Standard Chartered Saadiq BerhadRegistration No. 200801022118 (823437-K) Standard Chartered Saadiq...
Transcript of Standard Chartered Saadiq BerhadRegistration No. 200801022118 (823437-K) Standard Chartered Saadiq...
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Registration No. 200801022118 (823437-K)
Standard Chartered Saadiq Berhad
(Incorporated in Malaysia)
ended 30 September 2020
Condensed financial statements for the financial period
Registration No. 200801022118 (823437-K)
Registration No. 200801022118 (823437-K)
30 September 31 December
2020 2019
Note RM'000 RM'000
Assets
Cash and short term funds 2,144,527 1,488,152
Investment securities 10 919,598 898,250
Financing and advances - investment account placements 11 1,400,623 1,383,925
Financing and advances - others 11 2,978,119 2,962,632
Derivative financial assets 23,304 78,476
Other assets 13 421,149 242,303
Current tax assets 2,680 14,340
Statutory deposits with Bank Negara Malaysia 14 - 77,024
Property, plant and equipment 977 1,638
Deferred tax assets 9,867 2,613
Total assets 7,900,844 7,149,353
LiabilitiesDeposits from customers 15 3,191,090 2,859,327
Structured deposits - 3,143
Investment accounts of customers 16 509,631 519,052
17 720,765 106,345
Restricted investment accounts due to designated financial institutions 18 2,141,371 2,328,737
Derivative financial liabilities 23,782 78,792
Other liabilities 19 457,880 432,455
Provision for credit commitments and contingencies 20 263 216
Subordinated sukuk 100,000 100,000
Total liabilities 7,144,782 6,428,067
Share capital 411,000 411,000
Reserves 345,062 310,286
Total equity attributable to equity holder of the Bank 756,062 721,286
7,900,844 7,149,353
Commitments and contingencies 28 9,876,753 9,830,799
Total Islamic banking assets 7,900,844 7,149,353
STANDARD CHARTERED SAADIQ BERHAD(Incorporated in Malaysia)
CONDENSED INTERIM FINANCIAL STATEMENTS
UNAUDITED STATEMENT OF FINANCIAL POSITION AS AT 30 SEPTEMBER 2020
Total liabilities and equity
The Unaudited Condensed Interim Financial Statements should be read in conjunction with the audited financial statements of the
Bank for the financial year ended 31 December 2019.
Deposits and placements of banks and other financial institutions
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Registration No. 200801022118 (823437-K)
30 September 30 September 30 September 30 September
2020 2019 2020 2019
Note RM'000 RM'000 RM'000 RM'000
Income derived from investment of depositors'
funds 21 49,402 41,714 128,479 126,989
Income derived from investment of investment
account funds 22 21,246 32,567 70,982 112,482
Income derived from investment
of shareholder's funds 23 11,287 9,594 28,723 27,482
Provision for expected credit loss ("ECL") 24 (9,609) 4,920 (14,857) 7,691
Total distributable income 72,326 88,795 213,327 274,644
Profit/hibah distributed to depositors 25 (13,028) (21,112) (48,292) (63,494)
Profit/hibah distributed to investment account holders 26 (16,349) (26,652) (57,391) (91,400)
Total net income 42,949 41,031 107,644 119,750
Other operating expenses 27 (23,248) (23,586) (65,783) (71,440)
Profit before taxation 19,701 17,445 41,861 48,310
Taxation (4,819) (3,671) (10,197) (11,279) Profit for the period 14,882 13,774 31,664 37,031
Other comprehensive (loss)/income for
the period, net of income tax
Items that may be reclassified subsequently
to profit or loss
Fair value reserve:
Net change in fair value
- investment securities measured at fair value through
other comprehensive income ("FVOCI") 4,356 2,967 14,380 6,105
Net amount transferred to profit or loss (11,294) - (11,294) -
Net changes in expected credit losses 13 84 26 193
Other comprehensive (loss)/income for
the period, net of income tax (6,925) 3,051 3,112 6,298
Total comprehensive income for theperiod 7,957 16,825 34,776 43,329
STANDARD CHARTERED SAADIQ BERHAD(Incorporated in Malaysia)
CONDENSED INTERIM FINANCIAL STATEMENTSUNAUDITED STATEMENT OF COMPREHENSIVE INCOME
FOR THE 3RD QUARTER AND NINE MONTHS ENDED 30 SEPTEMBER 2020
3rd quarter ended Nine months ended
The Unaudited Condensed Interim Financial Statements should be read in conjunction with the audited financial statements of the
Bank for the financial year ended 31 December 2019.
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Registration No. 200801022118 (823437-K)
Distributable
ReservesShare Regulatory Fair value Retained Total
capital reserves reserves profits
RM'000 RM'000 RM'000 RM'000 RM'000
At 1 January 2020 411,000 31,622 6,944 271,720 721,286
Fair value reserve
- Net changes in fair value - - 14,380 - 14,380
- Net amount transferred from profit or loss - - (11,294) - (11,294)
- Net changes in expected credit losses - - 26 - 26
Total other comprehensive income for the period - - 3,112 - 3,112
Profit for the period - - - 31,664 31,664
Total other comprehensive income for the period - - 3,112 31,664 34,776
Transfer between reserves - (30,000) - 30,000 -
At 30 September 2020 411,000 1,622 10,056 333,384 756,062
The Unaudited Condensed Interim Financial Statements should be read in conjunction with the audited financial statements of the Bank for the financial year ended 31 December 2019.
