Malayan Banking Berhad - Hong Kong Monetary Authorityvpr.hkma.gov.hk/pdf/100050/ar_09/ar_09_pt02.pdf · 3813-K Malayan Banking Berhad (Incorporated in Malaysia) 4. Significant accounting

3813-K

Malayan Banking Berhad (Incorporated in Malaysia)

4. Significant accounting estimates and judgements

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. Although these estimates are based on management's best knowledge of current events and actions, actual results may differ from those estimates. Critical accounting estimates and assumptions used that are significant to the financial statements, and areas involving higher degree of judgement and complexity, are as follows:

(i) Fair value estimation of securities held-for-trading (Note 8(i)), securities available-for-sale (Note 8(ii)) and derivative financial instruments (Note 1 0)

The fair value of securities and derivatives that are not traded in an active market are determined using valuation techniques based on assumptions of market conditions existing at the balance sheet date, including reference to quoted market prices and independent dealer quotes for similar securities and discounted cash flow method.

(ii) Valuation of investment properties (Note 12)

The measurement of the fair value for investment properties is arrived at by reference to market evidence of transaction prices for similar properties and is performed by independent professional valuers.

(iii) Impairment of goodwill (Note 17)

The Group tests annually whether the goodwill that has an indefinite life has suffered any impairment by measuring the recoverable amount of the goodwill based on the value-in-use method, which requires the use of estimates of cash flow projections, growth rates and discount rates. Changes to the assumptions used by management, particularly the discount rate and the terminal value, may affect the results of the impairment assessment.

The details are disclosed in Note 17.

(iv) Impairment of other intangible assets (Note 17)

The Group's and the Bank's intangible assets that can be separated and sold and have a finite useful life are amortised over their estimated useful life.

The determination of the estimated useful life of these intangible assets requires the_ Bank's management to analyse the circumstances, the industry and market practice and also to use judgment. At each balance sheet date, or more frequently when events or changes in circumstances dictate, intangible assets are assessed for indications of impairment. If indications are present, these assets are subject to an impairment review. The impairment review comprises a comparison of the carrying amount of the assets with its recoverable amount.

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4. Significant accounting estimates and judgements (cont'd.)

(v) Liabilities of insurance business (Note 20)

The actuarial estimate of future contingent policy liabilities is computed in accordance with the standards and bases prescribed under the Insurance Act and Regulations, and uses a level net premium methodology with allowances for acquisition costs through the application of zilmer or full preliminary term adjustments, whichever produces higher reserves.

For general claims, reserve is made upon notification of a new claim where the potential liability will be assessed based on information available. Where little or no information is available, a "blind" reserve will be used. The blind reserves are based on class of business and are reviewed annually in line with Bank Negara Malaysia guidelines. As and when more information becomes available regarding a claim, the reserve is amended accordingly.

(vi) Deferred tax (Note 23) and income taxes (Note 38)

The Group and the Bank are subject to income taxes in many jurisdictions and significant judgment is required in estimating the provision for income taxes. There are many transactions and interpretations of tax law for which the final outcome will not be established until some time later. Liabilities for taxation are recognized based on estimates of whether additional taxes will be payable. The estimation process includes seeking expert advice where appropriate. Where the final liability for taxation is different from the amounts that were initially recorded, the differences will affect the income tax and deferred tax provisions in the period in which the estimate is revised or the final liability is established.

(vii) Allowances for bad and doubtful debts (Note 9(vii) and Note 36)

The Group and the Bank review the doubtful loans, advances and financing at each reporting date to assess whether allowances for impairment should be recorded in the financial statements. In particular, judgement is required in the identification of doubtful loans, and the estimation of realisable amount from the doubtful loans when determining the level of allowance required.

The Group and the Bank have adopted certain criteria in the identification of doubtful loans, which include classifying loans as non-performing when repayments are in arrears for more than three (3) months. Specific allowances for doubtful loans are provided after taking into consideration of the values assigned to collateral. The values assigned to collateral are estimated based on market value and/or forced sales value, as appropriate and conforms with BNM guidelines. In addition to the specific allowances made, the Group and the Bank also make general allowance against exposure not specifically identified based on a certain percentage of total riskweighted assets for credit risk. Such estimates are based on assumptions about a number of factors and actual results may differ, resulting in future changes to the allowance.

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4. Significant accounting estimates and judgements (cont'd.)

(viii) Impairment of investment in subsidiaries (Note 14) and interests in associates (Note 15)

The Group and the Bank assess whether there is any indication that an investment in subsidiaries and interest in associates may be impaired at each balance sheet date.

If indicators are present, these assets are subject to an impairment review. The impairment review comprises a comparison of the carrying amount of the investment and the investment's estimated recoverable amount.

Judgements made by management in the process of applying the Group and Bank's accounting policies in respect of investment in subsidiaries and interest in associates are as follows:

(i) The Bank determines whether its investments are impaired following certain indications of impairment such as, amongst others, prolonged shortfall between market value and carrying amount, significant changes with adverse effects on the investment and deteriorating financial performance of the investment due to obseNed changes and fundamentals.

(ii) Depending on their nature and the industries in which the investments relate to, judgements are made by management to select suitable methods of valuation such as, amongst others, discounted cash flow, realisable net asset value and sector average price-earning ratio methods.

Once a suitable method of valuation is selected, management makes certain assumptions concerning the future to estimate the recoverable amount of the investment. These assumptions and other key sources of estimation uncertainty at the balance sheet date, may have a significant risk of causing a material adjustment to the carrying amounts of the investments within the next financial year. Depending on the specific individual investment, assumptions made by management may include, amongst others, assumptions on expected future cash flows, revenue growth, discount rate used for purposes of discounting future cash flows which incorporates the relevant risks, and expected future outcome of certain past events.

The details are disclosed in Note 14 and Note 15.

Sensitivity to changes in assumptions

Management believes that no reasonably expected possible change in the key assumptions described above would cause the carrying amounts of the investments to materially exceed their recoverable amounts.

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5. Cash and short-term funds

6.

Cash, balances and deposits with banks and other financial institutions

Money at call

Group 2009

RM'OOO

23,525,521 82,458

23,607,979

2008 RM'OOO

27,444,984 199,375

27,644,359

Bank 2009

RM'OOO

17,446,195 2,117

17,448,312

Included in cash and short-term funds of the Group are monies held in trust of RM108,495,259 (2008: RM127,643,000) in respect of the stockbroking business.

Deposits and placements with financial institutions

Group Bank 2009 2008 2009

RM'OOO RM'OOO RM'OOO

Licensed banks 4,958,051 7,778,478 6,248,449 Bank Negara Malaysia 665,948 955,967 640,344 Other financial institutions* 675,176 222,070 675,176

6,299,175 8,956,515 7,563,969

2008 RM'OOO

24,047,978 21,639

24,069,617

2008 RM'OOO

8,124,261 449,162 222,069

8,795,492

* Included in deposits and placements with other financial institutions is USD10.0 million (2008: USD10.0 million) or Ringgit Malaysia equivalent of RM35.2 million (2008: RM32.6 million) pledged with the New York State Banking Department in satisfaction of capital equivalency deposit requirements and USD46.3 million (2008: USD77.4 million) or Ringgit Malaysia equivalent of RM162.8 million (2008: RM252.9 million) placed with National Bank of Cambodia.

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7. Securities purchased under resale agreements and obligations on securities sold under repurchase agreements

(i) The underlying securities purchased under resale agreements are as follows:

Group Bank 2009 2008 2009 2008

RM'OOO RM'OOO RM'OOO RM'OOO

Malaysian Government Securities 249,257 249,257

Foreign government treasury bills 97,205 97,205

346,462 346,462

(ii) The securities sold under repurchase agreements are as follows:

Group Bank 2009 2008 2009 2008


Securities (Note 8(iv)(b)) 322,371 322,371

8. Securities portfolio

Group Bank

Note 2009 2008 2009 2008 RM'OOO RM'OOO RM'OOO RM'OOO

Securities held-for-trading (i) 1,489,272 880,794 1338,721 418,170

Securities available-for-sale (ii) 47,877,105 34,484,135 39,349,558 28,620,398

Securities held-to-maturity (iii) 8,360,751 1 '186,227 6,831,898 672,972

57,727,128 36,551,156 47,020,177 29,711,540

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8. Securities portfolio (cont'd.)

