unaudited condensed interim financial statements …€¦ · the unaudited condensed interim...

NINE MONTHS PERIOD ENDED 30 SEPTEMBER 2014

UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS

NATIONAL BANK OF ABU DHABI MALAYSIA BERHAD (965488-H)

(Incorporated in Malaysia)

30 September 31 December

2014 2013

Note RM'000 RM'000

ASSETS

Cash and short term funds 15 193,572 308,017

Deposits and placements with banks and other

financial institutions 656,100 327,940

Held to maturity securities 16 233,954 200,721

Loans, advances and receivables 17 203,564 179,882

Derivative financial instruments 279 457

Other assets 18 3,154 3,095

Property and equipment 5,077 6,720

TOTAL ASSETS 1,295,700 1,026,832

LIABILITIES

Deposits from customers 19 149,578 164,272

Deposits and placements of banks and other

financial institutions 20 823,545 540,313

Other liabilities 21 4,813 3,444

TOTAL LIABILITIES 977,936 708,029

EQUITY

Share capital 330,000 330,000

Other reserve 279 457

Accumulated loss (12,515) (11,654)

TOTAL EQUITY ATTRIBUTABLE TO EQUITY

HOLDER OF THE BANK 317,764 318,803

TOTAL LIABILTIES AND EQUITY 1,295,700 1,026,832

COMMITMENTS AND CONTINGENCIES 27 57,354 80,277

The Condensed Interim Financial Statements should be read in conjunction with the audited

financial statements of the Bank for the year ended 31 December 2013.




STATEMENT OF FINANCIAL POSITION AS AT 30 SEPTEMBER 2014

Note 30 Sept 30 Sept 30 Sept 30 Sept

2014 2013 2014 2013

RM'000 RM'000 RM'000 RM'000

Interest income 22 5,452 4,049 14,598 11,866

Interest expense 23 (1,096) (1,501) (2,920) (4,702)

Net interest income 4,356 2,548 11,678 7,164

Other operating income 24 110 67 1,643 954

Net operating income 4,466 2,615 13,321 8,118

Other operating expenses 25 (5,777) (3,694) (13,822) (10,390)

Operating loss (1,311) (1,079) (501) (2,272)

Net allowance for impairment on loans

and advances 26 (937) (1,425) (360) (1,425)

Loss before tax expense (2,248) (2,504) (861) (3,697)

Tax expense - 31 - 31

Net profit/(loss) for the period (2,248) (2,473) (861) (3,666)

Other comprehensive income, net of income tax

Items that may be reclassified subsequently to

profit or loss:

Cash flow hedge

Effective portion of change in fair value (75) 88 (178) 396

Total comprehensive income for the period (2,323) (2,385) (1,039) (3,270)

The Condensed Interim Financial Statements should be read in conjunction with the audited

financial statements of the Bank for the year ended 31 December 2013.

FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014




STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME

3rd Quarter Ended Nine Months Ended

Hedging Accumulated

Share capital reserve losses Total

RM'000 RM'000 RM'000 RM'000

At 1 January 2014 330,000 457 (11,654) 318,803

Net profit for the period - - (861) (861)

Cash flow hedge: change in fair value - (178) - (178)

At 30 September 2014 330,000 279 (12,515) 317,764

At 1 January 2013 310,000 - (5,337) 304,663

Net loss for the period - - (3,666) (3,666)

Cash flow hedge: change in fair value - 396 - 396

At 30 September 2013 310,000 396 (9,003) 301,393




The Interim Financial Statements should be read in conjunction with the audited financial statements of the Bank for the

year ended 31 December 2013.

Non distributable

STATEMENT OF CHANGES IN EQUITY



30 Sept 30 Sept

2014 2013

RM'000 RM'000

Cash flows from operating activities

Loss before taxation for the period (861) (3,697)

Adjustment for non-cash items:

Allowance for impaired loans 360 1,425

Depreciation of property and equipment 1,762 1,711

Operating profit/(loss) before working capital changes 1,261 (561)

Changes in working capital:

Increase in deposits and placements with banks (328,160) (72,838)

Increase in loans, advances and receivables (24,042) (94,376)

Increase in other assets (90) (979)

(Decrease)/Increase in deposits from customer (14,694) 38,196

Increase in deposits and placements of banks and other FI. 283,232 264,014

Increase in other liabilities 1,369 578

Income tax refund/(paid) 31 (94)

Net cash (used in)/generated from operating activities (81,093) 133,940

Cash flows from investing activities

Purchase of property and equipment (119) (358)

Net investment in held to maturity securities (33,233) (33,483)

Net cash used in investing activities (33,352) (33,841)

Net change in cash and cash equivalent (114,445) 172,968

Cash and cash equivalents at beginning of the period 308,017 41,524

Cash and cash equivalents at end of the period 193,572 214,492

Analysis of cash and cash equivalents

Cash and short term funds at end of period 193,572 214,492


The Interim Financial Statements should be read in conjunction with the audited financial

statements of the Bank for the year ended 31 December 2013.