STANDARD CHARTERED SAADIQ BERHAD(Incorporated in Malaysia)
CONDENSED INTERIM FINANCIAL STATEMENTS
UNAUDITED STATEMENT OF CHANGES IN EQUITY
FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2020
Non-Distributable Reserves
Attributable to owner of the Bank
Page 3
Registration No. 200801022118 (823437-K)
STANDARD CHARTERED SAADIQ BERHAD(Incorporated in Malaysia)
CONDENSED INTERIM FINANCIAL STATEMENTS
UNAUDITED STATEMENT OF CHANGES IN EQUITY
FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2020
Distributable
ReservesShare Regulatory Fair value Retained Total
capital reserves reserves profits
RM'000 RM'000 RM'000 RM'000 RM'000
At 1 January 2019 411,000 13,622 75 243,169 667,866
Fair value reserve
- Net changes in fair value - - 6,105 - 6,105
- Net changes in credit losses - - 193 - 193
Total other comprehensive income for the period - - 6,298 - 6,298
Profit for the period - - - 37,031 37,031
Total other comprehensive income for the period - - 6,298 37,031 43,329
Transfer between reserves - 18,000 - (18,000) -
At 30 September 2019 411,000 31,622 6,373 262,200 711,195
The Unaudited Condensed Interim Financial Statements should be read in conjunction with the audited financial statements of the Bank for the financial year ended 31 December 2019.
Non-Distributable Reserves
Attributable to owner of the Bank
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Registration No. 200801022118 (823437-K)
30 September 30 September
2020 2019
RM'000 RM'000
Profit before taxation 41,861 48,310
Adjustment for non-cash items 4,704 (6,626)
Operating profit before working capital changes 46,565 41,684
Changes in working capitalNet changes in operating assets (148,632) 646,214
Net changes in operating liabilities 772,462 (275,410)
Income taxes paid (6,766) (12,466)
Net cash generated from operating activities 663,629 400,022
Net cash used in investing activities (6,496) (790,832)
Net cash used in financing activities (758) (700)
Net increase/(decrease) in cash and cash equivalents 656,375 (391,510)
Cash and cash equivalent at beginning of the year 1,488,152 1,852,990 Cash and cash equivalent at end of the period 2,144,527 1,461,480
STANDARD CHARTERED SAADIQ BERHAD
The Unaudited Condensed Interim Financial Statements should be read in conjunction with the audited financial
statements of the Bank for the financial year ended 31 December 2019.
(Incorporated in Malaysia)
CONDENSED INTERIM FINANCIAL STATEMENTSUNAUDITED STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2020
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Registration No. 200801022118 (823437-K)
PROSPECTS
The COVID-19 pandemic crisis continues to be a major cause for concern as new waves of infections are emerging
globally. Imposition of new lockdowns by many governments will place further strain on the global economy, which is
already forecasted to contract by -5.2% in 2020. The aviation, hospitality and oil and gas sectors continue to be the
most heavily impacted.
On the domestic front, the nation-wide Movement Control Order ("MCO") was gradually relaxed in stages from June
2020 onwards with most economic sectors now in full operation. However, international travel remains severely
restricted, placing further strain on the country’s aviation industry. Meanwhile, international trade volumes are still on a
declining trend, with August trade exports declining 2.9% and trade imports falling by 6.5%. This was however, a
significant improvement from the 25% and 30% declines seen in May, which was the peak of the pandemic crisis. A
new wave of infections that started in September have resulted in lockdowns imposed in the affected cluster areas, and
while businesses are allowed to continue operating, the situation is a reflection of the continued threat posed by COVID-
19.
Amidst this extremely challenging economic backdrop, the Bank has continued to engage and serve our customer
needs by creatively leveraging on our digital platforms and technology. The investments made in technology platforms
has helped the bank to operate seamlessly during the disruptions created by the pandemic. We will continue to
leverage on this digital capability as a broad strategic imperative, in tandem with the global shift towards the ‘new
normal’. In the near term, we are fully committed to continue supporting the government’s economic recovery efforts by
providing the requisite assistance to our customers across all segments who have been most impacted by the
pandemic crisis. As the situation remains volatile, the bank will continue to remain vigilant and proactively monitor new
developments as they happen and intensely manage the portfolio to minimise the downside risk. In the adverse
condition also, there are opportunities in various sectors witnessing surge in local and international demand, especially
in the Healthcare and Hygiene industries, where we will continue to play an active role by delivering our network and
serving clients with our diversified product capabilities.
For the longer term, we remain optimistic on the fundamentals, inherent strength and resilience of the diversified
Malaysian economy. It is important to stay on course on our core franchise strategy while navigating through the
turbulent times and we would continue to do so whilst managing the resultant downside risk emanating from
uncontrollable macro-economic headwinds.
Our strategic focus for the Retail Banking business will continue to be the Affluent and Emerging Affluent segments
through our range of Wealth Management product suites, while continuing to support the growth of SMEs though our
award winning Business Banking solutions. As the pace of digital adoption has intensified, we will continue investing in
our digital capabilities to enhance and improve client journeys.
The US Federal Reserve has maintained their policy rate at the 0% to 0.25% range, with most major central banks also
holding rates firm during the third quarter. However, the risk of further cuts remains, with Bank of England recently
making enquiries on banking industry readiness for negative rates.
Malaysia recorded a contraction of -17.1% in Gross Domestic Product ("GDP") for the second quarter of 2020, resulting
in Bank Negara Malaysia ("BNM") revising its annual GDP growth forecast downward to -3.5% to -5.5%. Following four
consecutive months of cuts, BNM decided to leave Overnight Policy Rate ("OPR") unchanged at 1.75% in September
2020. The automatic finance moratorium period implemented by BNM in April 2020 expired in end September 2020.
Nonetheless, the banking industry will continue to support customers impacted by the pandemic via targeted
repayment assistance schemes, under guidelines issued by BNM. Meanwhile, the Ringgit has been resilient this
quarter, continuing its upward momentum to close at 4.15 against the US Dollar in mid-October, from a low of 4.44 in
March 2020.