(i) Securities held-for-trading

Group Bank 2009 2008 2009 2008


At fair value

Money market instruments: Malaysian Government

Securities 63,813 38,947 4,940 38,947 Malaysian Government

Treasury Bills 73,227 19,917 73,227 19,917 Malaysian Government

Investment Issues 29,946 9,536 9,536 Khazanah Bonds 4,978 Bank Negara Malaysia

Monetary Notes 444,031 4,112 444,031 4,112 Foreign Government

Securities 4,738 268 Foreign Certificates

of Deposits 219,426 840,159 72,780 522,198 72,512

Quoted Securities: Shares 27,939 23,689 27,939 23,689

27,939 23,689 27,939 23,689

Unquoted Securities: Malaysian Government

Bonds 35,189 35,189 Foreign private debt

securities 288,584 286,780 288,584 286,780 Islamic private debt

securities in Malaysia 332,590 462,356 621 '174 784,325 288,584 321,969

Total securities held-for-trading 1,489,272 880,794 838,721 418,170_

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Malayan Banking Berhad (Incorporated in Malaysia}


(ii) Securities available-for-sale

Group Bank 2009 2008 2009 2008


At fair value, or at cost less impairment losses for certain unquoted equity instruments

Money market instruments:

Malaysian Government Securities 8,000,877 4,779,401 7,462,815 4,339,911

Cagamas Bonds 289,075 552,925 289,075 330,348 Foreign government

securities 7,601,976 3,699,181 4,889,677 3,602,495 Malaysian Government

Treasury Bills 9,902 29,915 9,902 29,915 Malaysian Government

Investment Issues 8, 128,186 4,144,204 5,156,329 2,643,988 Bank Negara Malaysia

Bills 49,962 49,962 Foreign government treasury

bills 556,106 943,965 405,546 817,769 Negotiable instruments of

deposits 1,776,469 907,399 4,691,967 2,868,290 Bankers' acceptances and

Islamic accepted bills 3,070,391 1,955,570 3,024,272 1,278,786 Khazanah Bonds 828,797 889,737 359,850 345,341 Bank Negara Malaysia

Monetary Notes 50,005 787,150 50,005 787,150 Foreign certificates of

deposits 216,237 30,311,784 18,955,646 26,339,438 17,093,955

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(ii) Securities available-for-sale (cont'd.)

Group Bank 2009 2008 2009 2008


At fair value, or at cost less impairment losses for certain unquoted equity instruments (cont'd.)

Quoted Securities:

In Malaysia: Shares, warrants, trust units

and loan stocks 386,243 508,255 181,936 165,835

Outside Malaysia: Shares, warrants, trust units

and loan stocks 97,811 106,536 48,518 58,150 484,054 614,791 230,454 223,985

Unquoted Securities:

Shares, trust units and loan stocks in Malaysia 691,283 777,089 441,733 507,187

Shares, trust units and loan stocks outside Malaysia 39,358 32,152 18,864 15,776

Islamic private debt securities in Malaysia 11,015,939 9,164,822 7,792,927 6,191,994

Malaysian Government Bonds 162,297 314,664 162,297 314,664

Foreign government bonds 80,671 73,138 Credit linked notes

(Note 8(iv)(c)) 225,735 245,012 . 225,735 245,012 Foreign Islamic private

debt securities 4,865,984 4,306,821 4, 138,110 4,027,825 17,081,267 14,913,698 12,779,666 11,302,458

Total securities available-for-sale 47,877,105 34,484,135 39,349,558 28,620,398

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(iii) Securities held-to-maturity

Group Bank 2009 2008 2009 2008


At amortised cost

Money market instruments:

Malaysian Government Securities 6,263,488 103,635 6,032,944 103,076

Cagamas Bonds 13,390 13,409 1,670 1,670 Foreign government

securities 443,637 152,962 Malaysian Government

Investment Issues/ Certificates 512,691 80 275,248

7,233,206 270,086 6,309,862 104,746

Unquoted Securities:

Islamic private debt securities in Malaysia 494,853 355,443 100,262 76,265

Malaysian Government Bonds 7,638 42,559 7,638 42,559

Foreign Islamic private debt securities 640,842 535,275 424,915 466,523

Others 2,044 2,044 2,044 2,044 1,145,377 935,321 534,859 587,391

Accumulated impairment losses (17,832) (19,180) (12,823) (19,165)

Total securities held-to-maturity 8,360,751 1 '186,227 6,831,898 672,972

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(iii) Securities held-to-maturity (cont'd.)

Indicative value of unquoted securities held-to-maturity:

Malaysian Government Securities

Cagamas Bonds Malaysian Government

Investment Issues Foreign government

securities Islamic private debt

securities in Malaysia Malaysian Government

Bonds Foreign Islamic private

debt securities Others

(iv) Other disclosures

Group 2009

RM'OOO

6,244,726 13,505

512,755

495,508

480,971

7,689

661,650 2,044

2008 RM'OOO

100,917 1,669

152,961

56,327

44,247

549,441 2,044

Bank 2009

RM'OOO

6,013,698 1,674

275,691

88,129

7,689

445,723 2,044

2008 RM'OOO

100,822 1,669

56,327

44,247

480,689 2,044

(a) The maturity structure of money market instruments available-for-sale and held-tomaturity are as follows:

Group Bank 2009 2008 2009 2008


Maturing within one year 7,804,762 6,518,195. 5,789,992 5,642,452 One year to three years 3,499,277 3,642,182 4,268,177 2, 150,118 Three years to five years 12,780,339 4,845,208 13,170,029 5,311,759 After five years 13,460,612 4,220,147 9,421 '102 4,094,372

37,544,990 19,225,732 32,649,300 17,198,701_

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(iv) Other disclosures (cont'd.)

(b) Included in the securities available-for-sale and held-to-maturity are the following securities sold under repurchase agreements:

Private debt securities

Group 2009 2008

RM'OOO RM'OOO

322,371

Bank 2009 2008

RM'OOO RM'OOO

322,371

(c) Included in securities available-for-sale are credit linked notes with a face value of USD90,000,000 (2008: USD90,000,000) or Ringgit Malaysia equivalent to RM316,530,000 (2008: RM293,895,000) with embedded credit default swaps. The notes would be redeemed at face values on their respective maturity dates provided there is no occurrence of a specified credit event affecting the reference entities or their obligations. If there is an occurrence of a credit event, the underlying asset (the reference obligation of the reference entity), or a cash settlement amount to be determined with reference to the market value of the underlying asset in accordance with the terms of the contract, would be delivered by the issuer of the note.

(d) Reclassification of securities

Disclosures of the reclassification from securities held-for-trading to securities heldto-maturity category in the financial statements of the Group are as follows:

(a) Amount reclassified from securities held-for-trading to securities held-tomaturity category with effect from 23 January 2009:

Fair value of securities held-for-trading reclassified to securities held-to-maturity

60

Group 2009

RM'OOO

78,092

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(iv) Other disclosures (cont'd.)

(d) Reclassification of securities (cont'd.)

(b) Carrying amount and fair value of securities held-for-trading reclassified to securities held-to-maturity as at 30 June 2009:

Carrying amount

Fair value

Group 2009

RM'OOO

73,093

77,199

(c) The fair value losses recognised in respect of the securities held-for-trading reclassified to securities held-to-maturity for the financial year ended 30 June 2009:

Losses recognised in income statement

Group 2009

RM'OOO

(63)

(d) The effective interest rate of the securities held-for-trading reclassified to securities held-to-maturity as at 23 January 2009 is at 5.97% per annum.

As at 30 June 2009, there is no significant change in the estimated amount of cashflows that the Group expects to recover from the securities held-for-trading reclassified to securities held-to-maturity category.

