HLB Annual Report 2023

Annual Report 2023
Corporate Financials Additional Information

01 Vision 158 Directors’ Report 425 Notice of Annual General Meeting
02 The Business 170 Statements of Financial Position 428 Statement Accompanying Notice
04 Awards & Accolades 171 Statements of Income of Annual General Meeting
06 Hong Leong Bank Story 172 Statements of Comprehensive 429 Other Information
08 Corporate Milestones Income 438 Network of Branches
18 Chairman’s Statement 173 Statements of Changes in Equity • Form of Proxy
24 Five Year Financial Highlights 177 Statements of Cash Flows
26 Group Managing Director/ 183 Notes to the Financial Statements

Chief Executive Officerʼs Review 369 Statement by Directors
41 Management Discussion & 369 Statutory Declaration
Analysis 370 Independent Auditors’ Report
83 Sustainability Statement 375 Basel II Pillar 3 Disclosures
112 Corporate Information
113 Board of Directors’ Profile Scan the QR Code to read our
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HONG LEONG BANK BERHAD
ANNUAL REPORT 2023 1
To be a Highly
Digital and Innovative
Financial Services
Company
2 • CORPORATE
The
Business
Hong Leong Bank Berhad ("HLB") boasts assets of over RM 279.9 billion, is a
In the ever-evolving tapestry of leading digitally-driven, customer-centric Malaysian financial institution, serving
our nation's economic landscape, customers across Asia. We offer a comprehensive range of innovative financial
solutions for individuals, SMEs, and corporates. Our core principles focus on
the year 2023 has emerged as
responsible financial services, prioritizing customer needs, championing digital
a pivotal chapter in Malaysia's innovation and sustainability, and fostering an engaged workforce to create
remarkable journey. As we stakeholder value. We are committed to inclusive growth and sustainable
reflect on the past year, we find community development by supporting and enabling social enterprises to create
ourselves immersed in a narrative meaningful impact on marginalised and underprivileged parts of societies and
of resilience, innovation, and empower them to thrive.
transformation. The year under
With a network of 238 branches across Asia, including Labuan Offshore, Singapore,
review brought forth a myriad
Hong Kong, Vietnam, and Cambodia, along with a full-service call center and
of challenges, including the 1,054 self-service terminals, we ensure accessible banking services are available
continued recovery from the global for all customers. Our extensive Wealth Management services are available at all
pandemic and the uncertainties of branches in Malaysia and Singapore, complemented by Priority Banking centers
a volatile global economic climate. in both regions.
Yet, in the face of these trials,
Rooted in a century-old legacy, our purpose drives us to make a tangible
Malaysia exhibited remarkable
difference to our customers and society. In response to unprecedented challenges,
fortitude and adaptability. It is a we continuously evaluate our strategy to uphold resilience, sustainability, and
testament to our collective spirit unwavering support for customers and employees. Despite a challenging year,
that we not only weathered these our business remains robust, guided by customer-centricity, innovation, customer
storms but also thrived in the insights, rigorous risk management, and entrepreneurial vigor. As we navigate
process. As a leading financial an ever-changing landscape, these principles remain our steadfast foundation,
ensuring we continue to deliver on our stakeholder expectations.
institution in Malaysia and the
region, it is important for us to
proactively facilitate economic
development and bolster the
HONG LEONG BANK’S
nation’s growth, contributing to
the creation of a vibrant society.
With a legacy spanning over 118
years, rooted in entrepreneurship,
Personal Financial Services
we leverage deep customer and
community insights to deliver Principal business activities include providing banking services and financial
personalised solutions that reflect products to individuals so that they can fulfil their needs for property and auto
loans/financing, personal loans/financing for their periodic household needs,
our commitment in meeting their
card and payment products to facilitate everyday spending and transactions,
needs at every stage, guided by investment and insurance solutions for wealth management and protection
our brand promise of 'Built Around needs, deposit and remittance products and services to individuals and small
You'. businesses for their liquidity, savings and payment needs, as well as digital
banking solutions including internet and mobile banking services.
Wealth Management
Wealth management has been expanded to providing comprehensive services
through solutions tailored to our clients’ individual and business needs,
spanning across Malaysia and Singapore. These services are delivered by
certified Wealth Advisors and an experienced network of Relationship Managers
with the aim of achieving sustainable, multigenerational, multifaceted wealth
progression through Investments, Insurance, Deposits and Asset Financing.
The Business
REGIONAL FOOTPRINT in second quarter of 2022. It will continue to consumer banking, SME banking, business
develop the SME business by acquiring good banking, global markets and transaction
In line with our growth strategy, HLB has quality customers and sound assets in the banking services. With seven full-fledged
maintained its footprint in the Asian region. new financial year while the global market branches located in Phnom Penh, HLBCAM’s
team will continue to provide treasury market strategic objective for the operations in
SINGAPORE OPERATIONS solutions to our customers. the Kingdom is towards growing with the
community by supporting the local SME and
HL Bank Singapore, the Singapore branch of VIETNAM OPERATIONS Commercial/ Corporate Customers, high net
HLB operates under a full banking license. worth individuals, affluent and emerging
We offer a comprehensive range of financial Hong Leong Bank Vietnam Limited (“HLBVN”), affluent as well as tech savvy young
services to business, retail and high net a subsidiary of the Bank, commenced professionals in prospering their financial
worth customers through our 4 core business operations in October 2009. HLBVN is a full- managements and solutions.
segments – business & corporate banking, fledged commercial bank in Vietnam whose
personal financial services, private wealth principal activities include provision of retail INVESTMENT IN CHINA
management and global markets. The branch loans, deposit products, wealth management,
is forging ahead by expanding the client and priority banking services to individuals. HLB was the first Malaysian bank to enter
segments value proposition, expanding Whereas business banking solutions include the Chinese banking sector in 2008 with a
employee’s capabilities and stepping-up its working capital and term loans, deposit and strategic investment in Bank of Chengdu Co.
digital transformation to enhance clients’ liability management products and trade Ltd (“Bank of Chengdu”) and has an 19.76%
experiences and operational efficiency. finance services as well as foreign exchange stake in the company. Bank of Chengdu is
(“forex”) and money market services. To date a leading city commercial bank in Western
HONG KONG OPERATIONS HLBVN has main operations through a branch and Central China based in Chengdu, the
each in Ho Chi Minh City and Hanoi. capital of Sichuan Province, and is listed
The Bank’s Hong Kong branch operates on the Shanghai Stock Exchange. HLB also
under a full banking license and provides CAMBODIA OPERATIONS holds a 12% equity investment in Sichuan
global market and SME/wealth management JinCheng Consumer Finance Company, a
services to its customers. The Hong Kong In July 2013, Hong Leong Bank (Cambodia) licensed consumer finance firm established in
branch soft launched its SME business in PLC (“HLBCAM”) commenced operations as Chengdu in March 2010.
early 2021 in a very prudent manner and we a 100% wholly owned subsidiary providing
started to build up good quality SME pipeline comprehensive financial services covering
KEY BUSINESS PILLARS ARE:
Islamic Financial
Business & Corporate Banking Global Markets
Services
Principal business activities include the Global Markets assists our Islamic Financial Services
provision of banking solutions to SMEs, institutional and corporate clients are offered by Hong Leong
commercial and corporate clients, such as on their investment and hedging Islamic Bank, a wholly-owned
deposit and loan services covering business needs across asset classes, including subsidiary of HLB which is
current account, liquidity management, auto- Foreign Exchange, Fixed Income, focused on providing Shariah-
sweep as well as fixed deposit. Financing Derivatives and Structured Products. compliant Personal Financial
options available range from asset acquisition, On top of managing Clients' treasury Services, Wealth Management,
working capital, business expansion and requirements, Global Markets also Business and Corporate Banking
business automation. HLB also specialises in manages the Bank's excess liquidity and Global Markets products and
the provision of transaction banking solutions and risks arising from the Bank's services.
via cash management, corporate internet transaction and payment flows.
banking platform, trade financing and services
and merchant payment solutions.
4 • CORPORATE
Awards &
Accolades
Lembaga Hasil Dalam Negeri Malaysia

- Hari Hasil Ke-27 LHDN
Anugerah Pembayar Cukai

Awards & Terbaik Tahun 2022
Accolades
- in Recognition of HLB’s Continuous
Commitment in Good Tax
Governance and Compliance
Organised by LHDN
Asian Banking & Finance Retail Banking Recognized by Syarikat Jaminan Pembiayaan
Awards 2022 Perniagaan Berhad (SJPP)
Best SME Bank in Malaysia 2022 Best Performance for a Financial

Institution 2022
Organised by Asian Banking & Finance Organised by SJPP
The Asian Banker Malaysia Excellence in Retail Financial The Asian Banker Malaysia Excellence in Retail Financial
Services International & Country Awards 2022 Services International & Country Awards 2022
Best SME Bank in Malaysia 2022 Most Recommended Retail Bank by

(Four consecutive years: 2019, 2020, 2021, Consumers 2022
2022)
Organised by The Asian Banker Organised by The Asian Banker

Awards & Accolades
Environmental
Environmental Finance
Finance Bond
Bond Awards
Awards 2022
2022 Awarded by Green Climate Initiative (GCI)
Asset-Backed / Asset-Based / Covered Titanium+ Tier Certification for

Sustainability Bond of the Year 2022 HLB Data Centre
Asset-Backed / Asset-Based / Covered
Sustainability Bond of the Year 2022
Organised by Environmental Finance Organised by Organized by Green Climate Initiative (GCI)
Sustainability & CSR Awards Malaysia 2022

Organised by Environmental Finance National Energy Awards 2022
Bank of the Year - Financial Literacy 2022 Best Bank - Sustainable Energy Financing
- Conventional Financing 2022
Organised by Organized by CSR Malaysia Organised by inistry of Natural Resources, Environment and Climate Change
Asset Benchmark Research 2023 The Edge Malaysia ESG Awards 2022
Mentioned 4 Times under “Highly Best Performer - Financial Institution 2022

Commended” in Malaysian Ringgit Bonds
- Sales 2023
Organised by The Asset Organised by The Edge
Asset Benchmark Research 2023 Global Good Governance Awards 2023
4th Best in Malaysian Ringgit Bonds - 3G Best Sustainability Disclosure &

Research 2023 Reporting Award 2023
Organised by The Asset Organised by Cambridge IFA
Asset Benchmark Research 2023 Global Good Governance Awards 2023
Best Trading Individual in Pan Asia 2023 3G Best Corporate Governance

Framework 2023
Organised by The Asset Organised by Cambridge IFA

6 • CORPORATE
Hong Leong
Bank Story
Incorporated in 1905:
HLB is listed on Bursa Malaysia Berhad
and forms part of the Hong Leong Group.
Headquartered in Kuala Lumpur, the Bank Kwong Lee Mortgage and Remittance
has a strong Malaysian entrepreneurship Company in Kuching, Sarawak
heritage of 118 years.
HLB was originally incorporated as Kwong Lee Mortgage RM279.9 billion in assets as at
and Remittance Company in 1905 in Kuching, Sarawak and
30 June 2023
later as Kwong Lee Bank Limited in 1934, bearing heritage
of the oldest local financial institution in Malaysia. Kwong
Lee Bank Berhad was acquired by the MUI Group in May
1982 and renamed Malayan United Bank Berhad on
2 February 1983. In 1989, it was renamed as MUI Bank.
Under the MUI Bank banner, it grew from 11 to 35 branches
nationwide. On 3 January 1994, Hong Leong Group acquired
MUI Bank Berhad through Hong Leong Credit Berhad
(now known as Hong Leong Financial Group Berhad) and
LOCATIONS
renamed it Hong Leong Bank Berhad. The Bank was listed
on the Kuala Lumpur Stock Exchange (now under Main
Market of Bursa Malaysia) on 17 October 1994 and since China
then has grown to be a significant player in the Malaysian
banking and financing landscape, organically as well as
Hong Kong
through mergers and acquisitions, with its merger with
EON Bank Group in 2011. Today the Bank is Malaysia’s fifth
largest banking group by assets with RM 279.9 billion in
assets as at 30 June 2023, and fourth largest by market
capitalisation as at the same date.
Cambodia
Vietnam
Malaysia (HQ) (Listed on Bursa Malaysia)

s
er Ta
l
Singapore
m
en
sto
t
Cu
Key Focus
Areas
ip
rsh
Com
un
ne
re
m
ity ep
E ntr
Hong Leong Bank Story
Personal Business & Global Islamic

Financial Corporate Markets Banking
Services Banking
Channels Core Values

Technologically
Focused Mobile Here for the
Banking long-term
Customer Centred
Solutions:
Built Around You Internet
Innovation
Banking
Strong
Entrepreneurial Collaborate
Heritage Branches
to Win
Building
Sustainability Self Service
Through: Terminals
Decisiveness
- Digital at the Core

- Workforce Readiness
- Socially Responsible Business
- Environmental Management Call Centre Have fun
- Community Investment
Relationship
Managers
E-Commerce
8 • CORPORATE
Corporate
Milestones
1905 1934 1989 1994

Started in Kuching, Sarawak, Incorporated as Kwong Lee Renamed as MUI Bank, • Acquired MUI Bank through
Malaysia, under the name Bank Limited operating with 35 branches Hong Leong Credit Berhad
of Kwong Lee Mortgage and (Now known as Hong Leong
Remittance Company Financial Group Berhad)
• Renamed as HLB
2013 2011 2009 2008

• HLBCAM commenced its HLB completed merger with HLBVN opened its doors in Ho Entered China banking sector
operations EON Bank Group Chi Minh City with a 20% strategic stake in
• Set up representative office Bank of Chengdu Co., Ltd.
in Nanjing, China
20%
Intensified digitisation of HLB’s

products and services
2015 2017
• Launched new platform for business internet • Piloted in-branch mobile
banking to replace HLOB (Hong Leong Online servicing solution featuring
Business), Applewatch app, eFD & e-TDI, iPad-equipped service
e-Will/Wasiat and Biometric authentication ambassadors to greet and
• Introduced physical PEx+ Merchant Payment service customers
• Launched HLB LaunchPad to
nurture Malaysian technology
and FinTech start-ups
2014 2016 • Introduced eFD via FPX
Launched new Internet Banking • First domestic bank to enable FPX payment allowing customers to
platform, PEx payment, tablet conduct transactions 24/7 via Hong Leong Connect BIZ
app and cardless withdrawal • Launched Artificial Intelligence Chat Service using IBM Watson, E-TT
and online statement
• Supercharged innovation through the setting up of a Customer
Experience and Innovation Lab
• Moved to online platforms for auto and personal loans, credit card
& CASA (Current Account & Savings Account) opening applications
• PEx+ Merchant Payment went online
Corporate Milestones
2018 2019
• Rolled out Robotic Process BUSINESS
Automation projects • First bank in Malaysia to enable merchants and individual users
• Launched comprehensive online to transact with WeChat Pay in Ringgit, with Malaysia being the
banking platforms for corporate, first country outside of China and Hong Kong to be able to make
commercial and SME banking payments in the local currency
(Hong Leong Connect First) • Increased efforts on SME business with more focus on providing
fit-for-industry total business solutions
• Introduced a first-in-market all-in-one Smart Point-of-Sales (POS)
terminal that enables merchants and consumers to perform cashless
transactions, accepting all cards and e-payments in a single device
• Introduced eLearning for the • Celebrated the 10th year of success of the country’s first co-branding
benefit of all employees, a card, the HLB Golden Screen Cinema (GSC) Credit Card with more
peer-to-peer, knowledge sharing exciting rewards and value to movie-goers
mobile platform application • Partnered and launched two Travel Cards, HLB AirAsia Credit Card
which incorporates fun elements and Emirates HLB Credit Card with two of the best-in-class airlines,
of gamification in the learning AirAsia and Emirates to serve the rising travel market in Malaysia
journey (SmartUp)
INNOVATION
• Pioneering change in the banking industry with the introduction of
intuitive digital service delivery by launching the first Digital Branch
in Penang at Burmah House
• Launched the Customer Experience and Usability Lab (CX Lab)
• Established the first Hong Leong in Menara Hong Leong providing a collaborative space for cross-
Bank Digital Concept flagship functional business, operations and technology teams to work
branch in Damansara City, together with external parties such as FinTechs, startups and
featuring Personalised Teller technology partners
tablets, Teller Assisted Units and a • The first bank in Asia to transform customer support with leading
Discovery Zone interactive digital innovative technology Amazon Connect, a self-service cloud-based
platform contact centre solution at HL Bank, HLB’s branch in Singapore
• Piloted Multi-lingual Robot
Concierge services at Damansara PEOPLE
City Priority Banking Branch • Introduced Hackathons to discover talents and to inculcate and
• Introduced a virtual assistant cultivate an innovation mindset to create an agile and future ready
Artificial Intelligence chatbox on workforce
our employees’ digital devices • Innovated the recruitment process via the introduction of HALI, an
(HALI) to provide answers on Artificial Intelligence chatbot and Virtual Recruitment Assistant to
Human Resources and Branch match suitable candidates with high-skill jobs
Operations Support policies and • Future-proofing employees by incorporating design thinking in our
procedure queries training modules as part of the on-boarding programme
• Rolled out Digital Business • Introduced Workplace by Facebook to ensure our workforce can
Solutions and SMElite Financing communicate, collaborate and connect simpler and better, using
facilities for SMEs familiar features like groups, chat and video calls
CSR/COMMUNITY
• Launched HLB Jumpstart, the Bank’s CSR platform that champions
Malaysians helping to build a sustainable Malaysia from social
enterprises and non-profit organisations to passionate individuals
on Malaysia Day
- Introduced the ‘Demi Kita’ campaign in collaboration with SURI
which upcycles denim and provides financial opportunity and
living skills for single and underprivileged mothers
- Partnered with Green Hero to support food wastage solutions
across Malaysia
10 • CORPORATE
2020
BUSINESS
• Committed RM500 million for renewable energy financing for the next 4 years in supporting government
plans to increase the share of Renewable Energy in the country
• Launched HLB Connect in Vietnam:
- true convenience for consumers with next generation, customer-centric digital banking
- greater financial inclusion and access to e-commerce on a single platform
• Pre-emptive action (early Feb 2020) to support customers with our HLB Customer Financial Relief Plans to
support customers facing financial challenges due to the impact of the novel coronavirus (COVID-19)
• Fast tracked credit approval for SME’s under BNM’s Special Relief Facility Funds (SRF) to ease their burden
amidst these challenging times
• Participated in the PENJANA SME Financing Scheme (“PSF”) where the Bank will extend its support to local
SME businesses during the recovery period which have and continue to be adversely impacted by COVID-19
• Plan in place to provide additional targeted assistance to customers who foresee difficulties in restarting their
regular payments come October 2020 (post Malaysia’s auto moratorium for individuals and SMEs) under the
Bank’s Payment Relief Assistance Plans
INNOVATION
• Cashless Experience - collaborated with WeEat, a WeChat mini programme for F&B outlets for customers to
order and enjoy meals seamlessly while avoiding queues
• Worked with MyTaman to empower Taman Desa Residents Association (TDRA) to use WeChat Pay functionality
at all merchants in the community, the first of such an effort in Malaysia
• Launched First-in-Market eToken with Biometric Recognition for businesses making banking more secure and
convenient
• Expanded and enhanced in-branch tablet facilities to serve customers quickly and effectively, while enabling
the Bank to reallocate resources to greater value add activities
• Launched ‘Cashless Lagi Senang’: onboarded traders at more than 20 public markets in Penang to accept
cashless transactions in support of the state’s ‘Cashless Pasar Awam’ initiative
• Upgraded the HLB Connect App to give customers the freedom to customise their digital banking experiences
and reduces the number of steps needed to make online transactions
• Continued the digitalisation and innovation journey with the successful transformation and migration of
Financial and Procurement processes to the PtoP@HLB platform allowing staff to work remotely, anytime
and anywhere with ease and convenience to amongst others, raise claims, process invoice payments and
raise purchase requisitions
CUSTOMERS AND EMPLOYEES

• Introduced the Brand Promise “Built Around You” which revolves around the principles of building trust through
personalised experiences, by having a deep understanding of our customers, making every experience easy to
delight customers consistently and to proactively anticipate customers’ needs to make their lives better
• Expanded Workplace by Facebook to Cambodia and Vietnam to make employee collaboration faster and
easier and connect easily with familiar features such as groups, chats and video calls
• Introduced the cloud-based Workday platform which has helped streamline talent management, HR
operational activities as well as learning and development
CSR/COMMUNITY
• Launched HLB DuitSmart initiative to empower Malaysians with better financial knowledge during Malaysia
Day Via HLB Jumpstart:
- the Bank partnered with Coffee for Good who provides barista training for underprivileged youth
- Assisted Social Enterprise SURI with Social Procurement to Support Single Mothers Producing PPE for Medical
front liners in an effort to uplift and strengthen communities in-need
• Pledged RM150,000 to Support Orphanages and Senior Care Homes with meals during Ramadan and Raya
• Donated RM1 million to MERCY Malaysia through the Association of Banks Malaysia to help the fight against
COVID-19
• Embraced environmentally friendly policies by changing the way we procure and use resources and how
we interact with customers, for example, not sending hardcopy statements which was expanded to more
products and services
2021
BUSINESS
• The Bank has been consistently offering repayment restructuring options to help individuals, SMEs and Corporate
borrowers navigate through the financial fallout from the COVID-19 pandemic as part of its own initiatives starting
February 2020 ahead of the industry wide initiatives in March 2020 while continuing to support the on-going industry
wide repayment deferment programmes over the past 18 months.
• Continued to work closely with clients that were not covered by the auto-moratorium such as credit card customers,
those that were in arrears and corporate clients.
• Additional credit was extended to SMEs under the Government’s recovery schemes and we have continued to
provide normal lending/financing activities throughout.
• A Flood Relief Assistance programme which consisted of a six-month moratorium was offered to customers impacted
by the major floods in various parts of Malaysia.
• Made available special financing to business customers who required working capital to aid the recovery of their
businesses.
• Introduced the HLB SME Solar Financing, a green energy financing facility specially developed for Malaysian SMEs
looking to install small-scale solar photovoltaic systems to help drive cost and energy efficiencies, which in turn
drive compliance with ESG principles.
INNOVATION
• The first bank in Malaysia to offer our customers an end-to-end digital onboarding via Apply@HLB without the need to
be physically present at a branch or go to a self-service terminal.
• The first bank in Malaysia to have an e-commerce store on Malaysia’s leading e-commerce platform, Shopee Mall.
Customers are able to sign-up for banking products and services anytime with just a few clicks without the need to visit
any physical branches.
• Upgraded the flagship HLB Connect digital platform to elevate its efficient transactional tool to an integrated and
personalised banking platform that can help our customers take control of their financial management.
• Launched HLB Pocket Connect, a first-in-the-market interactive digital banking platform that serves both young savers
and their parents enabling the younger customer segment to take charge of their own pocket money and savings, while
parents seed a responsible and healthy financial lifestyle in their children, which is done in a fun and interactive way.
• Extended the HLB Pocket Connect app offering with the digitally-forward first-of-its-kind in the market Earth Hero
initiative that gamified financial and environmental education through interactive and hyper-personalised content
designed to educate young digital natives towards being financially savvy and environmentally friendly.

• Enabled micro and smaller businesses and traders to embrace cashless payment mode via the Hong Leong Bank
Tap on Phone POS terminal where merchants such as hawkers and wet market traders were better positioned to
cope with the changing customer payment mode using the contactless mobile payment acceptance service, which
is a simple and secure low-cost payment solution.
• Initiated various cost savings initiatives for customers in FY2021 resulting in approximately RM93.3 million in overall
savings via:
- Provision of waiver of interbank cash withdrawal fee resulting in RM20.8 million savings for the community.
- Assisted customers in restoring their payment behaviours and financial well-being enabling them to settle their arrears in
full or partially during the moratorium period where some part of the interest/profit charged are waived thereby reducing
the amount owing by borrowers by RM31.1million.
- Initiated a Car Surrender Programme for customers with past due instalments where the Bank assisted borrowers to sell
their cars on their behalf and shortfalls on the loan/financing were waived. A shortfall amounting to RM2.5million was
borne by the Bank for this initiative.
- Waiver of various late fees, interest/profit accrual and collection fees were waived for customers who made settlement
plans to regularise or payoff their loans/financing with the total waived amounting to RM945,000.
- Waiver of late interest/profit & fees for SME clients with RM116,000 in savings for customers.
- Waiver of Corporate Internet Banking monthly subscription fees and token fees resulting in RM12 million in savings for
customers.
- Absorbed Stamp Duty on Foreign Exchange contracts with a total of RM77,000 in savings for customers.
- Introduced a Credit Card Conversion to Term Loan initiative resulting in savings amounting to RM25 million in the first year.
- Waiver of late payment fees and a hassle-free application process for customers applying for Relief Assistance during the
MCO period with a total of RM941,000 in savings.
12 • CORPORATE
• Fully deployed Google Workspace bank-wide, harnessing the power of working on cloud, enabling the utilisation of
virtual meetings capabilities among employees, customers and business partners.
• Supported employees through strong employee engagement amid the pandemic using platforms such as Google
Connect, the PlusVibes app and Brown Bag sessions.
CORPORATE SOCIAL RESPONSIBILITY AND COMMUNITY INVESTMENT

• Nurturing FinTechs and startups that solve community pain points by identifying startups with innovative solutions
that are Digital, Adaptable and Sustainable to help Malaysians adapt and thrive in this new and next normal.
• Launched Jumpstart@65 – a facility which offers collaborators a co-working space, customer usability labs and a
community centre that is equipped with state-of-the-art tools such as eye-tracking technology and 3D printing for
testing through customer immersion sessions such as focus groups, ethnographic studies, customer-staff co-creation
sessions as well as experiencing first-hand how customers behave and react to the solutions and offerings proposed.
• Expanded our financial sustainability and literacy programme, HLB DuitSmart by adapting the programme to be
easily used by the visually impaired community in collaboration with several blind associations in Malaysia.
• Expanded the HLB DuitSmart programme online to students, piloting the DuitSmart Online Workshop with 72 UCSI
University students and will be rolling out the online workshops to more students from higher education institutions,
secondary and private primary schools, as well as to single mothers and Orang Asli communities.
• Expanded access to financial literacy and inclusion through the financial sustainability programme, HLB DuitSmart
to the visually impaired community.
• Further driving the financial inclusion agenda for the visually impaired through the development of the first-of-its-
kind ‘talking ATM’ to serve the needs of our visually impaired customers in Brickfields, Kuala Lumpur and Pulau Tikus,
Penang.
• Mentored three winning startups; Food Market Hub, Pay:Watch and ERTH (e-Waste Recycling Through Heroes) to
work collaboratively on pilot projects addressing food security, gig economy and e-waste management respectively
in the third edition of our HLB Launchpad 2020.
• Collaborated with The Asli Co, a social enterprise focusing on helping Orang Asli mothers to earn a sustainable living
through making artisanal handicrafts and products from home by providing assistance and mentorship to make their
enterprise more sustainable and scalable through HLB Jumpstart, the Bank’s CSR platform.
• Onboarded our fifth social enterprise and our first from East Malaysia - Benak Raya Enterprise, a Sarawak-based
social enterprise, to the HLB Jumpstart platform.
• Donated a total of RM255,368.86 to Mercy Malaysia as part of a community disaster response effort to aid in ongoing
COVID-19 response mobilisation and support.
• Donated RM27,000 to the University of Malaysia Medical Centre towards a High Flow Nasal Cannula Oxygen (“HFNC”)
non-invasive ventilator unit to help critical patients suffering from COVID-19.
SUSTAINABILITY
• Sustainability has been elevated to a core focus area, integrating its various requirements into all aspects of our
business activities to ensure that we do our part in promoting sustainability. We contribute towards building a
vibrant and sustainable ecosystem by:
- Introduction of an ESG Framework that incorporates Environmental, Social and Governance (“ESG”) considerations
in the Bank’s credit evaluation of its small and medium-sized enterprises (“SME”) and corporate customers.
- The ESG Framework governs the Bank’s credit assessment as we move towards advocating the greening of
business activities as well as the transition to a low carbon and climate-resilient economy.
- Enhanced the Framework to include an Internal Environmental and Social risks rating system and additional
guidelines to deal with high-risk sectors such as forestry, metals and mining/quarrying, non-renewable energy
and palm oil.
- Launched the ‘Sustainability Roundtable’ aimed at engaging the industry including related associations,
organisations and companies embarking on sustainability transformations, to share and discuss the benefits and
challenges in sustainability practices. The Roundtable's early topics were related to plastics manufacturing and
renewable energy.
2022
CUSTOMERS
• Continued offering Relief Assistance for customers affected by the pandemic to help individual, SME, and
corporate customers recover with strength and sustain their business for the long term.
• Provided a six-month loan, financing and credit card payment deferment for flood affected customers and,
financing for working capital for SMEs and microenterprise customers.
• Waived various fees including interbank transfer fees, stamp duties, late payment charges, interest/profit
reduction for customers who caught up on their late payments and absorbing principal shortfalls from various
initiatives such as Car Surrender Programmes and lower interest rate to Credit Card customers who converted
their balance outstanding to term loans – these various initiatives provided total savings to customers
amounting to RM129 million in FY2021 and FY2022.
• Digitised the payment relief assistance process to eliminate the need for customers to visit the branch. We have
simplified the processing of applications and processed more than 194,000 requests between August 2020 and
June 2022, with an acceptance rate of 94%.
• Organised the Bank’s first ‘Digital Business Day’ to help businesses gain knowledge and access solutions to
transform their businesses in the digital era.
• Launched the seventh full-fledged branch in Borey Peng Huoth Boeung Snor, Cambodia to serve the rising
demand for banking and financial services for Cambodians and drive financial inclusion in the country while
deepening the Bank’s presence in the region.
• Supported the burgeoning SME sector through a collaboration between Hong Leong Bank Cambodia and the SME
Association of Malaysia through a Memorandum of Understanding to open opportunities for both Cambodian
and Malaysian SME businesses to cross collaborate and explore mutually beneficial business potential and
opportunities.
• Broadened the Bank’s portfolio to include Regional Wealth Management which provides solutions tailored to
clients’ individual and business needs spanning Malaysia and Singapore.
EMPLOYEES
• Supported employees amid the pandemic by initiating vaccine programmes targeting 100% vaccination
rates amongst employees, offering financial counselling via a dedicated channel on Workday and emotional
assistance through PlusVibes.
• Provided avenues for employees to give back to society by launching the HLB Employee CSR platform where
employees are able to volunteer their time and effort at homes, shelters or social enterprises, or donate
towards festive season meals for residents of homes, amongst others.
Employees Covid-19 Vaccination Programme