STANDARD CHARTERED SAADIQ BERHAD(Incorporated in Malaysia)
REVIEW OF PERFORMANCE
The Bank registered a pre-tax profit of RM 41.9 million, a 13.3% decrease as compared to the corresponding period
last year. Net Income after provisioning for credit losses declined by RM 12.1 million or 10.1% year on year as the Bank
has made prudent allowances for potential credit risk deterioration in its financing portfolio.
Total financing and advances increased marginally by 0.7 % over the period to RM 4.4 million while customer deposits
continued its strong momentum, growing by 11.6% to RM 3.2 million. The Bank’s Common Equity Tier 1 capital ratio
and Total Capital Ratio remained strong at 24.992% and 29.030%, respectively.
Page 6
Registration No. 200801022118 (823437-K)
PROSPECTS (CONTINUED)
Notes to the financial statements for the financial period ended 30 September 2020
1. Basis of preparation of the financial statements
MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2020i)ii)
MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 June 2020
i) Amendments to MFRS 16 Leases - Covid-19-Related Rent Concessions
MFRSs and amendments effective for annual periods beginning on or after 1 January 2021i) Amendments to MFRS 9, Interest Rate Benchmark Reform—Phase 2
MFRS 139, MFRS 7, MFRS 4 and MFRS 16
MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2022i) Amendments to MFRS 1, Annual Improvements to MFRS Standards 2018–2020
MFRS 9 and MFRS 141ii) Amendments to Illustrative Leases (Annual Improvements to MFRS Standards 2018–2020)
Examples accompanying
MFRS 16iii) Amendments to MFRS 3 Business Combinations - Reference to the Conceptual Framework
iv) Amendments to MFRS 116 Property, Plant and Equipment - Proceeds before Intended Usev) Amendments to MFRS 137 Provisions, Contingent Liabilities and Contingent Assets - Onerous Contracts
- Cost of Fulfilling a Contract
MFRSs and amendments effective for annual periods beginning on or after 1 January 2023
i) MFRS 17
ii) Amendments to MFRS 101 Presentation of Financial Statements – Classification of Liabilities as
Current or Non-current
i) Amendments to MFRS 10 and MFRS 128
and its Associate or Joint Venture
Our longer term agenda for the Corporate and Commercial Banking segment will be to continue leveraging on our
network to grow our Transaction Banking and Financial Markets flow business, focusing on acquiring new trade
oriented clients in the high growth sectors of the economy and also deepening existing relationships with world class
corporate finance and capital markets capabilities. We have also invested heavily in the digital capabilities to enhance
our corporate and commercial client journeys.
Insurance Contracts
MFRSs and amendments effective for annual periods beginning on or after a date yet to be confirmed.
STANDARD CHARTERED SAADIQ BERHAD(Incorporated in Malaysia)
The unaudited condensed interim financial statements for the financial period ended 30 September 2020 have been
prepared in accordance with Malaysian Financial Reporting Standards ("MFRS") 134, Interim Financial Reporting .
The accounting policies and methods of computation in the unaudited condensed interim financial statements are
consistent with those adopted in the last audited financial statements, except for the adoption of the following
MFRSs, Interpretation and Amendments to MFRSs during the current financial period:
Amendments to MFRS 3 Business Combinations - Definition of BusinessAmendments to MFRS 101and MFRS 108
Presentation of Financial Statements and Accounting Policies, Changes in
Accounting Estimates and Errors - Definition of Material
Consolidated Financial Statements and Investments in Associates and
Joint Ventures – Sale or Contribution of Assets between an Investor
In the Corporate and Commercial Banking space, we will continue to leverage on our network to grow our Transaction
Banking and Financial Markets flow business, with focus on Halal trade corridor and designated Shariah Counter
entities. Our Halal360 programme will be our latest initiative to support the Islamic trade ecosystem and aligned to the
government’s aspiration to make Malaysia the Halal economic hub.
Page 7
Registration No. 200801022118 (823437-K)
STANDARD CHARTERED SAADIQ BERHAD(Incorporated in Malaysia)
Notes to the financial statements for the financial period ended 30 September 2020
1. Basis of preparation of the financial statements (continued)
2. Auditors' report on preceding annual financial statements
3. Seasonal or cyclical factors
4. Unusual items due to their nature, size or incidence
5. Changes in accounting estimates
Other than those disclosed in Current Year Prospects, there is no other material seasonal or cyclical factors
affecting the business operations of the Bank.
In order to assist individuals and small and medium-sized enterprise ("SMEs") facing temporary financial challenges
arising from COVID-19 pandemic, the Bank has participated in national relief program to grant automatic moratorium
on all financing repayments, principals and profits by individuals and SME customers for a period of six months from
1 April 2020. The customers can opt out anytime during the payment deferment period and have until 30 September
2020 to reach an agreement in relation to repayment arrangement after the moratorium period. In addition, extended
assistance will be provided to targeted customer upon expiry of the moratorium period.
The unaudited interim financial statements should be read in conjunction with the audited financial statements for the
financial year ended 31 December 2019. The explanatory notes attached in the unaudited condensed interim
financial statements provide an explanation of events and transactions that are significant for an understanding of
the changes in the financial position and performance of the Bank since the financial year ended 31 December
2019.
The auditors' report on the financial statements for the financial year ended 31 December 2019 was not qualified.