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9. Loans, advances and financing

Group Bank

2009 2008 2009 2008 RM'OOO RM'OOO RM'OOO RM'OOO

Overdrafts 14,493,359 13,991,901 11,349,807 11,940,566 Term loans

- Housing loans/financing 33,537,779 30,529,957 26,945,169 25,677,247 - Syndicated loan/

financing 12,407,057 11,281,784 9,722,422 8,885,931 - Hire purchase

receivables 38,050,669 31,767,458 22,366,959 22,931,317 - Lease receivables 3,381 3,796 3,277 3,796 - Other loans/financing 56,782,224 45,446,862 39,278,820 33,320,876

Credit card receivables 4,283,414 3,459,441 3,796,899 3,459,441 Bills receivable 2,293,815 2,121,855 2,223,077 2,018,427 Trust receipts 2,082,258 2,214,701 1,742,023 1,999,919 Claims on customers under

acceptance credits 11,129,121 13,728,112 7,754,168 9,661,171 Loans/financing to banks and

other financial institutions 10,170,957 9,580,463 9,967,406 9,580,173 Revolving credits 20,228,361 17,484,607 17,131,926 17,062,932 Staff loans 1,460,468 1,213,644 950,028 954,499

206,922,863 182,824,581 153,231,981 147,496,295 Loans to:

- Executive directors of the Bank 193 193

- Executive directors of subsidiaries 2,104 972 2,104 972

Others 488,514 121 '139 207,413,674 182,946,692 153,234,278 147,497,267

Unearned interest and income (14,050,883) (11 ,791 ,230) (3,018,394) (3,215,131)

Gross loans, advances and financing 193,362,791 171 '155,462 150,215,884 144,282,1-36

Allowances for bad and doubtful debts/financing -Specific {3,854,026) {3,353,676) {2,847,031) (2,698, 146) -General (3, 725,599) {3,187,611) {2,937,055) {2,728,516~

Net loans, advances and financing 185,783,166 164,614,175 144,431,798 138,855,474

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9. Loans, advances and financing (cont'd.)

(i) Loans, advances and financing analysed by type of customer are as follows:

Group Bank 2009 2008 2009 2008


Domestic operations: Domestic non-bank financial

institutions - Stockbroking companies 96,725 136,051 96,546 135,869 -Others 11,364,670 10,803,486 9,566,429 9,274,482

Domestic business enterprise - Small and medium

enterprise 20,725,182 28,377,672 16,956,711 23,564,416 -Others 31,940,124 23,901,554 27,972,236 20,973,016

Government and statutory bodies 2,282,784 176,835 2,213,320 65,322

Individuals 62,811,592 58,022,736 45,902,511 45,539,807 Other domestic entities 148,302 164,331 25,925 31,771 Foreign entities 574,944 483,254 468,954 423,930 Total domestic operations 129,944,323 122,065,919 103,202,632 100,008,613

Overseas operations: Singapore 39,269,681 36,976,691 39,269,681 36,976,691 Labuan offshore 3,127,625 3,803,615 Hong Kong SAR 2,892,352 2,725,761 2,892,352 2,725,761 United States of America 1,339,147 1,230,560 1 ,339,147 1,230,560 People's Republic of China 969,266 799,411 969,266 799,411 Vietnam 548,044 547,172 548,044 547,172 United Kingdom 1,280,950 1,291,934 1,280,950 1,291,934 Brunei 130,655 155,298 130,655 155,298 Cambodia 302,508 174,832 302,508 174,832 Bahrain 280,649 371,864 280,649 371,864 Philippines 793,490 766,221 . Indonesia 12,417,737 196,818 Papua New Guinea 66,364 49,366 Total overseas operations 63,418,468 49,089,543 47,013,252 44,273,523

Gross loans, advances and financing 193,362,791 171 '155,462 150,215,884 144,282,136

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9. loans, advances and financing {cont'd.)

(ii) Loans, advances and financing analysed by interest/profit rate sensitivity are as follows:

Group Bank 2009 2008 2009 2008


Fixed rate - Housing loans/financing 11,235,546 11,058,229 7,724,707 6,905,381 - Hire purchase receivables 29,790,106 26,745,884 19,005,757 19,386,043 - Other fixed rate loans/

financing 19,021,173 13,636,046 13,285,625 10,317,152 Variable rate - Base lending rate plus 64,648,964 59,256,410 59,291,964 55,873,068 -Cost plus 20,795,087 20,379,761 17,128,290 16,034,765 - Other variable rates 47,871,915 40,079,132 33,779,541 35,765,727

Gross loans, advances and financing 193,362,791 171 '155,462 150,215,884 144,282,136

(iii) Loans, advances and financing analysed by economic purpose are as follows:

Group Bank

2009 2008 2009 2008 RM'OOO RM'OOO RM'OOO RM'OOO

Domestic operations: Purchase of securities 11,437,474 10,336,664 9,891,754 10,132,879 Purchase of transport

vehicles 19,844,339 17,793,442 8,912,826 9,960,972 - less Islamic transport

vehicles sold to Cagamas (268,304) (611 ,346) Purchase of landed properties - residential 24,649,453 24,269,339 19,241,121 18,752,859 - non-residential 6,493,344 6,429,515 . 5,797,391 5,812,909

-

- less Islamic housing loans sold to Cagamas (315,069) (362,256)

Purchase of fixed assets (exclude landed properties) 3,264 3,799 3,264 3,799

Personal use 3,782,771 3,326,392 3,348,353 2,982,30Z Credit card 3,556,878 3,196,102 3,510,535 3,196,102 Purchase of consumer

durables 15,709 12,283 14,838 12,155 Construction 6,300,230 5,456,547 5,426,053 4,590,098 Working capital 51,005,722 51,271,899 43,706,947 43,788,220 Others 3,438,512 943,539 3,349,550 776,318 Total domestic operations 129,944,323 122,065,919 103,202,632 100,008,613

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(iii) Loans, advances and financing analysed by economic purpose are as follows: (cont'd.)

Overseas operations: Singapore Labuan offshore Hong Kong SAR United States of America People's Republic of China Vietnam United Kingdom Brunei Cambodia Bahrain Philippines Indonesia Papua New Guinea Total overseas operations Gross loans, advances and

financing

Group 2009 2008

RM'OOO RM'OOO

39,269,681 3,127,625 2,892,352 1,339,147

969,266 548,044

1,280,950 130,655 302,508 280,649 793,490

12,417,737 66,364

63,418,468

193,362,791

36,976,691. 3,803,615 2,725,761 1,230,560

799,411 547,172

1,291,934 155,298 174,832 371,864 766,221 196,818 49,366

49,089,543

171 '155,462

Bank 2009 2008

RM'OOO RM'OOO

39,269,681

2,892,352 1,339,147

969,266 548,044

1,280,950 130,655 302,508 280,649

47,013,252

150,215,884

36,976,691

2,725,761 1,230,560

799,411 547,172

1,291,934 155,298 174,832 371,864

44,273,523

144,282,136

(iv) The maturity structure of loans, advances and financing is as follows:

Maturing within one year One year to three years Three years to five years After five years Gross loans, advances and

financing

Group 2009

RM'OOO

46,589,151 21,564,256 21,252,023

103,957,361

2008 RM'OOO

60,375,022 13,595,010 17,551,637 . 79,633,793

193,362,791 171 '155,462

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Bank 2009

RM'OOO

35,211,430 15,478,574 14,956,572 84,569,308

2008 RM'OOO

52,346,171 11,587,501 14,377,~65

65,970,799

150,215,884 144,282,136

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(v) Movements in the non-performing loans, advances and financing ("NPL") are as follows:

Group Bank 2009 2008 . 2009 2008


Balance at beginning of year 6,472,448 8,258,214 5,214,212 8,054,673 Non-performing

during the year 4,519,887 3,894,201 3,012,997 3,471,106 Reclassified as performing (1 ,870,449) (2,336,020) (1 ,513,811) (2, 102,674) Recovered during the year (1 ,398,790) (1 ,740,968) (959,732) (1 ,511 ,268) Amount written off (1 ,439,402) (1 ,537,598) (797,628) (1 ,388,906) Converted to securities (931) (47,188) (931) (47,188) Converted to properties (5,700) (5,700) Net amount transferred

to Maybank Islamic Berhad (1 ,245,328) Sale of Non-performing

loans ("NPL") (97,615) (97,615) Exchange differences

and expenses debited to customers' accounts 35,781 85,122 81,206 87,112

Acquisition of subsidiaries 396,688 Balance at end of year 6,715,232 6,472,448 5,036,313 5,214,212 Less: - Specific allowance (3,854,026) (3,353,676) (2,847,031) (2,698,146)

on non-performing loans (3,589,888) (3,229,837) (2,586, 136) (2,574,307) on performing loans (264, 138) (123,839) (260,895) (123,839)