STATEMENT OF CASH FLOW


1. GENERAL INFORMATION

2. BASIS OF PREPARATION

The unaudited interim condensed financial statements for the nine months ended 30

September 2014 have been prepared under the historical cost convention except for the

valuation of derivative financial instruments that are carried at fair value.

NOTES TO UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS


The unaudited condensed interim financial statements have been prepared in accordance

with MFRS 134: Interim Financial Reporting issued by the Malaysian Accounting Standards

Board ("MASB") and Policy Document on Financial Reporting issued by Bank Negara

Malaysia ("BNM").

The unaudited condensed interim financial statements do not include all of the information

required for full annual financial statements, and should be read in conjunction with the

audited financial statements of the Bank as at and for the financial year ended 31 December

2013. The explanatory notes attached to the interim financial statements provide an

explanation of the events and transactions that are significant for an understanding of the

financial position and performance of the Bank since the year ended 31 December 2013.

National Bank of Abu Dhabi Malaysia Berhad ("the Bank") is principally engaged in the

provision of banking and related financial services.

The Bank is a company limited by shares, a licenced bank, incorporated and domiciled in

Malaysia. The principal place of business of the bank is located at Level 28, Menara Maxis,

Kuala Lumpur City Centre, 50088 Kuala Lumpur.

The Bank is a wholly-owned subsidiary of National Bank of Abu Dhabi PJSC ("Holding

Company"), a bank incorporated in Abu Dhabi, United Arab Emirate and listed at the Abu

Dhabi Securities Exchange. The ultimate parent company of the Bank is the Abu Dhabi

Investment Council, an entity owned by the Government of the Emirates of Abu Dhabi.






2. BASIS OF PREPARATION (continued)

The significant accounting policies and methods of computation applied in the unaudited

interim financial statements are consistent with those adopted in the most recent annual

financial statements for the year ended 31 December 2013, except for the adoption of the

following MFRSs, IC Interpretation and Amendments to MFRSs during the current financial

period:

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1

July 2014:

• Amendments to MFRS 2, Share-based Payment

• Amendments to MFRS 3, Business Combinations

• Amendments to MFRS 8, Operating Segments

• Amendments to MFRS 13, Fair Value Measurement

• Amendments to MFRS 116, Property, Plant and Equipment

• Amendments to MFRS 119, Employee Benefits – Defined Benefit Plans: Employee

Contributions

• Amendments to MFRS 138, Intangible Assets

• Amendments to MFRS 124, Related Party Disclosures

• Amendments to MFRS 140, Investment Properties

MFRSs, Interpretations and amendments that the effective date to be announced by MASB:

• MFRS 9, Financial Instruments (2009)

• MFRS 9, Financial Instruments (2010)

• MFRS 9, Financial Instruments (2013) - Financial Instruments – Hedge Accounting and

Amendments to MFRS 9, MFRS 7 and MFRS 139

• Amendments to MFRS 7, Financial Instruments: Disclosures – Mandatory Effective Date of

MFRS 9 and Transition Disclosures

The Bank plans to apply the abovementioned accounting standards, amendments and

interpretations from the annual period beginning on 1 January 2015 for those accounting

standards, amendments or interpretations that will be effective for annual periods beginning

on or after 1 July 2014.





2. BASIS OF PREPARATION (continued)

3. SIGNIFICANT ACCOUNTING POLICIES

4 ESTIMATES

5. AUDITORS REPORT ON PRECEDING ANNUAL FINANCIAL STATEMENTS

6. COMMENTS ABOUT SEASONAL OR CYCLICAL FACTORS

The preparation of these condensed interim financial statements requires management to

make judgements, estimates and assumptions that affect the application of accounting

policies and reported amounts of assets and liabilities, income and expense. Actual results

may differ from these estimates.