There were no material changes in estimates of amounts reported that have a material effect on the unaudited
condensed interim financial statements in the third quarter and financial period ended 30 September 2020, other
than uncertainties on the timing and pace of economic recovery, management judgemental overlay on ECL has
been put in place to supplement MFRS 9 models' expected credit loss.
The initial application of the accounting standards, interpretations or amendments are not expected to have any
material financial impacts to the current period or prior period financial statements of the Bank.
Other than MFRS 17 and amendments to MFRS 141 which is not applicable to the Bank, the Bank plans to apply
the abovementioned accounting standards and amendments that is effective for annual periods beginning on or after
1 January 2020.
In relation to that, the Bank has to consider accounting effects as original terms of the financing and advances have
been modified by the automatic moratorium. Modification gain/loss arises when there is a difference between
present value of the cash flow pre and post-modification, discounted using the original profit rates. The gain/ loss will
be reported within “profit income” with a corresponding adjustment made to the gross carrying amount of the asset.
The amount will be unwound over the remaining term of the modified financial assets.
Page 8
Registration No. 200801022118 (823437-K)
6.
7. Proposed Dividend
8. Subsequent events
9. Changes in the composition of the Bank
10. Investment securities
30 September 31 December
2020 2019
RM'000 RM'000
Investment securities measured at FVOCI - debt instruments 919,598 898,250
i) By type
30 September 31 December
2020 2019
RM'000 RM'000
Investment securities measured at FVOCI - debt instruments
Malaysian Government Investment Issues 919,598 898,250 919,598 898,250
ii) Movement of allowance for expected credit losses
30 September 31 December
2020 2019
RM'000 RM'000
Balance as at 1 January 198 19 Net remeasurement of loss allowance 26 179
At end of reporting period/year 224 198
Issuances, cancellations, repurchases, resale and repayments of securities portfolio
The carrying amount of debt securities measured at FVOCI are its fair value. Accordingly, the recognition of
impairment loss does not affect the carrying amount of those assets, but is reflected as a debit to profit or loss or
retained profit and a credit to other comprehensive income.
STANDARD CHARTERED SAADIQ BERHAD(Incorporated in Malaysia)
There were no changes in the composition of the Bank during the financial period ended 30 September 2020.
There were no issuance and repayment of debt and equity securities, share-buy-backs, share cancellations, shares
held as treasury shares and resale of treasury shares in the third quarter and financial period ended 30 September
2020 .
No dividend has been proposed for the third quarter and the financial period ended 30 September 2020 .
As the impact of the COVID-19 pandemic continues to evolve, our estimates on expected credit losses are subject to
change in near term based on the latest development in the global and domestic economic environment.
Page 9
Registration No. 200801022118 (823437-K)
11. Financing and advances
(i) By type and by contract
As at 30 September 2020
RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
At amortised cost
Term financing
- House financing 304,714 - - - - 1,966,193 - 2,270,907
- Hire purchase receivables - - 5,188 - - - - 5,188
- Lease receivables - 11,194 - - - - - 11,194
- Other term financing 17,453 - - - 1,431,364 607,365 50,542 2,106,724
Bills receivable 47,868 - - 10,944 90,229 - - 149,041
Trust receipts - - - 112,578 - - - 112,578
- - - - 7,342 - 30 7,372
- - - - 181,223 - - 181,223
370,035 11,194 5,188 123,522 1,710,158 2,573,558 50,572 4,844,227
Less: Unearned income (402,527)
Gross financing and advances 4,441,700
Less: Allowances for credit losses on financing
and advances:-
- 12-month ECL (Stage 1) (12,922)
- Lifetime ECL non-credit-impaired (Stage 2) (16,777)
- Lifetime ECL credit-impaired (Stage 3) (33,259)
4,378,742
Less: Financing and advances funded by
investment account placements * (1,400,623) 2,978,119
^ Bai' comprises of Bai-Bithaman Ajil, Bai Al-Inah and Bai-Al-Dayn.
# Under this mode of financing, the Bank acquires the assets against customers' purchase undertaking to purchase the assets on maturity of the financing. The assets will be leased
to the customer during financing tenure prior to the acquisition of asset by the customer.
* Financing and advances funded by investment account placements are exposures under Restricted Profit Sharing Investment Account ("RPSIA"), as part of an arrangement
between the Bank and SCBMB. SCBMB is exposed to the risk of RPSIA financing and will account for all the expected credit losses arising thereon.
STANDARD CHARTERED SAADIQ BERHAD
(Incorporated in Malaysia)
Staff financing
Revolving credit
Bai'^ Ijarah # Ijarah
Thumma Al-
Bai #
Murabahah Musyarakah
Mutanaqisah
Total net financing and advances
Total net financing and advances - others
Total
financing and
advances
OthersCommodity
Murabahah
Page 10
Registration No. 200801022118 (823437-K) STANDARD CHARTERED SAADIQ BERHAD
(Incorporated in Malaysia)
11. Financing and advances (continued)
(i) By type and by contract (continued)
As at 31 December 2019
RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Term financing
- House financing 322,125 - - - - 2,015,410 - 2,337,535
- Hire purchase receivables - - 8,038 - - - - 8,038
- Lease receivables - 13,140 - - - - - 13,140
- Other term financing 19,653 - - - 1,389,028 638,570 38,828 2,086,079
Bills receivable 75,354 - - 14,382 60,519 - - 150,255
Trust receipts - - - 26,066 - - - 26,066
- - - - 7,227 - 136 7,363
- - - - 196,099 - - 196,099
417,132 13,140 8,038 40,448 1,652,873 2,653,980 38,964 4,824,575
Less: Unearned income (425,768)
Gross financing and advances 4,398,807
Less: Allowances for credit losses on
financing and advances:-
- 12-month ECL (Stage 1) (2,427)
- Lifetime ECL non-credit-impaired (Stage 2) (6,343)
- Lifetime ECL credit-impaired (Stage 3) (43,480)
4,346,557
Less: Financing and advances funded by
investment account placements * (1,383,925)
2,962,632
^ Bai' comprises of Bai-Bithaman Ajil, Bai Al-Inah and Bai-Al-Dayn.
