - - 13 13
Sovereign - - 5,560,859 5,560,859
Total 116,871 116,871 6,322,200 6,322,200

2022
AAA+ to AA- - - 98,980 98,980
BBB+ to BB- 113,589 113,589 1,318 1,318
Unrated - - 72,219 72,219
Sovereign - - 4,831,948 4,831,948
Total 113,589 113,589 5,004,465 5,004,465

The ratings shown for debt securities are based on the ratings assigned to the specific debt issuance.
As at the reporting date and prior year, none of the financial investments mentioned above are past due,
except for defaulted corporate sukuk of the Group and the Bank held under financial investments at fair value
through other comprehensive income with net outstanding amount is RM13,000 (2022: Nil), which have been
classified as impaired and provided for to the extent that the Bank expects to recover.
(b) Market risk

Market risk refer to the potential loss arising from adverse movements in market variables such as rate of return,
foreign exchange rate, equity prices and commodity prices.

Types of market risk
(i) Traded market risk
Traded market risk, primarily rate of return risk and credit spread risk, exists in the Group’s and the Bank’s
trading positions held for the purpose of benefiting from shortterm price movements, which are conducted
primarily by the treasury operations.

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