4. CREDIT RISK (CONTINUED) 4.5 Credit Quality of Gross Financing and Advances (continued) (b) Past Due but Not Impaired (continued) Analysis of the past due but not impaired financing and advances by sector: Group and Bank 31.12.2023 RM’000 31.12.2022 RM’000 Primary agriculture – 139 Mining and quarrying – – Manufacturing (including agro-based) 1,718 4,229 Electricity, gas and water 105 – Wholesale & retail trade, and hotels & restaurants 11,819 5,033 Construction 9,159 8,880 Real estate 529 19 Transport, storage and communications 2,081 1,102 Finance, insurance and business activities 3,797 798 Education, health and others 6,725 922 Household sectors 674,833 647,681 Other sectors – – 710,766 668,802 (c) Impaired Financing and Advances A financing is classified as impaired when the principal or profit or both are past due for three months or more, or where a financing is in arrears for less than three months, but the financing exhibits indications of significant credit weakness. The financing or group of financings is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that have occurred after the initial recognition of the financing (a ‘loss event’) and that the loss event has an impact on the estimated future cash flows of the financing or group of financings that can be reliably estimated. The Group and the Bank first assess individually whether the objective evidence of impairment exists individually for financings which are individually significant, and collectively for financings which are not individually significant. If it is determined that no objective evidence of impairment exists for an individually assessed financing, the financing is included in a group of financings with similar credit risk characteristic and collectively assessed for impairment. If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the financing’s carrying amount and the present value of the estimated future cash flows. The carrying amount of the financing is reduced through the use of an allowance account and the amount of the loss is recognised in the statement of profit or loss. 424 Pillar 3 Disclosure as at 31 December 2023 Bank Islam Malaysia Berhad ◆ Integrated Annual Report 2023
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