14 • CORPORATE
INNOVATION
• Launched the fourth edition of the HLB Launchpad which seeks to support and mentor tech
entrepreneurs and startups leveraging digital to develop innovative solutions for better and more
sustainable business resilience.
• HL Bank Singapore launched Southeast Asia’s first biodegradable debit card as part of the Bank’s
sustainable banking efforts, as well as to reduce the amount of single-use plastic bank cards in
circulation.
ENVIRONMENTAL
• Provided business customers wanting to install small-scale solar photovoltaic (“PV”) systems with
easy access to sustainability-linked financing via HLB SME Solar Financing.
• Issued the first in Malaysia Green Additional Tier 1 Capital Securities of RM900 million in nominal
value enabling more companies looking to advance their sustainability agenda through green
financing.
• Continued tree planting initiatives through the HLB Earth Hero initiative combining financial literacy
with environmental appreciation where young savers are able to pledge trees to be planted by
the Bank in the Lower Kinabatangan area of Borneo. 2,500 trees have since been planted with
2,500 more pending bringing positive changes in biodiversity in the area with endangered animals
repopulating the area.
• Partnered with the Malaysian Nature Society (“MNS”) to restore degraded forest with approximately
50,000 mangrove trees in the Kuala Selangor Nature Park over the next three years.
SOCIAL
• Completed a 3-year socially sustainable securitisation exercise of affordable HLB and HLISB home loans
and financing assets worth a total of RM300 million to CAGAMAS to meet the rising demand from
investors with ESG mandates to deploy capital towards socially responsible businesses.
• Continued support for social enterprises SURI Lifestyle (SURI), and Komuniti Tukang Jahit through social
procurement by engaging them to sew Baju Raya for residents of several welfare homes around the
country during the Raya celebrations thereby ensuring continued earnings for the social enterprise and
festive cheer for the residents of the homes.
• Continued assistance for Sarawak based Benak Raya the latest social enterprise to be onboarded onto
the Bank’s CSR platform known as HLB Jumpstart, to build a scalable and sustainable business through
mentorship, networking as well as equipping them with business tools and skills including logistics
management, digital adoption and strengthening brand awareness through marketing, amongst others.
• Rolled out the HLB DuitSmart Financial Literacy Workshop initiative as financial literacy is a crucial life
skill which not many Malaysians learn in universities and schools, impacting a total of 847 students,
with many more workshops in the pipeline.
• Mobilised a donation drive for essentials such as food, cleaning items, clothing, sanitary items, baby
formula and pet food for Hong Leong Foundation’s initiative in flood-stricken areas in Dusun Tua,
Hulu Langat, Taman Sri Muda, Shah Alam, Kg Tengah, Puchong and Mentakab, Pahang and provided
humanitarian support with MERCY Malaysia through funding during the devastating floods that impacted
over 27,000 people in Johor, Terengganu, Pahang, Perak and Kelantan in addition to donating RM55,368
to them to help communities impacted by the COVID-19 pandemic.
• Contributed RM34,650 to the Financial Industry Collective Outreach Programme (“FINCO”) initiative
where cash was distributed to 77 students to support their family’s grocery needs for three months
and channelled RM400,000 from HLB’s Malaysia Day marketing budget to provide school meals for
impoverished students when certain schools faced food supply issues due to the floods and the
pandemic.
• Contributed RM30,000 to UCSI University’s COVID-19 Vaccination programme to cover operational costs,
i.e., meals and allowances for unemployed volunteers while HLB employees donated 74.3 tonnes of food
aid to 219 schools nationwide, helping 4,952 deserving students and their families and raised RM90,000
towards 1.8 tonnes of food for eight soup kitchens feeding over 9,000 destitute individuals.
2023
• The Bank continued to offer Rescheduling & Refinancing programme to assist our individual, SME, and corporate
customers throughout the year.
• Continued to provide a six-month loan, financing and credit card payment deferment for flood-affected
customers during monsoon seasons and, financing for working capital for SMEs and microenterprise customers.
• Introduced HLB@Kampung, and transformed Sekinchan, Selangor into the First Cashless Kampung in the
country, driving efforts toward financial inclusivity by enabling cashless and contactless payments for 24,000
Sekinchan residents and small businesses as well as schools in addition to increasing access to banking.
• HLBVN launched its Personal Insurance Solutions in Partnership with Chubb Life Vietnam to promote financial
inclusivity and improve the lives of the community with comprehensive, value-adding financial products.
• Introduced enhanced security measures and increased customer education efforts to further strengthen our
online and mobile banking services and safeguard our customers from potential fraud.
- Moved away from Transaction Authorisation Code (TAC) to AppAuthorise;
- Restricted one mobile or secure device for the authentication of online banking transactions;
- Introduced cooling-off period for customers when they set up their HLB Connect mobile banking app and
enable AppAuthorise for the first time on a new device or when they increase their daily online transaction
limit;
- Introduced Emergency Lock in our HLB Connect App, allowing customers to lock their accounts on their own,
if they suspect any unauthorised or scam/fraud activity with their account;
- Offered 24-hour, 7 days a week hotline for customers to report financial scam incidents.
• Introduced CSR Leave as part of the Bank’s commitment to supporting employees’ volunteerism where employees
are entitled to two working days per calendar year to carry out CSR activities.
16 • CORPORATE
The Marketing Communication and Analytics Division spent a day volunteering at Zoo Negara under the HLB Employee CSR Programme
INNOVATION
• The Bank was one of the first Banks in Malaysia to enable cardholders to make contactless payments using
Google Wallet.
• Launched HLB Salary Advance Employer Solution, the first bank in Southeast Asia to back an Earned Wage
Access solution to provide Malaysians easy access to their earned salaries and transformed the way businesses
offer and manage their advanced salary payouts.
• Updated HLB Wallet that not only allows it to be used by adults (aged 18 and above), but also minors (aged 12
to 17).
• Upgraded HLB Wallet to a higher tier called HLB Wallet+ for additional features, such as the multi-currency
feature.
• Organised “Can You Hack It” 2022, with a focus on reimagining banking through hyperpersonalisation and the
Metaverse.
• Launched the fifth edition of the HLB Launchpad, focusing on discovering start-ups that could create shared
opportunities and economic multiplier effects through quality education and equipping talents for workforce
readiness in the new norm.
ENVIRONMENTAL
• Started including overseas markets and enhanced carbon disclosures to include Employee Commuting and
Downstream Leased Asset.
• Established a new Data Centre in Hong Leong Tower, which was officially certified as a Green Computing
Facility with a Titanium+ ranking from the Green Climate Initiative (“GCI”)
• Became a signatory to the Partnership in Carbon Accounting Financials (“PCAF”) as we step up our efforts
to calculate our Financed Emissions along with the identification and assessment of physical risks of our
collaterals and assets.
SOCIAL
• Rolled out a new social finance programme, ‘HLB Jumpstart – Micro Business’ to provide funding to individuals who
may not have the opportunities and means to secure full-time employment or to aspiring entrepreneurs who lack
credit history and the opportunity to start their own small businesses.
• HLB@School continued to support the digital transformation of schools in Malaysia by providing cashless payments,
digital banking tools and financial infrastructure to schools and students. Notably, HLB@School transformed 16 schools
in Kota Kinabalu in December 2022, the most digitally transformed school in a region.
• Assisted in the launching of Visit Sekinchan Year 2023 under HLB@Kampung, after the small town started using the
digital payment tools rolled out the Bank.
• Added more speech-equipped Self Service Terminals (“SSTs”) to assist the visually-impaired banking customers,
making it 17 units nationwide.
18 • CORPORATE
Chairman’s
Statement
A Commitment to
Enhancing Value For All
In the year under review, we have witnessed
our nation and the world emerge from a
prolonged period of difficulty and uncertainty
as a result of the Covid pandemic. While
there were numerous immediate positive
outcomes for the economy, businesses and
society, there was heightened inflation
which in turn led to sustained increases
in interest rates putting the fragile global
economic recovery at risk. Nevertheless,
we at Hong Leong Bank ("HLB" or "Bank")
remained resolute in meeting the needs of
our customers and generating sustained
value for our stakeholders.
Despite persistently challenging

operating environment in the past
year, we have continued to grow
in strength, underpinned by our
prudent approach to managing
asset quality and the investments
required to grow the business.
Consequently, the Bank was able
to deliver a set of resilient financial
results in the 2023 Financial Year
("FY2023"), building on its growth
momentum with a 16.1% year-
on-year ("y-o-y") increase in net
profit to RM3.8 billion. Total assets
have also increased and now stand
at RM279.9 billion, a 10.0% y-o-y
improvement.
Chairman’s Statement
ECONOMIC LANDSCAPE
Despite the softening growth prospects in the global

macroeconomic environment, the Malaysian economy
remained resilient and maintained its growth momentum.
In the second quarter of 2023, the economy continued to gain
traction, registering a 1.5% quarter-on-quarter (“q-o-q”) growth,
quickening from the 0.9% q-o-q growth experienced in the first
quarter of 2023. This translated into a y-o-y growth of 2.9% for
the second quarter of 2023, which came in below the long-term
average growth rate, skewed by a high base in the previous
corresponding period, with an 8.8% y-o-y growth in the second
quarter of 2022.
The sustained pace of domestic demand growth reflected

resiliency in consumption and pick-up in investment, underpinned
by policy support, a strong labour market amidst capacity
expansion, and progress in construction activities. This helped
cushion the fallout in net exports which has turned negative as
a result of bigger declines in both exports and imports compared
to the preceding quarter.
Looking ahead, the path to economic growth remains uncertain

due to ongoing challenges posed by macroeconomic and
geopolitical risks. Energy and food prices remain elevated
although somewhat eased from its peak so inflation has yet to be
tamed and a pause to interest rate increases is not yet certain. All
these factors call for vigilance and adaptive strategies to navigate
an evolving economic environment.
In addition to our financial performance, HLB has continued TOTAL ASSETS
RM279.9
to devote significant resources towards strengthening our
digital foundations and capabilities, driven by our "Built +10.0%
Around You" brand promise to our customers and "Digital at billion
the Core" ethos. We are also cognisant of our stakeholders’
ever-growing concern surrounding the Environmental,
Social and Governance ("ESG") agenda and remain deeply
GROSS LOANS AND FINANCING
committed to integrating ESG practices across our entire
value chain. Overall, the Bank's performance has been
commendable, and I am confident that we will continue
RM181.7 +8.0%
billion
delivering long-term and sustainable value to all our
stakeholders.
On that note, I am honoured to present to you, our Annual EARNINGS PER SHARE
186.4
Report and Financial Statements of the Bank for the financial
year ended 30 June 2023. +16.0%
sen
20 • CORPORATE
SUSTAINED VALUE CREATION
The Bank has continued to generate value

for its shareholders, with an improvement
in profits and other key metrics in the year
under review, underpinned by growth
in loan and financing assets as well as
healthy asset quality. Gross loans and
financing grew by a solid 8.0% y-o-y to
RM181.7 billion in FY2023. The growth in
loans and financing was largely driven
by increased business activities in the
key segments of mortgages, auto loans,
SME and commercial banking, as well as
overseas operations. Customer deposits
also exhibited positive growth, with a
7.3% y-o-y increase to RM211.7 billion in
FY2023. In FY2023, the Bank maintained
its healthy asset quality, with a gross
impaired loan ratio ("GIL") of 0.57%.
With this performance, earnings per

share ("EPS") for FY2023 rose to 186.4
sen, representing an increase of 25.8 sen remains robust, with strong capital buffers stays at the forefront, particularly in areas
or 16.0% y-o-y. In addition, our return supporting intermediation activities while such as Islamic wealth management,
on equity ("ROE") was commendable at the Halal sector has been recognised as the Halal economy and investment
11.8%. The Bank's share price performed a high-impact sector capable of driving intermediation. HLISB is dedicated to
resiliently during FY2023 and closed Malaysia's economic growth. growing alongside its customers by
at RM18.96, which outperformed both providing innovative and personalised
the FBM KLCI index and KLFIN index by As a leading player in the Islamic banking Islamic financial solutions while upholding
22.8% and 12.1%, respectively, over the sector, Hong Leong Islamic Bank (“HLISB”) a commitment to sustainability.
past five years. In light of the Bank's is steadily reinforcing its presence in the
financial performance and commitment industry. During the review period, HLISB REGIONAL PERFORMANCE
to enhancing shareholder value, the achieved a healthy financial performance,
Board declared a final dividend of 38.0 recording an encouraging 29.2% y-o-y In the year under review, most regional
sen per share for FY2023. This brings the growth in profit before zakat and taxation economies, like the rest of the world,
total dividend for FY2023 to 59.0 sen per to reach RM566.7 million. Islamic financing grappled with higher inflation and the
share, as compared against 55.0 sen per assets and deposits, including term ensuing effect of slower economic growth.
share paid out in FY2022, translating to a investment accounts, expanded by 12.9% Nevertheless, our franchises were able to
dividend payout ratio of 32.0%. to RM41.1 billion and 13.4% to RM47.1 navigate these challenges and capitalise
billion respectively. The contribution of on opportunities that emerged together
ISLAMIC BANKING PERFORMANCE the Islamic financing portfolio to the with economic activity being back at pre-
Bank's total loans/financing remained pandemic levels.
Malaysia maintains its position as a strong at 22.6%.
prominent global hub for Islamic finance. The Bank’s regional business continued to
In 2022, total Islamic banking assets Guided by the brand promise to its generate meaningful returns for HLB with
expanded by 10.8%, accounting for customers, HLISB actively extend the reach a gross loans expansion of RM2.2 billion
62.7% of the Asia-Pacific region's Islamic of our products and services to the public or 18.8% y-o-y. Robust loans growth was
banking assets. This growth is attributed through community outreach strategies. seen in Singapore, Vietnam and Cambodia
to Malaysia's dynamic and resilient HLISB is committed to explore emerging on the back of the ongoing economic
Islamic finance ecosystem. The industry trends in Islamic finance to ensure that it recovery.
Situated in one of Asia’s premier financial franchise, leveraging regional strengths to The government's strategic initiatives,
hubs, HL Bank Singapore (“HLBS”) enhance customer experience and provide including targeted fiscal measures and
represents our operations in Singapore greater product value proposition through robust investment programmes, have
as a fully licensed bank that operates a both physical and digital channels, played a pivotal role in revitalising
single branch and specialises in providing supported by proactive risk management. essential economic sectors and propelling
tailored products to specific segments. overall growth. During this time, we have
In FY2023, HLBS’s gross loans expanded Our associate in China, the Bank of Chengdu continued to be steadfast in supporting our
by RM1.7 billion, closing at RM9.4 billion, (“BOCD”) which is a city commercial customers as partners in their growth and
while deposits increased by 39.7%, bank in Sichuan Province listed on the path towards recovery and success.
totalling RM14.4 billion. As of end June Shanghai Stock Exchange, delivered a
2023, total assets expanded 26.7% y-o-y robust performance with strong asset This has been exemplified by our
to RM16.2 billion. Its offerings encompass quality, contributing RM1.3 billion to our commitment to invest in the right digital
Business and Commercial Banking (“BCB”), bottom line. BOCD aims to leverage on the capabilities to be market relevant while
Private Wealth Management (“PWM”), development of the Chengdu Chongqing serving our customers effectively. Today,
and Personal Financial Services (“PFS”). Economic Circle to achieve larger scale our digital platforms seamlessly facilitate
BCB caters to established small and and drive steady growth in core business the onboarding of our banking products and
medium enterprises involved in various areas while maintaining a leading position services, enabling customers to engage in
economic growth sectors and regional among city commercial banks in China. day-to-day banking at their convenience,
trade activities. PWM offers advisory thus transcending beyond the operating
services to high-net-worth individuals, DRIVING DIGITAL AND hours of human managed channels like our
assisting them with investment strategies SUSTAINABLE GROWTH branches and call centre.
and wealth preservation. PFS focuses on
serving the Auto Finance segment and Throughout the review period, Malaysia Our top priority, however, remains on
providing personalised banking services has successfully navigated a dynamic finding new ways to harness technology
to the mass affluent. HLBS remains fully and ever-changing economic landscape, in delivering exceptional Digital Human
committed to digital transformation demonstrating resilience and adaptability Experience for all our customers. Through
across all its business lines and actively in the face of formidable challenges. The innovation and the introduction of market
engages with the communities it serves combined efforts of the government, leading capabilities, we have significantly
to enhance the customer experience. businesses, and the Malaysian populace enhanced our customer journeys, ensuring
have contributed to a consistent that interactions are effortless, seamless,
In Vietnam, Hong Leong Bank Vietnam Ltd economic recovery and expansion. and intuitive across various channels.
(“HLBVN”) maintained strong momentum
in balance sheet growth during FY2023
despite the country experiencing softer HONG LEONG BANK SINGAPORE GROSS LOAN
RM9.4
economic growth due to weakened global
demand. Loans grew by 18.3% y-o-y, +22.9%
reaching RM2.0 billion, while deposits billion
increased by 42.8% y-o-y, totalling RM1.9
billion. As of end June 2023, total assets for
HLBVN grew 15.7% y-o-y to RM3.2 billion.
HLBVN continues to expand channels HONG LEONG BANK VIETNAM GROSS LOAN
and products for retail customers and is
enhancing its digital banking platform for RM2.0 +18.3%
business and corporate customers. billion
In Cambodia, Hong Leong Bank

(Cambodia) PLC (“HLBCAM”) achieved
a steady gross loan portfolio of RM2.6 HONG LEONG BANK CAMBODIA GROSS LOAN
billion while maintaining a deposit book
of RM2.2 billion. As of end June 2023, total RM2.6 +5.6%
assets amounted to RM3.4 billion. HLBCAM billion
remains focused on promoting the
22 • CORPORATE
Our progress over the years managed to reduce more than 15% of Crime Governance Committee (“FCGC”).
our operational carbon emissions (Scope Through this robust governance
has been a direct result of
1 & 2), ahead of the targeted reduction approach, we maintain appropriate
our "Digital at the Core" of 15% to 25% by the year 2026. This checks and balances that enable us
strategy, which has yielded was achieved through Energy Efficiency to successfully navigate uncertainties
further advancements over & Conservation (“EE&C”) Measures within an ever-evolving risk landscape.
implemented at our operational facilities.
the past 12 months. The
One of our primary objectives is to
strong performance we While we are continuously strengthening instil a strong compliance culture
have delivered represents our commitment and focus on the low throughout the organisation which is
the successful execution carbon transition, we prioritise climate achieved through a combination of
resilience through our financial solutions electronic and face-to-face training
of strategies driven by
and services. To that end, we have methods. We invest in our employees’
insightful data. Currently, become a signatory to the Partnership continuous learning and certifications,
we take great pride in in Carbon Accounting Financials (“PCAF”) equipping them with the necessary
serving 2.6 million retail this year and started calculating our knowledge to adapt to the rapidly
customers digitally, which is Financed emissions, in addition to changing regulatory environment.
identifying and assessing the physical This year, we have introduced the
almost three-quarters of our
risk of our collaterals and assets. Compliance Awareness Programme,
3.7 million retail customers which utilises activity-based learning
in Malaysia. Our digital We also recognise that to maintain to enhance active participation for
platforms cater to the needs our momentum and to build a strong enhanced knowledge retention.
sustainable culture among our people,
of close to 128,000 business
we need to develop future sustainability We maintain a zero-tolerance stance
customers and continue to champions within the Bank. We have towards bribery and corruption
help more every year. made this a priority by providing access to activities. To support this commitment,
knowledge on key sustainability issues, we have implemented policies and
In addition, we are moving ever closer engagements on practising sustainable procedures that are overseen by the
to having all banking transactions take lifestyle as well as recruiting talents with Board and management through the
place through our internet and mobile the relevant expertise. BAC, BRMC, and RCGC. This position
banking platforms across all regions. is affirmed with the Anti-Bribery and
FOSTERING A CULTURE OF Corruption Compliance Programme,
On the sustainability front, we have EFFECTIVE GOVERNANCE implemented to effectively manage
made significant strides in the year under and mitigate the risks associated
review. For instance, our renewable At HLB, we are steadfast in our with bribery and corruption, guided
energy financing commitment continues commitment to upholding strong by the Bank’s policy. We communicate
to grow, reaching an approved amount and effective governance practices this commitment to external
of RM3.2 billion as at the end of FY2023. rooted in integrity and responsible parties we work with, ensuring that
This is more than six times the amount business conduct. We recognise that they understand their obligations
we had originally targeted when we first these principles are vital for ensuring and adhere to relevant laws and
set the target in 2019. Our efforts have the long-term sustainability of our regulations.
been recognised through the Special organisation. To this end, our Board
Award for Sustainable Energy Financing and management have established In recognition of our role as a
by Domestic Bank in 2022 which we won a comprehensive framework of gatekeeper of the financial system,
at the National Energy Awards in March internal controls and risk management especially in the context of illicit
2023. practices. This framework is governed activities, we actively monitor
by key committees such as the Board regulatory developments and assess
In terms of our net zero ambitions and Audit Committee (“BAC”), Board Risk their impact on our internal policies,
carbon reduction targets, we have been Management Committee (“BRMC”), processes, and procedures. In our
making meaningful progress in achieving Risk and Compliance Governance ongoing efforts to mitigate the risks
our goals. Since FY2019, we have Committee (“RCGC”), and Financial of financial crime, we continuously
To our exceptional employees, I am

grateful for your dedication and hard
work which has resulted in yet another
outstanding performance for our Bank.
I would also like to acknowledge
the achievements of our senior
management team whose expertise
and commitment to our shared goals
have been invaluable.
On that note, I would like to

acknowledge the contributions made
by, Domenic Fuda, who retired from his
role as the Group Managing Director/
Chief Executive Officer in June 2023.
Domenic played an instrumental role in
guiding HLB over these past seven years,
leading with intense focus and taking
enhance our control measures external headwinds. Given that China
HLB through a period of significant
against Money Laundering, Terrorist is Malaysia's largest trading partner,
transformation which enabled the
Financing, and Proliferation Financing, any slower-than-expected recovery in
Bank to emerge stronger despite the
maintaining a high level of adherence the Chinese economy would inevitably
disruptive pandemic period. On behalf
to regulatory requirements. dampen growth prospects for Malaysian
of the Board, we wish Domenic all the
external trade, thus impacting the
best in his future undertakings. In his
OUTLOOK overall economy. However, Malaysia is
place, we welcome Kevin Lam who
well poised to benefit from a shift in
took over the helm of HLB effective
Looking ahead, the year 2024 is foreign direct investment in the region,
1 July 2023 and look forward to working
anticipated to be characterised by particularly in the semiconductor
closely with Kevin in bringing HLB to its
prolonged low growth and elevated cluster. This, coupled with closer
next phase of growth.
inflation. Advanced economies are collaboration between Singapore and
expected to bear the brunt with Johor in a special economic zone,
Lastly, I would like to express my
projected growth for 2024 standing at are expected to help bolster growth
appreciation to Bank Negara Malaysia,
1.4%, in contrast to the 4.1% expansion prospect in the Malaysian economy in
the Ministry of Finance, regulatory
projected for emerging market and the medium to longer term.
authorities, and government agencies.
developing economies. While downside
Your assistance and support have been
growth risks remain, odds of a global ACKNOWLEDGEMENTS
crucial to our operations and success.
recession has dissipated somewhat
As we embark on the next financial
for now, taking cue from resiliency in I would like to take this opportunity
year, let us approach it with fervour
the major economies. Inflation, while to convey my sincere and heartfelt
and determination to achieve our goals
remaining at elevated levels has also gratitude to the esteemed members
and fulfilling our collective aspirations.
abated from recent highs and this shall of our Board. Throughout the years,
Together, we will continue to make
offer some much needed relief to both your invaluable insights, guidance, and
a positive impact in the industry and
businesses and consumers, allowing support have played an instrumental
serve our stakeholders with excellence.
central banks globally to shift to a role in our collective success.
looser monetary policy stance in the
first half of 2024 to support growth, I also want to extend my appreciation
should the need arise. to our esteemed customers, trusted
QUEK LENG CHAN
business partners, dedicated investors,
Chairman
The prospects for the Malaysian and loyal shareholders. Your loyalty
economy are expected to remain and support have been the driving
19 September 2023
moderate, as domestic policy support force behind our Bank's growth and
is anticipated to partially offset accomplishments.
24 • CORPORATE
Five Year
Financial Highlights
FY2019 FY2020 FY2021 FY2022 FY2023

Group RM’million RM’million RM’million RM’million RM’million
Total Assets 207,369 221,278 237,129 254,331 279,850

Gross Loans, Advances and Financing 137,566 145,932 155,822 168,234 181,677
Customer Deposits 163,070 173,493 183,290 197,292 211,652
Shareholders’ Fund 25,474 27,234 29,459 30,989 33,987
Profit Before Tax 3,186 2,989 3,471 4,367 4,627
Profit After Tax 2,665 2,495 2,861 3,289 3,818
Earnings per share (sen) 130 122 140 161 186
Net dividend per share (sen) 50.0 36.0 50.0 55.0 59.0
Dividend payout ratio 38.4% 29.5% 35.8% 34.7% 32.0%
Gross Loans, Advances and Deposits from Customers Total Income

Financing Stable funding base backed by solid Resilient topline performance underpinned
Commendable growth trajectory driven individual deposit base and CASA by loan/financing expansion and improved
by expansion in mortgages, auto loans, acquisition initiatives non-interest income contribution
SME and commercial banking as well as
overseas operations
RM’Million RM’Million RM’Million
Total Deposits
Individual Deposit Mix %
CASA Ratio
211,652
181,677 5,686
197,292 5,597
5,467
168,234
183,290
155,822 173,493
145,932 163,070 4,726 4,778
137,566
53.3%
52.4% 51.2%
50.4%
49.4%
32.3% 33.5%
30.8%
27.9%
25.6%
FY2019 FY2020 FY2021 FY2022 FY2023 FY2019 FY2020 FY2021 FY2022 FY2023 FY2019 FY2020 FY2021 FY2022 FY2023
+8.0% YoY +7.3% YoY +1.6% YoY

Five Year Financial Highlights
FY2019 FY2020 FY2021 FY2022 FY2023

Bank RM’million RM’million RM’million RM’million RM’million
Total Assets 169,461 177,707 188,434 198,130 215,057

Gross Loans, Advances and Financing 109,943 113,745 120,402 128,054 136,343
Customer Deposits 131,397 137,633 144,357 155,007 162,733
Shareholders’ Fund 20,125 20,985 21,999 22,399 23,586
Profit Before Tax 2,386 2,075 2,404 3,196 2,729
Profit After Tax 1,927 1,654 1,868 2,212 2,077
Profitability Asset Quality Capital Ratios

Reasonable profitability amidst challenging Healthy asset quality with a stable GIL Solid capital positions which are
operating environment and global ratio and adequate loan impairment supportive of future business expansion
headwinds coverage
RM’Million
Industry GIL Ratio Total Capital %
PBT GIL Ratio Tier 1 %
PAT CET 1 %
ROE %
16.3% 16.5% 16.7%
10.8% 9.5% 10.1% 10.9% 11.8% 16.2% 15.9%
1.80% 1.75%
4,627
4,367 1.62%
1.54%
3,186 1.43%
3,471 14.5%
2,989 14.2% 13.9%
14.1% 14.1%
3,818
3,289 0.78%
2,665 2,861
2,495 13.7%
0.61% 13.6%
13.4%
0.57% 13.1% 12.8%
0.46% 0.49%
FY2019 FY2020 FY2021 FY2022 FY2023 FY2019 FY2020 FY2021 FY2022 FY2023 FY2019 FY2020 FY2021 FY2022 FY2023
26 • CORPORATE
Group Managing Director/

