Type

Risk

of Ratio

Calculation

A. Credit
Risk

5773399

Impaired
financing
Financing and advances

210217868
= 2,7%

Allowances
for
impaired
financing and advance
Total
Financing
Advance

B. Liquid
ity

Liquid Asset
Total Asset

1075179
6235933
= 17,2%

and

7 315 3924 1 54 797 3160 595

=
7 315 392
7 315392

Risk
0.4 3=4 3

C. Marke
t Risk

Total asset

1 year below
Total asset

1 504 990+3 81 885+688 639

7 315 392

RM Value of Market
Total Asset

0.352=35.2

159878
315619648
Total assets of >1 year
Total assists

= 0,05%
46639054
315619648
=14,7%

B. Marke
t Risk

Gap = asset - liabilities

D. operational risk
Operational
Risk
Total asset

315619648-268980594
= 46639054

508464
315619648
= 0,16 %

Risk explosion of year 2015

Credit risk
Credit risk is considered to be the most significant and pervasive risk for the
Bank. The Bank takes on exposure to credit risk, which is the risk that the

counterparty to a financial transaction will fail to discharge an obligation

causing the Bank to incur a financial loss. Credit risk arises principally from
financing (credit facilities provided to customers) and from cash and deposits
held with other banks. Further, there is credit risk in certain off-balance sheet
financial instruments, including guarantees relating to purchase and sale of
foreign currencies letters of credit, acceptances and commitments to extend
credit. Credit risk monitoring and control is performed by the CRMG which
sets parameters and thresholds for the Banks financing activities.

Liquidity risks
Liquidity risk is the risk that the Bank will be unable to meet its payment
obligations associated with its financial liabilities when they fall due and to
replace funds when they are withdrawn. The consequence may be the failure
to meet obligations to repay deposits and financing parties and fulfil
financing commitments. Liquidity risk can be caused by market disruptions
or by credit downgrades, which may cause certain sources of funding to
become unavailable immediately. Diverse funding sources available to the
Bank help mitigate this risk. Assets are managed with liquidity in mind,
maintaining a conservative balance of cash and cash equivalents

Market risks
The Bank is exposed to market risks, which is the risk that the fair value or
future cash flows of a financial instrument will fluctuate due to changes in
market prices. Market risks arise on profit rate products, foreign currency and
mutual fund products, all of which are exposed to general and specific
market movements and changes in the level of volatility of market rates or
prices such as profit rates, foreign exchange rates and quoted market prices.
Market risk exposures are monitored by Treasury/Credit and Risk Department
and reported to ALCO on a monthly basis. ALCO deliberates on the risks
taken and ensure that they are appropriate.

Operational risk
Operational risk is the risk of loss resulting from inadequate or failed internal
processes, people, systems, and external events.
Operational risk is inherent in most of the Banks activities, this necessitates
an integrated approach to the identification, measurement and monitoring of
operational risk.

An Operational Risk Management Unit (ORMU) has been established within

the Credit and Risk Management Group which facilitates the management of
Operational Risk within the Bank, ORMU facilitates the management of
Operational Risk by setting policies, developing systems, tools and
methodologies, overseeing their implementation and use within the business
units and providing ongoing monitoring and guidance across the Bank.
The three-primary operational risk management processes in the Bank are
Risk Control Self-Assessment, Operational Loss Database and eventual
implementation of Key Risk Indicators which are designed to function in a
mutually reinforcing manner
Management of risks on year 2015
Credit risk
Credit risk is the risk that one party will fail to discharge an obligation and
will cause the other party to incur a financial loss. The Company seeks to
manage its credit risk with respect to customers by setting limits for
individual customers and by monitoring these limits. With respect to credit
risk arising from the financial assets of the Company, including cash and
cash equivalents, the Company's exposure to credit risk arises from default
of the counterparties, with a maximum exposure equal to the carrying
amount of these instruments. All of the Company's counterparties are
subject to acceptance and regular credit reviews by the Company's Credit
Department. Moreover, the Murabaha contract receivable balance is secured
by shares and other tangible assets available in the counterparties' portfolios
which are under the custody of the Company.
Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in raising
funds to meet commitments associated with financial instruments. Company
aims to maintain liquidity coverage ratio in excess of 110% at all times.
Deposits are generally placed for short periods to manage the Company's
liquidity requirements. All liabilities on the Company's balance sheet, other
than end of service benefits, are contractually payable on a current basis.
Liquidity Risk at investment fund level is being managed through appropriate
liquidity limits and its monitoring for each Fund.

Operational risk Operational risk is the risk of loss resulting from

inadequate or failed internal processes, people and systems or from external
events, this will include legal risks covering, but not limited to, exposure to
fines, penalties, or punitive damages resulting from supervisory actions, as

well as private settlements. Operational risk of the Company is managed

through robust Incident Management, Root Cause Analysis, Risk Control Self
Assessments and Key Risk Indicators, Business Continuity Planning and
Disaster Recovery Planning.

Murabaha profit
rate risk Murabaha profit rate risk is the risk that the profit rate charged is
not commensurate with financing cost due to changes in the market
commission rate. The Company may be subjected to Murabaha profit rate
risk on its commission bearing assets, including Murabaha contracts
receivable.
The Company manages this risk by achieving higher trading commission so
that overall profitability of the total Murabaha portfolio is not adversely
affected. Further, for large exposures, the Company manages this risk by
matching the tenure and financing terms between the assets and the
liabilities.
The Company's Murabaha contracts receivable is exposed to market risk
arising from the fluctuation in share prices which are provided to the
company as collateral for the facilities. The Company has adequate policy,
procedures and monitoring mechanism in place to adequately control this
risk.