#Under this mode of financing, the Bank acquires the assets against customers' purchase undertaking to purchase the assets on maturity of the financing. The assets will be leased
to the customer during financing tenure prior to the acquisition of asset by the customer.
Musyarakah
Mutanaqisah
Total net financing and advances - others
Bai'^
* Financing and advances funded by investment account placements are exposures under Restricted Profit Sharing Investment Account ("RPSIA"), as part of an arrangement
between the Bank and SCBMB. SCBMB is exposed to the risk of RPSIA financing and will account for all the expected credit losses arising thereon.
Staff financing
Revolving credit
Total net financing and advances
Total
financing and
advances
OthersCommodity
MurabahahIjarah
# Ijarah
Thumma Al-
Bai #
Murabahah
Page 11
Registration No. 200801022118 (823437-K)
11. Financing and advances (continued)
(ii) By type of customer
30 September 31 December
2020 2019
RM'000 RM'000
Domestic non-bank financial institutions 130,000 229
Domestic business enterprises 1,327,254 1,427,911 Small medium enterprises 865,806 879,693
Others 461,448 548,218
Individuals 1,982,385 2,043,807
Other domestic entities 23,034 2,437
Foreign entities 979,027 924,423 4,441,700 4,398,807
(iii) By profit rate sensitivity
30 September 31 December
2020 2019
RM'000 RM'000
Fixed rate
Housing financing 208 229
Hire purchase receivables 5,188 8,038
Other fixed rate financing 653,120 557,959
Variable rate
Base lending rate ("BLR") plus/ Base rate plus 626,694 613,707
Cost plus 945,558 914,629
Other variable rates 2,210,932 2,304,245 4,441,700 4,398,807
(iv) By sector
30 September 31 December
2020 2019
RM'000 RM'000
Agriculture 44,037 70,179
Mining and quarrying 1,686 9,652
Manufacturing 343,502 251,480
Electricity, gas and water 830 1,139
Construction 154,600 164,296 Real estate 214,557 211,329
Wholesale & retail trade and restaurants & hotels 315,149 397,568
Transportation, storage and communication 30,489 38,860
312,897 205,820
Household 2,343,152 2,414,818
Others 680,801 633,666 4,441,700 4,398,807
STANDARD CHARTERED SAADIQ BERHAD
(Incorporated in Malaysia)
Finance, insurance and business services
Page 12
Registration No. 200801022118 (823437-K) STANDARD CHARTERED SAADIQ BERHAD
(Incorporated in Malaysia)
11. Financing and advances (continued)
(v) By purpose
30 September 31 December
2020 2019
RM'000 RM'000
Purchase of property
- Residential 2,116,779 2,170,956
- Non-residential 630,415 658,289
Fixed assets excluding land and building 3,937 5,914
Personal Use 68,246 75,697
Working Capital 1,622,323 1,487,951 4,441,700 4,398,807
(vi) By maturity structure
30 September 31 December
2020 2019
RM'000 RM'000
Maturing within one year 581,252 409,099
One year to three years 608,669 719,648
Three years to five years 442,347 320,312
Over five years 2,809,432 2,949,748 4,441,700 4,398,807
(vii) By geographical distribution
30 September 31 December
2020 2019
RM'000 RM'000
Within Malaysia 3,831,751 3,863,163
Outside Malaysia 609,949 535,644 4,441,700 4,398,807
(viii) Analysis of foreign currency exposure
30 September 31 December
2020 2019
RM'000 RM'000
EUR 108 -
JPY 1,673 - USD 200,318 117,778
12. Impaired financing and advances
(i)30 September 31 December
2020 2019
RM'000 RM'000
At 1 January 70,924 63,010
Classified as non-performing during the financial period/year 50,471 98,836
Reclassified as performing during the financial period/year (48,506) (55,907)
Amount recovered during the financial period/year (9,218) (6,393)
Amount written off during the financial period/year (14,506) (28,622)
At end of reporting period/year 49,165 70,924
Impairment provision (22,026) (30,865) Net impaired financing and advances 27,139 40,059
Movements in impaired financing and advances
Page 13
#
Registration No. 200801022118 (823437-K)
12. Impaired financing and advances (continued)
(ii)
Lifetime ECL Lifetime ECL Lifetime ECL Lifetime ECL
non credit- credit- non credit- credit-
12-month ECL impaired impaired 12-month ECL impaired impaired
(Stage 1) (Stage 2) (Stage 3) Total (Stage 1) (Stage 2) (Stage 3) Total
RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
2,427 6,343 43,480 52,250 3,364 12,375 54,212 69,951
Transfer to 12-month ECL 2,217 (1,992) (225) - 12,668 (7,648) (5,020) -
Transfer to lifetime ECL non-credit-impaired (688) 1,958 (1,270) - (2,027) 4,492 (2,465) -
Transfer to lifetime ECL credit-impaired (6) (1,579) 1,585 - (18) (4,828) 4,846 -
9,082 12,047 89 21,218 (11,127) 1,952 17,740 8,565
- - (8,572) (8,572) - - (23,380) (23,380)
Unwinding of discount - - (1,828) (1,828) - - (2,711) (2,711)
(110) - - (110) (433) - 258 (175) 12,922 16,777 33,259 62,958 2,427 6,343 43,480 52,250
*
Write-offs
Excluded in total allowance for credit losses end of reporting period/year is a transfer to SCBMB under PSIA arrangement amounting to RM5.0 million (2019: RM5.7
million).