Chief Executive Officer’s Review
Dear Shareholders,
Customers and Business
Partners
The Bank has once again delivered a commendable
set of results in FY2023, underpinned by robust
loan/financing growth and ensuring healthy asset
quality amidst a challenging global macroeconomic
landscape.
While Malaysia’s economic growth story

has been positive and certainly lent some
momentum to the business environment,
the global narrative has been more difficult
to pin down given the uncertainty emanating
from geopolitical tensions and stubborn
inflationary pressures.
With the recovery seen in the Malaysian

economy throughout 2022 and into the first
half of 2023 leading to encouraging spillover
effects in most economic sectors, we were
able to capitalise on these positives to
produce an even stronger performance than
the year before. In tandem with this, HLB
remained disciplined in the management of
its asset quality and continued to advance
Group Managing Director/Chief Executive Officer’s Review
needs of our customers by making banking as simple, seamless

and inclusive as possible while employing a digital-first
approach has certainly paid dividends. Guided by our "Digital
at the Core" ethos, we have stood by our customers during
their most challenging moments, continuously enhancing and
innovating our products and services to provide outstanding
banking experiences.
The encouraging response from our customers that we continue

to witness is what inspires us to do more. During this fiscal
year, the number of retail customers on our digital platform
crossed the 2.6 million mark, aided by growth in our retail
internet and mobile banking customer base of 12% and 19%
y-o-y respectively. Most significantly, 93% of all retail banking
transactions are now conducted via our internet and mobile
banking platforms. In tandem with this, digital banking adoption
by our business customers has experienced robust growth
following the resurgence of economic activities post-pandemic.
About 128,000 business customers are now connected digitally,
supported by the business internet banking customer base
growing 14% y-o-y, while our business mobile banking customer
base soared by 40% as compared to the same period last year.
The post-pandemic era has ushered in an exciting period for

digital-first banks like ours, where digital platforms continue
to be the primary channel across various facets of financial
services. Our digitally enabled innovation is reshaping the
way we work, facilitating collaboration with our customers,
businesses and partners, enabling us to explore new income
streams and opportunities for growth.
ECONOMIC LANDSCAPE
our key strategic priorities to continue our business growth
momentum. The macroeconomic landscape continues to face a myriad of
challenges, particularly risks associated with policy tightening
Here, I would like to say that I am honoured to be taking and persistent inflation. Furthermore, recent geopolitical
over as the Group Managing Director and Chief Executive uncertainties have further complicated an already tense global
Officer of HLB, effective 1 July 2023. I recognise the strong environment, potentially triggering another round of disruption
legacy left by my predecessor, Domenic Fuda, who has in the global supply chain and investment flows.
taken the Bank from strength to strength over the past
seven years. He has set a high benchmark and I fully However, policy tightening has been the prevailing theme in the
appreciate this opportunity to build on his legacy and to past year with central banks around the world implementing
take HLB to the next level. significant interest rate hikes. The US Federal Reserve, for
instance, has raised its target rate by a substantial 525 basis
In taking on this task ahead, it is clear to me that HLB’s points since March 2022. The Bank of England and the European
promise of “Built Around You” has worked well in our Central Bank have followed suit, with rate increases of 475 and
favour and we will continue to double down on our 450 basis points, respectively. These factors have impeded real
efforts to put customers and communities at the centre of income growth and real yields and will continue to do so in the
everything we do. The Bank’s laser focus on meeting the foreseeable future.
28 • CORPORATE
These policy actions reflect the Non-interest income witnessed a reach RM89.1 billion, while transport
commitment by global policymakers to substantial 15.8% y-o-y improvement vehicle loans experienced a robust 10.9%
address inflation and balance economic to RM1,133 million, resulting in a non- y-o-y growth to RM19.6 billion, in line
growth, albeit raising concerns about the interest income ratio of 19.9%. This with the surge in motor vehicle sales.
potential for a slowdown or recession. growth was primarily driven by credit
In fact, the Eurozone has already card-related fees, aligned with the Domestic loans to business enterprises
experienced a technical recession in economic recovery, and enhanced expanded by 10.2% y-o-y to RM60.8
the first quarter of 2023, marked by performance in trade finance and foreign billion, and the SME loan/financing
two consecutive quarters of quarter-on- exchange throughout the year. portfolio grew by 9.7% y-o-y to RM33.0
quarter contractions. billion. The Bank's community banking
Operating expenses were prudently initiative within the SME segment
On the domestic front, the Malaysian managed, ending the year slightly maintained its growth momentum,
economy continues to receive support higher than the previous year at RM2,233 achieving a remarkable 13.2% y-o-y
from ongoing policy measures, including million, maintaining a solid cost-to- growth, attributed to a strong loan/
government subsidies and cash transfers. income ratio of 39.3%. Consequently, the financing pipeline, innovative client-
These measures have helped to mitigate operating profit before allowances for centric solutions, and digitalised
the impact of higher inflation and the FY2023 amounted to RM3,452 million. onboarding initiatives enhancing
rising cost of living. Private consumption, customer experience.
which accounts for a significant portion of Gross loans, advances, and financing
total GDP, remains a key driver of growth, maintained their growth trajectories, The Bank’s fundamentals in FY2023
expanding by 4.3% y-o-y in the second reaching 8.0% higher y-o-y at RM181.7 remained supportive of business growth,
quarter of 2023. Investment activities billion, driven by expansion in key backed by our stable liquidity and capital
have also contributed to growth, with portfolios such as mortgages, auto loans, base, with loan-to-deposit ratio (“LDR”)
a faster 5.5% y-o-y increase, driven by Small and Medium Enterprises (“SMEs”) at 84.3% and liquidity coverage ratio
capital spending from both private and and commercial banking, as well as (“LCR”) at 136.4%.
public corporations. overseas operations.
Customer deposits showed a healthy
OPERATING PERFORMANCE 7.3% y-o-y increase in FY2023, amounting
to RM211.7 billion, with CASA reaching
In FY2023, the Bank achieved a total SUSTAINABLE COST-TO-INCOME RM65.1 billion, representing a CASA
income of RM5,686 million, marking RATIO OF ratio of 30.8%. The Bank's funding
39.3%
a 1.6% y-o-y increase, while net profit base remained robust, bolstered by an
after tax reached a record RM3,818 established individual deposit portfolio,
million, showing an encouraging 16.1% growing 5.2% y-o-y to RM104.6 billion,
improvement compared to the previous with an individual deposit mix of 49.4%.
year. This performance was driven by
continued loan/financing expansion, NET PROFIT AFTER TAX The Bank maintained its disciplined
RM3,818
sustained non-interest income, and approach to asset quality, reflecting a
robust contributions from our associates. healthy GIL ratio of 0.57% in FY2023. With
million the prudent pre-emptive buffer of RM574
million that the Bank holds on to, the
Net interest income remained stable +16.1%
loan impairment coverage ("LIC") ratio
at RM4,552 million, with a net interest
remained adequate at 168.8%. Inclusive
margin ("NIM") of 1.98% for FY2023.
of the value of securities held on our GIL,
The relatively flat performance was
Domestic loans/financing once again the Bank's LIC ratio stood comfortably
attributed to increased funding costs,
outpaced the industry in FY2023, recording at 238.8%. The Bank's capital position
but it was offset by growth in the loan/
a growth of 7.2% y-o-y compared to the remains solid, supporting future growth,
financing portfolio and effective asset/
industry growth of 4.3% y-o-y. Residential with CET 1, Tier 1, and Total Capital ratios
liability management.
mortgages increased by 8.1% y-o-y to at 12.8%, 13.9%, and 15.9%, respectively.
SETTING THE STANDARD FOR EXCELLENCE recognition with awards such as the Best journey, we are truly honoured to be
SME Bank in Malaysia in 2022 by The Asian recognised for our efforts in cultivating
At HLB, our unwavering commitment Banker for the fourth consecutive year. trust and instilling confidence among
centres around placing our customers We have also received accolades for our our stakeholders. Our efforts have
and communities at the forefront of overall performance in providing banking been recognised by awards including
our endeavours. Our "Built Around You" solutions to SMEs, including the Best the Bank of the Year - ESG Leadership
brand promise signifies our single- SME Bank in Malaysia by Asian Banking Award at the Sustainability and CSR
mindedness in delivering financial and Finance (“ABF”) for the second Malaysia Awards 2023, as well as the
products and services that meet the consecutive year and the Best Domestic 3G Leadership in Corporate Governance
evolving needs of our customers and Bank 2022 by Asiamoney. Additionally, Award 2022, 3G Best CSR Campaign
communities. We aim to simplify we were awarded as the Best Performing Award 2022, and 3G Best Sustainability
banking through digital innovation, Financial Institution in 2022 by Syarikat Disclosure & Reporting Award 2022 by the
complement lifestyles, enhance Jaminan Pembiayaan Perniagaan Global Good Governance ("3G") Awards
financial accessibility and inclusivity, Berhad (“SJPP”), recognising our role 2022-Cambridge IFA. In addition, The
and drive positive outcomes for all. in facilitating government guarantee Edge, a renowned business publication,
programmes aimed at assisting SMEs named us the Best Performer in the
Over the course of the financial year, with their cashflow needs. Financial category in their ESG Awards 2022.
our efforts to create value across
everything that we do has garnered In line with our digital-focused strategy, Meanwhile, our commitment to the
widespread commendation, reaffirming we continued to strengthen and community has driven us to embark
our status as a financial institution that innovate within the banking ecosystem, on various initiatives to give back and
genuinely values the perspectives of our providing customers with convenient empower those around us. Our efforts in
customers, employees, and communities. omnichannel access to our services. Our financial literacy and empowering social
These prestigious awards serve as a customer-centric innovations that deliver enterprises have received recognition
testament to our outstanding initiatives extraordinary experiences and positive where we were crowned the Company
in sustainability, governance, and outcomes have been recognised with of the Year (Banking) at the Sustainability
dedication to placing customers at the awards such as the Digital CX Awards Best & CSR Malaysia Award 2022. In addition,
heart of everything we do. Furthermore, Customer Insights Initiative 2022. premised on our financial literacy
they highlight the visionary and inventive workshops impacting more than 1,500
spirit of our highly skilled workforce. As a financial institution dedicated to students and various other community
maintaining exemplary levels of corporate outreach programmes, CSR Malaysia
Our deep commitment to nurturing governance while demonstrating awarded us the award of Bank of the Year
Malaysia's SME sector has garnered significant progress in our sustainability for Financial Literacy in 2022.
30 • CORPORATE
STRATEGIC PRIORITIES and delivering unparalleled banking in our journey to be a highly digital and
experiences. Our commitment to their innovative ASEAN financial services
At the heart of our strength and success financial well-being has also allowed us institution.
in creating value lies an unwavering to forge deeper connections and create
commitment to five strategic priorities unparalleled value, earning us their trust We also recognise that the financial
that have become the cornerstone of the and loyalty. landscape is constantly evolving,
Bank's journey. Each priority has been with digital banking amplifying
meticulously woven into our business Our workforce is the heart and soul of societal inequalities. As a responsible
fabric, ensuring that we stay resolute in our organisation, and effective talent financial institution, it is therefore our
our pursuit of excellence and customer- management is at the core of our people responsibility to cultivate an inclusive
centricity. These guiding principles have agenda. We understand the pivotal role banking ecosystem. Our collective efforts
not only driven us to navigate through that our employees play in driving our are directed towards the diverse needs
challenging times but have empowered vision forward. Over the past year, we have of our community ensuring that financial
us to seize opportunities and elevate our placed a heightened focus on building a services are accessible to all, regardless
performance to new heights. robust talent pipeline, reinforcing existing of their background or circumstances.
initiatives, and introducing new strategies
Grounded in innovation and a dedication that empower our people to excel and Embracing our role as stewards of the
to delivering exceptional service, our thrive in their roles. environment, we have embarked on a
customer-centric approach has been transformative sustainability journey.
the bedrock of our success. Even amidst To drive sustained growth for the Bank This year, we have made incremental
the headwinds of a higher interest and our stakeholders, we are committed but meaningful progress, enhancing
rate environment and global economic to growth through our existing franchises the standards and completeness of our
instability, we have remained steadfast while looking for new opportunities disclosures. Taking a leading role in the
in meeting the evolving needs of our to expand our reach and market share ESG conversation, we strive to create
customers as we doubled down on our especially in our retail, wealth and SME a positive impact through our internal
“Built Around You” brand promise. As portfolios. Looking ahead, we recognise initiatives and by mitigating climate
a digital-first bank, we remain at the the opportunities that are present around change risks.
forefront of fostering financial inclusion the region as we continue to progress
1 ANCHORING ON “BUILT AROUND YOU”
As a customer-centric financial institution with SMEs, and work together to help them payment experiences as we continue
driven by innovation and a commitment grow, scale and modernise their business to expand our connectivity to payment
to delivering exceptional service, we practices. In the era of digitalisation, the networks across Southeast Asia. As one of
remained steadfast in our dedication growing popularity of going cashless the pioneering banks offering cross-border
to meeting the evolving needs of our and mobile transactions in daily life has QR capabilities on our mobile banking app,
customers. Our unwavering dedication highlighted the need for our SMEs to be our customers can conveniently make
to fulfilling the needs of our customers digitally empowered and enabled. payments in Singapore, Thailand, and
and communities remains at the core of Indonesia, further enhancing their overall
everything we do. We continuously push This is where our “Digital at the Core” ethos banking experience.
the boundaries to create products and comes to life with the support we give our
services that truly cater to our customers' SME customers through various initiatives Our collaboration with the Cambodian
preferences while actively seeking their to help them integrate digital strategies Central Bank continues with the integration
input to further enhance their banking and solutions to drive greater growth and with Bakong, enabling instant fund
experience. Our primary focus is on strengthen their competitive edge. transfers and payment transactions. Since
building personalised solutions tailored the launch of the initiative last year, we
to their unique needs, ensuring banking Digitalisation Momentum Continues to have recorded a remarkable 91% increase
is accessible at any time. This customer- Strengthen in payments. Our CASA customers are also
centric approach is deeply ingrained in our able to perform real-time fund transfers
"Built Around You" brand promise, guiding Throughout this fiscal year, our efforts between other Bakong member banks
every aspect of our operations. have been directed towards enriching the both in USD and KHR currencies. In addition,
customer onboarding process, facilitating they are able to utilise QR-based payments
Despite the challenges posed by the higher seamless payment experiences, and at local banks' merchants through the
interest rate environment and an unstable fostering enhanced digital engagement Bakong wallet, and conveniently deposit
global economy in FY2023, we forged opportunities with the Bank for both retail or withdraw cash at any member bank's
ahead and embraced the opportunity and business customers. Additionally, location. These advancements in Cambodia
to excel while prioritising the financial we have expanded our reach across the have brought greater accessibility and
well-being of our customers. Although regional markets we operate in, aiming to flexibility to our customers, while driving
the country is in the endemic stage, HLB provide greater accessibility, transparency, sustainable growth in digital transactions.
continued to provide various forms of and convenience to a wider audience.
financial assistance to individuals, SMEs Meanwhile, in Malaysia, we launched
and corporate customers through the Embracing a Digital Future by community-based programmes such as
Payment Relief Assistance Plan (“PRAP”) Empowering a Cashless Society “Project Cashless Kampung” and “HLB@
and offered restructuring and rescheduling School” with the aim to help communities
plans. For customers affected by the HLB is actively driving the development benefit from digital and financial
floods in 2023, we mobilised a Flood Relief of an integrated financial ecosystem inclusivity, ultimately contributing to
Assistance programme that included a six- that prioritises seamless digital payment increase digital banking adoption across
month payment deferment of instalments experiences to enable the transition the nation. During the year under review,
on loans and financing and credit cards for towards a cashless society. The widespread we continue to provide support to our
all affected customers, as well as additional acceptance of DuitNow QR codes, mobile "Project Cashless Kampung" in Sekinchan
financing for working capital for SMEs and banking apps, and mobile wallets has by helping 1,486 residents open bank
microenterprise customers. propelled mobile payments as one of the accounts, obtain debit cards and connect
preferred methods of conducting payment with the Bank digitally. In addition, over
In the year under review, we continued transactions. In further accelerating 258 businesses are now furnished with our
to pay close attention to the SME sector, this transition to a cashless society, we HLB DuitNow starter kit, which includes a
which accounts for 98.5% of all business introduced support for the Google Wallet DuitNow QR Code and the versatile All-in-
establishments in Malaysia and contributes app on our cards in November 2022. One Payment Terminal, enabling seamless
to 48% of employment in the country. As a and contactless transactions for the entire
financial institution known for our close ties To date, 65% of our Android platform community. In line with our ESG principles
to the SME sector, we feel a strong affinity customers enjoy easy, safe and secure of addressing the digital divide between
32 • CORPORATE
1 ANCHORING ON “BUILT AROUND YOU”
urban and non-urban areas, our initiative This year, we have gone one step to further improve the onboarding of
has already generated positive impact further as we recognise the unique customers, offering options beyond
with vendors experiencing increased complexities present within the businesses the normal branch visit to complete
sales while customers are empowered of our corporate and SME customers. their journey. The upcoming launch of
to make transactions without concerns of Consequently, we made a multitude of Electronic Know-Your-Business (“e-KYB”)
cash availability. enhancements to the iPad onboarding will create a full end-to-end account
solution to cater to diverse business needs. opening journey for SME customers who
We continue to invest in building the will be able to instantly open a current
cashless ecosystem through our HLB@ For example, key enhancements this account via Hong Leong Bank’s website
School programme. With the programme, year include the ability to verify multiple by submitting an account opening board
we have had much success in transforming signatories in different sessions and resolution.
schools into cashless ecosystems with the provide editable Ultimate Beneficial
Bank's All-in-One Point of Sale (“POS”) Owner (“UBO”) information for entities Invigorating the Customer Banking
terminal and providing students with with complex structures. Furthermore, we Journey at HLB with “Always On”
cashless payment and digital banking now accept the onboarding of businesses Services
tools, empowering them to make digital in East Malaysia that are registered with
transactions securely. Students opening local City Councils, ensuring inclusivity Adding to our efforts of making the
accounts also gain access to the HLB across regions and a wider range of onboarding journey easier, we are now
Pocket Connect App for tracking spending businesses. We have also broadened the first and only bank in Malaysia
and engaging in sustainability tasks, account opening capabilities to include to enable the digital acceptance of
while parents can conveniently monitor more account types with the aim of auto loans. Launched in July 2022, the
and manage their children's accounts providing greater flexibility and choice. eAcceptance feature allows customers
through the HLB Connect online and With these enhancements in place, we to conveniently accept loan applications
mobile banking platform. With 75 schools have seen steady growth in new digital on the go, reducing the reliance on sales
successfully on-boarded and integrated accounts, which increased by 25% y-o-y. agents and streamlining the overall
into this transformative cashless Today, 92% of all new business customers customer experience. This enhancement
programme, we are making a lasting are on-boarded digitally. aligns with our sustainability objectives
impact on the financial well-being of our of reducing our reliance on paper
future generations. Moving ahead, we have several upgrades documents, resulting in cost savings and
and enhancements in the pipeline a reduced carbon footprint. We are proud
Powering Business Success with
Enhanced Onboarding Experience
At HLB, we invest considerable resources

in reimagining the customer journey to
prioritise efficiency, convenience and
inclusivity. One of our top priorities in
recent years has been on improving the
onboarding process for both our retail
and business banking customers. Our
in-house developed iPad solution has
proven to be an invaluable tool in this
regard, empowering our colleagues to
efficiently onboard customers at their
location of choice and beyond traditional
branch hours. Today, the iPad solution
contributes to 76% of the retail account
opening process, making it a major
onboarding channel.
of this achievement as it puts us ahead of the industry in the context of the Consumer Expanding our regional footprint, we
Credit Oversight Board indicating their intention to enable digital acceptance for auto launched HLB Connect Singapore Mobile
loans in 2025. Notably, we have already achieved an impressive 64% adoption rate for Banking in December 2022. This mobile-first
this “industry first” capability. banking solution offers a comprehensive
suite of services that can be accessed on-
Further extending our efforts across the region, in February 2023, we achieved a proud the-go. With this innovative mobile app,
milestone in Singapore by seamlessly integrating the Singapore Digital ID, Singpass, customers can conveniently manage their
into our HLB Connect platform. This integration has revolutionised the customer CASA fixed deposit, loan accounts, add
journey, allowing for swift registration and account resets in a matter of minutes favourite payees, perform immediate and
instead of the 24-48 hours required in the past. By eliminating the need for temporary scheduled transfers, activate emergency
IDs and introducing the Singpass login, it has also reduced complications in accessing locks for HLB Connect and CASAs, and
HLB Connect, resulting in an 88% reduction in monthly customer calls related to authorise online banking transactions
registration. using two-factor authentication Digital
Tokens. Our mobile-first approach ensures
In addition, we are meeting the growing customer preference for greater transparency that our customers have the flexibility and
in their dealings with us and as such, we have successfully integrated the Product convenience to manage their finances and
Tracker feature into our retail banking platform. The Product Tracker was first developed access our services anytime, anywhere.
in 2021 and enables customers to monitor the status of their product application
Fortifying Security in the Digital Age
ranging from credit cards, personal loans, auto loans and mortgages. The integration
of the Product Tracker provides easier access for our existing retail customers to find
Banks face significant challenges due to
out about the status of their applications. This tool has been well-received as we have
the increasing prevalence of scams and
witnessed a significant increase in usage by 50% y-o-y across all borrowing products.
fraudulent activities and as technology
advances, malicious actors become more
Staying Engaged with our Customers through Self-Directed Support & Services adept at exploiting vulnerabilities. To
effectively combat fraud and enhance
With digital services now the norm in the post-pandemic era, HLB has capitalised on our surveillance capabilities, we have
this opportunity to roll out new digital-first features to engage with our customers. implemented robust risk mitigation
For instance, we acknowledge the importance of providing personalised support to measures leveraging technology and
customers especially when they are on the move. Thus, we introduced real-time chat data analytics across borders. Our
support in July 2022 through our Connect Mobile Banking app. By authenticating our advanced fraud monitoring system utilises
customers digitally, assistance can be provided instantly instead of being delayed by sophisticated algorithms and machine
manual identification and verification processes. Our customer service personnel are learning to identify, detect and promptly
equipped to handle up to four chats concurrently, which is a significant improvement alert us to any suspicious activity or
in productivity over the conventional call centre model. In less than 12 months since patterns in real-time, enabling us to
its launch, the successful resolution of queries has exceeded 70%, proving that it is take immediate action against potential
an effective channel for seeking assistance, further enhancing the overall customer threats. Additionally, we are committed to
journey. raising awareness and promoting vigilance
among our customers by providing them
On top of that, in May 2023, we introduced an exciting new feature on our HLB with essential knowledge and practical
Connect internet banking platform - online Unit Trust investing. This digitalisation guidance on common fraud schemes
initiative aims to make investing more accessible to all our existing customers. Our through informative pop-ups, educational
customers can now easily perform customer risk profiling and invest in unit trusts sessions, targeted communications, and
with as little as RM50 on our platform. We have more capabilities planned for the monthly campaigns. By empowering our
next year including providing a portfolio dashboard, enabling regular saving plans, customers with the necessary tools and
and allowing cross fund house switching. Our goal is to continuously enhance the information, we enable them to proactively
investing experience and empower our customers with greater control over their protect themselves and engage in secure
financial future. banking practices.
34 • CORPORATE
2 DEVELOPING WORLD CLASS LEADERSHIP AND TALENT POOL
At HLB, we remain dedicated to effective Within this performance management career progression. Additionally, we
talent management throughout the framework, we emphasise the growth prioritise managerial effectiveness
employee lifecycle as a key driver of and development of our employees through structured programmes like the
our people agenda. In the past year, in their chosen career paths. While we HLB Leaders Programme and on-the-job
we have focused on building depth, are committed to providing learning training, ensuring alignment with the
reinforcing existing initiatives, reviewing opportunities, we encourage employees to Bank's mission, values, and business
our approaches, and introducing new take ownership of their own development, objectives.
initiatives where opportunities arise. guided by our 70:20:10 Learning Framework
(70% On-the-Job Learning, 20% Learning This year, our employee engagement
To attract top talent and build a strong from Others, 10% Structured Learning). initiatives have been designed to achieve
pipeline, we have expanded our outreach
specific outcomes. We aim to enhance
efforts to academic institutions in
Professional development is a cornerstone employee skills, nurture aspirations, and
Malaysia and abroad. We have refined
of our learning approach and we support support their career journeys within the
our graduate recruitment approach,
the development of our employees in Bank. We have also placed increased
establishing partnerships with selected
their respective fields of expertise through focus on promoting physical and mental
universities to nurture talent pipelines.
various initiatives, including on-the-job well-being and fostering a sense of
Online and offline recruitment methods,
learning, mentorships, and classroom or community through reimagined digital
supported by our social media presence,
have been instrumental in engaging and structured learning/certification via the and physical touchpoints. Employee
hiring graduate talent. 70:20:10 Learning Framework. Sustainability feedback continues to be the basis for
training is a vital aspect of our approach, the shaping of a conducive place to
Employee engagement has been a with the introduction of e-learning modules work. With this in mind, we relaunched
priority for us, and we have fostered developed in collaboration with World Wide the employee engagement survey, My
deep connections with our workforce Fund for Nature (“WWF”). Thoughts, Our Future, to continue seeking
through meaningful career conversations, employee points of view on a range of
transparency, and timely communication. We strive to offer employees opportunities topics from rewards and recognition to
Every employee undergoes a structured to explore various career paths within the health and wellbeing and more, to build
performance management cycle, ensuring organisation. Monthly career coaching a meaningful workplace. 7,872 employees
clarity regarding their goals and deliverables, sessions have been instrumental in participated in the survey, representing
and providing managers with platforms to building aspirations and facilitating 93% of the Bank’s employee population.
deliver timely feedback.
3 SEEKING NEW ENGINES OF GROWTH
At HLB, we remain fully committed to

delivering value to our stakeholders over
the long term by seeking out new engines
to ensure a sustained growth momentum.
Across ASEAN, we possess numerous
growth levers that we have tapped on,
and we are consistently identifying new
opportunities and areas of the business
to expand. Broadly, we are firmly focused
on driving growth through our SME
and Wealth portfolios, as well as other
segments within our retail franchise.
An important component will be the

establishment of a robust sales and service
culture, underpinned by an in-depth
understanding of our customers and their
wallet sizes, as well as leveraging on our
branch networks to cross-sell effectively.
Furthermore, through our robust digital
infrastructure and innovation DNA,
we can deliver new opportunities and
services to our customers at a quicker
pace, thus ensuring that we stay ahead
of the market. By meeting the needs of
our customers in a relevant and seamless
way, and therefore echoing our “Built
Around You” brand promise, we are thus
creating value for the business and our
stakeholders.
information to empower customers to In January 2023, we introduced
In the year under review, our Regional make informed decisions surrounding the HLB Wallet, a new digital banking
Wealth Management (“RWM”) team, management of their wealth. In addition, proposition available through Apply@
which covers Malaysia and Singapore, we are actively shifting the conversation HLB. The e-wallet offers ease and
recorded robust growth, capitalising on with our clients to focus on their portfolio convenience as customers can now
opportunities in Fixed Income, Foreign investing needs as a way to drive greater instantly open a bank account in
Exchange (“FX”) and Bancassurance engagement. minutes and on the go, with account
products. Our Islamic product suite also and control limits in place. Setting
continued to expand , driving a multifold For our retail customers, we are itself apart from other e-wallets, HLB
increase in revenues across Structured progressively making it easier for Wallet offers the unique advantage of
Products and Bancassurance. them every year to sign up for financial a multi-currency option that provides
products through Connect while offering the benefit of instant cashback rewards
Leveraging on our digital strength to new capabilities to make their payments for selected transactions. While the HLB
deliver greater convenience and to experience more seamless. For instance, Wallet offering will help contribute to
foster greater engagement, RWM added in FY2023, we launched our cross-border CASA growth, it is also enabling us to
new features to HLB’s Connect platform QR capability on Connect, which will allow be more inclusive as it improves access
enabling customers to transact their customers to effortlessly make payments to banking and financial services for
Unit Trusts online. Beyond this, the new to merchants in Thailand, Indonesia, and the unbanked population in Malaysia.
features will provide a range of relevant Singapore.
36 • CORPORATE
3 SEEKING NEW ENGINES OF GROWTH
Through our Business and Corporate Banking (“BCB”) team, we relentlessly support the SMEs in Malaysia. We have continued to
provide relevant products and financing programmes, improved access to financing and facilitated an ecosystem for SMEs to enhance
their sustainability practices. One of our key initiatives this FY2023 has been the introduction of a faster and more inclusive onboarding
process that now accepts sole proprietors.
To complement this journey, we launched the data-led Web Product Recommender tool on our business corporate website in January
2023. By leveraging customers’ responses to a questionnaire, the feature provides personalised product recommendations, enabling
businesses to make informed decisions swiftly. This solution only requires one application for multiple products, which simplifies and
speeds up the entire process. Since its launch, businesses have successfully applied for over 3,000 products via the BCB web product
recommender. With approximately 2,500 monthly users and a 55% questionnaire completion rate, the feature has proven its value in
guiding businesses to their desired products efficiently.
Further to this, we created a dedicated Cash, Trade and Foreign Exchange team to provide SMEs trade financing, cash management,
and FX services, ensuring that we are comprehensively meeting their needs. Our Islamic arm also has an ongoing partnership with the
SME Corporation to provide financing to SMEs and recently partnered with SJPP to facilitate a new MicroSME financing programme. As
a result of these and many other SME-focused initiatives, our SME loan/financing portfolio grew 9.7% y-o-y to RM33.0 billion while our
community banking initiative, within the SME segment, maintained a solid 13.2% y-o-y.
4 EXPANDING THE BANKING ECOSYSTEM THROUGH PARTNERSHIP AND FINANCIAL INCLUSION
The dynamic financial landscape, coupled To foster greater awareness, we regularly sustainable products. We also organised
with the widespread adoption of digital publish financial literacy and scam the HLB Jumpstart 2.0 Workshop, a three-
banking has brought forward societal awareness content on our social media, as day crash course involving seven social
inequalities and, in some instances, part of our HLB DuitSmart platform, to reach enterprises and one non-governmental
amplified the matter. As a responsible a wider audience. In the past financial year, organisation, covering topics ranging
financial institution, we recognise the we have produced 11 bite-sized episodes, from scam awareness, data science, and
imperative of cultivating an inclusive garnering 3.42 million views and a reach sustainability.
banking ecosystem that caters to the of 1.82 million.
diverse needs of our community and we Fostering a Culture of Giving through
continue to focus on creating positive HLB works with various partners to support Volunteerism
social impact for our stakeholders. the circular economy finance and aims to
drive positive change and contribute to a The Bank encourages our employees to be
Our financial literacy programme, HLB more sustainable future. We are passionate active members of the community who
DuitSmart, imparts simplified content about investing in social enterprises and are passionate and equipped to give back
about financial literacy to all Malaysians. guiding them towards creating a bigger to society. Throughout the past financial
In 2023, 1,567 students were engaged impact in their communities. year, our employees have contributed their
through this initiative and we ran our efforts and finances to welfare homes
gamified financial literacy workshops Through our CSR platform, HLB JumpStart, across the country. For instance, we brought
for 14 primary, secondary, and tertiary we work closely with five social enterprises festive cheer during the Chinese New Year
institutions, both physically and online. to drive community development by and Deepavali celebrations by donating a
In addition, we rolled out tailor-made providing them with tools and means to collective 332 meals and spring-cleaned 33
financial literacy workshops with members run a viable and resilient enterprise. We are homes involving 181 volunteers.
of the Orang Asli community, in line with committed to guiding and developing these
our goal of overcoming inequalities and businesses towards growth, expansion and In addition, we embarked on our second
empowering the underprivileged to take sustainability. collaboration with the Financial Industry
control of their own finances. Our financial Collective Outreach (“FINCO”), by organising
literacy contents are now accessible to the Last year, Benak Raya Enterprise, which a book donation drive where we filled the
visually impaired as we created both audio was our fifth on-boarded social enterprise, libraries of 37 schools across the country.
and Braille versions. experienced a 114% increase in sales since In total, we managed to collect 6,193 pre-
its inception and started operating on loved books for the various schools, with
As part of our efforts to improve financial their new website that the Bank helped Perpustakaan Awam Bintangor, Sarawak
literacy, HLB is committed to protecting develop. The Bank customised gift sets for contributing 4,360 books.
our customers and aggressively combating the media in conjunction with Hari Gawai
financial fraud via comprehensive 2023 with products procured from Benak
protective measures and awareness Raya, facilitating a circular economy and Fifth on-boarded social enterprise
initiatives. Alongside existing multi- promoting social procurement across all Benak Raya Enterprise
+114%
layered security, the Bank has activated an avenues.
Emergency Lock for both online and mobile
banking platforms, which allows customers In addition to empowering social SALES SINCE INCEPTION
to manually restrict activity on their bank enterprises, HLB JumpStart organised two
accounts if and when they suspect it major initiatives that helped promote and
has been compromised. The Bank also market the social enterprises we engage
introduced a “Cooling Off” Period, where with. Our Sustainability Month Bazaar
customers can stop or reverse suspected in April 2023 saw the involvement and
fraudulent activity in their accounts within participation from four social enterprises,
a certain period of time. where our employees could purchase
38 • CORPORATE
5 STEPPING UP SUSTAINABILITY AND ESG ADVISORY CAPABILITIES TO BENEFIT OUR CLIENTS
portfolio that are vulnerable to extreme

weather conditions such as flooding. This
exercise will also ensure that we are
operationally prepared to manage the
associated physical risk.
Expanding Boundaries and Improving

