Page 236 - KWAP_Integrated-Report_2023

ENRICHING NATIONAL PROGRESS ENRICHING SUStAINABLE REtURNS

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

34. FINANCIAL RISK (CONTINUED)
(d) Credit risk (continued)

(iv) Estimated value of collateral for financial assets

Unsecured
Gross portion of
Value of exposure to credit
collateral credit risk exposure
RM’000 RM’000 RM’000

2023
loans and receivables 71,586 506,634 435,048
2022
loans and receivables 60,378 1,040,896 980,518
(v) Maximum exposure to credit risk

the assessment of the credit risk of counterparties determines the required amount and type of collaterals.
the treatment of collateral is established encompassing the acceptability and valuation of each type of
collateral.

the main types of collaterals are as follows:
• Guarantees from the Government of Malaysia in relation to government-related loans;
• Charges over collaterals as well as guarantees from parent companies for loans to their respective
subsidiaries in relation to corporate loans; and
• Cash and securities for securities in relation to repurchase transitions.
the group and KWap monitor the market value of collaterals including the possible request for additional
collaterals in accordance with the underlying agreement.
Analysis of the maximum exposure to credit risk and collaterals and other credit enhancements

the following table illustrates the maximum exposure to credit risk by classes of financial assets as well as the
total fair value of collaterals, the surplus collateral (to the extent whereby the fair value of the collateral held is
greater than the exposure to which it relates), if any, as well as the net exposure to credit risk.
for financial assets reflected in the statement of financial position, the exposure to credit risk equals the
carrying amount. for credit related commitments and contingents that are irrevocable over the life of the
respective facilities, the exposure to credit risk is generally the full amount of the committed facilities.

the financial effect of collateral (quantification to the extent to which collateral and other credit enhancements
mitigate credit risk) held for financial assets that are exposed to credit risk for the group and KWap is 0.10%
(2022: 0.09%). the financial effect of collateral held for the remaining financial assets are deemed to be
insignificant.

234 KUMPULAN WANG PERSARAAN (DIPERBADANKAN) i INtEGRAtED REPoRt 2023