Net balance 2,861,206 3,118,772 2,189,282 2,516,066

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(v) Movements in the non-performing loans, advances and financing ("NPL") are as follows (cont'd.):

Gross loans, advances and financing

Add: Islamic loans sold to Cagamas

Less: - Specific allowance Net loan, advances and

financing (including Islamic loans sold to Cagamas)

Group 2009

RM'OOO 2008

RM'OOO

193,362,791 171,155,462

583,373 973,603 193,946,164 172,129,065

{3,854,026) {3,353,676)

190,092,138 168,775,389

Ratio of net non-performing loans: - Including specific

allowance on performing loans 1.51% 1.85%

- Excluding specific allowance on performing loans 1.64% 1.92%

67

Bank 2009

RM'OOO 2008

RM'OOO

150,215,884 144,282,136

150,215,884 144,282,136

(2,847,031) {2,698, 146)

147,368,853 141,583,990

1.49% 1.78%

1.66% 1.86%

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(vi) Non-performing loans analysed by economic purpose are as follows:

Group Bank 2009 2008 2009 2008


Domestic operations:

Purchase of securities 131,940 235,595 74,889 141,008 Purchase of transport

vehicles 122,873 113,949 90,420 85,480 Purchase of landed properties

- residential 1,957,069 2,054,284 1,480,025 1,540,594 - non-residential 332,185 384,991 294,607 341,498

Personal use 212,615 205,453 174,808 170,885 Credit card 53,267 39,488 52,733 39,488 Purchase of consumer

durables 1,571 1,073 1,567 1,069 Construction 462,533 413,657 365,212 277,209 Working capital 2,391,994 2,583,576 2,026,305 2,273,731 Others 19,492 33,895 16,845 28,896 Total domestic operations 5,685,539 6,065,961 4,577,411 4,899,858

Overseas operations:

Singapore 296,279 237,782 296,279 237,782 Labuan offshore 107,238 61,287 Hong Kong SAR 74,170 25,716 74,170 25,716 Brunei 2,789 41,076 2,789 41,076 Vietnam 20,859 9,488 20,859 9,488 People's Republic of China 22,176 292 22,176 292 United Kingdom 42,629 42,629 Cambodia Papua New Guinea 2,637 3,073.

Philippines 33,922 27,773 Indonesia 426,994 Total overseas operations 1,029,693 406,487 458,902 314,354

6,715,232 6,472,448 5,036,313 5,214,212-

68

-) 3813-K



(vii) Movements in the allowance for bad and doubtful debts are as follows:

Group Bank 2009 2008 2009 2008

RM'OOO RM'OOO RM'OOO RM'OOO Specific allowance:

Balance at beginning of year 3,353,676 4,016,704 2,698,146 3,837,843

Allowance made during the year 2,088,853 1,649,562 1,337,489 1,451,779

Amount written back in respect of recoveries (475,569) (766,333) (396,612) (628,320)

Amount written off (1 ,439,402) (1 ,537,598) (797,628) (1 ,388,906) Transfer to general

allowance (143) (7,366) (4,302) Transfer to impairment

losses in value of securities (931) {8,651) (931) (8,651)

Amount transferred to Maybank (579,816) Islamic Berhad

Exchange differences (29,441) 7,358 6,567 18,519 Acquisition of subsidiaries 356,983 Balance at end of year 3,854,026 3,353,676 2,847,031 2,698,146

General allowance:

Balance at beginning of year 3,187,611 2,757,315 2,728,516 2,613,274 Allowance made

during the year 358,818 437,587 202,599 407,327 Amount written back (41,574) (22,418) Amount transferred

to Maybank Islamic Berhad (307,~91)

Transfer from specific allowance 143 7,366 4,302

Exchange differences (20,059) 7,761 5,940 11,504 Acquisition of subsidiaries 240,660 Balance at end of year 3,725,599 3,187,611 2,937,055 2,728,51()

As a percentage of total loans (including Islamic loans sold to Cagamas, less specific allowance) 1.96% 1.89% 1.99% 1.93%

69

3813-K

Malayan Banking Berhad {Incorporated in Malaysia)


(vii) Movements in the allowance for bad and doubtful debts are as follows: (cont'd.)

Group Bank 2009 2008 2009 2008

RM'OOO RM'OOO RM'OOO RM'OOO As a percentage of total

risk-weighted assets for credit risk excluding deferred tax assets 1.93% 1.82% 1.83% 1.72%

10. Derivative financial instruments

2009 2008 Contract/ Contract/ Notional Fair Value Notional Fair Value Amount Assets Liabilities Amount Assets Liabilities RM'OOO RM'OOO RM'OOO RM'OOO RM'OOO RM'OOO

Group

Foreign exchange contracts:

Currency forward 12,570,470 82,533 (150,556) 13,644,197 165,069 (95,999)

Currency swaps 21,750,058 244,681 (214,662) 39,531,712 159,343 (275,742)

Options 1,920,053 6,096 (17,066) 2,893,206 18,486 (13,909) 36,240,581 333,310 (382,284) 56,069,115 342,898 (385,650)

Interest rate related contracts: Interest rate

swaps 55,892,895 640,375 (1,076,784) 44,447,327 487,252 (669,447)

Total derivative assets/( liabilities) 973,685 (1 ,459,068) 830,150 (1 ,055,097)

70

) .. /

3813-K


10. Derivative financial instruments (cont'd.)

Bank

Contract/ Notional Amount RM'OOO

Foreign exchange contracts:

Currency forward 11,052,406

Currency swaps 21,750,058

Options 1,920,053 34,722,517

Interest rate related contracts:

2009

Fair value Assets Liabilities RM'OOO RM'OOO

63,224 (127,822)

222,539 (187,524)

6,095 (17,066) 291,858 (332,412)

Contract/ Notional Amount RM'OOO

13,644,197

39,531,712

2,893,206 56,069,115

2008

Fair value Assets Liabilities RM'OOO RM'OOO

165,069 (95,999)

159,343 (275,742)

18,486 (13,909) 342,898 (385,650)

Interest rate swaps 54,311,740 638,046 (1,049,448) 42,362,974 485,284 (641 ,398)

Total derivative assets/(liabilities)

11. Other assets

Interest receivables Prepayments and deposits Other debtors Amount due from related

companies Tax recoverable Foreclosed properties Prepaid land lease payments

(Note (a))

929,904 (1 ,381 ,860)

Group 2009 2008

RM'OOO RM'OOO

1,274,972 925,031 462,836 335,980

2,959,679 2,481,359

194,935 117,874 147,186 124,377

209,682 116,557 5,249,290 4, 101,178

71

828,182 (1 ,027,048)

Bank 2009 2008

RM'OOO RM'OOO

945,287 759,031 352,005 328,790

2,349,390 1,885,723

57 54,327 24,222 62,568 62,561-

85,337 86,358 3,818,866 3,176,790

3813-K


11. Other assets (cont'd.)

(a) Prepaid land lease payments

Leasehold Land Less Than 50 Years

50 Years or More Total Group RM'OOO RM'OOO RM'OOO As at 30 June 2009

Cost Balance at 1 July 2008 6,413 135,810 142,223 Acquisition of subsidiaries (Note 14) 117,959 117,959 Additions 1,026 1,026 Disposals (196) (1,140) (1,336) Write offs (Note 34) (8,625) (8,625) Transfers 570 (570) Reclassification from property, plant and

equipment (Note 16) 4,877 4,877 Reclassification to investment properties

(Note 12) (18,787) (18,787) Exchange differences 238 238 Balance at 30 June 2009 116,121 121,454 237,575

Accumulated depreciation and impairment losses

Balance at 1 July 2008 2,546 23,120 25,666 Charge for the year (Note 34) 139 1,607 1,746 Writeback of impairment losses (Note 37) (184) (184) Disposals (13) (334) (347) Reclassification from property, plant and

equipment (Note 16) 783 783 Transfers 129 (129) Exchange differences 229 229 Balance at 30 June 2009 2,801 25,092 27,893

Analysed as: Accumulated depreciation 2,801 25,092 27,893

Net carrying amount At 30 June 2009 113,320 96,362 209,682

72

3813-K



(a) Prepaid land lease payments (cont'd.)