ESG Practices
This year, we improved our Scope

3 disclosures by adding Category 7:
Employee Commuting and Category 13:
Downstream Leased Asset. Category 7
is a disclosure requirement under Bursa
Malaysia’s Sustainability Reporting
Guideline and TCFD, while Category 13
is meant to address instances of double
reporting now that all our tenants are
disclosing their GHG emissions.
We have included operational and

business travel emissions from our
Sustainability remains a cornerstone of enhance our green financing targets in a branches in Hong Kong and Singapore
all that we do, and we continue to make bid to accelerate our nation’s transition in FY2023 and we plan to include our
meaningful progress in our sustainability into a low carbon economy. Cambodia and Vietnam subsidiaries
journey. For instance, we continued to in FY2024. As part of the TCFD Stretch
expand the scope of our ESG practices Additionally, we continue to play an Recommendation, we are assessing the
to encompass our overseas operations, active role in leading and steering the carbon emissions for Scope 3: Category 15
and enhance our Scope 3 disclosures to sustainability conversation through our which is Investment/Financed Emission
better align them with best practices. participation in various sub-committees on our Corporate Banking Project
We are also exploring how we can better under the Joint Committee for Climate Financing, Mortgage Financing and Auto
meet the disclosure requirements and Change ("JC3"), as well as in BNM’s Loan Financing portfolios.
recommendations of the Task Force for Climate Change and Principles-based
Climate-related Financial Disclosures Taxonomy (“CCPT”). As a member of the In terms of operating sites, we managed
(“TCFD”) to maintain our position as an CCPT Implementation Group, we strive to to complete all the Energy Efficiency &
ESG leader among Malaysian corporates. ensure that the provisions of the CCPT Conservation (“EE&C”) Measures for Hong
are seamlessly adopted by the banking Leong Tower and PJ City Tower A. We also
I would like to state here that our fraternity. As part of this process, we installed solar panels on the rooftop of our
ESG efforts have not been limited to have started assessing our sustainability PJ City Tower A building and are currently
simply improving our ESG reporting and implementation strategies as guided upgrading and retrofitting our branches
checking off boxes. Indeed, the Bank has by BNM’s Climate Risk Management & with energy efficient air conditioning
been taking substantial steps forward Scenario Analysis (“CRMSA”) Discussion systems and LED light fittings. As the
in terms of reducing the size of our Paper. upgrading and retrofitting works were
carbon footprint, to the point where we implemented in phases throughout the
have already reached our Scope 1 and 2 We have also embarked on a project year, we will only see the optimum
targets of a 15% reduction in emissions to identify and assess the flood risk of energy savings for these measures in the
in FY2023, three years ahead of our 2026 our collaterals and assets to help us next financial year.
target year. Meanwhile, we continue to better understand the proportion of our
In March 2023, our Data predominantly for the solar segment of For further information about our
renewables. We have set a new target sustainability practices, please refer
Centre in Hong Leong Tower
of RM4.2 billion by FY2025. Meanwhile, to the Sustainability Statement in this
was officially certified as in line with the strong government and Annual Report on page 83. The statement
a Green Computing Facility ecosystem support for EV and hybrid summarises our Sustainability Report
with a Titanium+ certification cars, our financing for EV and hybrid cars 2023 that details our strategies and
has exceeded our disbursement target achievements, guided by local and
from Green Climate Initiative
of RM240 million in FY2023, settling at international reporting and disclosure
(“GCI”). RM429 million as at the end of FY2023. standards such as the Global Reporting
Initiative (“GRI”) Standards, the Bursa
In respect to the Mangrove restoration
Our HLB Earth Hero digital initiative, Malaysia Sustainability Reporting Guide,
project held in collaboration with the
which ties financial literacy tasks to the the TCFD Application Guide for Malaysian
Malaysian Nature Society (“MNS”), the
reforestation of the Lower Kinabatangan Financial Institutions and the IFRS S1 and
plantation of 50,000 mangrove trees has
area in Borneo, continues to see sustained S2 standards released by the International
been completed as at the end of April
momentum as we planted another 2,500 Sustainability Standards Boards (“ISSB”).
2023 at the Kuala Selangor Nature Park.
trees. This has brought the total trees
To determine the success of the project,
planted to 5,000 since the programme FINAL REMARKS
we appointed a leading ESG consultant
started in 2021 and we aim to plant
to perform independent assurance
another 2,500 trees in 2023. While there remains some uncertainty
and verification of the outcomes. The
regarding the global economic outlook,
outcomes were reported back to us and
I am pleased to report that the Bank we continue to be cautiously optimistic
we are satisfied with the results of the
remains a constituent of the FTSE4Good regarding the opportunities present
project.
Bursa Malaysia Index, making this in Malaysia. Prospects of resiliency
the sixth consecutive year where we in domestic demand are expected to
Externally, we have continued engaging
have been part of the ESG index. Our help cushion external headwinds and
our customers and stakeholders through
score continues to improve every year, uncertainties in the global financial
the Hong Leong Bank Sustainability
and our score of 3.9 in 2023 places us markets. While geopolitical risks and
Roundtable series of discussions on the
comfortably ahead of the banking sector banking turmoil appear contained for
latest developments in the ESG world.
average. We have also maintained our "A" now, lingering recession risks among the
Our tenth roundtable, organised in
rating in the MSCI Global Sustainability major economies will continue to cloud
collaboration with the Small and Medium
Indexes and further improved our above the global growth outlook going forward.
Enterprises Association (“SAMENTA”),
industry-average score in the S&P Global
carried the theme of ‘Building
Corporate Sustainability Assessment As the new Group Managing Director, I have
Competitiveness with Green Supply
to place in the 87th percentile within taken the important step of calibrating our
Chains’. HLB will continue to organise this
the banking industry. Sustainalytics, a five broad strategic priorities to ensure a
roundtable series to serve as a platform
leading independent ESG and corporate sharper focus in producing meaningful
to foster networking, collaboration, and
governance research firm, has categorised outcomes for our customers and people,
knowledge-sharing of ESG best practices
the Bank as ‘low risk’, placing us ahead of as well as technological advancement.
among participants.
our banking peers. However, I would like to highlight that
even as we direct our resources towards
Enhancing Our ESG Targets and Goals
enhancing our capabilities, we will remain
steadfast in our prudent approach towards
We have continued to set targets to grow
managing our risks.
our green financing portfolio as we seek
to amplify the momentum and support for RM3.2 We are committed to anchoring on our
the transition to a low carbon economy. billion
brand promise of “Built Around You”,
For our corporate customers, we have APPROVED RENEWABLE
where customers are at the centre of
now approved close to RM3.2 billion of ENERGY FINANCING
everything we do. Internally, we are
financing for the renewable energy sector,
looking at ways to optimise the time we
40 • CORPORATE
spend on our operations to ensure that we laurels however and will work towards further enhancing our own internal ESG strategies
are spending as much time as possible and practices, while working with our stakeholders to ensure that the entire ecosystem
with our customers. Aided by our robust progresses together.
digital and innovation capabilities, we will
continue to elevate and reimagine the OUTLOOK
customer journey for a more seamless
and relevant experience. Looking towards the future, while a slowdown is inevitable and the possibility of a
recession in major Western economies cannot be completely ruled out, recent resilience,
We believe that to be a world class bank, particularly in the US economy, has raised hopes of a soft landing. This, combined with
we need to have world class talent. This is the persistence of core inflation, indicates that interest rates will remain elevated for an
where our human capital practices will take extended period, with any potential rate cuts being carried out at a more measured pace.
centre stage to strengthen both our talent We anticipate the first US rate cut in the first half of 2024.
pool and practices so that we can compete
with the best in the world, especially at In Malaysia, the economy is projected to follow a steady and moderate growth trajectory,
our regional outposts. I believe that we supported by further recovery in tourism activities and resilient domestic consumption. The
have the ecosystem that is both wide and healthy labour market and easing inflationary pressures are expected to sustain domestic
deep enough to nurture a strong cadre of demand. As a result, Bank Negara Malaysia (“BNM”) is likely to maintain the Overnight
banking professionals to lead this charge. Policy Rate (“OPR”) at a slightly accommodative level of 3.00% to support economic
growth, despite the potential for a global easing cycle.
To build a strong ASEAN franchise we need
new engines of growth. SME and Wealth ACKNOWLEDGEMENTS
Management will be our top priorities, as
well as capturing opportunities from the I am delighted to share that despite the challenges we encountered this year, we have
Johor-Singapore special economic zone, made significant progress and achieved solid results. I want to extend my heartfelt
amongst other transformative programmes gratitude to all those who stood by our side during these testing times.
that we will soon undertake. In this context,
I will be establishing a special office to To our esteemed Board of Directors, I want to express my gratitude for your exceptional
oversee these transformation projects leadership and invaluable guidance that proved instrumental throughout the various
to ensure timely implementation and challenges we faced this year. Moreover, I would like to convey a special thanks to all
correct execution, in addition to personally the dedicated employees and the management team of the Bank. Your passion and
overseeing key projects that are set to commitment has put us on a strong footing to take on our next phase of growth and I look
have a lasting impact on our business and forward to working together with all of you in the days to come.
operations.
I would like to extend our thanks to our shareholders for their unwavering belief in our
As the banking landscape becomes capacity to create sustainable long-term value. To our esteemed customers, I want to
even more competitive especially as express our deepest appreciation for your unwavering loyalty and trust in our ability to
digital banking license holders start to deliver.
operationalise their businesses, it has
become even more crucial to form new A sincere expression of gratitude is also due to Bank Negara Malaysia, the Ministry of
strategic partnerships. Our digital expertise Finance, government agencies and regulatory authorities. Your invaluable guidance and
will also continue to hold us in good stead support have played a vital role in enabling us to achieve our vision and navigate the
and give us a competitive advantage in complex financial landscape.
better understanding our customers’ needs
and markets.
We recognise that the ESG agenda

continues to feature prominently in the KEVIN LAM
corporate landscape and we are ahead of Group Managing Director/
the industry in this regard in the adoption Chief Executive Officer
of practices as well as in the management
of our ESG risks. We will not rest on our 19 September 2023
Management Discussion & Analysis

FINANCIAL REVIEW
1 FINANCIAL HIGHLIGHTS
PROFIT AFTER TAX TOTAL INCOME RETURN ON EQUITY COST-TO-INCOME RATIO
RM3.8 RM5.7 11.8% 39.3%

billion billion
+16.1% Y-O-Y +1.6% Y-O-Y GROSS IMPAIRED LOAN IMPAIRMENT

LOAN RATIO COVERAGE RATIO
GROSS LOANS / FINANCING DEPOSITS 0.57% 168.8%

RM181.7 RM211.7 CASA RATIO TOTAL CAPITAL RATIO
billion billion
+8.0% Y-O-Y +7.3% Y-O-Y 30.8% 15.9%

SUMMARY OF GROUP PERFORMANCE
FY2022 FY2023 Growth %
Profitability & Efficiency (RM’million)

Total Income 5,597 5,686 1.6%
Operating Profit 3,499 3,452 -1.3%
Profit Before Tax 4,367 4,627 6.0%
Profit After Tax 3,289 3,818 16.1%
Earnings Per Share (sen) 161 186 15.5%
Net Interest Margin 2.14% 1.98%
Cost-to-Income Ratio 37.5% 39.3%
Return on Assets 1.34% 1.43%
Return on Equity 10.9% 11.8%
Balance Sheet (RM’million)

Total Assets 254,331 279,850 10.0%
Gross Loans, Advances and Financing 168,234 181,677 8.0%
Customer Deposits 197,292 211,652 7.3%
Asset Quality
Gross Impaired Loan Ratio 0.49% 0.57%
Loan Impairment Coverage Ratio 212% 169%
LIC Ratio (provisions made on GIL and security value) 282% 239%
Liquidity and Capital Ratios

Loan-to-Deposit Ratio (include IA and SRF) 83.5% 84.3%
Common Equity Tier 1 Capital Ratio 13.4% 12.8%
Tier 1 Capital Ratio 14.5% 13.9%
Total Capital Ratio 16.7% 15.9%
42 • CORPORATE

FINANCIAL REVIEW
2 FY2023 KEY PERFORMANCE INDICATORS (KPIs)
TARGET FY2023 ACHIEVED FY2023
~7% Gross Loan Growth 8.0%

~2.00% Net Interest Margin 1.98%
≤38% Cost-to-Income Ratio 39.3%
Gross Impaired
~0.60%
Loan Ratio 0.57%
~10 bps Net Credit Cost 6 bps
>12.0% Return on Equity 11.8%
>30% CASA Mix 30.8%
On the back of solid fundamentals, the Bank was able to deliver a set of commendable results despite the headwinds in the second
half of FY2023.
• Loans growth momentum picked up to 8.0% y-o-y driven by • Asset quality position of the Bank remained healthy with
the expansion in our key segments of mortgages, SME and a GIL ratio of 0.57%, below our guidance of circa 0.60%.
commercial banking, as well as overseas operations. Accordingly, net credit cost for FY2023 was at 6bps, well
within our guidance.
• Faced with elevated funding cost pressure for most part of
the financial year, we have been prudently managing our • Navigating through the challenges faced during the year,
NIM, to deliver at 1.98% for FY2023. ROE for FY2023 was commendable at 11.8% attributed to the
solid fundamentals and business performance.
• We continue to manage our expenditures prudently and
drive strategic cost management initiatives to achieve a • CASA ratio came in better than guidance at 30.8% driven by
sustainable CIR ratio of 39.3%. our cash management solutions and community acquisition
initiatives.

FINANCIAL REVIEW
3 GUIDANCE FOR FY2024
ANCHORING ON OUR SOLID FOUNDATION TO DELIVER SUSTAINABLE OUTCOMES THROUGH COMMITTED EXECUTION OF ALIGNED
STRATEGIC PRIORITIES
• Strong loan/financing growth momentum of 6% to 7%
• NIM in the region of 1.8% to 1.9%
• Sustainable CIR ratio of <40%
• Uphold GIL ratio <0.70%
• Net Credit Cost of ~10bps
• Continue to drive CASA with a mix of >30%
• Robust ROE of ~12%
• Moving forward, we believe that our solid foundation coupled with strategic and tactical plans in seeking new engines of growth
while upholding solid asset quality, would provide reasonable momentum to deliver sustainable outcomes to our stakeholders.
• For FY2024, the Bank strives to maintain strong loan/financing growth momentum of 6% to 7%, without compromising on asset
quality with a GIL ratio of below 0.70%. At the same time, we will intensify our CASA acquisition efforts to sustain CASA mix at
above 30%.
• Management guidance for NIM is in the region of 1.8% to 1.9%, a sustainable CIR ratio of below 40% and net credit cost of
approximately 10 bps. With this, we expect to achieve a robust ROE of around 12% for the next financial year.
44 • CORPORATE

FINANCIAL REVIEW
4 INCOME STATEMENT ANALYSIS
INCOME STATEMENT SUMMARY
Change %
RM’ Mil FY2022 FY2023 (YoY)
Total income 5,597 5,686 1.6%

Operating expenses (2,098) (2,233) 6.4%
Operating profit before allowances 3,499 3,452 -1.3%
Allowances for loans and other impairments (163) (115) -29.3%
Profit before associates contribution 3,336 3,337 0.0%
Share of profits from associates 1,030 1,289 25.1%
Profit before tax 4,367 4,627 6.0%
Profit after tax 3,289 3,818 16.1%
Total income for FY2023 recorded a 1.6% y-o-y growth to RM5.7 billion, attributed to healthy loan/financing growth and improved
non-interest income contribution. We remained disciplined in managing our operating expenses, which stood at RM2.2 billion for
FY2023.
For FY2023, the Bank had a lower loan and other impairment allowances of RM115 million, translating to net and gross credit cost
of 6bps and 19bps respectively. Accordingly, profit before associates contribution was flat y-o-y at RM3.3 billion.
Profit contribution from our overseas associates remained robust, improving 25.1% y-o-y to RM1.3 billion. This performance led to a
6.0% y-o-y growth of the Bank’s PBT in FY2023 to RM4.6 billion while PAT grew 16.1% y-o-y to RM3.8 billion.
A) Net Interest Income
For FY2023, NIM came under pressure with the heightened cost of funds arising from banks striving to comply with the
Statutory Reserve Requirement (“SRR”) followed by elevated deposit competition. Thus, NIM moderated to 1.98% while net
interest income stood at RM4.6 billion.
Interest income increased 32.6% y-o-y to RM9.7 billion for FY2023, driven by loan/financing growth momentum coupled with
higher yields from the Overnight Policy Rate (“OPR”) hikes. Intense deposit competition in both retail and wholesale space
for most of the financial year has resulted in higher cost of funds for the Bank. Thus, interest expense grew at a faster pace to
RM5.1 billion for FY2023.
NIM has begun to stabilise in the fourth quarter and we expect this trend to continue into the new financial year.

FINANCIAL REVIEW
A) Net Interest Income (Cont’d.)
2.18%
2.10% 2.09%
1.82% 1.83% 2.14%
1.98%
RM’Mil RM’Mil
4,618
1,232 1,198 4,552
1,159 1,089
1,033
Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q4FY23 FY2022 FY2023
Net interest income NIM Net interest income NIM
B) Non-interest Income
Non-interest income for FY2023 grew by 15.8% y-o-y to RM1.1 billion driven by higher credit card fees, trade finance activities
and Foreign Exchange (“FX”) performance. Non-interest income ratio improved to 19.9%. Fee income was stable y-o-y at RM599
million for FY2023 as the growth in credit card related fees of 8.9% y-o-y and improvement in trade finance activities was offset
by lower wealth management income mainly from reduced sales commissions.
Despite the absence of the one-off BOCD convertible bond mark-to-market (“MTM”) gain last year, the performance of trading,
investment and forex was commendable due to higher net gain from sale of financial assets at fair value through profit or loss
(“FVTPL”). As for foreign exchange, FY2023 recorded gains of RM145 million due to improved performance in FX trading and FX
swap activities.
19.9%
17.5% Islamic and others

Fee income
RM’Mil Trading, Investment & Forex
1,133 FY2023
Non-Interest Income ratio
979 117
RM211.0
63 Credit Card 8.9%
418 Related Fees mil
307
Fee income:
599 of which Wealth
610 Management and RM174.5
12.6%
Bancassurance mil
Income
FY2022 FY2023
46 • CORPORATE

FINANCIAL REVIEW
C) Operating Expenses
We continue to strategically manage our expenses with a disciplined approach, keeping our expenses optimised at RM587
million in Q4FY23. Overall for FY2023, operating expenses stood at RM2.2 billion, with a sustainable CIR of 39.3%.
Personnel costs, which accounted for 54% of total operating expenses, increased by 4.3% y-o-y to RM1.2 billion from increased
salaries and allowances. Establishment costs saw a slight uptick y-o-y as we continue to improve efficiency via our digitisation
efforts.
Similarly, higher expenses were recorded in marketing, up by 14.3% y-o-y to RM196 million from higher sales incentives driven
by higher sales volume, in line with the recovery in economic activities. Administrative and general expenses were up by 19.7%
y-o-y mainly due to higher card related expenses from increased merchant sales and retail spend.
Operating Expenses
Domestic 36.9%
CIR 35.4%
13%
39.3%
Admin & general
37.5%
9%
2,233
RM’Mil Marketing
2,098 302 54%
253 FY2023 Personnel cost
24%
196
171 Establishment
532
521
1,203
1,154
RM’Mil
587
560 559
541 546
FY2022 FY2023 Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q4FY23
Personnel cost Establishment Marketing Admin & general CIR Operating expenses

FINANCIAL REVIEW
5 GROSS LOANS, ADVANCES AND FINANCING
COMMENDABLE GROWTH TRAJECTORY DRIVEN BY EXPANSION IN KEY SEGMENTS
Gross Loans, Advances and Financing FY2022 FY2023

by Domicile RM’million % Contribution RM’million % Contribution Growth %
Total Domestic Operations 156,479 93% 167,712 92% 7.2%

International Operations 11,755 7% 13,965 8% 18.8%
of which
Singapore 7,625 4.5% 9,368 5.2% 22.9%
Hong Kong 21 0.01% 47 0.03% 121.9%
Vietnam 1,653 1.0% 1,956 1.1% 18.3%
Cambodia 2,457 1.5% 2,595 1.4% 5.6%
Total Gross Loans, Advances and Financing 168,234 100% 181,677 100% 8.0%
Our gross loans, advances and financing maintained its commendable growth trajectory, expanding 8.0% y-o-y to RM181.7 billion,
as we looked for opportunities to support customers in their personal and business endeavours. Mortgages, auto loans, SME and
commercial banking as well as overseas operations remain the key drivers of loan/financing growth.
Domestic loans/financing represents 92% of the Bank’s total loan/financing book and outpaced industry growth in FY2023, recording
a 7.2% y-o-y expansion to RM167.7 billion as at 30 June 2023. Overseas loans grew 18.8% y-o-y to RM14.0 billion, underpinned by
strong growth in Singapore, Vietnam and Cambodia which expanded by 22.9%, 18.3% and 5.6% y-o-y to RM9.4 billion, RM2.0 billion
and RM2.6 billion, respectively.
Gross Loans, Advances and FY2022 FY2023 Domestic

Financing by Key Segments RM’million % Contribution RM’million % Contribution Growth % Market Share %
Residential Properties 82,434 49% 89,114 49% 8.1% 11%

Transport Vehicles 17,654 10% 19,575 11% 10.9% 8%
SME 30,115 18% 33,031 18% 9.7% 9%
Community SME 11,411 7% 12,920 7% 13.2% -
The residential properties segment expanded by 8.1% y-o-y to RM89.1 billion, backed by a healthy loan/financing pipeline. Transport
vehicle loans/financing stood at RM19.6 billion, a 10.9% y-o-y growth driven by the strong growth in motor vehicle sales activities,
sales tax exemption and attractive promotional offers from car manufacturers.
Reported SME loans growth was encouraging with a 9.7% y-o-y expansion to RM33.0 billion, as we supported SMEs in their business
and financial needs. Within this SME portfolio, the Bank’s community banking initiative continued its solid performance with
encouraging growth of 13.2% y-o-y, attributed to proactive and innovative efforts to meet the needs of our clients and digitalised
onboarding initiatives.
48 • CORPORATE

FINANCIAL REVIEW
6 ASSET QUALITY
HEALTHY ASSET QUALITY METRICS WHILE MAINTAINING SUFFICIENT PREEMPTIVE IMPAIRMENT BUFFERS
Gross Impaired Loans/Financing (GIL)
1.80%
1.75%
1.62%
1.54%
1.43%
0.78%
0.61%
0.57%
0.46% 0.49%
RM’Mil
1,071
1,042
890
820
717
FY2019 FY2020 FY2021 FY2022 FY2023
GIL GIL ratio Industry GIL ratio
Asset quality was managed tightly with a healthy GIL ratio of 0.57% as at 30 June 2023, comfortably below the industry GIL ratio.
The Payment Relief Assistance Plan (“PRAP”) balances has continued to decrease to a modest amount of RM1.4 billion as of
30 June 2023, representing less than 1% of gross loans/financing portfolio.
Asset Quality by Key Segments FY2022 FY2023 Industry Average
Residential Properties 0.38% 0.45% 1.48%

Transport Vehicles 0.20% 0.22% 0.51%
SME 1.25% 1.06% 3.03%
The asset quality for key segments of our loan/financing portfolio remained healthy, with stable GIL ratio for residential properties,
transport vehicles and SME at 0.45%, 0.22% and 1.06% respectively, well below the industry average.
This is attributed to our strategies in taking preventive measures and tactical action plans on accounts with arrears, identifying and
managing high risk accounts, initiating site visits and implementing various programmes to remedy our pre-impaired and impaired
accounts.

FINANCIAL REVIEW
Loan/Financing Impairment Coverage (LIC)
317%
282%
239%
212%
247%
188% 212%
169%
142%
118% 113%
98% 99%
92%
85%
FY2019 FY2020 FY2021 FY2022 FY2023
LIC LIC (including security value) Industry LIC
In view of the current operating environment, the Bank maintained our prudent stance with a sizable amount of preemptive buffer
of RM574 million. With that, our loan/financing impairment coverage (“LIC”) is healthy at 169% as at 30 June 2023. Inclusive of the
value of securities we hold on our GIL, the Bank’s LIC ratio was 239%.
50 • CORPORATE

FINANCIAL REVIEW
7 CUSTOMER DEPOSITS
STABLE FUNDING BASE SUPPORTED BY EXPANSION IN FIXED DEPOSITS AND FOCUS ON CASA ACQUISITION
FY2022 FY2023
Customer Deposits by Domicile RM’million % Contribution RM’million % Contribution Growth %
Total Domestic Operations 183,457 93% 192,874 91% 5.1%

International Operations 13,835 7% 18,778 9% 35.7%
of which
Singapore 10,290 5.2% 14,380 6.8% 39.7%
Hong Kong 119 0.1% 308 0.1% 160.0%
Vietnam 1,310 0.7% 1,871 0.9% 42.8%
Cambodia 2,117 1.1% 2,219 1.0% 4.8%
Total Customer Deposits 197,292 100% 211,652 100% 7.3%
Total customer deposits registered a 7.3% y-o-y growth to RM211.7 billion as at 30 June 2023, mainly driven by strong expansion in
fixed deposits.
Domestic customer deposits which comprise 91% of the Bank’s total deposit base, grew 5.1% y-o-y to RM192.9 billion while
customer deposits from our international operations increased by 35.7% y-o-y underpinned by the growth in Singapore, Vietnam
and Cambodia which expanded by 39.7%, 42.8% and 4.8% y-o-y to RM14.4 billion, RM1.9 billion and RM2.2 billion, respectively.
Customer Deposits by Key FY2022 FY2023 Domestic

Product and Customer Type RM’million % Contribution RM’million % Contribution Growth % Market
By key product type of deposits

Demand and Savings Deposits (CASA) 66,051 33% 65,097 31% -1.4% 8%
Fixed Deposits 93,856 48% 112,228 53% 19.6% 8%
Total Core Deposits 159,907 81% 177,325 84% 10.9% 8%
By key type of customers

Individual 99,405 50% 104,616 49% 5.2% 11%
Business Enterprises 92,431 47% 99,972 47% 8.2% 8%
Total Customer Deposits 197,292 100% 211,652 100% 7.3% 9%
Core customer deposits comprising demand, savings and fixed deposits made up 84% of our total customer deposits base and
expanded by 10.9% y-o-y. CASA stood at RM65.1 billion with a healthy CASA ratio of 30.8%, as we continue to focus on the
Bank’s cash management solutions and community acquisition initiatives. Fixed deposits increased 19.6% y-o-y to RM112.2 billion,
representing a domestic market share of 8%.
The Bank’s stable funding base continues to be backed by a solid individual deposit base that grew 5.2% y-o-y to RM104.6 billion,
represented by an industry leading mix of 49.4%.