STANDARD CHARTERED SAADIQ BERHAD
(Incorporated in Malaysia)
2020 2019
Movements in allowances for credit losses for financing and advances
Balance at 1 January
Net remeasurement of loss allowance
Foreign exchange and other movements
At end of reporting period/year *
^
Page 14
Registration No. 200801022118 (823437-K)
12. Impaired financing and advances (continued)
(iii) Impaired financing and advances by sector
30 September 31 December
2020 2019
RM'000 RM'000
Manufacturing 2,714 1,794
Construction 2,172 2,672
Real estate 5,322 4,935
Wholesale & retail trade and restaurants & hotels 13,274 15,633
Transportation, storage and communication 716 1,450
Finance, insurance and business services 2,378 8,340
Household 20,554 34,029
Others 2,035 2,071 49,165 70,924
(iv) Impaired financing and advances by purpose
30 September 31 December
2020 2019
RM'000 RM'000
Purchase of property 32,752 47,817
- Residential 15,811 25,668
- Non-residential 16,941 22,149
Fixed assets excluding land and building 72 214
Personal use 1,429 3,706
Working capital 14,912 19,187 49,165 70,924
(v) Impaired financing and advances by geographical distribution
30 September 31 December
2020 2019
RM'000 RM'000
Within Malaysia 49,165 70,924
13. Other assets30 September 31 December
2020 2019
RM'000 RM'000
Income receivable 12,083 8,952
Other receivables, deposits and prepayments 409,066 233,351 421,149 242,303
14. Statutory deposits with Bank Negara Malaysia
STANDARD CHARTERED SAADIQ BERHAD
(Incorporated in Malaysia)
The non-profit bearing statutory deposits maintained with Bank Negara Malaysia are in compliance with Section
26(2)(c) of the Central Bank of Malaysia Act, 2009 to satisfy the Statutory Reserve Requirement (“SRR”); which is
determined at a set percentages of total eligible liabilities. Effective 16 May 2020, all banking institutions may
recognise holdings of Malaysian Government Securities ("MGS") and Malaysian Government Investment Issues
("MGII") as part of their SRR compliance.
Page 15
Registration No. 200801022118 (823437-K)
STANDARD CHARTERED SAADIQ BERHAD
(Incorporated in Malaysia)
15. Deposits from customers
(i) By type of deposits
30 September 31 December
2020 2019
RM'000 RM'000
Demand deposits 1,390,371 1,312,841
- Qard 1,126,165 1,080,055
- Commodity Murabahah * 264,206 232,786
Saving deposits 582,395 514,583
- Qard 64,372 70,515
- Commodity Murabahah * 518,023 444,068
Term deposits 1,218,324 1,031,903
- Commodity Murabahah * 1,205,452 1,018,233
- Mudharabah 12,872 13,670
3,191,090 2,859,327
- - *
30 September 31 December
2020 2019
RM'000 RM'000
Due within six months 955,712 866,748
Six months to one year 260,602 151,807
One year to six years 2,010 13,348 1,218,324 1,031,903
(ii) By type of customers
30 September 31 December
2020 2019
RM'000 RM'000
Government and statutory bodies 35 72,020
Business enterprises 918,685 1,063,132
Individuals 1,430,321 960,268
Foreign entities/individuals 423,732 115,700
Others 418,317 648,207 3,191,090 2,859,327
The maturity structure of the term deposits is as follows:-
Balances under Commodity Murabahah arrangement may contain incidental Qard elements due to timing
differences between the deposit placement renewal and the execution of Commodity Murabahah.
Page 16
Registration No. 200801022118 (823437-K)
STANDARD CHARTERED SAADIQ BERHAD
(Incorporated in Malaysia)
16. Investment accounts of customers30 September 31 December
2020 2019
RM'000 RM'000
Unrestricted investment accounts
Without maturityMudharabah 509,631 519,052
17.
30 September 31 December
2020 2019
RM'000 RM'000
Qard
Licensed banks 190,451 74,006
Commodity Murabahah
Other financial institutions 530,314 32,339 720,765 106,345
18.
Restricted investment accounts
Mudharabah 2,141,371 2,328,737
By type of counterparties
Licensed banks 2,141,371 2,328,737
19. Other liabilities
30 September 31 December
2020 2019
RM'000 RM'000
Lease liabilities 959 1,605
Income payable 13,008 12,616
Other payables and accruals 443,913 418,234 457,880 432,455
20. Provision for credit commitments and contingencies
30 September 31 December
2020 2019
RM'000 RM'000
Financing commitments and financial guarantee contracts
Balance as at 1 January 216 5,059
Net remeasurement of loss allowance 43 (4,849)
Foreign exchange and other movements 4 6
At end of reporting period/year 263 216
Mudharabah deposit placement of licensed bank is a placement under the PSIA arrangement by the Bank's
immediate holding company.