In preparing these condensed interim financial statements, the significant judgements made

by management in applying the Bank’s accounting policies and the key sources of estimation

and uncertainty were the same as those that were applied to the audited financial statements

as at and for the year ended 31 December 2013.

The initial application of the accounting standards, amendments or interpretations are not

expected to have any material financial impact to the current period and prior period

financial statements of the Bank. IC Interpretation 21: Levies does not have any impact on

the financial statements of the Bank as it is not relevant to the operations of the Bank.

The auditors' report on the audited financial statements for the financial period ended 31

December 2013 was not qualified.

The operations of the Bank were not materially affected by any seasonal or cyclical factors

since the financial year ended 31 December 2013.

The accounting policies applied by the Bank in these condensed interim financial statements

are the same as those applied by the Bank in its audited financial statements as at and for the

year ended 31 December 2013.





7. UNUSUAL ITEMS DUE TO THEIR NATURE, SIZE OR INCIDENCE

8. CHANGES IN ESTIMATES

9.

SECURITIES

10. DIVIDEND

11. SEGMENTAL REPORTING ON REVENUE, PROFIT AND ASSETS

12. SIGNIFICANT EVENTS DURING THE FINANCIAL PERIOD

13. SUBSEQUENT EVENTS

14. CHANGES IN COMPOSITION OF THE BANK

There were no significant changes in the composition of the Bank for the period ended 30

September 2014.

There were no significant events subsequent to the statement of financial position date

which have not been disclosed in these condensed interim financial statements.

There were no significant events during the period ended 30 September 2014 that have not

been disclosed in these condensed interim financial statements.

Segmental reporting has not been prepared as there is no other segment other than the

Wholesale Banking.

There were no dividends paid or declared for the period ended 30 September 2014.

There were no unusual items affecting the assets, liabilities, equity, net income or cash flow

of the Bank for the period ended 30 September 2014.

There were no material estimated amounts in the period ended 30 September 2014.

There were no other issuance, cancellation, repurchase, resale or repayment of debt and

equity securities for the period under review.

ISSUANCE, REPURCHASE AND REPAYMENTS OF DEBT AND EQUITY


15. CASH AND SHORT TERM FUNDS


2014 2013

RM'000 RM'000

Cash and balances with banks and other

financial institutions 1,059 2,232

Money at call and deposit placements

maturing within three months 192,513 305,785

193,572 308,017

16. HELD TO MATURITY SECURITIES


2014 2013

RM'000 RM'000

At amortised cost

Government securities & treasury bills:

Bank Negara Malaysia monetary notes 57,596 24,831

Money market instruments:

Negotiable instruments of deposit 169,797 169,331

Non-money market instruments:

Islamic private debt securities 6,561 6,559

233,954 200,721

17. LOANS, ADVANCES AND RECEIVABLES


2014 2013

At amortised cost RM'000 RM'000

(i) By type:

Syndication term loans 137,344 34,009

Bills receivables 1,172 65,912

Trust receipts 23,088 22,612

Revolving credits 45,060 60,089

Gross loans, advances and receivables 206,664 182,622








17. LOANS, ADVANCES AND RECEIVABLES (continued)


2014 2013

At amortised cost RM'000 RM'000

(i) By type:

Gross loans, advances and receivables 206,664 182,622

Less: Allowance for impaired loans and advances:

- collective assessment (3,100) (2,740)

- individual assessment - -

Net loans and advances 203,564 179,882

(ii) The maturity structure of gross loans and advances are as follows:

Maturing within one year 69,320 148,613

More than one year to three years 23,009 -

More than three years to five years 13,536 19,867

More than five years 100,799 14,142

206,664 182,622

(iii)

Non-bank financial institutions 45,060 60,089

Business enterprises 88,750 22,612

Foreign entities 72,854 99,921

206,664 182,622

(iv)

Malaysia 133,810 82,701

Other countries 72,854 99,921

206,664 182,622

Gross loans, advances and receivables analysed by type of customer are as follows:

Gross loans, advances and receivables analysed by geographical distribution are as

follows:







2014 2013

RM'000 RM'000

(v)

Fixed rate

- Fixed rate loans 24,260 65,912

Variable rate

- Cost plus 45,060 82,701

- Other variable plus 137,344 34,009

206,664 182,622

(vi)

Agriculture 23,088 22,612

Mining and quarrying 65,662 -

Finance, insurance and business services 46,232 126,001

Other sectors 71,682 34,009

206,664 182,622

(vii)