FINANCIAL REVIEW
8 LIQUIDITY
PRUDENT LIQUIDITY POSITIONS TO SUPPORT SUSTAINABLE BUSINESS GROWTH
Liquidity Ratios
145.3% 145.2%
134.2% 136.8% 136.4%
126.0%
127.0% 127.0% 122.0%
114.0%
Industry LDR: 86.8%
84.3%
84.4% 83.9%
83.5% 83.5%
FY2019 FY2020 FY2021 FY2022 FY2023
LCR NSFR LDR
The Bank continues to maintain strong funding and liquidity positions, with a LDR of 84.3%, as we continue to optimise balance
sheet profitability whilst maintaining sustainable growth. As at 30 June 2023, the Bank’s LCR and NSFR stood comfortably at 136.4%
and 122.0% respectively, well above regulatory requirements.
As at 30 June 2023, loan-to-funds (“LTF”) and loan-to-funds & equity (“LTFE”) ratios are 86% and 74% respectively, well in line with
industry averages.
9 CREDIT RATINGS
Rating Agency Malaysia and Moody’s Investors Services have reaffirmed our long-term and short-term ratings, anchored by our
sound fundamentals, strong domestic retail and SME franchises, robust asset quality and strong capitalisation.
Our consistent business performance has translated to strong credit ratings by domestic and international credit rating agencies,
as shown below:
Rating Agency Date Accorded / Latest Update Rating Classification
Long-Term Rating: AAA

Short-Term Rating: P1
Subordinated Notes: AA1
Rating Agency Malaysia Berhad 30-Aug-23 Additional Tier 1 Capital Securities: A1
Long-Term Rating: A3
Moody’s Investors Services Ltd 25-Aug-23 Short-Term Rating: P2
52 • CORPORATE

FINANCIAL REVIEW
10 CAPITAL MANAGEMENT
INTRODUCTION CAPITAL MANAGEMENT FRAMEWORK
The Bank's capital management approach is documented in the Internal Capital

HLB's capital management Adequacy Assessment Process ("ICAAP"), which has received approval from Senior
framework comprises the Management, the Board Risk Management Committee ("BRMC"), and the Board.
Within the ICAAP, the Bank evaluates its capital levels in different economic scenarios,
necessary policies and
including stressed conditions, to determine the optimal capital levels required.
procedures to ensure the
efficient utilisation of i) Comprehensive Risk Assessment and establish internal capital targets
under ICAAP accordingly. These targets undergo
capital by the Bank and its an annual review to ensure that the
principal subsidiaries, while The Bank achieves its capital capital levels remain robust, exceed
management objectives through regulatory requirements, and are
maintaining adequate the ICAAP. This process assesses all sufficient to withstand challenging
capital levels. significant risks faced by the Bank economic conditions.
and ensures that the capital allocated
to support its business activities is ii) Capital Plan
The framework defines the adequate in relation to those risks. The Bank's Capital Plan is a three-
risk profiles, management year strategy that includes capital
To do so, the Bank subjects its base
targets, and applicable capital levels, derived from the annual
projections, requirements, levels,
and composition, all aligned with
regulatory standards budget, to various stress tests. These the Bank's business and strategic
or guidelines that each tests evaluate whether the level goals. The plan also takes into
of capital is sufficient to withstand account regulatory, policy, and
business unit must follow. adverse economic situations or rapid stakeholder perspectives, such as
economic downturns. capital buffers, new accounting
The capital management standards, and expectations from
Based on these evaluations, the Bank investors, analysts, and rating
structure aims to: will make necessary adjustments agencies.
• Keep capital ratios at

levels above regulatory CAPITAL INITIATIVES
minimums or internal
The Bank is dedicated to maintaining a capital position that complies with
capital thresholds. stringent Basel III capital requirements and satisfies stakeholder expectations,
while also being aligned with strategic business objectives. Major initiatives
• Support the Bank’s strong undertaken over the years include:
credit ratings.
i) Equity Capital
• Be open to future As at June 2023, the Bank held 37.6 green assets, projects, or companies
million treasury shares that had been meeting the eligibility criteria in HLB's
strategic opportunities. bought back previously. These shares, Green Bond Framework.
which can be made available for sale,
iii) Healthy Dividend Payout
can be used to improve the Bank’s CET 1.
• Allocate capital
While the Bank does not have a fixed
efficiently to businesses ii) Debt Capital
dividend payout policy, it strives for a
and optimise return on The Bank has established RM10 billion balanced approach between growth
Multi-Currency Additional Tier 1 ("AT1") and proactive capital management to
capital. Capital Securities and RM10 billion ensure sustainable dividend pay-outs
Multi-Currency Tier 2 Subordinated to shareholders in the long term. For
• Be resilient during Notes ("Sub Notes"). In April 2022, the FY2023, the Board has declared a final
Bank issued its first Green AT1 Capital dividend of 38 sen per share, resulting in
stressful economic and Securities worth RM900 million, a total dividend of 59 sen, up from 55 sen
financial conditions. intended for financing or refinancing in the previous year.

FINANCIAL REVIEW
CAPITAL ADEQUACY RATIO
i) Minimum capital adequacy requirements HLA requirement

As per Bank Negara Malaysia's (“BNM”) Capital Adequacy Bucket (as % of risk-weighted assets)
Framework, banks must maintain a minimum CET 1 Ratio
of 4.5%, Tier 1 Capital Ratio of 6.0%, and Total Capital 3 (empty*) 2.0
Ratio of 8.0%.
2 1.0
ii) Capital buffer requirements 1 0.5
In addition to the minimum capital requirements, banks
are required to maintain the following capital buffers: Note: *An empty bucket will be maintained above the current
highest populated bucket (3) as a pre-emptive measure for
• Capital Conservation Buffer (“CCB”) of up to 2.5% D-SIBs with higher systemic importance in the future. If the
to ensure the building up of capital buffers during empty bucket becomes populated in the future, an additional
normal times, which can be used during periods of bucket with a higher HLA requirement shall be added.
stress.
• BNM reviews the list of D-SIBs on an annual basis.
• Counter-cyclical Capital Buffer ranging from 0% However, they may review the list as and when
to 2.5% of total risk-weighted assets, intended to deemed necessary if there are major structural
safeguard the banking sector from the accumulation changes to the banking system, e.g. a merger or
of systemic risk during economic upswings when significant restructuring exercise by a bank or banks.
credit growth tends to be excessive. Presently, this
capital buffer is not mandated for credit exposures • D-SIBs are also required to maintain HLA and this
in Malaysia but may be implemented by the central shall apply to apex entities on a consolidated basis
bank in the future. (this includes consolidation of all subsidiaries, except
insurance and/or takaful subsidiaries). However, BNM
• Higher Loss Absorbency (“HLA”) requirement per may exercise its own discretion to require financial
Table 1 for FIs designated as Domestic Systemically institutions to comply at the entity level.
Important Banking Institutions (“D-SIBs”) by BNM:
• On 5 February 2020, BNM announced that three
banking groups (MBB, CIMB and PBB) have been
identified as D-SIBs based on 2018 data.
HEALTHY CAPITAL ADEQUACY RATIOS
The table below shows the capital adequacy ratios of the Bank, at both group and entity levels, presenting figures for financial
years 2022 and 2023.
After proposed HLB Group HLB Entity Regulatory Minimum with CCB*
dividend FY2022 FY2023 FY2022 FY2023 2022 2023
CET 1 Ratio 13.4% 12.8% 13.3% 12.4% 7.00% 7.00%

Tier 1 Ratio 14.5% 13.9% 14.4% 13.4% 8.50% 8.50%
Total Capital Ratio 16.7% 15.9% 16.4% 15.4% 10.50% 10.50%
Note: *Inclusive of minimum capital adequacy requirements and Capital Conservation Buffer of up to 2.5%
54 • CORPORATE

BUSINESS OPERATIONS REVIEW
1 PERSONAL FINANCIAL SERVICES ("PFS")
OVERVIEW
Growth of the Malaysian economy moderated in the first half of 2023 to 4.2% from 6.8% the year
before as a result of weaker exports in the second quarter of 2023, offset by robust domestic
demand and recovery in tourism activities. Concerns about a slowdown in the global economy,
inflation and tighter monetary policy have also persisted, although Malaysia is expected to be
resilient against these headwinds given its strong fundamentals, improving labour market and
the implementation of long-term infrastructure projects.
Amid this challenging operating environment, the PFS business our customers' credit needs and demonstrates our commitment to
segment played a crucial role in creating value for the Bank, maintaining strong risk management practices.
contributing 56% to the Bank's revenue and 38% to its pre-tax
profit. This reflects the success of our growth strategies and the Notwithstanding the challenging business environment,
momentum we have achieved in this sector. we have sustained strong business momentum, achieving
a noteworthy year-on-year (“y-o-y”) loan/financing growth
Furthermore, we have been disciplined in managing asset quality, of 7%. This growth has enabled us to build a robust pipeline,
resulting in a solid and low GIL ratio of 0.50% for the PFS segment in positioning us well for the coming year and further strengthening
FY2023. This healthy ratio provides us with ample room to support our market presence.
Transforming through Digital needs have resonated strongly with HLB in uptake through Connect, while balance
Disruption Connect achieving high penetration rates, transfers have seen a robust 26% growth
reaching 70% of our total retail customer compared to the previous year.
In FY2023, HLB continued to base. The penetration rate stands at 74%
for CASA customers and 88% for credit In empowering our customers in their
forge ahead in the digital
card holders. These robust numbers have pursuit of wealth growth and preservation,
realm, fully committed translated into a 12% y-o-y increase in we introduced HLB Wealth on our online
to our brand promise of online financial transactions, accounting banking platform. This innovative feature
“Built Around You”. Our for 78% of all PFS financial transactions. enables seamless subscription, top-up,
Retail transactions conducted via Connect and monitoring of Unit Trusts, starting
dedication to delivering
have also grown by 12%, representing with a minimum investment of just RM50.
exceptional financial 93% of the Bank's total retail transactions. HLB Wealth opens the door to investment
solutions and enhancing the The convenience of signing up for opportunities for customers across
digital banking experience financial products through Connect,
remained unwavering. coupled with our targeted campaigns
Proof of this was in the sustained growth

and integrated festive promotions, has
resulted in significant growth in product 12%
uptake through our online banking Y-O-Y INCREASE IN ONLINE
in the adoption of HLB Connect, which saw
channel. Approved credit cards have FINANCIAL TRANSACTIONS
an encouraging 16% increase in our user
base compared to the previous year. We strong growth, which led to 9.5% y-o-y
now have over two million Connect users, increase in credit card loans, while e-FD
93%
with 73% of them actively engaging with placements have risen by 9%. Overseas
the platform on a monthly basis. transfers performed via Connect have
experienced a substantial 8% growth. OF TOTAL RETAIL TRANSACTIONS
The seamless digital experiences we have Flexi payment plans have also increased ARE CONDUCTED VIA CONNECT
crafted to meet our customers' evolving in popularity, with a strong 77% increase

different income levels, risk appetites, PFS Deposits members with bank accounts and
and financial literacy. With a wide cashless payment capabilities.
selection of funds and comprehensive Despite the economic uncertainty in
insights, customers can make informed FY2023, we experienced a notable 36% In our commitment to enhancing financial
investment decisions aligned with their growth in new account acquisitions literacy and inclusion among the younger
goals and preferences. compared to FY2022, leading to a 4% generation, we have established
expansion of our customer deposits base. strategic partnerships with organisations
We are also pleased with the launch of like Smart Reader® Worldwide. Through
our cross-border QR capability on the During the year, we introduced HLB initiatives like DuitSmart Kids, we have
HLB Connect App. This feature allows Wallet, an innovative multi-currency introduced 3,000 pre-school children to
customers to effortlessly make payments e-wallet that offers customers a relevant and engaging financial literacy
to merchants in Thailand, Indonesia, and convenient digital payment experience content. We also collaborate with Little
Singapore, expanding the convenience of and instant cashback rewards. We have League Soccer, KL Badminton Association,
digital transactions beyond borders. also made it convenient for customers to and SK Badminton Academy to promote
obtain this e-wallet through our existing cashless payments and provide seamless
At HLB, we prioritise the security and Apply@HLB app. account opening services to children.
protection of our customers, aligning Meanwhile, our HLB@Kampung
with Bank Negara Malaysia’s (“BNM") To better serve sole proprietors, who are programme supports the digital and
five key measures to combat financial often underserved, we rolled out several cashless transformation of village
scams. In addition, we continue to initiatives. For example, in April 2023, we communities, enabling over a thousand
raise awareness on the ever evolving launched Pay & Save Sole Prop which residents and businesses to access HLB
scam/fraud tactics by continuously enables business owners to transact in 12 accounts and actively participate in the
enhancing our security measures and currencies and earn interest. In addition, digital financial landscape.
introducing new features. Our Emergency our “Cashless Lagi Senang” solution
Lock feature empowers customers to continues to support small business As we enter the new financial year, PFS
quickly halt all new transactions if they owners in accepting digital payments Deposit remains committed to embracing
suspect their HLB Connect access has effortlessly. Through a collaborative a more digitalised business environment
been compromised. Furthermore, our approach, we also extend our support while prioritising the needs of our valued
Card Freeze/Unfreeze feature enables to micro sellers from organisations such customers. We continue to dedicate
credit card customers to immediately as the Trishaw Association in Malacca ourselves to uplifting and empowering
block their cards temporarily in case of and Tamu in Sabah by providing their underserved communities.
suspected fraudulent activities. We have
also extended the AppAuthorise feature
to cover a wider range of transaction
types.
Looking ahead, we are committed

to enriching our customers' financial
journeys. We will be extending the end-
to-end digital onboarding experience
via Apply@HLB to sole proprietors and
making HLB Wealth available on our
Connect Mobile App. In addition, we are
implementing loyalty programmes on
our Connect App to reward customers for
their support and advocacy of our brand,
which will also help to drive user growth
and engagement.
56 • CORPORATE

PFS Loans Through strategic collaborations of our Personal Loans business. By being
and improved dealer coverage, we prudent, strengthening risk management
Mortgage successfully expanded our presence practices, and embracing innovation, we
In FY2023, our mortgage business within the top five brands in the new are confident in our ability to navigate
experienced stronger loan/financing growth car segment. By leveraging these the evolving landscape and overcome
of 6.7% compared to the previous years, partnerships and enhancing our dealer external headwinds.
with 5.4% in FY2022 and 4.2% in FY2021. network, we were able to effectively
This growth was partly driven by our cater to the growing demand for auto Regional Wealth Management (“RWM”)
focus on the affordable housing segment, loans/financing and provide customers
particularly first home buyers, as evidenced with competitive financing options. This The year was marked by global interest
by a significant 17% increase in approvals for resulted in a substantial increase in rate hikes and downward pressure on
properties valued below RM400,000. application volume and approval volume China's growth prospects, as well as
compared to FY2022. turbulence in the equity environment
To enhance market coverage and improve with the collapse of the Silicon Valley
the property buying and financing journey Personal Loan Bank and Credit Suisse.
for our customers, we have collaborated The past year witnessed modest growth
with property technology partners and in our personal loans business as external Nevertheless, these market conditions
implemented innovative solutions. These factors such as a moderation in economic created opportunities for RWM, as
collaborations aim to provide a seamless growth and higher interest rates resulted we achieved a robust 22% growth in
and efficient loan/financing process, in increased lending rates, which weighed PBT. The higher interest rates drove
leveraging digital improvements to on demand for personal loans. significant interest in Fixed Income
streamline the customer experience. products, resulting in a 57% increase
Given the headwinds, we have taken in sales. This also led to cross-selling
In response to climate change concerns a proactive stance to address the opportunities in foreign exchange
and to support the Bank’s overall ESG situation through the early detection of (“FX”), with FX revenues nearly
agenda, our business has actively potential risks which has enabled the doubling this year. Our strong deposit
encouraged property developers to apply rollout of timely measures to mitigate franchise contributed to a 4% growth
for Green Certification which is monitored adverse effects. To ensure stability and in segment Deposits and an 8% growth
through our End-Financing empanelment resilience in our personal loan business, in Assets Under Management (“AUM”).
process. Additionally, we have introduced we have implemented several measures,
the HLB Solar Plus Loan/Financing-I including: Bancassurance saw credit insurance
product, which offers financing options sales as the key driver, increasing by
for homeowners seeking to install solar Portfolio Diversification: We are
• 23% due to mortgage growth. While
energy systems, further promoting expanding our portfolio to include savings products were impacted by the
sustainable practices. the higher income and self-employed weak equity environment, Q4 FY2023
segment, which has demonstrated showed a strong turnaround. In FY2024,
Auto Loan greater resilience in challenging credit our sales teams will continue to focus
In FY2023, our auto loan/financing conditions. on Bancassurance, maintaining the
business experienced robust growth, with positive momentum.
a significant increase in loan/financing • Risk-based pricing: We have
volume compared to the previous year. introduced Pay-on-time rebates to Customer engagement remained strong,
This includes a 167% growth in Green incentivise borrowers to make prompt leading to a 7% increase in the overall
Car Financing for Hybrid Electric Vehicles payments, while adjusting pricing for client base. This resulted in a solid 26%
(“HEV”), Plug-in Hybrid Electric Vehicles late payers based on risk assessment. growth in investment AUM, with record
(“PHEV”) and Battery Electric Vehicles As part of our portfolio diversification flows into Fixed Income and Negotiable
(“BEV”). This growth can be attributed to strategy, we offer higher rebates for Instrument of Deposits. Relationship
several factors, including the introduction preferred segments. Managers played a crucial role in
of new car models, the availability of sales engaging clients, shifting conversations
tax exemptions, and attractive promotional While challenges may persist, we remain towards their investing needs rather than
offers from car manufacturers. committed to the prudent management solely product discussions.

In terms of digital channels, RWM strengthen customer loyalty, boost the coming year. Our commitment to
made significant progress in FY2023. card usage, and ultimately drive continuous improvement and innovation
Additional investment functions profitability. will enable us to strengthen our position
were enabled in Connect, allowing in the market and provide unparalleled
customers to apply and transact Unit • Deepening customer relationships value to our customers and stakeholders.
Trust online. Soon, they will also have with our lending customers: We
access to a wealth position dashboard have adopted a strategic approach to Moving Forward
allowing them to view their investment credit card acquisition by targeting our
holdings. existing loans customer base. By cross- Moving forward, we are committed
selling credit cards to this group, we can to embracing technology, innovation,
Looking ahead, RWM remains vigilant reduce acquisition costs and maximise and workforce transformation as we
of market conditions, particularly the value of our existing relationships. adapt to the new normal and cater to
the increased risk of a recession due To facilitate a seamless experience, we the evolving needs of our customers.
to high interest rates. However, we have implemented a streamlined credit We remain dedicated to our brand
are confident in our ability to help card application process for our loans promise of being “Built Around You”. By
customers navigate these challenges by customers. This allows us to optimise leveraging advanced distribution models,
focusing on their investment needs and acquisition costs, improve customer we aim to enhance customer onboarding
enhancing our investment proposition. retention, and leverage the trust and and service processes, particularly for
familiarity we have established with our underserved segments.
Payments Business loans customers.
Over the past three years, there has been
Our debit/credit cards and merchant • Enhancing customer experience: a significant increase in the number of
acquiring business has experienced We understand the importance users embracing Connect, our digital
significant sales growth over the past of delivering a superior customer banking platform, and utilising its
year, demonstrating the strength of our experience in the competitive credit diverse range of services. We view this
sales drivers. However, profitability has card industry. To achieve this, we as a significant growth opportunity in
remained a challenge due to factors are actively pursuing partnerships waiting and will focus on maximising the
such as the reduction in credit card and initiatives that enhance the potential of our digital platform. In the
interchange fee ceilings and ongoing convenience and accessibility of our upcoming phase, we will intensify our
investments into our systems. services. For example, we recently efforts and allocate more resources to
introduced Google Pay as a payment further commercialise Connect. Our goal is
To address these challenges and improve option for our credit card holders, to transform our service delivery through
our bottom line, we have developed a providing them with a seamless and digital channels, segment digitalisation,
set of strategies focused on enhancing secure digital payment experience. and increased customer involvement
operational efficiency and optimising This integration aligns with the initiatives. This transformation will lead
resources: preferences of our tech-savvy to greater scale, cost efficiency, and an
customer base and enhances their improved reach in acquiring and serving
• Investment in systems and overall satisfaction. customers, partners, merchants, and
infrastructure: We recognise the small businesses.
importance of upgrading our loan While we have experienced exceptional
origination systems to streamline the sales growth in our credit cards and In FY2024, we will continue on the
credit card application and approval merchant acquiring business, we journey of building an integrated and
process. This investment will not only acknowledge the profitability challenges agile payments strategy that caters to our
improve productivity but also enhance we face. However, by leveraging customers' needs, capitalising on the rapid
our ability to serve our customers advanced analytics for cross-selling, changes in the consumer, merchant, and
more effectively. In addition, we investing in loan origination systems payments landscapes. Furthermore, we
are prioritising the enhancement and loyalty programmes, and enhancing see an opportunity to revolutionise our PFS
of our loyalty system to increase the customer experience through digital organisation to become more data-driven,
customer engagement and retention. payment solutions, we are confident in leveraging technology and analytics to
By introducing innovative features our ability to overcome these challenges develop highly focused and personalised
and personalised rewards, we aim to and drive sustained profitability in solutions for our valued customers.
58 • CORPORATE

2 BUSINESS & CORPORATE BANKING ("BCB")
OVERVIEW
Amidst a challenging operating environment, the BCB division demonstrated strong performance,
achieving 7% y-o-y growth in loans/financing, outpacing the industry. Our strategic focus on
SME and commercial client segments yielded impressive results, with loans expanding by 12%
and 8% y-o-y, respectively. Similarly, demand deposits saw a robust growth of 11% y-o-y.
The momentum in loans/financing and deposits growth, along with our dedication to cross-selling and holistic relationship
management, translated into 11% y-o-y growth in operating income. BCB's revenue for the year contributed 29% and 25% of the
Bank's total income and profit before tax, respectively.
BCB LOANS/FINANCING
GROWTH OUTPACING THAT
OF THE INDUSTRY AT
+7% Y-O-Y
ROBUST GROWTH IN
DEMAND DEPOSITS BY
+11% Y-O-Y
Assisting Our Clients Our strong relationship with the SME sector has helped us
deliver above-industry loans portfolio growth rate of 12%
As the Malaysian economy recovered, HLB y-o-y in our SME Banking segment, all while maintaining a
robust and healthy portfolio asset quality.
actively supported businesses through
various means, including providing working In our efforts to offer comprehensive banking services to our
capital facilities to aid in their restart SME clients, we established an SME Cash, Trade, and Foreign
and offering bank-initiated payment Exchange (“CTFX”) team in FY2022. This team engages clients
on trade financing, cash management, and Foreign Exchange
relief assistance programmes as well as
(“FX”) hedging services. The CTFX team has since doubled in
facilitating government financial assistance headcount, enhancing our ability and capacity to support our
programmes. clients' transactional and hedging needs.

Enhancing the Customer Experience outlook and opportunities for SMEs and will continue this support, continuously
corporates in the near and medium improving our offerings to meet the
BCB remains committed to delivering term. We also highlight how BCB can evolving market and client needs. We
exceptional customer experiences support them in capitalising on these also recognise that security, reliability,
through our digital transformation opportunities and managing associated and capabilities are paramount in
strategies. In the past year, we have inherent risk factors. today's digital landscape. Hence, we
made significant improvements to our are committed to enhancing our digital
products and services, streamlining Commitment to Sustainability channels, which have become primary
internal processes to create more conduits for serving our clients.
efficient, seamless, and frictionless As part of our firm commitment to
customer journeys. sustainability, HLB actively engages With our extensive experience and proven
with stakeholders to refine BCB's ESG track record, BCB remains a key growth
We have made continuous enhancements Policy & Assessment Framework, aiming engine for the Bank. Leveraging our
to our BCB digital onboarding experience to promote sustainability practices regional presence in Singapore, Cambodia,
for account opening and Hong Leong among our clients. To drive this effort, Vietnam, Hong Kong, and China, we
ConnectFirst (“HLCF”) sign-ups, with we initiated the HLB BCB Sustainability empower our customers' competitiveness
nine out of ten new accounts now being Roundtable series in February 2021. So by facilitating their expansions into
onboarded digitally. This feature has far, we have successfully completed 10 these markets and streamlining capital
resulted in significant time and cost roundtables, covering various critical and transaction flows for SMEs and
savings for our clients, as it simplifies topics like palm oil, renewable energy, corporates engaged in import and export
the process of becoming an HLB business waste management and more. activities. As we expand our business
client, eliminating traditional pain points, banking coverage in regional offices, we
and removing the need to adhere to These roundtables serve as platforms also draw from the wealth of expertise
branch opening hours. for policymakers, regulators, industry and knowledge acquired through our
experts, and business leaders to engage successful BCB operations in Malaysia,
Our efforts to enhance the HLCF corporate in meaningful conversations and provide while ensuring compliance with local laws
internet banking platform include valuable insights on selected sustainability and regulations.
introducing multilingual options for topics. Our latest roundtable in June
customers and implementing the use of 2023, conducted in collaboration with
eTokens. Additionally, we incorporated a Small and Medium Enterprise Association
treasury module into the HLCF platform, (“SAMENTA”), focused on helping SMEs
providing clients with a quick and build competitiveness through greening
straightforward way to fulfill their FX their supply chain. This demonstrates our
booking requirements. Furthermore, we dedication to supporting SMEs in future-
introduced the PrimeBiz Current Account, proofing their businesses and accessing
a new and improved business current new, lucrative markets.
account service that allows clients to
earn rebates from their CA balances, Moving Forward
which can be used to offset selected
transaction fees and charges. Our sustained growth in the past year is a
testament to our efforts in engaging and
In addition to the above enhancements, supporting our clients, especially SMEs,
we have intensified our customer amid challenging economic conditions
engagement and outreach efforts worldwide. Despite rising interest rates,
through nationwide Transaction Banking stop-start economic recovery, and
roadshows. These roadshows feature inflationary pressures, we have stood
experienced specialists from our trade, by Malaysian businesses, offering a
cash, and global markets segments, comprehensive range of financing and
providing valuable insights into market banking services. Moving forward, BCB
60 • CORPORATE

3 GLOBAL MARKETS ("GM")
OVERVIEW
Amid continued headwinds and volatility in the financial markets, GM demonstrated resilience
and contributed positively to the Bank's overall performance, with revenue reaching RM278
million and PBT amounting to RM165 million. These figures accounted for 5% of the Bank's total
income and 4% of the Bank's PBT, highlighting GM's significant contribution.
Even as liquidity tightened around the world in response to persistent inflation concerns, particularly in developed
markets, Malaysia's system liquidity remained well-managed under the supervision of BNM. This demonstrated the
central bank's commitment to maintaining a stable domestic environment for growth while effectively managing
inflationary pressures.
Nonetheless, key ratios such as the industry loan-to-fund ratios (“LFR”) and liquidity coverage ratio (“LCR”) remained
stable during this period.
REVENUE
RM278
million
5%
CONTRIBUTION TO THE BANK’S
TOTAL INCOME
PBT
RM165
million
4%
CONTRIBUTION TO THE BANK’S PBT
Performance Review
GM faced challenges in the financial year as the operating environment was unfavourable
for its liquid asset portfolio. The bank encountered low portfolio yields, higher funding costs,
and negative mark-to-market impact on bond portfolios due to the persistently high interest
rates.