Deposits and placements of banks and other financial institutions
Restricted investment accounts due to designated financial institutions
Page 17
Registration No. 200801022118 (823437-K)
21. Income derived from investment of depositors' funds
30 September 30 September 30 September 30 September
2020 2019 2020 2019
RM'000 RM'000 RM'000 RM'000
Income derived from investment of:-
(i) Term deposits 21,684 20,098 54,442 66,938
(ii) Other deposits 27,718 21,616 74,037 60,051 49,402 41,714 128,479 126,989
(i) Income derived from investment of term deposits
30 September 30 September 30 September 30 September
2020 2019 2020 2019
RM'000 RM'000 RM'000 RM'000
Finance income and hibah
Financing and advances 9,725 12,412 29,937 40,614
Investment securities 2,634 3,053 7,923 5,934
Money at call and deposits
with financial institutions 1,689 1,984 4,761 11,685
Total finance income and hibah 14,048 17,449 42,621 58,233
Other operating income
Fees and commission income 7,689 2,675 11,924 9,013
Fees and commission expense (53) (26) (103) (308)
7,636 2,649 11,821 8,705
21,684 20,098 54,442 66,938
(ii) Income derived from investment of other deposits
30 September 30 September 30 September 30 September
2020 2019 2020 2019
RM'000 RM'000 RM'000 RM'000
Finance income and hibah
Financing and advances 12,133 13,295 40,713 36,436
Investment securities 3,296 2,959 10,775 5,323
Money at call and deposits
with financial institutions 2,131 2,523 6,474 10,483
Total finance income and hibah 17,560 18,777 57,962 52,242
Other operating income
Fees and commission income 10,227 2,885 16,215 8,086
Fees and commission expense (69) (46) (140) (277)
10,158 2,839 16,075 7,809 27,718 21,616 74,037 60,051
3rd quarter ended Nine months ended
STANDARD CHARTERED SAADIQ BERHAD
(Incorporated in Malaysia)
3rd quarter ended Nine months ended
3rd quarter ended Nine months ended
Page 18
Registration No. 200801022118 (823437-K)
22. Income derived from investment of investment account funds
30 September 30 September 30 September 30 September
2020 2019 2020 2019
RM'000 RM'000 RM'000 RM'000
Finance income and hibah
Financing and advances 18,108 27,446 58,851 97,408 Money at call and deposits
with financial institutions 3,138 5,121 12,131 15,074 21,246 32,567 70,982 112,482
23. Income derived from investment of shareholder's funds
30 September 30 September 30 September 30 September
2020 2019 2020 2019
RM'000 RM'000 RM'000 RM'000
Finance income and hibah
Financing and advances 5,035 5,905 15,794 16,675
Investment securities 1,365 1,336 4,180 2,436
Money at call and deposits
with financial institutions 877 1,092 2,512 4,798
Total finance income and hibah 7,277 8,333 22,486 23,909
Other operating income
Fees and commission income 4,037 1,280 6,291 3,700
Fees and commission expense (27) (19) (54) (127)
4,010 1,261 6,237 3,573 11,287 9,594 28,723 27,482
24. Provision for expected credit loss
30 September 30 September 30 September 30 September
2020 2019 2020 2019
RM'000 RM'000 RM'000 RM'000
Charge/(release) of provision for expected credit
losses for financial assets 11,633 (2,185) 21,287 1,033
- Financing and advances 13,410 (1,965) 21,218 5,591
- Credit commitments and contingencies (1,790) (304) 43 (4,745)
- Financial assets held at FVOCI -
investment securities 13 84 26 187
Amount recovered from impaired
financing and advances (2,024) (2,735) (6,430) (8,724)
9,609 (4,920) 14,857 (7,691)
STANDARD CHARTERED SAADIQ BERHAD(Incorporated in Malaysia)
3rd quarter ended Nine months ended
3rd quarter ended Nine months ended
3rd quarter ended Nine months ended
Page 19
#
Registration No. 200801022118 (823437-K)
25. Profit/hibah distributed to depositors
30 September 30 September 30 September 30 September
2020 2019 2020 2019
RM'000 RM'000 RM'000 RM'000
Deposits from customers
- Mudharabah fund 94 95 275 296
- Non-Mudharabah fund 10,927 19,739 42,002 59,201
Deposits and placements of banks
and other financial institutions
- Non-Mudharabah fund 2,007 1,278 6,015 3,997 13,028 21,112 48,292 63,494
26. Profit/hibah distributed to investment account holders
30 September 30 September 30 September 30 September
2020 2019 2020 2019
RM'000 RM'000 RM'000 RM'000
Investment accounts of customers 3,107 5,068 11,045 16,392
Investment accounts due to designated
financial institutions 13,242 21,584 46,346 75,008 16,349 26,652 57,391 91,400
27. Other operating expenses
30 September 30 September 30 September 30 September
2020 2019 2020 2019
RM'000 RM'000 RM'000 RM'000
Personnel costs
- Salaries, bonus, wages and allowances 2,047 2,125 6,263 6,573
- Pension fund contributions 296 307 896 1,030
- Other staff related cost 185 240 1,062 830
2,528 2,672 8,221 8,433
Establishment costs
- Depreciation of property, plant and equipment 20 18 67 54
- Depreciation of right-of-use assets 187 212 644 668
- Rental 15 24 55 89
- Information technology expenses 128 12 147 226
- Utilities and maintenance 292 286 1,101 877
642 552 2,014 1,914
Marketing expenses
- Advertisement and publicity 93 8 342 106
- Others 6 93 193 172
99 101 535 278
Administration and general expenses
- Communication expenses 37 43 92 114
- Group administration fees and business
support expenses 5,346 1,536 9,032 4,192
- Management fee 14,007 18,257 43,531 53,895
- Others 589 425 2,358 2,614
19,979 20,261 55,013 60,815 Total other operating expenses 23,248 23,586 65,783 71,440
STANDARD CHARTERED SAADIQ BERHAD(Incorporated in Malaysia)
3rd quarter ended Nine months ended
3rd quarter ended Nine months ended
3rd quarter ended Nine months ended
Page 20
Registration No. 200801022118 (823437-K)
28. Commitments and contingencies
Credit Risk Credit Risk
Principal equivalent weighted Principal equivalent weighted
amount amount ** amount ** amount amount ** amount **
RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Direct credit substitutes 85,174 67,974 89,645 66,269 49,069 57,783
Transaction-related contingent items 252,970 156,496 14,030 128,863 128,863 38,851
44,431 40,280 7,977 19,737 19,737 8,278
- 4,359,625 125,772 113,136 4,560,174 275,208 267,336
- maturity exceeding one year 366,495 14,034 20,687 623,716 61,394 97,612
- less than one year 1,185,073 35,225 9,388 2,238,741 113,429 46,762
Profit rate related contracts:-
- less than one year 1,407,476 150 27 1,419,065 9,381 1,489
- 2,175,509 64,504 31,188 774,234 33,735 13,946 9,876,753 504,435 286,078 9,830,799 690,816 532,057
**
STANDARD CHARTERED SAADIQ BERHAD(Incorporated in Malaysia)
Short-term self liquidating trade-related contingencies
In the normal course of business, the Bank makes various commitments and incurs certain contingent liabilities with legal recourse to its customers. No material losses
are anticipated as a result of these transactions.