Group As at 30 June 2008

Cost Balance at 1 July 2007 Additions Disposals Exchange differences Balance at 30 June 2008


Balance at 1 July 2007 Accumulated depreciation Charge for the year (Note 34) Impairment losses Disposals Exchange differences Balance at 30 June 2008

Analysed as: Accumulated depreciation Accumulated impairment

losses

Net carrying amount At 30 June 2008

73


50 Years or More Total RM'OOO RM'OOO RM'OOO

6,413 135,460 141,873 554 554

(1 ,554) (1 ,554) 1,350 1,350

6,413 135,810 142,223

2,400 21,457 23,857 146 1,502 1,648

184 184 (102) (102)

79 79 2,546 23,120 25,666

2,546 22,936 25,482

184 184 2,546 23,120 25,666

3,867 112,690 116,557

3813-K





50 Years or More Total

Bank RM'OOO RM'OOO RM'OOO As at 30 June 2009

Cost Balance at 1 July 2008 6,413 99,299 105,712 Additions 1,026 1,026 Disposals (35) (1,140) (1,175) Transfers 570 (570) Exchange differences 237 237 Balance at 30 June 2009 6,948 98,852 105,800


Balance at 1 July 2008 Accumulated depreciation 2,545 16,809 19,354 Charge for the year (Note 34) 140 1,087 1,227 Disposals (13) (334) (347) Transfers 129 (129) Exchange differences 229 229 Balance at 30 June 2009 2,801 17,662 20,463

Analysed as: Accumulated depreciation 2,801 17,662 20,463

Net carrying amount At 30 June 2009 4,147 81 '190 85,337

74

3813-K




Bank (cont'd.)

As at 30 June 2008



Balance at 1 July 2007 Accumulated depreciation

Charge for the year (Note 34) Disposals Exchange differences Balance at 30 June 2008

Analysed as: Accumulated depreciation


75

Leasehold Land Less Than

50 Years

RM'OOO

6,413

6,413

2,399 146

2,545

2,545

3,868

50 Years or More

RM'OOO

98,949 554

(1 ,554) 1,350

99,299

15,768 1,065 (103)

79 16,809

16,809

82,490

Total

RM'OOO

105,362 554

(1 ,554) 1,350

105,712

18,167 1,211 (103)

79 19,354

19,354

86,358

3813-K


12. Investment properties

At 1 July 2008/2007 Fair value adjustment (Note 34) Revaluation reserve (Note 28(iii)) Reclassification from prepaid land lease payments (Note 11) Reclassification from property, plant and equipment

(Note 16) Additions Disposal Exchange differences At 30 June 2009/2008

The following investment properties are held under lease terms:

Leasehold land Buildings

13. Statutory deposits with Central Banks

With Bank Negara Malaysia With other Central Banks

Group 2009

RM'OOO 2008

RM'OOO

832,808 4, 729,493 3,218,124 -~1~, 1=4~2,_92~1~ 4,050,932 5,872,414 .

Group 2009 2008

RM'OOO RM'OOO

3,885 (136)

2,742 18,787

1,572

(330) 58

26,578

Group 2009

RM'OOO

17,211 5,497

22,708

Bank 2009

RM'OOO

40,750

338 (37, 169)

(34) 3,885

2008 RM'OOO

1,700 1,700

2008 RM'OOO

822,590 3,949,492 1,287,553 990,209

----:--::-:::-::-"=:-:---2,110,143 4,939,7:01

The non-interest-bearing statutory deposits maintained with Bank Negara Malaysia are in compliance with Section 37(1)(c) of the Central Bank of Malaysia Act, 1958 (Revised 1994), the amounts of which are determined as set percentages of total eligible liabilities. The statutory deposits of the foreign branches and subsidiaries are denominated in foreign . currencies and maintained with the Central Banks of respective countries, in compliance with the applicable legislations.

76

3813-K


14. Investment in subsidiaries

Unquoted shares, at cost

-In Malaysia - Outside Malaysia

Less: Accumulated impairment losses

Bank 2009 2008

RM'OOO RM'OOO

14,020,168 5,864,517 896,844 893,129

14,917,012 6,757,646 (3,130,719) _ ___..:....(3.....,.4_;2,..,...80.....,.2,.:...) 11,786,293 6,414,844

(a) During the financial year, the Bank acquired PT Bank lnternasionallndonesia TbK ("BII") and its subsidiaries ("BII Group") and BinaFikir Sdn Bhd ("BinaFikir"), as disclosed in Note 51 (a) and 51 (d).

(b) The Group acquired various tranches of shareholdings in Bll Group, a listed bank in Indonesia, from 26 March 2008 to 1 December 2008, resulting in a shareholding of 97.5% as at 30 June 2009.

The Group acquired 100% of BinaFikir on 11 November 2008.

The total cost of acquisition, amounting to RM7,906.6 million, is satisfied by cash consideration.

(i) The newly acquired subsidiaries have contributed the following results to the Group:

Revenue Profit for the year

RM'OOO

2,073,000 59,260

(ii) The assets and liabilities arising from the acquisitions are as follows:

Trade and other receivables Cash and bank balances Loans, advances and financing Securities portfolio Property, plant and equipment Prepaid land lease payments (Note 11 (a)) Intangible assets (Note 17) Deferred tax (Note 23)

77

Fair value recognised on

acquisition RM'OOO

3,358,053 554,306

13,248,110 3,210,571

137,656 117,959 411,727 151,329

21,189,711

Acquiree's carrying amount RM'OOO

3,293,218 554,306_

13,318,622 3,210,571

151,717 117,959

133,700 20,780,093

3813-K


14. Investment in subsidiaries (cont'd.)

Trade and other payables Deposits from customers Deposits and placements of banks and other

financial institutions Other liabilities Subordinated obligations

Fair value of net assets Less: Minority interests Group's share of net assets Goodwill on acquisition (Note 17) Total cost of acquisition

The cash outflow on acquisition is as follows:

Purchase consideration satisfied by cash Costs attributable to the acquisition, paid in cash Total cash outflow of the Bank Less: Unrefundable deposits for acquisition Net cash outflow of the Bank

Fair value recognised on

acquisition RM'OOO

2,352,805 15,293,538

378,284 503,459 505,940

19,034,026

2,155,685 53,700

2,101,985 5,804,567 7,906,552

Acquisition of a subsidiary by Maybank Investment Bank Berhad Cash and cash equivalents of subsidiaries acquired Net cash outflow of the Group

Details of the subsidiaries are disclosed in Note 55.

78

Acquiree's carrying amount RM'OOO

2,352,846 15,293,538

378,284 503,417 505,940

19,034,025

RM'OOO

7,861,915 41,000

7,902,915 (483,824)

7,419,091 3,637

(554,306) 6,868,422

3813-K


15. Interest in associates

Unquoted shares, at cost · Quoted shares, at cost Exchange differences

Share of post-acquisition reserves

Less: Accumulated impairment losses

Market value of quoted shares

Group Bank 2009 2008 2009 2008


397,129 67,950 393,049 63,869 2,864,864 2,174,564 (288, 993) __ __;1~, 7;......;9_;_7 __________ _

2,973,000 2,244,311 393,049 63,869

10,190 __ _,_(2_5 ...... ,4_6_4.._) ----------2,983,190 2,218,847 393,049 63,869

(353' 067) --=-=~-:::-:-:::- ---::(:-:570 '-::-00-:-::0:-'-) __ ('-:-570 '-::-00=0::-'-) 2,630,123 2,218,847 343,049 13,869 ___ ...,;,..._

925,706 1,470,259

(a) The summarised financial information of the associates are as follows:

Total assets Total liabilities Operating revenue Profit after tax

79

Group 2009 2008

RM'OOO RM'OOO

24,400,445 (20,673,965)

2,314,369 512,865

21,817,103 (18,878,558)

1,786,500 905,389

3813-K


15. Interest in associates (cont'd.)

(b) Details of the associates are as follows:

Name Principal Country of 2009 2008 activities incorporation % %

Held by the Bank:

Uzbekleasing International Leasing Uzbekistan 35.0 35.0 A. 0.