At 1 January - -

Impaired during the year - -

Recoveries - -

Closing balance - -

Ratio of net impaired loans and advances to net loans

and advances - -

Impaired loans - movements in impaired loans and advances are as follows:

Gross loans, advances and receivables analysed by economic sectors are as follows:

Gross loans, advances and receivables analysed by interest rate sensitivity are as

follows:







2014 2013

RM'000 RM'000

(viii) Movements in collective assessment allowance are as follows:

At 1 January 2,740 -

Allowance made during the period/year - 2,740

Written back during the period/year 360 -

Closing balance 3,100 2,740

As % of gross loans and advances less individual

assessment allowance 1.50% 1.50%

18. OTHER ASSETS


2014 2013

RM'000 RM'000

Interest receivables 1,158 1,387

Other receivables, deposits and prepayments 1,996 1,708

3,154 3,095

19. DEPOSITS FROM CUSTOMERS


2014 2013

RM'000 RM'000

At amortised cost

a) By type of deposit

Demand deposits 622 817

Short-term deposits 148,956 163,455

149,578 164,272


19. DEPOSITS FROM CUSTOMERS (continued)


2014 2013

RM'000 RM'000

b) By type of customer

Statutory authorities - 50,000

Business enterprises 131,828 113,520

Foreign customers 17,750 752

149,578 164,272

c) The maturity structure of short-term deposits is as follow:

Due within six months 148,956 163,455

20. DEPOSITS AND PLACEMENTS OF BANKS AND OTHER

FINANCIAL INSTITUTIONS


2014 2013

RM'000 RM'000

At amortised cost

Licensed banks 823,545 540,313

21. OTHER LIABILITIES


2014 2013

RM'000 RM'000

Interest payable 319 438

Other payable and accruals 769 1,585

Provisions for other operating expenses 3,725 1,421

4,813 3,444






22. INTEREST INCOME

30 Sept 30 Sept 30 Sept 30 Sept

2014 2013 2014 2013

RM'000 RM'000 RM'000 RM'000

Balances with banks 2,447 1,224 6,853 5,976

Held to maturity securities 1,705 2,584 4,351 5,584

Loans, advances and receivables 1,274 208 3,315 229

Others 26 33 79 77

5,452 4,049 14,598 11,866

23. INTEREST EXPENSE


2014 2013 2014 2013

RM'000 RM'000 RM'000 RM'000

Deposits from customer 656 1,350 1,833 4,355

Deposits from banks 387 97 927 207

Others 53 54 160 140

1,096 1,501 2,920 4,702

24. OTHER OPERATING INCOME


2014 2013 2014 2013

RM'000 RM'000 RM'000 RM'000

Fee and commission income 66 18 1,445 545

Foreign exchange gains 44 49 198 406

Trading Income - - - 3

110 67 1,643 954



3rd Quarter Ended

3rd Quarter Ended

3rd Quarter Ended

Nine Months Ended

Nine Months Ended

Nine Months Ended





25. OTHER OPERATING EXPENSES


2014 2013 2014 2013

RM'000 RM'000 RM'000 RM'000

Personnel costs

- Salaries, allowances and bonuses 2,333 1,155 4,491 3,286

- Defined contribution plan 383 188 730 544

- Others 369 50 799 105

3,085 1,393 6,020 3,935

Establishment costs

- Rental of premises 464 464 1,392 1,392

- Lease rental 8 7 18 17

- Depreciation 589 577 1,762 1,711

- Insurance 33 32 94 91

- Utilities 42 30 110 74

- Information technology expenses 292 261 730 621

- General repair and maintenance 29 17 60 49

- Others 1 - 11 1

1,458 1,388 4,177 3,956

Administration and general expenses

- Advertising and publicity 4 3 46 44

- Communication expenses 220 338 720 737

- Legal and professional fees 7 17 38 79

- Others 1,003 555 2,821 1,639

1,234 913 3,625 2,499

Total other operating expenses 5,777 3,694 13,822 10,390

3rd Quarter Ended Nine Months Ended





26. NET ALLOWANCE FOR IMPAIRMENT ON LOANS AND ADVANCES


2014 2013 2014 2013

RM'000 RM'000 RM'000 RM'000

Individual impairment - - - -

Collective impairment - write back (937) (1,425) (360) (1,425)

(937) (1,425) (360) (1,425)