Trading income was also affected

by bond selloffs in both local and
global markets, while widening USD/
MYR interest rate differentials posed
additional challenges. These market
conditions had a widespread impact
across multiple markets, resulting in
lower monetised gains in fair value
through other comprehensive income
investments.
Despite the tougher operating

environment, coupled with higher global
and domestic interest rate expectations
which had led to many market
participants staying on the sidelines,
GM Fixed Income Sales business had
managed to broadly defend bond
sales margins in the markets where it book FX rates with the Bank, expanding to volatile commodity prices and
competed notwithstanding softer sales beyond spot FX trades to include forward supply-demand imbalances. The global
volume. The Bank's pivotal role in the contracts, which has also helped to drive headwinds added further pressure on
markets was recognised by The Asset, FX volume in our SME and corporate raw material costs and energy prices,
a leading publication, as GM received
segments. In addition, we introduced leading to temporary disruptions in
accolades for Best Local Currency Bond
LiveRate for internal users, enabling the supply chain. As the economy
Individuals in Trading and Research, and
seamless end-to-end delivery of FX- continues to adjust, we anticipate a
Highly Commendable Persons in Sales
for FY2023. This recognition further related transactions, including branches. gradual resolution of these supply chain
solidified HLB’s prominent position in issues in the coming years. Together
the local institutional space. Collaboration between GM and other with the high base from the previous
business units, particularly Regional Wealth year, headline inflation is expected to
In FY2023, GM experienced a slight Management, saw a significant increase in gradually decrease as the impact of
increase in FX product margins, although transactions across multiple products such tight monetary policy takes effect.
recorded volume was slightly lower due as bonds, FX, and structured products. This
to the absence of a surge in volume growth facilitated the offering of bespoke Looking ahead, we believe that the
immediately after the reopening of wealth management products with a current cycle of interest rate hikes is
the economy following pandemic
high level of customisation to cater to the nearing its end, barring any unforeseen
restrictions. However, digital remittance
needs of our high-net-worth clients. As the events. The performance of our fixed
volumes remained strong, reflecting
wealth management industry in Malaysia income investment book, which was
the growing adoption of digital banking
channels by customers even in the post- becomes more sophisticated and mature, impacted by the rapid rise in global
pandemic era. The bank's ongoing focus we anticipate this momentum to continue interest rates, will gradually improve
on upgrading digital capabilities will and further expand. as we replace short-dated bonds with
enable it to handle a wider range of FX higher-yielding ones. Our prudent
transactions to meet customer needs. Moving Forward balance sheet management has allowed
us to take advantage of the current high
Initiatives in the Past Year In FY2023, the Malaysian economy interest rate environment by strategically
showcased its resilience following its deploying our resources. However, we
In FY2023, GM collaborated closely with reopening, supported by timely policy remain mindful of the possibility of the
internal partners and clients to deliver responses from BNM and ongoing global economy entering a recession as
innovative treasury solutions. The government assistance programmes a result of aggressive monetary policy
launch of HLCF Live in the previous year for those affected by the pandemic. tightening.
allowed corporate clients to directly However, challenges persisted due
62 • CORPORATE

4 ISLAMIC BANKING
OVERVIEW
Hong Leong Islamic Bank (“HLISB”) delivered a strong set of financial results in FY2023 with a
29.2% y-o-y increase in Profit before Zakat and Taxation to achieve RM567 million. This growth
was driven by a 5.1% increase in operating profit and a 6.5% increase in total income. Our retail
and commercial business segments showed strong growth, contributing to a 10% expansion in
assets, totalling RM56.6 billion. Furthermore, Gross Financing increased by 13%, surpassing the
industry average of 9%, driven by healthy growth in retail, SMEs, and corporate financing. To
add further, these growth milestones were achieved while maintaining our discipline in cost
management with a stable cost-to-income ratio of 29.7% (FY2022: 28.8%).
Progressive and Inclusive Growth
In line with our brand promise

of “Built Around You”, HLISB
has been steadfast in its
goal to becoming a one-
stop Islamic bank, providing
innovative and diversified
financial solutions tailored
to the diverse needs of the
communities in which we
operate. HLISB continues
to make significant strides
in the financial landscape,
guided by our commitment
to providing innovative
digital banking solutions
while adhering to our core
values of Shariah-compliant
financial services.
TOTAL ASSETS FINANCING ASSETS Enhanced Market Presence through
RM56.6 RM41.1
Personal Financial Services-i (“PFS-i”)
billion billion Our PFS-i business has witnessed

substantial growth, thanks to our robust
10% Y-0-Y +13% Y-0-Y
digital strategies that effectively engage
customers through a simplified banking

journey. By offering a multitude of Business and Corporate Banking-i and provide them with valuable guidance
Islamic wealth management services and (“BCB-i”) on the necessary steps.
products, we have catered to the diverse
financial requirements of our clientele. HLISB's BCB-i has achieved significant Shariah excellence remains a crucial
growth, by providing comprehensive business enabler for HLISB, as we
During the year under review, we have financial solutions while adhering to our continue to foster a strong culture
witnessed a surge in digital participation, Shariah principles. During the financial of learning centred on creating
evident from the rise in active users for year, BCB-i recorded an impressive overall value-based outcomes both within
both Retail Connect Internet Banking and financing growth rate of 14.3%, with the the Bank and the community we serve.
Retail Connect Mobile Banking customers. SME segment contributing significantly, In FY2023, we strengthened our Shariah
The y-o-y increase of 18% highlights the boasting a y-o-y growth of 20.3%. The compliance culture through disciplined
growing preference for digital banking Manufacturing sector led the growth in implementation of Shariah governance
solutions among our clientele. our business banking segment, followed and training programmes, which has
closely by the Wholesale & Retail Trade improved awareness among our staff and
In response to evolving customer and Real Estate sectors. These results key stakeholders at Hong Leong Group.
demands, we have expanded our were largely due to our expansion and
offerings by introducing two new Islamic outreach efforts to SME customers Apart from the annual Shariah Compliance
Structured Products as part of our Islamic through a close-knit collaboration programme, our dedicated Shariah
Wealth Management Shariah compliant with Hong Leong Bank Group and their team has actively engaged in various
shelf offering. These products are extensive branch network nationwide. business-focused research activities and
meticulously designed to cater to the knowledge-sharing programmes with
specific needs of our clients, offering Our ongoing partnership with SME the community. This proactive approach
them even more options to manage and Corporation via the Shariah-Compliant ensures that we remain at the forefront
grow their wealth. SME Financing Scheme 3.0 (“SSFS 3.0”) of Shariah-compliant practices and
Programme has continued to bear fruit. To provide our customers with the highest
HLISB remains committed to upholding foster further SME growth, we successfully standards of financial services.
sustainability in our operations. In line launched our maiden MicroSME financing
with this, we continue to provide Green programme, Islamic SME Grow, which Moving Forward
Financing options to our retail customers, is guaranteed by Syarikat Jaminan
empowering them to transition towards Pembiayaan Perniagaan (“SJPP”) and HLISB remains firmly committed to leading
a low carbon economy. Our efforts in targets deposit and merchant terminal the growth potential of Islamic Finance
providing Green affordable property Shariah-compliant customers. and fulfilling its pivotal role in bridging
financing have also flourished through gaps and broadening access to Islamic
close collaboration with developers HLISB remains steadfast in supporting the financial services for both individuals
to promote the adoption of Green Halal sector, achieving a commendable and business communities. To realise
Certification applications. y-o-y growth rate of 12.1%, primarily this vision, we are dedicated to offering
driven by the Manufacturing of Food and a comprehensive array of value-based
To promote financial inclusion among Beverages sub-sector and the Agriculture finance solutions, supporting financial
the younger generation, our PFS- sub-sector. To further enhance our inclusion through our Islamic wealth
i's Mobile Deposit Specialists have expertise in this field, nine of our full-time management services, expanding our
significantly increased their efforts staff completed a specialised training offerings to SMEs and Halal businesses,
through community-based programmes programme conducted by the University enhancing our workforce through
such as HLB@School. These initiatives of Malaya, qualifying as Halal Executives upskilling initiatives, and venturing into
have effectively unlocked the untapped under Majlis Profesional Halal, JAKIM. the realm of Islamic social finance. By
potential of deposits from our younger With this recognised qualification and adhering to these strategic directions,
customer segment. Impressively, 70% of deeper understanding of the intricacies we aim to strengthen our position as a
all Junior Savings accounts opened were of the Halal industry, we are better prominent player in the Islamic finance
Islamic accounts, signifying the success positioned to identify customers who are industry and continue making a positive
of our inclusive approach. ready to apply for JAKIM Halal certification impact on the communities we serve.
64 • CORPORATE

5 INTERNATIONAL
Hong Leong Bank Singapore (“HLBS”) food, wholesale trade, and financial
services. The value proposition of BCB is
HLBS LOANS GROWTH OF In FY2023, HLBS demonstrated improved to support customers in their local and
22.9%
performance, with an operating profit of regional growth by offering simple and
RM86.4 million (FY2022: RM78.5 million) reliable solutions. Digital platforms for cash
Y-O-Y and total income of RM223.1 million (FY2022: management and trade financing that
RM187.4 million). The growth of the loan we offer are also able to enhance market
book also contributed to the positive results, connectivity. Digitalisation efforts, such as
with a 22.9% y-o-y increase of RM1.7 billion the launch of a corporate internet banking
HLBVN LOANS GROWTH OF to reach RM9.4 billion. platform in FY2022 and the addition of a
18.3%
payment gateway platform in FY2023, also
HLBS has been undergoing a transformation contribute to BCB's value proposition.
Y-O-Y in recent years to become a more
comprehensive financial services provider, Hong Leong Bank Vietnam (“HLBVN”)
expanding beyond its niche Private Wealth
Management (“PWM”) focus to include In the first half of calendar year 2023,
HLBCAM LOANS GROWTH OF Vietnam's economy experienced a mild
BCB and targeted segments of PFS. This
5.6%
Y-O-Y
strategic shift has enabled HLBS to broaden
its customer coverage.
slowdown, with a y-o-y increase of 3.7%
while credit growth decelerated to 4.7%
during the same period. Despite these
In the PWM business, HLBS is aiming to conditions, HLBVN delivered another year
become a regional hub for high-net-worth of strong performance in FY2023. HLBVN
business owners and their families. To achieved impressive loan growth of 18.3%
achieve this, PWM has upgraded its wealth and deposit growth of 42.8% y-o-y, while
Bank of Chengdu (“BOCD”)
platform, introduced new products and maintaining a low Gross Impaired Loans
services through a Regional Advisory and (“GIL”) ratio below 0.10%. Total income
In the year under review, BOCD delivered
Financing framework, and enhanced the saw a significant increase of 32.7%
impressive profit growth, contributing
customer experience through digitalisation. y-o-y, driven by robust loan growth and
a significant portion to the Bank's PBT
a noteworthy improvement of 21 basis
of RM1.3 billion, representing a 25.0%
PFS has experienced notable growth, points in Net Interest Margin (“NIM”).
improvement compared to the previous
particularly in the niche Auto Finance and HLBVN's diligent cost management
year. This positive performance can be
mass affluent depositors segments. In resulted in a 13-percentage point
attributed, in part, to HLB's increased
its next phase of transformation, PFS is reduction in the Cost-to-Income Ratio
shareholding in BOCD resulting from a
expanding its reach to millennials in order (“CIR”), and PBT soared by 115% to reach
recent convertible bond conversion.
to capture a larger portion of the mass RM23.6 million.
Moving forward, BOCD is committed to affluent market. Digitalisation is a key
further strengthening and expanding focus to meet the needs of this digitally HLBVN continues to prioritise investments
its PFS, financial market, and wealth savvy consumer base, enabling swift in channels and product solutions to
management businesses. It aims to delivery of a wider range of products and better serve its customers. In early 2023,
enhance its presence in Chongqing and services. The launch of the HLB Connect the branch introduced the telemarketing
other branches outside Chengdu to Singapore Mobile Banking app further channel, complementing its existing
further solidify its leading position. The supports this goal, providing on-the-go digital channel, to provide an unsecured
ultimate goal is to become the preferred banking convenience. personal loan product. Additionally,
bank for enterprises and residents in the HLBVN established a partnership with
region. To achieve this objective, BOCD BCB has achieved impressive growth Chubb Life Vietnam to offer life insurance
will focus on enhancing competitiveness since 2021 by refocusing on expanding solutions, catering to the protection needs
through continuously improving digital its commercial and SME customer base of personal customers. After successfully
transformation, risk management, within the local business community. BCB launching a new mobile app and eKYC for
information technology, and human serves customers across various sectors, retail customers, HLBVN is now focusing
resource management practices. including manufacturing, construction, on enhancing its digital banking platform

for business and corporate customers, Training and talent management are key Hong Leong Bank Hong Kong (“HLBHK”)
further expanding its digital offerings. priorities for HLBCAM. HLBCAM fosters
a high-performance culture where After experiencing a contraction of 3.5%
Hong Leong Bank Cambodia employees are empowered through the in 2022, Hong Kong's economy rebounded
(“HLBCAM”) core values of Innovate, Collaborate, with growth of 2.7% in the first quarter
Decisiveness, Have fun and Here for the of 2023. This recovery has been driven by
HLBCAM has maintained a steady gross long term. HLBCAM adopts a competency- the relaxation of Covid restrictions in both
loan portfolio of RM2.6 billion, while based approach to learning, developing the Mainland China and Hong Kong, resulting
also preserving the deposit book at skills and abilities of employees to meet in increased visitor arrivals and domestic
approximately RM2.2 billion. The bank's the specific requirements of their roles. demand. However, Hong Kong still faces
total assets stood at around RM3.4 billion macro-financial challenges due to factors
as of June 2023. HLBCAM also places importance on creating such as rising interest rates, a slower-than-
a harmonious working environment and expected recovery in Mainland China, and
The strategic priorities for HLBCAM strengthening employee engagement. declining demand from advanced economies.
are focused on accelerating customer Celebrating wins and having fun is ingrained
acquisition and growing the local deposit in our corporate values, resulting in various Despite the challenging macroeconomic
base, while effectively managing and events and activities such as New Year conditions, HLBHK has successfully
expanding the lending book with qualified celebrations, International Women's Day, executed its SME business strategy. By
existing customers. HLBCAM remains staff town halls/appreciation days, team focusing on SMEs that qualify under the
committed to accelerating the digitisation building by division, and museum visits. HK Government's SME Financing Guarantee
of its operations and strengthening its Scheme, HLBHK achieved a significant
digital offerings to meet the evolving Furthermore, HLBCAM is committed to doubling of its loan growth in the current
needs of customers. Simultaneously, participating in charitable activities in financial year compared to FY2022. With the
HLBCAM is dedicated to enhancing Cambodia. One notable initiative is its reopening of borders between Mainland
operational efficiency and productivity support for the demining efforts of the China and Hong Kong, the SME sector is
through strategic cost management and Samekh Techo Project for Mine Action expected to continue its growth trajectory.
proactive risk management, ensuring (“STP-MA”) where HLBCAM is a Gold In addition, the Global Markets team has
sustainable growth and further expanding Sponsor for a charity event organised by the collaborated closely with the BCB team to
its customer base. Malaysian Business Chamber of Cambodia capture market share through competitive
China
in collaboration with the Cambodian Mine FX rates. To mitigate the impact of rising
Action Authority (“CMAA”). This initiative interest rates, the Global Markets team
Hong Kong contributes to the Royal Government of has maintained strong liquidity levels and
Cambodia's goal of achieving a mine-free judiciously increased earning assets.
Cambodia by 2025.
Looking ahead, Hong Kong is expected to
Looking ahead to FY2024, HLBCAM's recover from the pandemic and further
Cambodia strategic priorities include leveraging its integrate into the Greater Bay Area (“GBA”).
Vietnam regional strength to promote the franchise, The Hong Kong Branch, capitalising on the
enhancing the customer experience, and city's status as an international financial
delivering greater value propositions in both centre and a financial hub for Mainland
physical and digital channels in response China, will leverage the extensive network
Malaysia to the current economic and business of Hong Leong Bank in Malaysia, Singapore,
Singapore environment. A significant focus will be on and other Southeast Asian countries to
investing in human capital, building staff drive further business growth.
bench strength, and equipping employees
with the necessary hard and soft skills
to progress along a well-planned career
roadmap aligned with the Bank's people
agenda for FY2024 and beyond.
66 • CORPORATE

6 INFORMATION TECHNOLOGY (“IT”)
In FY2023, our IT division made significant progress in driving digital adoption and sharpening
our digital capabilities across the Bank. Its efforts were directed towards digitalisation,
customer-centricity, cybersecurity, data protection, fraud mitigation, ESG factors, and cost
sustainability. Digital adoption has clearly increased across all customer segments, and the
Bank's commitment to being "Digital at the Core" is as evident as ever as various solutions
were implemented to deliver improved services to both external and internal stakeholders.
This year, the team expanded to approximately 500 people and completed 1,094 system enhancements and delivered 55 projects,
showcasing a 16% increase in enhancements and a 25% increase in project delivery compared to the previous year. Today, the IT team
manages and maintains over 200 technology applications across multiple geographies, with most systems being on-premise and 15
being outsourced or cloud-based.
In spite of the numerous projects we handled, we are pleased to highlight that two key projects involving the commissioning of a
new data centre and the implementation of a new data warehouse were carried out without disruption to the business. The new data
centre was also a noteworthy achievement given its ESG-aligned characteristics as it received recognition as the greenest data centre
in Malaysia, achieving the highest tier of certification available. Overall, HLB continues to remain committed to providing sustainable,
cost-efficient, scalable, agile, and robust systems to support our growth ambitions.
Enabling the Business digital transformation strategy in collaboration with the

business stakeholders. In continued alignment with ensuring
Throughout the past year, our focus on IT development has sustainable costs, we prioritise the development of scalable
been unwavering as we strive to enhance our business IT solutions built in-house where possible, utilising enterprise
operations and services. Our key focus areas of ‘Governance’, open-source software. This is also where optimising operational
‘Customer’, ‘People’, ‘Cost’ and ‘Data Analytics’ and 'Data efficiency while reducing overall costs comes into play. Through
Analytics' have been central to this endeavour. We remain process automation, system consolidation, and the adoption of
committed to executing strategic initiatives and driving our cloud-based solutions, we have achieved cost savings without

compromising the quality of our services. Customer We are committed to enhancing our
In addition, we continue to recognise systems and delivering new capabilities
the critical priorities of cybersecurity and Our focus on customer-centricity remains for corporate clients, including straight-
data protection which is fundamental to steadfast as we aim to enhance the through processing for seamless self-
our business operations. customer experience by minimising service options. We recognise the
friction wherever possible. However, importance of mobile solutions and are
In the context of cloud enablement, in response to sophisticated social introducing tailored mobile banking,
HLB continues to take a cautious engineering fraud, we are introducing payment solutions, and real-time
stance, keeping the greater majority of some friction into the ecosystem where notifications for businesses on the go.
systems and services housed, managed, necessary to ensure greater security.
maintained and secured within the Thus, there are instances where measures Our focus on customer satisfaction,
franchise. Our stringent stance towards such as time-bound actions or temporary the exponential growth in online
the adoption of cloud services has also halts are required, particularly for high- transactions, and our dedication to
mitigated against rising foreign exchange risk transactions. These measures innovation contribute to the success
and inflation and we will continue to provide customers with the opportunity and enablement of corporate and SME
monitor developments in this space. to reconsider decisions and ensure their sectors. We strive to provide efficient
However, for instances where we have utmost satisfaction and protection. and user-friendly experiences, equipping
adopted cloud (e.g. with Google), we businesses with the tools they need to
have seen the collaborations delivering We are also continuously improving self- thrive in the digital world.
secure and competitive capabilities to care functionalities and expanding our
the franchise. digital offerings to provide convenient Making Retail Banking Safer, Quicker
access to banking services, allowing our & Better
Governance internal stakeholders to devote more
time to customer-related activities. Our Our IT team continues to collaborate
We prioritise governance as a crucial on the transformation, migration,
"Digital at the Core" ethos drives us to
aspect of our operations especially in and enhancement of retail online
develop innovative digital capabilities
a highly regulated environment like services. The positive growth and
that cater to the needs of our consumer
ours. To meet regulatory requirements adoption of these services are evident
and business customers. This customer-
and ensure consumer protection, we through customer satisfaction surveys,
centric approach, based on rich
continuously adapt and improve our with average ratings of 4.35 for
data insights, enables us to deliver
processes. During the reporting period, web interfaces and 4.38 for mobile
prompt solutions, offer personalised
we implemented advanced technology interfaces out of a maximum score
recommendations, and create tailored
solutions to strengthen our fraud of 5. The relevance and convenience
experiences that enhance our customers'
monitoring and detection systems to of our online channels has seen the
financial journeys.
enhance customer protection. number of registered customers on
our web channels up by 12% compared
Notably, we successfully deployed ENABLING BUSINESS BANKING to the previous year, with a 12% y-o-y
a new fraud monitoring system in increase in active users. Monthly
Singapore and a merchant transaction Corporates and SMEs are vital to HLB's transactions have also shown a 3%
monitoring system in Malaysia. These business and we have simplified increase, highlighting the ongoing
real-time systems further enhance business banking for them. Our online preference for online banking. Our
our ability to limit fraud vectors channels have been well received, with in-house designed mobile interface
and protect our stakeholders. Our high adoption rates and positive reviews. has experienced a 19% growth in
dedication to technology governance We have also seen significant growth registered users and a strong 23%
aligns with our broader objective of in online transactions, with a 40% and increase in monthly transactions.
embracing innovation to optimise our 105% increase in transactions on HLCF
business processes, ensure regulatory web platform and mobile platform While leveraging open-source
compliance, and strengthen our position respectively. technologies, our focus remains
as a trusted financial institution.
68 • CORPORATE

on delivering reliable and user- functionality within the Malaysian (“AML”) capabilities, enabling
friendly services. We prioritise Mobile Application. This feature allows stakeholders to expedite approvals
the performance, scalability, and customers to seamlessly communicate and disbursements more efficiently.
availability of our interfaces to ensure with call centre representatives after
a secure and dependable banking authentication, reducing the need for In Cambodia, we achieved significant
experience for our customers. manual identity verification. This new milestones by enhancing user
channel includes features like a queue interfaces for internet banking and
In terms of enhancements, we function and chat history, offering enabling online enrolments for the
have placed a strong emphasis on convenience and reducing call centre Bakong payment system. Bakong,
fraud mitigation. We introduced an volumes. introduced by the National Bank of
emergency lock functionality for Cambodia, allows real-time retail local
the mobile application, allowing We have also brought our digital and payments and additional payment-
customers to freeze all online wealth business online, combining based services, such as transfers
services in case of suspected fraud. existing technological platforms to between accounts and different banks.
Our secure AppAuthorise service create a Self-Directed Portal and We also integrated with the Cambodian
has been integrated with online a Relationship Manager Assisted Shared Switch (“CSS”), providing more
merchant payments and digital Tablet Solution. These tools empower payment options for our customers
onboarding, reducing reliance on SMS customers to self-service their and facilitating routing, clearing, and
and enhancing security measures. In investments through Retail Internet settlement of debit card transactions
the upcoming reporting period, we Banking (“RIB”), catering to different in Cambodia.
will further extend the use of this customer segments. Through these
technology to mitigate consumer fraud developments, we aim to enhance Looking ahead, we will continue to
risk. customer experience, provide efficient collaborate and bring new services
self-service options, and streamline online, prioritising performance,
In addition to our ongoing efforts operations across our various business scalability, and security. Our goal is to
to mitigate fraud at the frontend, areas. provide customers with convenient and
we have enhanced the backend secure online banking experiences while
data validation service to detect Across the region, we have minimising friction whenever possible.
and prevent erroneous transactions, made consistent upgrades and
including the challenge of online enhancements for both internal and Operational Resilience
service usage from different devices. external stakeholders across different
Furthermore, we have introduced new geographies. Notably, we developed The IT team continues to play a crucial
services across our diverse markets. a new mobile application specifically role in ensuring the operational resilience
Some notable additions include an for Singapore to meet the growing of the franchise, and the last reporting
Auto Loan e-acceptance capability, demands of our retail banking clients. period was no exception. By automating
enabling customers to review and This platform enables us to roll out critical processes, facilitating technology
accept loan documents conveniently. more digital offerings and enhance refreshes, and re-platforming systems in
We have also enrolled in the cross- features based on market demands. alignment with the guiding principles, the
border Quick Response Code (“QR”) To boost security, we introduced a new team continues to contribute significantly
initiative, allowing customers to scan online transaction monitoring system to enhancing the efficiency, reducing risks,
and transact with our mobile banking to identify unusual user behaviour and and maintaining business continuity.
application across multiple countries. transactions, assigning risk scores and
Additionally, Google Pay integration denying actions until verified by the During the reporting period, two major
has provided secure tokenised registered customer. projects were undertaken to enhance
enrolment of HLB cards, enabling operational resilience and business
customers to make transactions using We also delivered a new trade services capabilities. The first project involved
their Android devices' Near Field system that improves the review and commissioning a state-of-the-art data
Communication (“NFC”). approval process for trade applications centre, certified as a Platinum Plus facility
for Singapore. This system provides by the Green Computing Initiative (“GCI”),
Another achievement is the real-time information on goods, vessel making it the greenest data centre in
implementation of post-login chat details, and anti-money laundering Malaysia as at February 2023. The data

centre was successfully completed, Overall, our talent development areas of expertise, including ETL design
ensuring uninterrupted service and programme aims to equip IT graduates and development, data modelling
minimal downtime as per Tier 3 standards with the skills, knowledge, and and mapping, campaign feasibility,
for reliability and availability. experience needed to excel in the campaign development, data extraction,
industry. Through practical training, and business analysis. Their collective
The second project involved replacing mentoring, and exposure to experienced knowledge and experience have been
the data warehouse with a modern, senior team members, we strive to build instrumental in ensuring the success
non-proprietary system, offering a skilled workforce capable of driving of the data warehouse project and will
centralised data management, innovation and success within the equip and enable HLB well into the future
enhanced data analysis, improved organisation and continues to produce leveraging the “Built by Us” mantra.
data quality, scalability, and simplified fit for future talents.
data integration. These projects were Cybersecurity
complemented by additional initiatives With the introduction of the new
to ensure operational resilience, talent and the continual upskilling of As financial services become increasingly
including alerts enhancements, patching the Development Centre of Excellence digitalised, cybersecurity emerges as a
automation, system refreshes, and (“CoE”), we continue to provide robust significant risk for financial institutions.
technology re-platforming. and meaningful solutions to the HLB The digital ecosystem offers great
Franchise at sustainable cost and benefits but also exposes vulnerabilities,
During the year under review, we also accelerated speed with this model, the including operational disruptions, data
encountered new and unique challenges team delivered around 40 enhancements breaches, fraud, and financial losses.
that we had never seen before and took to corporate internet sites, more than Effectively managing these risks is
it as an opportunity to further increase 145 enhancements to mobile banking crucial to maintain trust, stability, and
the resilience of the HLB IT ecosystem. and over 325 enhancements to internet financial results. To address this, we have
These challenges have prompted a banking. These efforts have helped to continued to manoeuvre strategically
rethink in some instances on the best save considerable time and expenditure in the management of our security
practice principles and on what we need in facilitating services to customers architecture and governance.
to do collectively with our partners to and demonstrated the team’s ability
strengthen our overall resilience. Our and agility to come up with innovative This includes adopting a software-
ultimate goal is to not only achieve 24/7 solutions that deliver significant value defined network structure with multi-
availability for our customers, it is to also to the Bank. tier security and establishing a security
achieve speed at which the service is architecture and governance team to
delivered. Data Analytics enforce standards aligned with regulatory
guidelines. A dedicated Vulnerability
People
Data analytics remains a key focus for Assessment and Penetration Test
HLB recognises the vital role of its our franchise as we continue to invest in (“VAPT”) team has also been formed
employees in the IT team and their technology and people, demonstrating to identify and address security
contribution to our ongoing success. In our adaptation capabilities. We have weaknesses. In addition, the Bank
FY2023, we prioritised enhancing their successfully replaced the older data has implemented virtual patching for
capabilities and fostering a culture of warehouse in the reporting period with critical systems to prevent exploitation
continuous learning and development. a new and more sustainable solution. of known vulnerabilities. Furthermore,
Our talent development programme The newly introduced system has real- we have upgraded to a next-generation
encompasses IT graduates being time capabilities and can assemble both Intrusion Protection System (“IPS”) and
assigned to teams based on their structured and unstructured data using there are plans to implement Network
preferences and strengths, which are common and readily available tried and Behaviour Analysis (“NBA”) capabilities
then mentored by senior professionals. proven programming languages. for advanced threat detection.
We emphasised continuous learning
through regular training sessions Alongside the implementation of the Looking ahead, the Bank plans to
and workshops, while ensuring fair new data warehouse, we have invested modernise its Security Information and
remuneration and maintaining open in building a strong in-house data team Event Management (“SIEM”) platform to
communication channels to address residing within IT. This team, comprising improve incident response and forensic
employee aspirations. 36 skilled professionals, covers various investigation capabilities and expanding
70 • CORPORATE

it to include Security Orchestration, Automation, and Response (“SOAR”) capabilities. This will result in increased efficiency, faster
response times, improved collaboration, and an overall enhanced security posture. Meanwhile, there is also an ongoing initiative
to implement a security operations platform for proactive vulnerability tracking and remediation.
FIRST HALF SECOND HALF

FY2023 FY2024
Milestone #1 Milestone #2 Milestone #3 Milestone #4 Milestone #5

Enhanced security Setup Security Setup dedicated Implemented Upgrade current
architecture that Architecture Vulnerability virtual patching Intrusion
integrated with and Governance Access and for critical Protection System
software defined Team Penetration Test systems (IPS) to Next
network Team Generation IPS
Looking Ahead: Embracing Progress with Purpose
As we embark on the new reporting period, Hong Leong Bank IT is committed to relentlessly supporting all our stakeholders,
including both external and internal stakeholders. In the upcoming reporting period, we are committed to providing seamless
banking services, fortifying technology infrastructure, and prioritising stakeholder protection and satisfaction.