Philmay Holding, Inc. Investment Philippines 33.0 33.0 holding

Pelaburan Hartanah Property Trust Malaysia 30.0 30.0 Nasional Berhad

Mayban Agro Fund Sdn. Fund specific Malaysia 33.3 33.3 Bhd. purpose

vehicle

Mayban Venture Capital Venture Malaysia 33.3 33.3 Company Sdn. Bhd. capital

An Sinh Commercial Joint Banking Vietnam 15.0 Stock Bank

Held through subsidiaries:

Baiduri Securities Sdn. Bhd. Under Brunei 39.0 39.0 members' voluntary liquidation

80

3813-K


15. Interests in associates (cont'd.)

(b) Details of the associates are as follows: (cont'd.)

Name Principal Country of activities incorporation

Pak-Kuwait Takaful Investment Pakistan Company Limited holding

MCB Bank Limited Banking Pakistan

Maybank JAIC Management Fund Malaysia Ltd management

2009 2008 % %

17.3 17.3

20.0 15.0

50.0

The financial year ends of the above associates are coterminous with those of the Group, except for Uzbekleasing International A.O., Pelaburan Hartanah Nasional Berhad and MCB Bank Limited, which all have a financial year end of 31 December to conform with their holding companies' financial year end and/or regulatory requirement. For the purpose of applying the equity method of accounting, the financial statements of Uzbekleasing International A.O., Pelaburan Hartanah Nasional Berhad and MCB Bank Limited for the year ended 31 December 2008 have been used and appropriate adjustments have been made for the effects of significant transactions between 31 December 2008 and 30 June 2009.

(c) Acquisition of additional shareholding in MCB Bank Limited ("MCB") and acquisition of An Sinh Commercial Joint Stock Bank ("An Binh")

Details in relation to the acquisition of An Sinh is disclosed in Note 51 (b).

(d) The details of goodwill included within the Group's carrying amount of interest in associates are as follows:

As at 1 July Arising from interest in associates Exchange differences As at 30 June

81

2009 RM'OOO

2,060,104 209,474

2008 RM'OOO

2,060,104

(208,977) ------2,060,601 2,060,104

3813-K


16. Property, plant and equipment

Office Furniture, Electrical

Fittings, Computers and Equipment and and Security Motor Buildings-in-

Group *Properties Renovations Peripherals Equipment Vehicles Progress Total RM'OOO RM'OOO RM'OOO RM'OOO RM'OOO RM'OOO RM'OOO

As at 30 June 2009 Cost Balance at 1 July 2008 1,156,318 623,950 1,078,406 145,358 17,328 57,270 3,078,630 Additions 33,935 71,810 82,844 5,008 5,382 36,291 235,270 Acquisition of subsidiaries

(Note 14) 80,063 47,946 2,849 - 6,591 207 137,656 Disposals (10,199) (14,719) (3,508) (1 ,850) (3,878) - (34, 154) Write-offs (Note 34) (27,781) (57,622) (6,691) (3,816) (228) (131) (96,269) Transfers 1,261 59,400 (2,818) 2,292 - (60, 135) Reclassification to prepaid

land lease payments (Note 11 (a)) (4,877) - - - - - (4,877)

Reclassification to investment properties (Note 12) (1 ,572) - - - - - (1 ,572)

Reclassification to intangible assets (Note 17) - - (6, 120) - - (3,033) (9, 153)

Exchange differences 2,054 1 '118 1,015 127 93 79 4,486 Balance at 30 June 2009 1,229,202 731,883 1 '145,977 147,119 25,288 30,548 3,310,017

82

3813-K


16. Property, plant and equipment (cont'd.)

Group (cont'd.)

As at 30 June 2009 (cont'd.)


Balance at 1 July 2008 Accumulated depreciation Accumulated impairment

losses

Charge for the year (Note 34) Impairment losses (Note 37) Disposals Write-offs (Note 34) transfers Reclassification to prepaid land

lease payment (Note 11 (a)) Exchange differences Balance at 30 June 2009

Office Furniture,

Fittings, Equipment and

*Properties Renovations RM'OOO RM'OOO

292,507

7,076

492,686

4

492,690 85,095

299,583 25,814

232 (3, 192) (9,779)

446

(13,116) (57,369)

(509)

(783) 1,389

313,710 650

507,441

83

Computers and

Peripherals RM'OOO

940,217

940,217 24,111

-(3,499) (6,684)

508 954,653

Electrical and

Security Equipment

RM'OOO

122,962

122,962 7,530

-(1 ,832) (3,730)

63

98 125,091

Motor Buildings-in-Vehicles Progress

RM'OOO RM'OOO

12,345

12,345 3,617

(2,247) (225)

70 13,560

Total RM'OOO

1,860,717

7,080

1,867,797 146,167

232 (23,886) (77,787)

(783) 2,715

1,914,455

•. •· ' u

3813-K



Group (cont'd.)

As at 30 June 2009 (cont'd.) Analysed as: Accumulated depreciation Accumulated impairment

losses


Office Furniture,



306,402 507,437

7,308 4 313,710 507,441

915,492 224,442

84

Computers and

Peripherals RM'OOO

954,653

954,653

191,324

Electrical and

Security Equipment

RM'OOO

125,091

125,091

22,028


RM'OOO RM'OOO

13,560

13,560

11,728 30,548

Total RM'OOO

1 ,907,143

7,312 1,914,455

1,395,562

3813-K



Group

As at 30 June 2008 Cost Balance at 1 July 2007 Additions Disposals Write-offs Transfers Reclassification to property held

for sale Reclassification to intangible

assets (Note 17) Exchange differences Balance at 30 June 2008

Office Furniture,



1,137,259 662,625 19,359 22,867 (9,680) (452)

(84,254) 20,563

(8,750) -

18,130 2,601 1,156,318 623,950

85

Computers and

Peripherals RM'OOO

998,777 95,901

(104) (10,387)

(580)

-

(6,512) 1,311

1,078,406

Electrical and

Security Equipment

RM'OOO

146,510 1,217

-(4,942) 2,034

-

-539

145,358


RM'OOO RM'OOO

18,103 18,667 2,988 63,119 (937) -

(2,416) (2,726) (197) (21 ,820)

- -

- -(213~ 30

17,328 57,270

Total RM'OOO

2,981,941 205,451 (11,173)

(104,725)

(8,750)

(6,512) 22,398

3,078,630

,.

0

3813-K





Group (cont'd.) *Properties Renovations Peripherals Equipment Vehicles Progress Total RM'OOO RM'OOO RM'OOO RM'OOO RM'OOO RM'OOO RM'OOO

As at 30 June 2008 (cont'd.)


Balance at 1 July 2007 Accumulated depreciation 268,616 517,163 902,935 120,498 14,096 - 1,823,308 Accumulated impairment

losses 6,942 4 - - - - 6,946

275,558 517,167 902,935 120,498 14,096 - 1,830,254 Charge for the year (Note 34) 21,351 57,275 46,568 7,220 1,867 - 134,281 Impairment losses (Note 37) 134 - - - - - 134 Disposals (3,056) (308) (104) - (935) - (4,403) Write-offs - (84,060) (10,307) (4,938) (2,362) - (101 ,667) Transfers - 810 (564) (86) (160) Exchange differences 5,596 1,806 1,689 268 (161) - 9,198 Balance at 30 June 2008 299,583 492,690 940,217 122,962 12,345 - 1,867,797

86

3813-K



Group (cont'd.)

