Bank Islam Integrated Annual Report 2022

Group Chief Executive Officer Statement MOHD MUAZZAM MOHAMED Group Chief Executive Officer Dear Stakeholders, I am pleased to report BIMB’s outstanding performance in 2022, despite the significant headwinds that continue to challenge our ability to serve our stakeholders. Our resilience during these unprecedented times is a testament to our unwavering commitment to helping our customers while achieving our financial goals. Our adherence to Value-based Intermediation (VBI) has been instrumental in our resilience and continued growth. Sustainability has been a fundamental part of our DNA long before it became mainstream in the business environment. This approach has allowed us to navigate social and environmental risks, such as pandemics and climate change, to deliver shared growth and prosperity for our customers and society at large. THE BANKING LANDSCAPE: OUR STANDING IN THE MARKET In 2022, Malaysia’s banking industry demonstrated strength despite global events and market uncertainties. The net financing growth in the industry has increased by 4.9% year-on-year (YoY), with household, personal, and term financing being the primary drivers of the growth. However, loan indicators such as loan applications and approvals have contracted month-on-month (MoM) in the past two to three months, indicating signs of weakening in the leading loan indicators. On the other hand, BIMB has outpaced the banking industry’s loan expansion, with financing growth mainly contributed by household, personal, and term financing. The growth in outstanding credit card receivables and Ar-Rahnu also climbed 21.5% compared to December 2021. However, the Gross Impaired Financing (GIF) ratio was higher at 1.27% as of December 2022, mainly due to higher impairment incurred in households and business financing. BIMB has implemented adequate measures to manage the GIF ratio and assure stakeholders. The industry faces challenges posed by vulnerable household and SME borrowers who could not resume loan repayments after exiting the repayment assistance programme and defaults of specific corporate borrowers. Malaysian banks are strong in terms of their liquidity coverage ratio, whereby should the situation affect the liquidity in the market, banks are resilient enough to face the situation. Leadership Insights Bank Islam Malaysia Berhad 19 01 05 03 07 02 06 09 04 08

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