OTHER STATUTORY INFORMATION (CONTINUED) Change of circumstances At the date of this report, the Directors are not aware of any circumstances, not otherwise dealt with in this report or the financial statements which would render any amount stated in the financial statements of the Group and of the Bank misleading. Items of an unusual nature The results of the operations of the Group and of the Bank for the financial year were not, in the opinion of the Directors, substantially affected by any item, transaction or event of a material and unusual nature. There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature, likely to affect substantially the results of the operations of the Group or of the Bank for the current financial year in which this report is made. Compliance with Bank Negara Malaysia’s expectations on financial reporting In the preparation of the financial statements, the Directors have taken reasonable steps to ensure that Bank Negara Malaysia (“BNM”)’s expectations on financial reporting have been complied with, including those as set out in the Financial Reporting for Islamic Banking Institutions and Circular on the Application of MFRS. 2022 BUSINESS PLAN AND OUTLOOK Business Plan, Strategy and Future Outlook Economic recovery is expected in FY2022 with Gross Domestic Product (“GDP”) of 5.3%, despite downward revision of 2021 GDP to 3.0% (previous projection: 4.2%). This is in light of gradual normalisation of domestic economic activities amid higher vaccination rates and easing restrictions on production capacity which will bolster GDP expansion alongside improving global trade. The domestic banking sector is expected to stay resilient in 2022 amid the challenges of the Covid pandemic. Even as impairments begin to surface in the coming year, credit losses will be amply cushioned by healthy earnings accretion, comfortable provisioning buffers and solid capitalisation. Driven by household segment with mortgages as the main driver, overall sentiments shall remain positive for banking sector with continued support to viable consumers facing temporary financial difficulties through repayment assistance packages. In addition, Bank Negara Malaysia (“BNM”) has released a new five-year Financial Services Blueprint 2022 – 2026 in January this year. The blueprint is anchored on 4 key thrusts in fostering greater market dynamism and advancing the sustainability agenda to support the transition towards a greener economy. We have gone into the first year of LEAP25. Our 5-year aspiration of LEAP25 is to increase the asset size and ESG-rated financing assets, reduce Cost-to-Income ratio, sustain superior industry Return-to-Equity (“ROE”), increase our non-fund based income (“NFBI”) contribution, create positive social impact and retain high-performing talents. The Bank’s targets are anchored by the six pillars namely Sustainable Prosperity, Value Based Culture, Community Empowerment, Customer Centricity, Real Economy and Digitalisation. Gearing up for 2022 as the economy moves into the recovery period, the Bank will be focusing on the goal and ensuring effective execution of our strategies. Our customers will always be at the heart of our strategy execution. Cost rationalisation will remain our focus and spending will be allocated to our priority areas. BANK I SLAM MALAYS IA BERHAD 216 DIRECTORS’ REPORT for the financial year ended 31 December 2021
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