As at 30 June 2008 (cont'd.) Analysed as: Accumulated depreciation Accumulated impairment

losses


Office Furniture,



292,507 492,686

7,076 4 299,583 492,690

856,735 131,260

87

Computers and

Peripherals RM'OOO

940,217

940,217

138,189

Electrical and

Security Equipment

RM'OOO

122,962

122,962

22,396


RM'OOO RM'OOO

12,345

12,345

4,983 57,270

Total RM'OOO

1,860,717

7,080 1,867,797

1,210,833

,,

\__)

3813-K



Group (cont'd.)

* Properties consist of:

Cost Balance at 1 July 2008 Additions Acquisition of subsidiaries Disposals Write-offs Transfers Reclassification to prepaid land lease payments (Note 11 (a)) Reclassification to investm~nt properties (Note 12) Exchange differences Balance at 30 June 2009

88

Buildings on Freehold Freehold

Land Land RM'OOO RM'OOO

111 '150 454,296 6,376 22,517

(5,028) (2, 1 06) (25,493)

600 585

(493) (1 ,355) 151 633

112,756 449,077

Buildings on Leasehold Land

Less Than 50 Years

RM'OOO

70,247 5,042

80,063 (105)

(2,288) (317)

-(391) 250

152,501

50 Years or More RM'OOO

520,625

(2,960)

393 (4,877)

667 1,020

514,868

Total RM'OOO

1 '156,318 33,935 80,063

(10,199) (27,781)

1,261 (4,877) (1 ,572) 2,054

1,229,202

3813-K



Group (cont'd.)

* Properties consist of: (cont'd.)

Accumulated depreciation and impairment losses Balance at 1 July 2008

Accumulated depreciation Accumulated impairment losses

Charge for the year Impairment losses (Note 37) Disposals Write-offs Transfers Reclassification to prepaid land lease payments (Note 11 (a)) Exchange differences Balance at 30 June 2009

89



- 144,984 - 6,132

151,116 - 9,346 - (118) - (877) - (9,166) - 9,610 - -- 455 - 160,366

.-\_)


Less Than 50 Years 50 Years or More Total


32,280 115,243 292,507 335 609 7,076

32,615 115,852 299,583 5,765 10,703 25,814

(13) 363 232 (27) (2,288) (3, 192)

(613) - (9,779) (9,214) 50 446

- (783) (783) 125 809 1,389

28,638 124,706 313,710

3813-K



Buildings on Leasehold Buildings on Land

Freehold Freehold Less Than 50 Years Land Land 50 Years or More Total

RM'OOO RM'OOO RM'OOO RM'OOO RM'OOO Group (cont'd.)

*Properties consist of: {cont'd.) ·

Analysed as: Accumulated depreciation - 154,352 28,316 123,734 306,402 Accumulated impairment

losses - 6,014 322 972 7,308 160,366 28,638 124,706 313,710

Net carrying amount At 30 June 2009 112,756 288,711 123,863 390,162 915,492

90

3813-K



Group (cont'd.)


Cost Balance at 1 July 2007 Additions Disposals Transfers Reclassification to property held for sale Exchange differences Balance at 30 June 2008

91



118,839 457,361 - 1,999

(1 ,939) (4, 133) - -

(6,600) -850 (931)

111 '150 454,296

0

\_}




70,109 490,950 1 '137,259 - 17,360 19,359

(597) (3,011) (9,680) 1,389 (1 ,389)

(2, 150) - (8,750) 1,496 16,715 18,130

70,247 520,625 1,156,318

3813-K



Group {cont'd.)

*Properties consist of: {cont'd.)


Balance at 1 July 2007 Accumulated depreciation Accumulated impairment losses

Charge for the year Impairment losses (Note 37) Disposals Transfers Exchange differences Balance at 30 June 2008

92



137,790 4,213

142,003 8,065 1,919

(1 ,630)

759 151,116




28,067 102,759 268,616 322 2,407 6,942

28,389 105,166 275,558 2,346 10,940 21,351

13 (1,798) 134 - (1 ,426) {3,056)

300 (300) 1,567 3,270 5,596

32,615 115,852 299,583

3813-K



Group (cont'd.)

*Properties consist of: (cont'd.)

Analysed as: Accumulated depreciation Accumulated impairment losses


93

Freehold Land

RM'OOO

111 I 150

Buildings on Freehold

Land RM'OOO

144,984 6,132

151,116

303,180

Buildings on Leasehold

Less Than 50 Years

RM'OOO

32,280 335

32,615

37,632

Land 50 Years or More RM'OOO

115,243 609

115,852

404,773

Total RM'OOO

292,507 7,076

299,583

856,735

;,:. .~

\~)

3813-K




Fittings, Computers and Equipment and and Security Motor Buildings .. in-

Bank *Properties Renovations Peripherals Equipment Vehicles Progress Total RM'OOO RM'OOO RM'OOO RM'OOO RM'OOO RM'OOO RM'OOO

As at 30 June 2009

Cost

Balance at 1 July 2008 1,006,710 510,487 945,947 124,313 10,264 52,390 2,650,111 Additions 13,093 38,167 80,915 4,951 1,427 30,055 168,608

Disposals (8,662) (13,771) (3,363) (1 ,850) (837) - (28,483)

Write-offs (Note 34) - (54,732) (6,421) (3,816) (135) - (65, 104)

Transfers - 50,519 - 2,241 - (52,760)

Reclassification to intangible assets (Note 17) - - (6, 120) - - - (6, 120)

Exchange differences 1,415 604 882 97 101 79 3,178 Balance at 30 June 2009 1,012,556 531,274 1,011,840 125,936 10,820 29,764 2,722,190

94 .

95

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Buildings on Leasehold Buildings on Land

Freehold Freehold Less Than 50 Years Land Land 50 Years or More Total

RM'OOO RM'OOO RM'OOO RM'OOO RM'OOO Bank (cont'd.)

*Properties consist of:

Cost Balance at 1 July 2008 107,454 390,181 68,369 440,706 1,006,710 Additions 6,235 1,816 5,042 - 13,093 Disposals (4,644) (1 ,383) - (2,635) (8,662) Transfers - - (393) 393 Exchange differences 150 94 246 925 1,415 Balance at 30 June 2009 109,195 390,708 73,264 439,389 1,012,556

Accumulated depreciation Balance at 1 July 2008 - 142,779 22,188 98,392 263,359 Charge for the year - 7,787 1,877 9,211 18,875 Disposals - (460) - (1 ,066) (1 ,526) Exchange differences - 38 375 (121) 292 Balance at 30 June 2009 - 150,144 24,440 106,416 281,000

Net carrying amount At 30 June 2009 109,195 240,564 48,824 332,973 731,556

96

3813-K



Office Furniture,

Fittings,

Equipment and Bank

As at 30 June 2008

Cost

Balance at 1 July 2007 Additions Disposals Write-offs (Note 34) Transfers Reclassification to intangible

assets (Note 17) Exchange differences Balance at 30 June 2008

*Properties

RM'OOO

978,983 17,383 (8,604)

18,948 1,006,710

Renovations

RM'OOO

552,002 19,244

(83,509) 19,756

2,994 510,487

97

Computers

and Peripherals

RM'OOO

867,120 93,049

(9,645) -

(6,471)

1,894 945,947

,,

\_)

Electrical

and Security Motor Buildings-in-

Equipment Vehicles Progress Total


125,708 11,272 15,849 2,550,934 945 1,446 58,330 190,397

(8,604) (4,941) (2,416) - (1 00,511)

2,064 - (21,820)

- - - (6,471)

537 (38) 31 24,366 124,313 10,264 52,390 2,650,111

3813-K

Mal_ayan Banking Berhad (Incorporated in Malaysia)




Bank (cont'd.) *Properties Renovations Peripherals Equipment Vehicles Progress Total

RM'OOO RM'OOO RM'OOO RM'OOO RM'OOO RM'OOO RM'OOO

As at 30 June 2008

Accumulated depreciation

Balance at 1 July 2007 243,985 421,687 780,573 108,380 9,115 - 1,563,740 Charge for the year (Note 34) I 17,970 50,936 40,926 4,998 838 - 115,668

Depreciation attributable to Islamic Banking Operations I 554 1,569 1,260 154 26 - 3,563

18,524 52,505 42,186 5,152 864 - 119,231 Disposals (2,599) - - - - - (2,599) Write-offs - (83,370) (9,613) (4,938) (2,362) - (1 00,283) Exchange differences 3,449 2,269 1,659 267 (5) - 7,639 Balance at 30 June 2008 263,359 393,091 814,805 108,861 7,612 - 1,587,728

Net carrying amount

At 30 June 2008 743,351 117,396 131,142 15,452 2,652 52,390 1,062,383

98

3813-K



Bank (cont'd.)



