Page 311 - Bank Muamalat_AR24

ANNUAL REPORT 2024 1 2 3 4 5 6 7 Our Numbers 8 309

47. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D.)

(a) Credit risk (cont’d.)
(ii) Credit quality for financing of customers (cont’d.)

Past due but not impaired (cont’d.)
The following table presents an analysis of the past due but not impaired financing by economic purpose.

Group and Bank
2024 2023
RM’000 RM’000

Purchase of transport vehicles 23,490 11,477
Purchase of landed properties of which:
- residential 425,010 238,530
- non-residential 15,572 12,596
Personal use 219,701 151,997
Construction 965 649
Working capital 53,407 23,055
Other purpose 5,496 3,819
743,641 442,123

Collateral and other credit enhancements

The amount and type of collateral required depends on assessment of credit risk of the counterparty. Guidelines
are implemented regarding the acceptability of types of collateral and valuation parameters.

The main types of collateral obtained by the Group and the Bank are as follows:
- For home financing - mortgages over residential properties;
- For syndicated financing - charges over the properties being financed;
- For hire purchase receivables - charges over the vehicles financed; and
- For other financing - charges over business assets such as premises, inventories, trade receivables or deposits.

The financial effect of collateral (i.e. quantification of the extent to which collateral and other credit enhancements
mitigate credit risk) held for financing of customers for the Group and the Bank are at 51.24% and 51.25%
respectively as at 31 December 2024 (45.47% and 45.48% respectively as at 31 December 2023). Meanwhile,
the financial effect of collateral held for other financial assets is not significant.
As at 31 December 2024, the fair value of collateral that the Group and the Bank hold relating to financing of
non-retail customers determined to be impaired amounts to RM83,639,000 (2023: RM51,677,000). The collateral
consists of cash, securities, letters of guarantee, and properties.