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)

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Page 1: Standard Chartered Saadiq BerhadRegistration No. 200801022118 (823437-K) Standard Chartered Saadiq Berhad (Incorporated in Malaysia) ended 30 September 2020 Condensed financial statements

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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)

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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

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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.

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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.

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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.

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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.

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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

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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

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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

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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

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#

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 *

^

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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.

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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.

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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

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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

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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

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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

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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

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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.

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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