Accumulated depreciation Balance at 1 July 2007 Charge for the year Depreciation attributable to Islamic

Banking Operations

Disposals Exchange differences Balance at 30 June 2008


Freehold Land

RM'OOO

108,543

(1 ,939) 850

107,454

Buildings on Freehold

Land RM'OOO

393,757 23

(4, 133) 534

390,181


Less Than 50 Years

RM'OOO

66,859

1,510 68,369

50 Years or More RM'OOO

409,824 17,360 (2,532) 16,054

440,706

Total RM'OOO

978,983 17,383 (8,604) 18,948

1,006,710

136,409 19,805 87,771 243,985 I - 7,571 1,332 9,067 ----f7,M01

- 233 41 280 554 7,804 1,373 9,347 18,524

(1 ,630) - (969) (2,599) 196 1,010 2,243 3,449

142,779 22,188 98,392 263,359

107,454 247,402 46,181 342,314 743,351

99

.-\ _ __)

3813-K


17. Intangible assets

Group Bank 2009 2008 2009 2008


(a) Goodwill

Cost:

At 1 July 2008/2007 81,015 81,015 81,015 81,015 Acquisition of subsidiaries

(Note 14) 5,804,567 Impairment losses (1 ,619,518) Exchange differences (302,854) At 30 June 3,963,210 81,015 81,015 81,015

(b) Core Deposits Intangibles

Cost:

At 1 July 2008/2007 Acquisition of subsidiaries

(Note 14) 388,024 Exchange differences (20,254) At 30 June 367,770

Accumulated amortisation:

At 1 July 2008/2007 Amortisation charged

(Note 34) 71,737 Exchange differences 1,403 At 30 June 73,140

Net carrying amount 294,630

100

'.

/) ~ .

3813-K


17. Intangible assets (cont'd.)

Group Bank 2009 2008 2009 2008


(c) Computer Software

Cost:

At 1 July 2008/2007 354,151 317,957 291,667 248,427 Acquisition of subsidiaries

(Note 14) 23,703 Additions 33,282 38,383 23,814 33,676 Disposals (386) (10,756) Write-offs (187) (667) (187) Reclassification from property,

plant and equipment (Note 16) 9,153 6,512 6,120 6,471

Exchange differences 838 2,722 1,029 3,093 At 30 June 420,554 354,151 322,443 291,667

Accumulated amortisation:

At 1 July 2008/2007 245,437 205,902 190,227 144,980 Amortisation charged

(Note 34) 58,884 48,046 44,437 42,532 Disposals (46) (10,756) Write-offs (187) (138) (187) Exchange differences 296 2,383 849 2,715 At 30 June 304,384 245,437 235,326 190,227

Net carrying amount 116,170 108,714 87,117 101,440

(d) Total intangible assets

Goodwill 3,963,210 81,015 81,015 81,015 Core Deposits Intangible 294,630 Computer Software 116,170 108,714 87,117 101,440 At 30 June 4,374,010 189,729 168,132 182,455_

101

3813-K


17. Intangible assets (cont'd.)

(a) Goodwill

Goodwill has been allocated to the Group's Cash-Generating Units ("CGU") identified according to the following business segments:

Cash Generating Unit

American Express ("AMEX") card services business in Malaysia

Acquisition of PT Bank lnternasional Indonesia TbK ("BII")

(i)

Impairment loss (ii)

Acquisition of BinaFikir Impairment loss

2009 Group

RM'OOO

81,015

5,804,567

Bank RM'OOO

81,015

2008 Group

RM'OOO

81,015

Bank RM'OOO

81,015

(1,617,000) ----------------4,187,567

2,518 ----~<2~,_51_8~) ___________________ __

Goodwill is allocated to the Group's CGUs expected to benefit from the synergies of the acquisitions. The recoverable amount of the CGUs are assessed based on value-in-use and compared to the carrying value of the CGU to determine whether any impairment exists. Impairment is recognised in the income statement when the carrying amount of the CGU exceeds its recoverable amount.

(i) The value-in-use calculations apply discounted cash flow projections prepared and approved by management, covering a 1 0-year period.

The other key assumptions for the computation of value-in-use are as follows:

(a) The Bank expects the AMEX card services business to be a going concern;

(b) The growth in business volume is expected to be equivalent to the current inflation rate of 6% per annum;

(c) The discount rate applied is the internal weighted average cost of capital of the Bank at the time of assessment, which is estimated to be 7.83% per annum.

102

3813-K


17. Intangible asset (cont'd.)

(a) Goodwill (cont'd.)

(ii) The value-in-use calculations discounted cash flow model using free cash flow to equity (FCFE) projections prepared and approved by managment covering a 10 year period. The compounding annual growth rate ("CAGR") of Bll's FCFE projections was 21%.

The other key assumptions for the computation of value-in-use are as follows:

(a) The Bank expects the Bll banking business operations to be a going concern;

(b) The discount rate applied is based on current specific country risks which is estimated to be approximately 16.5% per annum;

(c) Terminal value whereby cashflow growth rate of 6% consistent with the Gross Domestic Product rates of Indonesia

Management believes that any reasonably possible changes in any of the above key assumptions would not cause the carrying value of the CGU to exceed its recoverable amount. Based on the above review, there is no evidence of impairment on the Group's and Bank's goodwill, other than an impairment loss of approximately RM1 ,617,000,000 on the goodwill of the Group arising from Bll's banking business operations.

(b) Core Deposits Intangible ("CDI")

The intangible assets consist mainly of the core deposits intangible arising from the acquisition of Bll banking business operations. The COl is deemed to have a finite useful life of 8 years and the CDI is amortised based on reducing balance method over the deemed finite useful life.

103

3813-K


18. Deposits from customers

Fixed deposits and negotiable instruments of deposits - One year or less - More than one year

Money market deposits Savings deposits Demand deposits Structured deposits*

Group 2009 2008

RM'OOO RM'OOO

115,657,191 102,661,282 3,075,955 3,073,899

118,733,146 105,735,181 11 '118,846 10,964,912 35,290,821 29,425,896 44,730,963 38,634,568

2,724,813 2,351,520 212,598,589 187,112,077

Bank 2009 2008

RM'OOO RM'OOO

86,308,707 84,064,822 1,585,090 1,571,969

87,893,797 85,636,791 11 '118,846 10,964,912 26,554,841 25,027,773 35,708,559 32,721,668

2,176,887 1,971,420 163,452,930 156,322,564

* Structured deposits represent time deposits with embedded foreign exchange, and commodity-linked time deposits.

The maturity structure of fixed deposits and negotiable instruments of deposits is as follows:

Group Bank 2009 2008 2009 2008


Due within six months 91,290,183 83,131 '133 64,109,316 65,391,920 Six months to one year 24,367,008 19,530,149 22,199,391 18,672,902 One year to three years 2,781,981 2,069,441 1,535,744 1,525,761 Three years to five years 165,084 793,404 33,046 29,908 After five years 128,890 211,054 16,300 16,300

118,733,146 105,735,181 87,893,797 85,636,791

The deposits are sourced from the following types of customers:

Group Bank 2009 2008 2009 2008


Business enterprises 76,884,016 68,428,468 55,882,422 52,832,804-Individuals 105,075,231 90,243,156 87,758,655 83,229,457 Government and

statutory bodies 8,263,553 7,703,001 3,845,947 5,028,237 Others 22,375,789 20,737,452 15,965,906 15,232,066

212,598,589 187,112,077 163,452,930 156,322,564

104

Documents

Malayan Banking Berhad - Hong Kong Monetary Authorityvpr.hkma.gov.hk/pdf/100050/ar_09/ar_09_pt02.pdf · 3813-K Malayan Banking Berhad (Incorporated in Malaysia) 4. Significant accounting