Nine Months Ended3rd Quarter Ended





27. COMMITMENTS AND CONTINGENCIES

Credit Risk Credit Risk

Principal equivalent weighted Principal equivalent weighted

amount amount assets amount amount assets

RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

Contingent liabilities

Transaction related contingent items 11,029 5,515 1,179 5,760 2,880 576

Derivative financial instruments

Interest rate related contracts:

- over five years 6,561 804 161 6,559 1,047 209

Irrevocable commitments to extend credit

- maturity not exceeding one year 28,746 5,749 5,749 10,218 2,044 2,044

- maturity exceeding one year 11,018 5,509 5,509 57,740 28,870 28,870

57,354 17,577 12,598 80,277 34,841 31,699

31 December 2013

The credit equivalent and risk weighted amounts are computed using credit conversions factors and risk weighting factors based on

Standardised Approach under the Bank Negara Malaysia’s Capital Adequacy Framework (Risk-Weighted Assets).

In the normal course of business, the Bank makes various commitments and incurs certain contingent liabilities with legal recourse to

its customers. No material losses are anticipated as a result of these transactions. The notional amounts of the commitments and

contingencies are as follow:

30 September





28. CAPITAL ADEQUACY

i) Capital Adequacy Ratios


2014 2013

% %

Common Equity Tier 1 ("CET1") ratio 73.600% 98.782%

Tier 1 ratio 73.600% 98.782%

Total Capital ratio 74.319% 99.632%

Calendar Year CET I Tier I Total Capital

% % %

2013 3.50 4.50 8.00

2014 4.00 5.50 8.00

The minimum regulatory capital adequacy ratios, as required under BNM's Capital

Adequacy Framework (Capital Components) which includes transitional arrangements

for year 2014 and 2013, are set out as follows:

The capital adequacy ratios of the Bank have been computed based on BNM’s Capital

Adequacy Framework (Capital Components and Risk-Weighted Assets) issued on 28

November 2012 and the disclosures on capital adequacy ratios are pursuant to the

requirements of Bank Negara Malaysia ("BNM")'s Risk Weighted Capital Adequacy

Framework (Basel II) - Disclosure Requirements (Pillar 3)





28. CAPITAL ADEQUACY (continued)

ii) Capital Components of CET1, Tier I and Tier II Capital


2014 2013

RM'000 RM'000

Common Equity Tier 1 ("CET1") / Tier 1 capital

Paid-up share capital 330,000 330,000

Accumulated loss (12,515) (11,654)

Other reserve 279 457

CET1 / Tier 1 capital before regulatory adjustments 317,764 318,803

Less: Regulatory adjustments

- Cash flow hedge reserve (279) (457)

CET1 / Tier 1 capital after regulatory adjustments 317,485 318,346

Tier-2 capital

Allowance for collective assessment impairment 3,100 2,740

Total Tier-2 capital 3,100 2,740

Total capital 320,585 321,086

iii) The breakdown of risk-weighted assets by each major risk category is as follow:


2014 2013

RM'000 RM'000

Credit risk 410,500 304,886

Operational risk 19,348 16,534

Market risk 1,516 852

Total risk-weighted assets 431,364 322,272





29. REVIEW OF PERFORMANCE AND COMMENTARY OF PROSPECTS

i) Performance Review

ii) Prospect for 2014

In 2014, NBAD Malaysia will continue to cross-sell NBAD Group's wholesale banking

products to capitalize on bilateral opportunities between Malaysia and the Middle East

while concurrently strengthening its core processes and internal capabilities to serve the

corporate clients.

The Bank's loss before tax for the nine months ended 30 September 2014 was RM0.86

million as compared to a loss before tax of RM3.67 million for the same period last year.

Operating income in the period increased by 64.1% or RM5.20 million to RM13.32

million was attributable to higher net interest income which contributed by higher loans

and advances as well as liquidity support from parent bank. Other operating income

also increased RM0.69 million in tandem with higher business volume whilst operating

expenses expanded at a lower persentage of 33% or RM3.43 million.

Collective impairment on loans and advances for the current period is lower by RM1.06

million due mainly to lower loans growth for the current period as compared to last

year.

Total assets increased marginally by RM0.27 billion to RM1.3 billion by end September

2014 mainly due to higher deposits and placements with banks, loans and advances and

held to maturity securities but offset by lower cash and short-term funds.

unaudited condensed interim financial statements …€¦ · the unaudited condensed interim...

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