As at 30 September 2020 As at 31 December 2019
Irrevocable commitments to extend credit:-
Foreign exchange related contracts:-
The commitments and contingencies are as follows:-
maturity not exceeding one year
Included in direct credit substitutes and transaction-related contingent items are the deals or contracts entered under Kafalah concept amounting to RM 338.1 million
(2019: RM195.1 million). All deals and contracts in short-term self liquidating trade-related contingencies are entered under Wakalah concept amounting to RM 44.4
million (2019: RM19.7 million).
Excluded from the credit equivalent and risk weighted amounts of the Bank are RM 162.9 million (2019: RM69.7 million) and RM 56.5 million (2019: RM48.3 million)
respectively relating to exposures funded by PSIA placements from SCBMB as provided by BNM's policy document on Investment Account. The related credit risk and
exposure of facilities funded by the Specific Investment Account are allowed to be transferred to SCBMB as the fund provider.
one year to less than five years
20062008
Page 21
Registration No. 200801022118 (823437-K)
29. Fair values of financial assets and liabilities
Methods and assumptions
Fair value hierarchy
Level 1 Level 2 Level 3
-
Level 1 Level 2 Level 3 Total
RM'000 RM'000 RM'000 RM'000
30 September 2020
Assets
Investment securities at FVOCI
- Malaysian Government Investment Issues - 919,598 - 919,598
Derivative financial instruments - 23,304 - 23,304
- 942,902 - 942,902
Liabilities
Derivative financial instruments - 23,782 - 23,782
- 23,782 - 23,782
Level 1 Level 2 Level 3 Total
RM'000 RM'000 RM'000 RM'000
31 December 2019
Assets
Investment securities at FVOCI
- Malaysian Government Investment Issues - 898,250 - 898,250
Derivative financial instruments - 78,476 - 78,476
- 976,726 - 976,726
Liabilities
Structured deposits - 3,143 - 3,143
Derivative financial instruments - 78,792 - 78,792
- 81,935 - 81,935
There were no transfers between Level 1 and Level 2 during the period ended 30 September 2020.
Structured deposits.
-
STANDARD CHARTERED SAADIQ BERHAD
(Incorporated in Malaysia)
The valuation hierarchy, and the types of instruments classified into each level within that hierarchy, is set out below:
-Type of financial liabilities OTC derivatives.
Fair value determined using
Type of financial assets Actively traded government
and agency securities.
Unadjusted quoted prices in
an active market for identical
assets and liabilities.
Valuation models with directly
or indirectly market observable
inputs.
Valuation models using
significant non-market
observable inputs.
Corporate and other
government bonds and
financing and advances.
Over-the-counter (OTC)
derivatives.
Page 22
Registration No. 200801022118 (823437-K)
30. Capital adequacy
The capital adequacy ratios of the Bank are analysed as follows:-
30 September 31 December
2020 2019
RM'000 RM'000
Tier 1 Capital
Paid-up ordinary share capital 411,000 411,000
Other reserves 301,720 271,720 Less: Deferred tax assets (11,614) (3,819)
Unrealised gains on investment securities 4,525 3,125
Common Equity Tier ("CET") 1 and Eligible Tier 1 capital 705,631 682,026
Tier 2 Capital
Subordinated sukuk 100,000 100,000
1,864 929
Surplus of total Eligible Provisions over total Expected
Loss under AIRB approach 12,139 15,693
Eligible Tier 2 capital 114,003 116,622
Total Capital Base 819,634 798,648
30 September 31 December
2020 2019
RM'000 RM'000
Total risk-weighted assets:-
- credit risk 2,532,917 2,692,359
- operational risk 290,462 281,851 2,823,379 2,974,210
CET 1 capital ratio 24.992% 22.931%
Tier 1 capital ratio 24.992% 22.931%
Risk-weighted capital ratio 29.030% 26.852%
*
STANDARD CHARTERED SAADIQ BERHAD
(Incorporated in Malaysia)
General provision refers to stage 1 and stage 2 ECL allowance as defined under MFRS 9, Financial
Instruments , to the extent they are ascribed to non-credit-impaired exposures as determined under the
standardised approach for credit risk.
Breakdown of risk-weighted assets in the various categories of risk-weights are as follows:-
General provisions under standardised approach*
Page 23