7 DIGITAL & INNOVATION OFFICE
During the year under review, capabilities, promoting widespread we successfully onboarded 32,458
adoption and financial inclusivity. businesses digitally in the last 12
HLB has made significant months alone, a 40% increase from the
strides towards becoming Of our 3.7 million retail customer base, 2.6 previous year. This shift has resulted in
million customers (a 12% y-o-y increase) a significant 26% reduction in over-the-
a leading ASEAN financial
have adopted our digital platforms, counter transactions for businesses, as
services company, driven by reflecting the success of our digital-first they embrace our ConnectFirst digital
our brand promise of “Built approach. We witnessed an increase in platform. Online banking transactions
our retail internet and mobile banking have increased by 40% y-o-y to reach
Around You”. Our digital
customer base, growing by 13% and 16% 13.2 million, while mobile banking
services have experienced respectively. These statistics highlight the transactions have risen by 105% y-o-y to
steady growth, accompanied growing preference for digital channels. reach 4.9 million. We also scored positive
Furthermore, our digital platform has ratings with our business customers, with
by strong customer processed 199 million transactions, a a mobile banking CSAT score of 4.65 and
satisfaction ratings. 12% y-o-y increase, reinforcing the trust 90%, and an internet banking platform
our customers have in our reliable digital score of 4.49 and 86%.
Our digital-first mindset, fostered services. In addition to a solid growing
through collaboration between our user base, our digital channels have With notable results of our new digital
product and channel teams, has enabled achieved a strong Customer Satisfaction capabilities, our success in digital
us to develop effective solutions that Score (“CSAT”). For mobile banking, we innovation can be attributed to the strong
cater to our customers' evolving wants received a 4.38 rating on a 5-point scale foundation built upon three key pillars:
and needs. and an 86% Top-2-Box score while our Infrastructure, Customer-Obsessed
online banking received a rating of 4.35 Culture, and Strategic Programmes. We
We prioritise execution based on customer and 89% Top-2-Box score. continue to be guided by these pillars as
insights and feedback to ensure we stay we undergo our transformation into the
aligned with customer expectations. This Our digital capabilities have greatly Bank of the Future, ensuring sustained
empowers us to introduce new digital benefited our business customers as growth and customer-centricity.
72 • CORPORATE

PILLAR 1: INFRASTRUCTURE
Enabling Innovation with the Right Environment and Solutions

We have integrated our community hub, Jumpstart@65
(“JS@65”) into our innovation strategy and by leveraging
on cutting-edge technology such as the Tobii eye-tracking
solution, we have successfully cultivated a culture of co-
creation and experimentation with customers throughout
the lifecycle. Over the course of the year, we have engaged
with more than 3,000 stakeholders including consumers,
business owners, and bank staff through 21 customer
research engagements. Our extensive usability research
has played a crucial role in shaping our strategic decisions
and product roadmap. This enables us to create highly
personalised experiences that provide maximum value to
our customers.
JS@65 is not only utilised by bank-affiliated social

enterprises for training and brainstorming purposes, but
also to conduct community engagement. For instance,
JS@65 hosted school holiday programmes by the Chumbaka
and Arus Academy which are two social enterprises. The
interactive programmes provide computational thinking
skills to our employees’ children aged nine and above,
making use of gamified coding lessons. These sessions
equipped them with valuable knowledge in an engaging Scratch, Python, and JavaScript. Parents can work from our
and enjoyable manner. Over three days, participants learn co-working spaces while their children actively participate in
coding, pattern recognition, and algorithm design using the coding camp.
PILLAR 2: CUSTOMER-OBSESSED CULTURE
Ensuring that Our Business is “Built Around You” and suggestions, allowing us to better understand customer
Our customer-obsessed culture is highly prioritised and needs and highlighting our commitment to transforming
practised throughout the Bank, as we invest in initiatives customer-centric concepts into reality. Alongside our regular
to develop experiences and solutions that are aligned with interactions, we also organise physical Meet and Share
the needs of our customers. By keeping our customers at the sessions at JS@65 with existing members and foster financial
centre of our focus, we gain deep insights into their needs confidence with them. Over the past year, we have welcomed
and challenges to deliver innovative phygital experiences that more than 3,000 new programme members.
align with their ever-evolving expectations. A notable catalyst
for innovation within the Bank is our exclusive “Designed by
You” (“DBY”) community platform. This platform enables us to
reimagine insights discovery, simplify banking products, and
deliver financial experiences that truly prioritise our customers.
DBY boasts over 12,500 community members and facilitated
more than 46,000 engagements to date, which is an increase
of 34% and 59% respectively from the previous year. Since its
inception in 2021, our platform has received over 3,200 ideas

PILLAR 2: CUSTOMER-OBSESSED CULTURE (CONT’D.)
Advocating our brand promise of being “Built Around You” to exceptional experiences that not only meet but go beyond our
understand our customers’ perceptions and experiences, our customers' expectations.
Voice of Customer (“VOC”) platform, which collects customer
feedback on touchpoint experiences, has gathered feedback
from more than 286,000 customers.
During the year under review, we significantly reduced the

manual effort needed to analyse customer sentiment trends
by 53%, through the effective usage of machine learning.
We are further investing in building 19 new near- real-time
Tableau dashboards to equip the Bank’s product and channel
owners with real-time CSAT scores, providing an avenue to
make fact-based decisions.
With these advancements in place, our VOC initiative has

made substantial progress in improving our CSAT. Our channel
satisfaction and product satisfaction scores are approaching
our ambitious targets of 4.35 and 90% respectively. These
achievements are a testament to our customer-centric
approach and underscore our dedication to providing
CSAT Dashboard (Y-O-Y)
Channels Customer Satisfaction Product Applications Customer Satisfaction

97%
89%
94% 93% 91% 90% 90%
81% 82% 88% 85% 86% 85% 90% 87%
76%
Contact Branch Mortgage Personal

Center 4.21 4.26 4.46 4.34 4.09 4.39 4.49 4.39 (Application) 4.43 4.59 4.60 4.72 Loan 4.41 4.55 4.56 4.53
(Application)
93% 92%
87% 86% 92% 84% 83% 85%
84% 85% 89% 88% 84% 86% 90%
79%
Internet Mobile Auto Loan Credit Card

Banking 4.24 4.26 4.28 4.28 Banking 4.27 4.32 4.41 4.38 (Application) 4.47 4.51 4.56 4.57 (Application) 4.15 4.31 4.31 4.39
91% 91%
84% 86% 88% 87% 84% 85% 88% 86% 85%
72%
ATM 4.33 4.37 4.44 4.42 CRT 4.32 4.38 4.42 4.40 CASA 3.96 4.40 4.57 4.60
(Application)
FY2020 FY2021 FY2022 FY2023
Note: Percentages represent the Top 2 Box (“T2B”) scores, with T2B referring to the percentage of customers who rated us 4 or 5 out of the
5-point scale - satisfied or very satisfied customers. The number scores represent the average customer rating score out of the 5-point scale.
74 • CORPORATE

PILLAR 3: STRATEGIC PROGRAMMES
Building an Enriching Culture of Innovation through finance programme that provides funding to individuals who are
Knowledge Exchange unable to secure full time-employment.
Recognising the importance of interconnected ecosystems
in driving innovation, we actively foster collaborations with Furthermore, we have selected three impact start-ups
strategic partners, public institutions, and private organisations including Pandai, Accelerate Global, and Dialogue for All. In
beyond the banking industry. This enables us to encourage collaboration with the Edutech startup, Pandai, we are actively
experimentation, facilitate knowledge exchange, and cultivate pursuing opportunities to promote financial literacy among
a culture of innovation. One of our initiatives, the HLB LaunchPad young individuals. Through this partnership, we aim to provide
mentorship programme, supports young entrepreneurs and value-added services that complement our financial products
develops the local startup ecosystem. Through this programme, and enhance the overall financial wellbeing of the youth.
we co-create digital banking solutions that have the potential to Our partnership with Accelerate Global focuses on furnishing
shape the future of our society, building upon our strong belief underprivileged communities with the knowledge and skills
in supporting entrepreneurship. required to navigate in the digital world, enhancing their
economic prospects and social mobility. With Dialogue for All,
Since 2017, we have accumulated over 350 applicants to we aim to create meaningful employment opportunities for
pitch their inventive ideas. These pitches are catalysts of 33 differently-abled individuals, upholding our belief on diversity
collaborations that enabled HLB to offer value added services to and inclusive environment within the Bank.
our customers above and beyond financial services. In support
of the programme’s winners, our reputable network of mentors We also prioritise the development of future innovators who
have dedicated over 2,000 hours to date. They have exposed possess the ability to think creatively and deliver customer-centric
our winners to the market landscape, helped them build new solutions. Through a combination of structured learning and on-
capabilities and scale their business. the-job training, our Management Associates and Digital Graduate
Trainees are equipped with the necessary skills and confidence
For this financial year, we have forged partnerships with HLB to drive the Bank's digital transformation. We conduct initiatives
Launchpad participants, including PayWatch, Alfie Tech, and such as frequent Brown Bag sessions on customer experience
MADCash. With PayWatch we launched our Salary Advance and human psychology and in-house training programmes on
Employer Solution, a service that allows employers to offer Design Thinking and Agile methodologies. We also curated
their employees up to 25% of their earned salary in advance. digital courses on customer-centricity, emerging technologies,
This makes us the first bank in Malaysia to provide this highly and accelerating innovation to ensure that all employees have
sought-after employee benefit to corporates. Meanwhile, HLISB access to comprehensive learning opportunities. Under each
worked with Alfie Tech and MADCash to introduce a social series, all employees are guided in a comprehensive range

of topics, such as the principles of user-centred design, how In the latest edition last November, we successfully convened 90
natural language processing AI models are applied in customer participants, consisting of technology enthusiasts, developers,
service touchpoints, and how digital banking is reshaping the and start-ups to present their innovative ideas that can
future of financial services. Our initiatives have empowered our revolutionise the banking experience for customers through
staff to stay ahead of industry trends, cultivate innovation, and hyper-personalisation and the Metaverse.
contribute to the Bank's continued success.
During the three-day hackathon, 35 prototypes were developed,
As a digitally-obsessed bank, we recognise the importance with the top three ideas selected. Among these ideas were
of cultivating a network of individuals who share our passion a fun and customised bank statement solution, a mobile app
for experimentation. By fostering an ecosystem of like- that leverages psychology and AI to deliver highly personalised
minded innovators, we are empowered to explore emerging experiences for micro financial goals, and a banking experience
technologies, experiment with new concepts, and efficiently tailored to the lifestyle in the Metaverse. This hackathon was
implement transformative solutions. the first in Malaysia to explore this technology disruption for
potential use cases.
Our annual “Can You Hack It” hackathons showcase our openness
to experimentation and co-creation, as we strive to leverage
next-generation technology to deliver unique, immersive, and
personalised banking experiences for our customers. Since
2018, over 700 exceptional individuals have participated in our
hackathons, generating more than 300 ideas. Some of these
leading ideas have been turned into prototypes that could
potentially shape and contribute to the future transformation of
the Bank.
Moving Forward digitally driven and customer-obsessed bank, we recognise that

innovation is an ongoing and evolving journey. We acknowledge
Our "Digital at the Core" strategy is pivotal in navigating the the immense potential in next-generation technologies like AI,
rapidly changing market landscape, giving us the agility to big data analytics, Industry 4.0 solutions, partnerships with
accelerate our digital transformation journey. In embracing a startups and fintech firms, as well as the API economy and
digital future, we are committed to progressively enhancing our cloud-based solutions. The Bank’s direction in embracing these
phygital initiatives to deliver customer experiences that delight opportunities will enable us to advance and gain long-term and
them. Although we have the reputation of being a dynamic, sustainable success.
76 • CORPORATE

8 HUMAN RESOURCES (“HR”)
INTRODUCTION
Effective talent management remains a top priority in driving HLB’s people agenda. During the
year under review, we continue to work towards strengthening our talent pool and implementing
new initiatives which are aligned with our "Digital at the Core" ethos and "Built Around You"
brand promise. We are proud to highlight our key accomplishments on the talent management
front in FY2023.
Our Reputation as the Employer of Choice
HLB maintains a high-performance culture fuelled by skilled and driven talents with the right
mindset. The Bank values resilience, an aptitude for learning, and agility in a dynamic financial
landscape, leading to strategic hiring and retention.
Our people culture emphasises personal and professional growth, as reflected in our Employer Value Proposition (“EVP”). Through
various touchpoints, we showcase career paths to potential candidates, using multiple channels to attract suitable talents. Furthermore,
HLB actively builds relationships with academic institutions to foster a pool of well-prepared professionals, continuously supporting
talent acquisition efforts.
Collaborating with universities to scout for talents, we target key universities to attract desired talent by participating in career fairs
as well as conducting campus recruitment days. To support our regional business needs, we proactively engage with talent at our key
market hubs including Penang and Perak, which form part of the 20 engagement sessions we held during the year. These engagement
activities comprise of physical career fairs, on-campus recruitment days, virtual career talks and university and public career fairs.
With the pandemic behind us, we heightened our on-ground presence at key academic institutions via our participation in internship and career
fairs. Pictured (Clockwise from top right): Career talk at TARUC Penang with our regional business heads; campus recruitment day at INTI Subang;
our participation in Graduan Aspire Career Fair at KL Convention Centre and a Career Workshop at INTI Penang.

Our internship programmes have through its Management Associate and Graduate Trainee Programmes, with 50%
proven to be one of our most effective securing permanent positions in various divisions. This year, 51 individuals were
recruitment methods and remains our identified and shortlisted for the HLB Leaders Programme, adding to a total of 149
core outreach strategy. Interns gain employees chosen to bolster our pool of managers. The programme focuses on three
knowledge and valuable insights as well pillars aimed at nurturing and developing talent, including:
as establish working relationships with • An Individual Development Plan discussion between the talent, HR and the line
stakeholders, that prepare them for a manager to determine the pace of each individual in attaining their development
permanent role in our organisation. goals
• Developmental offerings tailored accordingly to the talent’s needs
To encourage our employees to • Opportunities to encourage cross-functional networking and co-operation
explore various career paths within
our organisation through learning and
development opportunities offered
internally, we organise monthly ‘career
coach’ sessions via our Virtual Brown Bag
lunch and learn platform. Participants are
given exposure to career progression tips
such as ways to nurture healthy ambition,
communicate with confidence and create
effective work relationships. These
initiatives have led to 884 employees
transitioning to new roles or receiving
promotions. Our employees can explore
diverse career paths within HLB, taking
on various responsibilities over time.
This approach fosters positive employee A monthly ‘career coach’ session is available to all employees for knowledge enrichment
experiences, retains institutional on topics such as career progression with the help of experts from different fields including
psychology, leadership and consulting.
knowledge, ensures team stability, and
boosts overall productivity. We ensure that our people managers are given the right training on how to retain key
talents through meaningful conversations which are carried out via our “Driving the
Since 2019, our LinkedIn follower base has People Agenda” workshops. Insights and outcomes that derive from these sessions
witnessed a growth from 29,000 followers are recorded as part of the performance management process on Workday for each
to approximately 101,000 followers to employee. During the year, our newly promoted and newly hired people managers
date. For this financial year, our follower were engaged through the workshops to obtain insights for employee career
base grew by 37% y-o-y. To fortify our aspirations and direction for possible internal recruitment opportunities.
presence further in the digital space, we
are working to pilot a full-fledged digital Elevating Professionalism in Our People
employer branding campaign which is
targeted to be launched in FY2023/2024 We ensure that comprehensive policies are implemented to bolster excellence
via Facebook and Google. We will in our organisation, to deliver value to all stakeholders. HLB’s strong compliance
continue to leverage on our social media and governance policies enable our employees to maintain the highest level of
platforms to deliver employer branding professionalism and competency. Annually, our employees are required to fulfil
efforts more efficiently. a minimum of 40 training hours with at least one training day focused on topics
of digital and/or sustainability. They also complete mandatory e-learning modules
Continuously Nurturing Talents quarterly through the HLBWorkday platform. With the latest developments at their
fingertips, they are empowered with knowledge to keep up with industry updates.
A crucial aspect of our talent management
process is building a sustainable talent Our new e-learning platform, Go1, which is due to be launched in FY2023/2024, will
pool to support the organisation's give all employees access to more than 80,000 modules curated from over 200 content
business goals. Since 2016, the Bank providers. Similarly, the platform is available through the HLB@Workday at any one
has successfully on-boarded graduates time, from any location.
78 • CORPORATE

& Development Management Policy.

Regular reviews of these policies ensure
their relevance in a changing landscape,
alignment with regulatory standards and
as guidance to our business goals.
We prioritise a safe and healthy

work environment to ensure that the
wellbeing of our employees is taken
care of. The Bank upholds a non-
violent workplace and will act against
unacceptable behaviours in any form of
discrimination, harassment (including
sexual harassment) or intimidation.
The Go1 platform will deliver a big learning and development impact for employees to grow We have in place our Code of Conduct
through productive engagements.
and Ethics (“CoCE”) which outlines our
Our new employees are introduced signed with AICB and the member stance on discrimination and sexual
to the organisation firsthand via a banks of the Association of Banks in harassment. The CoCE is available on
virtual onboarding programme that Malaysia (“ABM”) in October 2017, all our corporate website and employee
includes pre-read materials, self-guided key personnel in critical job functions intranet to ensure that our employees
e-learning, and virtual classrooms within these core areas are required have access to, and understand and
focusing on fundamental banking topics. to obtain relevant certifications within comply with the Code. The CoCE is also
For newly promoted people managers, five years of their appointment date. made known to them during the on-
two essential workshops, namely the We have identified 1,288 employees boarding process as well as through
“Coaching for Performance” and “Driving to complete the certification by 2028, the quarterly mandatory e-learning
the People Agenda”, form part of their out of which 39% are now pursuing modules.
required learning. These workshops instil their certifications while 26% have
values of ownership and accountability, completed their respective courses. We train our employees comprehensively
providing tools to manage their teams on OSH-related topics and the OSHA
effectively in all aspects of talent Upholding Policies, Processes (Amendment) Act 2022 where 195
management. Similarly, the Executive and Culture employees from the Central region
Presence workshop equips HLB Leaders participated in 11 Emergency Response
Programme participants and nominated At HLB, our values and policies form the physical workshops which took place in
employees of their Head of Division with foundation in guiding employees to find the second quarter of 2022. E-learning
skills to engage key stakeholders through the balance between prudent risk-taking sessions were rolled out in Q3 2022
positive personal brand, communicating and reward, which promotes a high- and made mandatory bank-wide. We
with confidence and impact as well as performance culture. We are guided by also introduced our First Aider physical
inspiring and influencing all employee our values to ensure that our actions workshops nationwide in the last
levels. are sustainable and add value to the financial year and we will be reorganising
communities in we are in (Here For The the sessions in this financial year to
We maintain a strong partnership Long Term); respectful and beneficial to cover newly appointed/existing first
with the Asian Institute of Chartered all (Collaborate to Win); accountable and aiders that were unavailable in the past
Bankers (“AICB”) in the five core areas can be realised (Decisiveness). At the workshops.
of governance, which are audit, anti- same time, employees are encouraged
money laundering (“AML”), compliance, to embrace change and not be afraid to The Bank prioritises employee training
credit, and risk. This collaboration do things differently (Innovation) and and development to ensure strong
ensures that our employees are celebrate new ways of learning (Have compliance culture and the safeguarding
furnished and certified with the Fun!). The values are supported by four of customers' interests. Training occurs
necessary skills to thrive in the ever- key policies - the HLBG Code of Conduct at organisational, team, and individual
changing banking landscape. As part & Ethics, Talent Management Board Policy, levels, focusing on practical applications
of the industry-wide commitment Remuneration Board Policy, and Learning for everyday scenarios. In addition, key

roles receive role-specific compliance Our role-based training continues to focus on upskilling Account Relationship Managers
courses, such as "No Training, No in Business & Corporate Banking and Credit Risk teams to conduct client-level ESG due
Sales" for SME banking employees and diligence and social risk and impact assessments. This year, 469 employees from the
"No Certification, No Sales" for PFS/ PFS Credit Division benefited from the Climate Change and Principle-based Taxonomy
PFS-i employees, ensuring product training. Leaders and sustainability experts throughout the organisation also benefit
knowledge, compliance, and customer from targeted training through conferences and workshops.
service skills for superior customer
experiences. To drive further awareness and engagement, our divisions also organise sustainability
initiatives to complement our bankwide actions. Examples include the PFS Credit
Division’s Go Green campaign, which saw employees recycle 16,000kg of paper, fabric,
To promote awareness and appropriate
metal and plastic.
conduct, 100% of the Bank's workforce
undergoes compliance e-learning
modules annually. Moreover, 1,434
customer-facing employees receive
custom role-based compliance training.
Assessments which require a 70%
pass score are conducted 30 days after
the training to gauge effectiveness
and knowledge retention, ensuring
adherence to learned policies and
procedures.
For Sustainability Month, the Bank organised a series of activities such as e-waste collection,
a webinar on food waste as well as workshops on transforming cooking oil into soap and a
Sustainability at the Core of Our
bazaar, with the participation of 1,910 employees.
Business Practices
Acknowledging the Best of Our Talents

Our ESG and Value-based Intermediation
Financing and Investment Impact (“VBI”)
HLB’s three key pillars of employee engagement, employee appreciation and employee
frameworks propel us to creating long- wellness form the foundation for the Bank to offer employees impactful experiences
term solutions for our stakeholders. All with us at every stage of their professional career.
levels of the organisations are exposed
to our sustainability capacity building Purposeful Employee Engagement
via bank-wide training sessions from
onboarding, mandatory e-learning to In FY2023, our engagement activities were based on three lenses:
new opt-in learning modules that are
published together with WWF. • To build employees skills and aspiration through monthly career coaching sessions
– conducted via virtual brown bag lunch and learning sessions
This year, over 1,600 employees have • To sharpen our focus on both physical and mental aspects of wellbeing – executed
completed modules covering various through our collaboration with our health vendor with the health screening activity while
aspects of sustainability, including our monthly ‘doctor in the house’ virtual sessions emphasised topics based on employees’
preparing corporate sustainability top outpatient concerns from the outpatient data of our healthcare providers
reports utilising sector-relevant • To focus on building community bonds – engaged employees through digital and
disclosures and best practices in physical touchpoints including Google Currents Photo contests and physical games,
engaging stakeholders. As of FY2023, enabling employees to have fun, connect, recharge and perform better at work
over 8,000 employees have completed
the mandatory sustainability e-learning, We also celebrated International Women’s Day by organising a sharing session with
and sustainability is now integrated into our Independent and Non-Executive Director Puan Fa’izah Binti Mohd Amin, where
the onboarding sessions for new hires, she connected with employees by relating her experience on career, leadership and
with more than 1,800 new hires attending people management. Other activities include the celebration of International Family
sustainability training during their Day, online contests celebrating Malaysian cuisines and the reinstating of physical
onboarding. games such as bowling.
80 • CORPORATE

The IWD sharing session

was organised to encourage
employees to maximise learning
opportunities by adopting a
growth mindset.
Fun activities such as sharing of personal favourite hot and spicy For International Family Day, we asked employees to share their
food enabled employees to participate and get to know favourite moments with their family, showing a side
each other more. of employees outside of work.
Physical games such as bowling were reintroduced, providing a platform for employees to engage with each other outside the workplace.

Meaningful Employee Appreciation
Our commitment to acknowledging outstanding contributions from our employees remain unwavering through our eTOUCH platform.
The year-long eTOUCH campaign culminates in Appreciation Day, during which our GMD/CEO extends his heartfelt gratitude and
presents a small gift to express thanks on behalf of the senior management team, honouring employees Bank-wide for their efforts
throughout the financial year.
We celebrated Appreciation Day at the end of the financial year by presenting gifts to all employees accompanied by a heartfelt appreciation
message from senior management.
Our eTOUCH platform remains key in cultivating a culture of appreciation for colleagues who have gone above and beyond their duty to help
customers, colleagues or others around them.
82 • CORPORATE

Our wellness activities provide a holistic

platform for employees to practise and
nurture long-lasting habits to improve
their quality of life.
Committing to Employee Wellness
The Bank is cognisant that the physical,

emotional and mental wellbeing of our
people is of utmost importance, and
we have in place wellness activities to
ensure that our employees are well taken
care of. This year, we organised several
virtual activities including runs and
exercise sessions, brown bag sessions
on physical and mental wellbeing as
well as releasing special health-themed
infographics.
We offer PlusVibes, a mobile-first

wellbeing platform, as a key touchpoint
to support our employees in building
personal resilience as well as physical
The PlusVibes all-in-one well-being app includes a visual representation of the user’s life areas
and mental wellbeing. The contents of (“Wheel of Life”). Users also have the option to speak to qualified listeners through messaging,
PlusVibes are available to all employees relaxation activities and inspirational content for employee self-care.
which consists of topics such as finance,
family, leadership, self-development, more attention, empowering employees to practice self-care as needed. If further
and relationships. The platform's Wheel assistance is required, employees can connect with qualified counsellors through the
of Life provides a visual assessment app. Additionally, the platform offers a list of relevant associations for employees to
to identify areas that may need explore and connect with if they choose to.
Sustainability
Statement
OVERVIEW
The HLB Sustainability Statement 2023 provides an overview of the Bank’s sustainability
strategy, journey and performance, encompassing the activities of HLB and its subsidiaries
(collectively, “the Bank''), including Hong Leong Islamic Bank (“HLISB”) in Malaysia, Singapore
and Hong Kong for the financial year from 1 July 2022 to 30 June 2023.
This statement has been prepared in accordance with the following (“TCFD”) Application Guide for Malaysian Financial Institutions
regulations, standards and guidelines: (“FI”), along with the Climate Change and Principle-based
Taxonomy (“CCPT”) and Climate Risk Management and Scenario
• Bursa Malaysia Securities Berhad (“Bursa Malaysia”) Listing Analysis (“CRMSA”) reporting requirements. Through these
Requirements on Sustainability Reporting frameworks and guidelines, we aim to disclose the efforts and
• Global Reporting Initiative (“GRI”) Standards impacts of our environmental, social and governance (“ESG”)
• United Nations Sustainable Development Goals (“UN SDGs”) performance via metrics and targets we believe to be relevant for
the financial services industry.
Aside from adherence to the above regulations, standards and
guidelines, our climate-related disclosures have been further A more detailed disclosure of our sustainability practices, complete
guided by the Recommendations of the Bank Negara Malaysia with GRI, TCFD and UN SDGs content index with its supporting
(“BNM”)’s Task Force on Climate-related Financial Disclosures limited assurance statements and reports are presented in HLB's
standalone Sustainability Report 2023.
Global ESG Indices and Assessments
We continuously endeavour to strengthen the implementation of ESG practices into our business operations. Testament to our ESG efforts,
we continue to be recognised in leading sustainability ratings and indices, which use comprehensive standards to evaluate sustainability
efforts. These include:
Morgan Stanley Capital S&P Global Corporate

FTSE4Good Sustainalytics
International (“MSCI”) ESG Rating Sustainability Assessment
• Constituent of FTSE4Good Bursa

• Achieved an ESG rating of • Scored 54 out of 100 as at 31 • Achieved a Low Risk rating
Malaysia index for the 6th
A, with a score of 5.0 during December 2022, which signifies score with an ESG risk
consecutive year
the 2023 MSCI ESG rating a 2-point improvement from the rating of 18.6 for the year
• Top 25% by ESG ratings among
assessment, an improvement previous year of assessment and 2023, a marginal drop
public listed companies in the
of ranking bands from our compares favourably to banking compared to the previous
FBM EMAS Index, which was
previous year’s assessment, at industry average of 28 year and is significantly
assessed by FTSE Russell
par with the banking industry • Currently placed in the 87th below the year’s industry
• Improved ESG score to 3.9 out of
average of 5.0 (which includes percentile within the banking average of 27.2
5.0, ahead of the overall banking
foreign banks) industry
sector’s average of 3.1
84 • CORPORATE
Sustainability
Statement
Sustainability &
Climate Approach
Given our significant reach and impact, HLB strives to do
business in a responsible manner to better address the
needs of our stakeholders. This has driven us to ensure
that sound business practices are embedded across the
organisation, underpinned by our robust governance
structure. Spurred by our efforts to provide a customer-
centric and seamless digitally-driven experience, we
continue to enhance our business practices, governance
structures and standards of conduct, to deliver meaningful
impact to all of our stakeholders.
Sustainability Themes
Our corporate vision remains to be an ASEAN financial services company that leverages digitalisation and innovation through our
products and services. We are determined to help customers succeed through personalised fair banking services. Apart from that,
we aim to create stakeholder value and provide our people with the best opportunities to reach their potential. As we strive to
embed our Sustainability Themes into the business, we have taken proactive steps that reflect our commitment to sustainability
and responsible practices.
Our Corporate Vision To be a highly digital and innovative

ASEAN financial services company
To help customers succeed through simple, relevant, personal and fair banking;
Our Mission To provide our people with the best opportunities to realise their potential;
To create stakeholders value
Our
Sustainability
Themes Digital Workforce Socially Responsible Environmental Community
at the Core Readiness Business Management Investment
Sustainability
Statement
FY2023 SUSTAINABILITY HIGHLIGHTS
Focus Area
GHG Emissions Auto Mortgage Renewable

(Malaysia) Loan/Financing Loan/Financing Energy Financing
Key Performance Indicator
Scope 3
Scope 1 & 2 (Business Travel, New Green Car Green Building/ Solar, Bioenergy,
(Operational Leased Asset - Financing for Township & Affordable Small Hydro &
Emissions) Downstream & BEV, PHEV & HEV Property Financing Any RE
Employee Commuting)
FY2023 Target
Baseline FY2019 is
Baseline FY2019 is
34,703 tCO2e and Newly Cumulative Cumulative
12,699 tCO2e and
target is 15% to 25% approved approved approved
target is Net Zero
reduction by FY2026 & RM240 million RM12.13 billion RM2.9 billion
by 2050
Net Zero by 2030
FY2023 Performance
Total emissions Total emissions Newly Cumulative Cumulative

recorded: recorded: approved approved approved
27,545 tCO2e 12,216 tCO2e RM391.96 million RM13.17 billion RM3.23 billion
Net Zero Ambition*
By June 2026 By June 2030 By June 2050
15% to 25% reduction of Net Zero for Net Zero for

GHG Emissions Scope 1 & 2 GHG Emissions Scope 1 & 2 GHG Emissions Scope 1, 2 & 3
*All ambitions are set from baseline FY2019.
For more details on Our Net Zero Ambition and Measures taken to achieve the Ambition, please refer to the Making The Sustainability Connection chapter on
pages 11 to 13 of the HLB Sustainability Report 2023.
86 • CORPORATE
Sustainability
Statement
MATERIALITY
The ever changing landscape of the global banking sector gives rise to mounting economic, environmental, and societal pressure.
To that end, we recognise the need to constantly keep abreast of emerging sustainability risks and opportunities, especially
those most material to us and our stakeholders. By leveraging on these material matters, we are able to strategise and prioritise
concerted efforts for the Bank to create long-lasting value.
In FY2023, we undertook a materiality assessment to validate and inform the Bank’s current and forward-looking strategy as
well as develop a more profound approach to ESG reporting and disclosure. This exercise took into account the diverse views of
a broad range of stakeholders across our operating entities, including the Board, senior management, employees, regulators,
investors, analysts, customers, media, vendors, suppliers, and the community.
FY2023 Materiality Assessment Approach
Topic Identification Stakeholder Engagement Prioritisation & Validation
Process the inputs gathered to

Identify key sustainability topics
Capture internal and external produce our FY2023 Materiality
through comprehensive review of
stakeholders’ views and understand Matrix, which was validated by
ESG standards and industry
what matters to them through online the Sustainability Committee
global/mega trends, backed by deep
surveys and engagements. and endorsed by Board-level
understanding of our value chain.
Committees.
FY2023 Material Topics
HLB’s materiality assessment approach encourages recognition and communication of the impact of sustainability topics on our
performance, as well as the impact of our business activities along the value chain on the community and environment. This year,
the Bank has identified 16 topics material to our operations, which are mapped in the materiality matrix and further explained in the
following table.
HLB Sustainability Material Topic Description

Themes
Digital Finance and Leveraging advanced data analytics and digital systems to develop innovative
Innovation products aligned with customers’ needs, whilst simultaneously increasing
accessibility of our offerings to new and existing customers.
Customer Embedding a customer-centric culture within the organisation and undertaking

Experience & initiatives to improve end-to-end customer experience as well as customer
Satisfaction satisfaction; leading to increased customer retention.
Digital at
the Core Privacy, Data Protecting employees’ and customers’ data from unauthorised access, cyber
Protection & attacks and threats via responsible collection, handling, storage and protection of
Cybersecurity personal and proprietary data.
Good Governance Committed to conducting our business and operations professionally, while
& Ethical Business adopting the highest standards of ethics, integrity, transparency and accountability,
Conduct in order to maintain stakeholders’ trust in the organisation.
Socially
Responsible
Business
Sustainability
Statement
HLB Sustainability Material Topic Description

Themes
Sound Risk Upholding a strong compliance culture throughout the organisation to ensure
Management & compliance to applicable laws, regulations, and standards as well as the
Compliance prevention of financial crime (e.g. money laundering, terrorism financing, fraud,
corruption and bribery).
Adopting a systematic and comprehensive risk management approach in

identifying and mitigating emerging risks to our business activities by investing
in people, technology, policies and processes.
Sustainable & Integrating ESG factors into the design, evaluation, and management of our
Responsible financial products and services (e.g. green loans, green bonds, islamic finance
Socially Financing for sustainability) to encourage higher adoption of sustainability principles by
Responsible customers.
Business Fair Treatment Ensuring fair treatment of our customers and clients in the conduct of our business
& Dealing of by prioritising their financial needs and risk appetite, as well as providing them
Customers transparent, accurate, sufficient and easily understood information about our
products and services.
Sustainable Supply Upholding sustainability procurement principles across the supply chain via robust
Chain supplier policies, assessment and engagement practices, whilst also encouraging
supplier diversity to include local businesses.
Managing Our Responsibly optimising resource consumption to effectively manage the

