41. FINANCIAL RISK MANAGEMENT (CONTINUED) (b) Credit risk (continued) Maximum exposure to credit risk (continued) (b) Financing, advances and others (continued) The Group and the Bank routinely update the valuation of collateral held against all financing as it adopts an annual internal valuation policy and a 2 years external valuation policy. At 31 December 2022, the gross exposure of credit-impaired financing and advances to business customers amounted to RM464,334,000 (2021: RM395,179,000) and the forced sales value of collateral held against those financing and advances amounted to RM526,060,000 (2021: RM278,957,000). House financing The following table presents credit exposures from financing and advances that are credit impaired by ranges of financing-to-value (“FTV”) ratio. FTV is calculated as the ratio of the gross amount of the financing, or the amount committed for financing commitments - to the value of the collateral. Group and Bank FTV ratio 2022 RM’000 2021 RM’000 Credit-impaired financing Less than 51% 25,773 9,180 51-70% 17,930 8,303 More than 70% 186,682 115,688 Total 230,385 133,171 Vulnerable sectors The Group and the Bank have also identified certain vulnerable sectors that are mostly impacted by the pandemic, of which tighter assessment was made on the customers’ credit rating, credit risk, credit cost and available financing. Financing, advances and others Group and Bank On balance sheet (net of impairment) 2022 RM’000 2021 RM’000 Tourism, airlines, oil and gas, transportation, restaurant, hotel and others 357,462 10,667,494 % over total maximum exposure 1% 18% Notes to the financial statements for the financial year ended 31 December 2022 Integrated Report 2022 334
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