41. FINANCIAL RISK MANAGEMENT (CONTINUED) (b) Credit risk (continued) Maximum exposure to credit risk (continued) Note Bank 2022 RM’000 2021 RM’000 Cash and short-term funds and deposits and placements with financial institutions 7,128,159 5,204,364 Financial assets at FVTPL* 54,858 1,287,089 Derivative financial assets (a) 123,000 26,037 Financial assets at FVOCI^ 12,017,378 12,526,670 Financial assets at AC 3,055,256 1,348,844 Financing, advances and others (b) 64,901,994 58,153,769 Other financial assets at AC@ 480,595 239,257 Sub-total 87,761,240 78,786,030 Credit related obligation: Financial guarantee contracts (c) 1,926,256 1,822,909 Financing commitments# (d) 9,201,594 9,357,082 Sub-total 11,127,850 11,179,991 Total credit exposures 98,889,090 89,966,021 * Excludes unit trust ^ Excludes equity instruments @ Excludes prepayment # Excludes derivative financial instruments (a) Derivative financial assets In mitigating the counterparty credit risks from foreign exchange and derivatives transactions, the Group and the Bank enter into master agreements that provide for closeout netting with counterparties, whenever possible. A master agreement that governs all transactions between two parties, creates the greater legal certainty that the netting of outstanding obligations can be enforced upon termination of outstanding transactions if an event of default occurs. (b) Financing, advances and others Business and retail Financing, advances and others will have levels of collateralisation depending on the nature of the product. The general creditworthiness of a corporate and commercial customer tends to be the most relevant indicator of credit quality of a financing extended to it. The Group and the Bank manage its exposures to these customers by completing a credit evaluation to assess the customer's character, industry, business model and capacity to meet their commitments in a timely manner. The Group and the Bank may take collateral in the form of a first charge over real estate, floating charges over all corporate assets and other liens and guarantees. Financial Statements 333 01 05 03 07 02 06 09 04 08 Bank Islam Malaysia Berhad
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