Operational environmental footprint of our operations (e.g. energy management, waste
Environmental management, water consumption, GHG emissions).
Footprint
Building Climate Identifying and integrating climate-related risks into our strategies, business
Environmental
Resilience to operations and across our value chain via our risk management framework, in
Management Facilitate a Low- order to facilitate a just transition to a low-carbon economy (e.g. reducing exposure
Carbon Transition to high-risk sectors, supporting low-carbon solutions).
Talent Attraction, Investing in talent attraction, development and retention to cultivate a pool of
Development and high-quality talent, whilst also fostering a growth mindset in our employees to
Retention ensure their adaptability in today’s ever-changing business and technological
landscape.
Diverse and Promoting and embracing a diverse and inclusive workplace, whereby all
Inclusive Workforce employees are treated equally and without discrimination, thus fostering
productivity and innovation.
Workforce Employee Well- Creating an inclusive and supportive work environment which supports employee
Readiness Being, Health & health and safety, promotes their well-being and improves work-life balance via
Safety effective policies, processes and labour standards.
Fostering a Establishing a corporate culture that embraces and promotes sustainable

Sustainability- practices, values, and behaviours throughout the organisation (e.g. encouraging
Driven Culture employee volunteerism, implementing ESG capacity-building programmes).
Supporting Social Developing strategic partnerships with social enterprises to implement

Enterprises and community empowerment programmes that create long-term environmental
Communities and social impact for underserved communities across our operations.
Community Financial Inclusion Enabling the accessibility of affordable financial services to all segments of
Investment & Literacy society and promoting financial literacy, thus empowering individuals and
businesses to improve their financial well-being.
88 • CORPORATE
Sustainability
Statement
MATERIALITY MATRIX
The 2023 Materiality Assessment outlined the priorities of the Bank’s stakeholders on matters relevant to ESG. This exercise
enabled a more informed decision making process, leveraging topics that are important to the Bank’s stakeholders as well as
HLB to further our sustainability journey in depth and reach.
Prior to the assessment process, material topics were identified and developed on global best practices to ensure matters most
pertinent to us and our stakeholders were accurately reflected. 16 material topics were identified by the Bank, reflecting our
ambitions in the sustainability space, and cascaded to our stakeholders, both internal and external, for deliberation. This process
resulted in the following materiality matrix, where each material topic obtained a minimum rating of 4.1 out of 5.
HLB 2023 Materiality Matrix

5.00
4.00
Influence of Stakeholders’
Assessments & Decisions
3.00
2.00
1.00
0.00 1.00 2.00 3.00 4.00 5.00

Significance of HLB’s Sustainability Impacts
HLB 2023 Materiality Matrix

5.00
Influence of Stakeholders’ Assessments & Decisions
Privacy, Data Protection &

Cybersecurity
4.75
Good Governance & Ethical Business

Sound Risk Management
& Compliance
Employee Well-Being, Health & Safety Customer Experience

& Satisfaction
4.50
Supporting Social Enterprises Talent Attraction,

& Communities Financial Inclusion Fair Dealing & Treatment of Customers
& Literacy Development & Retention
Diverse & Inclusive Workforce
Managing Our Operational
Environmental Footprint Fostering a Sustainability-Driven Culture Digital Finance
& Innovation
4.25
Building Climate Resilience to Facilitate the Low-Carbon Transition

Sustainable Supply Chain Sustainable & Responsible Financing
4.00 4.25 4.50 4.75 5.00

Significance of HLB’s Sustainability Impacts
HLB SUSTAINABILITY THEMES

Digital at the Core Socially Responsible Business Environmental Management Workforce Readiness Community Investment
Sustainability
Statement
In comparison to the 2021 Materiality Assessment results, the Bank’s priorities remain largely consistent with minor shifts in certain
areas. As an integral pillar in the economy, Cybersecurity, Good Governance and Sound Risk Management and Compliance remain as
priorities to the Bank, as evidenced in the materiality matrix, and further denoted by our progressive efforts to ensure measures are
in place to address risks associated with these material topics.
Beyond stewarding effective governance, our efforts in Fair Dealing and Treatment of Customers and Sustainable Supply Chain material
topics have also borne results as we note a decrease in priority from our stakeholders, from the previous assessment conducted in
FY2021.
True to our theme of Workforce Readiness, we see strong value in developing and maintaining a productive and effective workforce
as we look to deliver value to our customers. As an increasing priority to the Bank, this is reflected in our enhanced efforts to attract,
train, and retain our talent, showcased throughout this report.
Elsewhere, our Community Investment material matters have also garnered increasing attention from our stakeholder groups across
our value chain. In line with this, the Bank is ramping up efforts to foster engagement and continue delivering impactful value to the
community.
Materiality Assessment Phased Approach
Year 1 Year 2 Year 3
Comprehensive materiality Assessment and review of Assessment and review of

assessment Year 1 findings Year 1 and 2 findings
Moving forward, the Bank is intent on enhancing our materiality assessment through a phased approach across three years beginning
FY2023. Next year, we aim to conduct structured interviews and focus groups with HLB’s internal and external stakeholder groups to
identify the risks, opportunities, and impacts associated with all material topics. In Year 3, consolidation of these collective efforts will
lead to a comprehensive materiality assessment, enabling the Bank to stay abreast of current trends and issues pertinent to us and
our stakeholders.
90 • CORPORATE
Sustainability
Statement
SUSTAINABILITY GOVERNANCE
Robust corporate governance and clear leadership are crucial to our organisation’s success,
paving the way towards achieving the Bank’s sustainability ambitions and enabling us to
facilitate a smooth and just transition for the communities that we serve. To that end, HLB’s
sustainability governance in integrating ESG practices throughout the bank is driven from the
top with a strong sense of accountability.
Board Roles and Responsibilities
Forward-looking sustainability goals and targets are a fundamental step in governing for a better future. By defining targeted and
measurable objectives, we commit to implementing initiatives that promote environmental, social, and economic well-being. These
goals serve as a compass, guiding decision-making and resource allocation towards more sustainable practices and outcomes.
HLB’s Board of Directors leads the organisation’s progressive journey towards sustainability, and is supported by the Bank’s
senior management and staff. The Board ensures the Bank’s strategic initiatives support long-term value creation, taking ESG
concerns and corresponding risks and opportunities into account. As the Bank’s highest governing body, the Board is responsible
for overseeing Board-level committees that have oversight on areas relating to sustainability, encompassing climate change.
Supporting the Board in effectively carrying out its functions are the following governing bodies:
Frequency of meetings
BOARD OF DIRECTORS related to Sustainability
in FY2023
To establish a sound governance structure for the implementation of
sustainability efforts and practices in business operations, to ensure that 2
sustainability is embedded in business operations
BOARD RISK MANAGEMENT COMMITTEE (“BRMC”) - HLB

AND BOARD AUDIT AND RISK MANAGEMENT COMMITTEE (“BARMC”) - HLISB
Supports the Board in overseeing the management of the
4
Bank’s sustainability strategy and ESG risks
SUSTAINABILITY COMMITTEE (“SC”)

Composed of senior management and act as the enabler of the Bank’s sustainability 4
and VBI strategies and initiatives; as well as climate-related goals
SUSTAINABILITY WORKING COMMITTEE (“SWC”) As and when necessary

Multiple SWC groups to steer and execute the Bank’s sustainability strategies, for each SWC group
including climate-related strategies and initiatives throughout the year
SUSTAINABILITY DEPARTMENT WITHIN

SUSTAINABILITY RISK DEPARTMENT WITHIN
MARKETING, COMMUNICATIONS & ANALYTICS
GROUP RISK MANAGEMENT (“GRM”)
(“M&C”)
Coordinates and monitors the Bank’s sustainability Responsible for reviewing and validating the
efforts and integrate financial and non-financial sustainability and climate-related risks while
results with sustainability initiatives monitoring the progress of related initiatives
Sustainability
Statement
Sustainability Awareness at the Board and Senior Management level
Cultivating sustainability awareness amongst the Board members and Senior Management includes the need for training on
sustainability knowledge including climate-related risks and opportunities on a regular basis. In line with this, we have sent
two of our directors to attend the Listed Entity Director Programme (LED) on ESG Essentials in September 2022, organised by the
Singapore Institute of Directors. In March 2023, one of our directors attended the Asia Business School’s Leadership for Enterprise
Sustainability Asia 2023 programme and four more directors went to the PwC ESG Briefing. This is our ongoing commitment in
ensuring our directors gain more comprehensive knowledge and stay on top of sustainability-related developments.
To further strengthen the awareness of sustainability within the organisation, particularly at senior management level,
our annual HLB Expert Session in FY2023 focused on Carbon issues. The session, which was originally planned for June
2023, was held in July 2023 with experts from the Green Building Council, Bursa Carbon Exchange, and Energy Commission
sharing their knowledge and latest developments in their respective carbon and energy fields to our senior management
and heads of departments. The annual HLB Expert Engagement Session is a series of engagements that features subject
matter experts on thematic and trending topics that are most relevant to the Bank’s sustainability initiatives and strategy.
Ethics, Integrity, and Compliance
Our Code of Conduct and Ethics ensures that all our employees, We actively provide training and awareness initiatives to our
subsidiaries and affiliated business partners comply with the employees in regards to ABC-related matters. Employees are
highest standard of professionalism and ethics in the conduct mandated to complete required e-Learning courses conducted
of our business. We make a conscious effort to ensure that the via HLB@Workday, our people and performance management
principles outlined in the Code are adhered to throughout our platform. These courses are delivered in a blended format
entire organisation. encompassing videos, reading materials, assessments, covering
topics such as ABC, AML/CFT, Code of Conduct & Ethics, Banking
Upholding Ethics and Integrity Secrecy, Shariah Compliance and Data Protection.
In FY2023, we continued with our mandatory and role-based

The Bank strives to establish high quality work culture and is
ABC training to all employees. With the HLB@Workday platform,
committed to comprehensive and positive work ethics and
we are able to provide training to all levels of the organisation,
integrity. It is our utmost priority that our employees observe the
including our Board and Senior Management. This year, we rolled
highest standards of ethical and professional conduct.
out mandatory bankwide e-learning to more than 400 contract
staff and over 8,000 employees bankwide.
In line with global best practices and good governance approach,
we conduct a corruption risk assessment of the overall Bank’s All employees are required to complete e-Learning courses
operations at least biennially. Cases regarding misalignment to on Compliance as part of Mandatory eLearning. On top of the
the ABC, if any, are deliberated by the Disciplinary Committee bankwide mandatory e-learning, selected employees, depending
(“DC”), followed by the RCGC and the Board of Directors during on their roles, will be assigned additional role based compliance
the BRMC or BARMC meetings, which include appropriate action courses in order to obtain the knowledge required for their
taken. We did not receive any reports of cases in FY2023. respective roles. Assessment requiring a 70% pass score will be
triggered 30 days post workshop and employees that do not pass
HLB’s Anti-Bribery and Corruption Compliance training initiatives within the given 5 attempts will be required to re-attend the
solidifies our zero-tolerance policy towards corrupt activities, training. 17 members of our senior management and Board of
including bribery. The Ethics and Integrity Unit led by the Bank’s Directors completed a half-day refresher training on Corporate
Ethics and Integrity Officer (“EIO”) observes the content of our Liability Provision on Corruption under the MACC Act 2009.
ABC Programme that focuses on comprehensive, practical, and Additionally 50 Global Markets employees underwent role-based
effective policies for curbing bribery and corruption. training for Anti-bribery and Corruption and Corporate Liability
under Section 17A MACC Act 2009.
For more details on Our Governance Approach, please refer to the Governance chapter on pages 19 to 25 of the HLB Sustainability Report 2023.
92 • CORPORATE
Sustainability
Statement
SOUND ESG RISK MANAGEMENT
In FY2023, we continued to develop our Sustainability Risk Monitoring Reports to track bank-wide ESG initiatives and their
implementation progress for long-term tangible benefits. These reports serve the purpose of facilitating discussions and
gathering input regarding the significant impacts and opportunities related to these initiatives. Subsequently, the reports are
presented at the SC and BRMC meetings.
We believe that aligning business growth with environmental protection goals is pivotal to generate a positive impact on the
communities and environments that we operate in. We have progressed in embedding ESG considerations into our interactions
with stakeholders and daily business practices as well as for our products and services. In addition to that, we are driven to
implement an efficient risk management structure that balances risk mitigation while promoting growth.
This ideal drives our sustainability progress and aspirations, leading to our dedication in promoting sustainability within our
business value chain and network of stakeholders. We are well aware that our business engagement with organisations and
individuals creates social and environmental impacts, be it directly or indirectly.
Thus, ESG risk remains a material risk to the Bank as illustrated in our Enterprise View and Management of Risks diagram below.
Board of Directors
Top Down
Effective stewardship and control
HLB HLISB
Monitoring & Reporting
Set Risk Appetite & Board Risk Board Information Board
Board Risk Board Information Board Audit Risk
Tolerance Limit Management Technology Committee Audit Risk
Management Technology Management
Committee Management
Committee Committee Committee
Committee
Present single view of risks and to ensure adequate policies

Set Policies and and controls within the Group
Bottom Up
Capital Allocation
Group Risk Management & Group Compliance
Credit Market Operational Liquidity IT & Regulatory Bribery and ESG Pandemic Business Shariah
Risk Risk Risk Risk Cyber Risk Compliance Corruption Risk Risk Related Risk Continuity Risk Risk
Daily management of risks, limits, policies, procedures, and reports
As such, a holistic approach of sustainability integration and the ESG risks that come with it are considered within the Bank’s
Sustainability Risk Governance Framework and risk management strategies.
We consider the Sustainability Risk Governance Framework an integral part of our sustainability journey in ensuring the continuous
delivery of long-term value with community and environmental considerations. The adoption and implementation of this framework
creates a systematic and structured approach in working towards a progressive sustainability journey.
Sustainability
Statement
In managing and mitigating identified ESG risks, which includes climate-related risks for example physical and transition risks,
management provides periodic reporting to the BRMC on execution statuses as well as the results attained. This is coordinated and
monitored by both the Sustainability department and the Sustainability Risk department, using the Three Lines of Defense (“3LOD”)
model. The 3LOD model serves as a conduit as we seek to manage the exposures and impediments that prevent the achievement of
our corporate objectives, while ensuring the mitigation outcomes are in line with our Sustainability Themes. In order to address these
challenges, we adopt a structured risk management approach as follows:
STEWARDSHIP
Sustainability and
Sustainability Risk
Departments
Board of Board-level Risk Sustainability Sustainability Working

Directors Management Committees Committee Committee
1st Line 2nd Line 3rd Line

01 Business lines/departments 02 Group Risk Management 03 Group Internal Audit
• Responsible for identifying, • Facilitates the setting of risk • Provides independent assurance on
mitigating and managing ESG policies and risk measurement, and verification of the effectiveness
risks arising from their business monitoring of risk metrics and of the implementation of the
activities/operations. escalation of risk reports and Bank’s ESG policies and operations.
concerns to management and
Board.
• Provides advisory for and conducts
validation of bank-wide ESG
initiatives including in the areas of
policies and governance as well as
in risk monitoring and reporting.
Risk Management Subject Matter Risk Management Approach
Sustainability Sustainability Identify Monitor Escalate

Business Strategy Strategic Initiatives and Measure and Report and Mitigate
3 Lines of Defense Model

Exposures Impediments
Accountability
Desired Outcomes Change Management

94 • CORPORATE
Sustainability
Statement
EFFECTIVE GOVERNANCE FOR CLIMATE RESILIENCE
Climate Strategy
Adopting industry best practices, we have formulated and implemented frameworks and policies with ESG and climate importance
embedded. These frameworks apply to vendors, SME, commercial, and corporate customers, and even retail and wealth management
customers. In addition, we have also embedded the environmental framework into our operations.
Climate Governance
We are aware that incorporating climate risk considerations into our policies and sector standards forms the foundation for identification
and management of climate-related risks across our company. In an effort to create long-term value for our stakeholders, strengthening
climate risk management becomes our priority.
We continue to disclose our approach to managing climate-related risks and opportunities, aligned with the TCFD recommendations.
The Bank has taken guidance from JC3’s TCFD Application Guide for Malaysian Financial Institutions in developing our climate-related
disclosures around the four thematic areas: Governance, Strategy, Risk Management and Metrics and Targets.
To ensure robustness of HLB’s climate governance, several measures have been implemented across the organisation, including:
Internal Reporting • Sustainability-related meetings held throughout FY2023, where climate-related topics (e.g.
on Climate carbon offsetting initiatives, physical risk identification and assessment) were discussed.
Progress
Sustainability and • All of our directors have knowledge and skills in corporate governance, risk management
Climate-related and/or Sustainability.
Risk Board training
• The Bank’s senior management team is assessed against scorecard objectives which are
Senior
aligned with the Bank’s sustainability and climate-related targets and strategy.
Management
• SC, SWC and Employees’ KRA are linked to sustainability and climate-related non-financial
Remuneration
performance targets commencing FY2022.
Climate Risk Management
The Bank views climate change as an emerging risk that could impact our operations hence our ability to provide value to our
customers and all of our stakeholders. We recognise physical, transition and liability risks may transfer through microeconomic and
macroeconomic perspectives and subsequently impact the Bank’s performance. These risks may potentially have both financial and
non-financial impacts on our business and portfolio exposures. We categorise climate-related risks based on 5-year intervals, aligning
with the Paris Agreement’s stipulation that each member is required to communicate their NDCs every 5 years. Furthermore, we
consider the repayment maturity of our loan and financing portfolios, which generally ranges from 4 to 15 years, depending on the
specific products.
For more details on Potential Climate-related Risks and Its Impacts, and Scenario Analysis, please refer to the Governance chapter on pages 30 to 35 of the HLB Sustainability Report 2023.
Sustainability
Statement
Climate-related Opportunities
Numerous initiatives have been introduced and implemented with the aim of mitigating and adapting to climate-related risks. This,
strengthened with the heightened awareness of climate-related risks, has led to the emergence of new climate-related opportunities
throughout the Bank.
By capitalising on climate-related opportunities, the Bank has embraced an integrated operations model that seamlessly aligns with
our shift towards a low-carbon transition through enhancing our ability to seize opportunities in responding to physical and transition
risks. This journey has driven the review and transformation of our operations, with no compromise on safety, comfort, and reliability
of the Bank’s physical operations.
Green and
Sustainable Products, SME, Commercial and Corporate Customers Retail Customers
Services & Market
Renewable Energy Financing Solar Plus Financing
Green Financing Green Mortgage and Affordable Property Financing
Green Car Financing
Sustainable Investing Green Securities: Green Bond/Green Debt Financing
Climate-resilient Operations
As we transition towards a low-carbon operations model, we aspire to optimise efficiency by leveraging digital innovation initiatives.
To this end, we are actively exploring ways to optimise our internal processes and streamline our operations, which in turn would
minimise resource consumption. With the latest technologies integrated, we are committed to driving greater efficiency and resource
utilisation, while maintaining the highest standards of service for our valued customers.
Climate-resilient Operations
Enabling cost-savings, optimising efficiency and reducing our carbon footprint
Resource Efficiency Energy Source
Transition to more resource-efficient buildings, reducing Use of new technologies, lower-emission sources of
water and electricity usage and consumption, while energy and supportive policy incentives.
adopting recycling practice.
Impact to HLB:
Impact to HLB: • Reduced exposure towards GHG emissions resulting in
• Improvements in health and safety through a reduction reduced sensitivity to changes in the cost of carbon
in air pollution resulting from cleaner combustion • Higher returns on investment in low-emission
• Reduction in energy, water and maintenance costs technology
• Reputational enhancements resulting in increased
market take up of the Bank’s products and services
Our Initiatives
• Completed EE&C Measures in Hong Leong Tower and PJ City Tower A; and in the midst of completion for bank-owned
branches
• In FY2023, we reduced 844 tCO2eq for Scope 1 and 2 emissions for our Malaysian operations compared to FY2022
96 • CORPORATE
Sustainability
Statement
BUILDING RESILIENCE
Turning Climate Ambition Into Action
As a financial institution, we recognise that we are well-positioned to influence the transition towards a low-carbon economy. We are
cognisant that operationalising our ambitions is essential to our business growth and ability to create long-term value. Therefore, we
have developed robust action plans that effectively translate our ambitions into tangible steps towards achieving our sustainability
goals and targets.
We are guided by our carbon-neutrality ambition, including our commitment to achieve Net Zero emissions by 2050, as a way of
strengthening our climate pledge. Our ambition forms the foundation to demonstrate our dedication to sustainability and responsible
corporate citizenship. In FY2023, we have taken significant strides towards enhanced sustainability reporting by becoming a signatory
to PCAF as we dive into the calculation of financed emissions.
To achieve our Net Zero goal, we have adopted a multifaceted approach that encompasses various aspects of our business. This
includes the provision of green debt financing through financing access to renewable energy, green transportation, and supporting
green developments as well as further enhancing our EE&C measures across the organisation.
Promoting Cleaner Energy

Bioenergy
Any RE* RM458.82 million
The transition to a low-carbon economy
RM182.30 million Small Hydro
relies heavily on moving away from
high carbon emitting sources to more RM163.59 million
sustainable avenues. To this end, we have
revised out RE Financing commitment,
which was initially set at RM500 million
for a period of 5 years starting in 2019,
to RM4 billion by FY2025 which includes Total Approved
working capital, term financing, contract Renewable
financing, and trade lines. By the end of Energy
FY2023, we have approved over RM3.2 Financing:
billion of financing, encompassing various RM3.2 Billion Solar
projects including bioenergy, solar, hydro RM2,425.82
power and other Renewable Energy million
projects. The result of our RE Financing is
expected to save over 800,000 tonnes of
*Any RE consist of customers with facilities that is not concentrated on a single RE resource
CO2 equivalent emissions in a year.
HLB Renewable Energy Financing
The Bank is playing its part in contributing to Malaysia’s Renewable Energy Roadmap through the provision of access to RE
Financing solutions. The provision of these financing solutions in the country drives accelerated growth of RE usage.
At present, the Bank’s RE Financing mix sees the largest contribution from solar energy financing.
HLB RE Proposition
Customised Financing Solutions for Renewable Energy Projects with our in-house RE Specialists.
For more details on Building a Sustainable and Responsible Business, please refer to the Building Resilience chapter on pages 42 to 49 of the HLB Sustainability Report 2023.
Sustainability
Statement
FY2023 Key Highlights
Renewable Energy Financing Green Car Financing
Approved over RM3.2 billion of financing, encompassing various FY2023 Green Car Financing - RM391.96 million consists of
projects including bioenergy, solar, hydro power and other Renewable Battery Electric Vehicle (BEV) - RM103.83 million
Energy projects. The result of our RE financing is expected to save over Plug-in Hybrid Electric Vehicle (PHEV) - RM175.54 million
800,000 tonnes of CO2 equivalent emissions in a year. Hybrid Electric Vehicle (HEV) - RM112.59 million
Green Building/Township and Affordable Property Financing
Total Outstanding Total Outstanding Green

Total Outstanding Affordable Total Outstanding
Green Building/ Building/Township and
Property Financing Mortgage Portfolio
Township Financing Affordable Property Financing
RM 3.97 billion RM 9.22 billion RM 13.17 billion* RM 95.7 billion
*There is Affordable Property Financing which is also categorised under Green Mortgage Financing amounting to RM28.36 million.
BCB ESG Policy & Assessment Framework
Expanded our High Social risk considerations to Organised two physical Conducted five closed-door sessions with
include health and safety; sustainability roundtables selected customers from the Manufacturing,
social impact; and foreign labour recruitment on energy efficiency and green Chemicals, Real Estate and Construction sectors,
process as well as accommodation, supply chain, with a total number aimed to provide personalised support on how
guided by the International of 200 participants attending the Bank can help them in their ESG
Labour Organisation (“ILO”) indicators. which comprises our business and transition journey.
corporate banking customers.
HLB Green Bond
Renewable Energy Green Building Sustainable Transportation

• Proceeds may be allocated towards • Purchase of highly-rated green • Purchase of Electric Vehicle or Hybrid
the financing of Large Scale Solar properties by customers (Gold and Vehicles by consumers (tailpipe CO2
Photovoltaic ("LSSPV") projects above) emissions of less than 75g per km per
• Capacity: 161 MW • Enabled 2,049 retail customers to passenger car)
• Annual Generation: 225.6 GWh purchase homes with green building • Financed 2,578 electric and hybrid
• Annual Carbon Avoidance: Close certifications with ratings of Gold consisting of:
to 176,000 tonnes CO2 based on and above awarded by recognised • BEV - 527
current established national emission certification bodies • PHEV - 2,051
avoidance coefficient factor • Platinum Green Building Certified
Properties: 495
Note: The figures on Solar PV assets/projects are
• Gold Green Building Certified
based on the assumption that the plants
commence operations and perform at the Properties: 1,554
declared capacity.
98 • CORPORATE
Sustainability
Statement
SUSTAINABILITY IMPACT
Sustaining Our Digital Momentum Innovative Digital Solutions
We remain cognisant of our digital banking performance, hence The Bank’s Digital At The Core theme has been a guiding light
in FY2023 we saw a 10% growth in corporate internet banking in creating innovative digital solutions. Sticking true to the core
users, 12% growth in retail internet users and a 15% growth value of the theme, we strive to develop and offer a range
in mobile banking users from previous years. This marks more of solutions to enhance our customers banking experience.
than 80% digital penetration across the Bank, an 8% growth Our range of solutions serve to create positive environmental
from FY2022. The domestic economic growth indicates growing impacts while giving us an avenue to develop and enhance the
economic productivity and consequently, the need for more delivery of our financial metrics.
financing solutions.
Tailored Solutions in Sustaining a Digital Momentum
For SME, Commercial and

For Retail Customers For the Youth
Corporate Customers
Apply@HLB & HLB Wallet HLB@Kampung HLB Pocket Connect Cashless Lagi Senang
HLB Connect App HLB Connect Retail HLB@School HLB ConnectFirst
Through these digital banking solutions, we are able to enhance our customers’ experience through flexible and secure digital banking
services via internet and mobile banking platforms for better convenience. Our digital touch is also evident in our branches, aligning to
our ethos of customer centricity. The deployment of our InBranch Tablet services, like our other digital solutions, is aimed at improving
the banking experience for all of our customers, across all their needs.
HLB@Kampung HLB@School
In partnership with PayNet, HLB rolled out digital HLB@School programme offers a cashless ecosystem
payment tools that helped in transforming Sekinchan to for schools, while nurturing financial and environmental
be the first cashless kampung in Malaysia. This initiative literacy among students. Aimed to encourage financial
is intended to popularise the town as a full-fledged literacy and financial inclusion and inculcate environmental
holiday destination for locals and foreigners, in line with stewardship at a young age, the programme facilitates
its ‘Visit Sekinchan 2023’ campaign. Equipping around digital transformation by equipping the students of
800 businesses in Sekinchan with a HLB DuitNow starter these schools with the HLB 3 in-1 Junior Account, which
kit that aids cashless transactions, the Bank is dedicated comes with a savings account with fixed deposit, and
to closing the digital gap between urban and non-urban a reloadable debit card that will allow them to make
areas. 258 businesses onboarded and transitioned cashless payments in their schools.
to cashless under the HLB@Kampung Programme in
Sekinchan. Our future commitment is to onboard 6
kampung under the HLB@Kampung Programme in 59 more schools
FY2024. onboarded in FY2023 16 schools in Kota
making it a total of Kinabalu were recognised
68 schools, an 88% as “Cashless Schools” by
increase compared to PayNet
FY2022
To roll out to 50 schools in FY2024 which will further

develop a cashless ecosystem and promote financial
literacy
Sustainability
Statement
CUSTOMER EXPERIENCE AND SATISFACTION
Innovating and Enhancing Customer Experience The CX Lab is a culmination of contributions from stakeholders
and collaborators to innovate and curate customer journeys
The influence of digital technology on the financial sector has as well as products and services. The fruits of the CX Lab are
parallelly influenced customer needs and expectations when contributory to the inputs from our customers, cross-functional
engaging financial services. To ensure a seamless experience, business, operations & technology teams, and external partners
we use our Customer Experience (“CX”) lab to reach out to (BigTechs, FinTechs, start-ups, academia & other value partners).
customers, perceiving their growing and changing demands
and digital adoption as opportunities to improve. We leverage In FY2023, we collected a total of 286,966 feedback via our Voice
this to create an experience that is simple. of Customer (“VOC”) platform. Based on our platform, we have
gathered over 46,000 suggestions and ideas from our customers
on CX improvements.
The Bank continues to monitor the impact of our initiatives in improving CX through Customer Satisfaction Scores.
FY2023 Customer Satisfaction Scores
4.34 out of 5 4.39 out of 5 4.28 out of 5

for ‘Customers Calling Contact Centre’ for ‘Customers Visiting Branch’ for ‘Internet Banking Users’
4.38 out of 5 4.41 out of 5 4.7 out of 5

for ‘Mobile Banking Users’ for ‘SST Users’ for ‘HLB Pop-up’
Reaching Out to Customers

In FY2023, we piloted our HLB Pop-up concept to address the gaps in customers' accessibility to brick-and-mortar branches
while innovating new ways to explore and reach out to new potential customers. 10 HLB Pop-ups were constructed in malls,
exhibition halls and trade expos with a comfortable relaxing set-up, providing free coffee and popcorn as conversation starters to
encourage the public to engage with us on their financial queries. The HLB Pop-ups received a promising engagement with over
5,000 prospects and provided more than 1,000 financial advisory sessions collectively. Based on the Customer Satisfaction survey
conducted with prospects who received financial advisory from the pop-ups, we were rated 4.7 out of 5 on average for overall
experience satisfaction.
100 • CORPORATE
Sustainability
Statement
SUPPORTING SOCIAL ENTERPRISES AND COMMUNITIES
HLB Jumpstart
Social enterprises are pivotal in creating value to the society while also contributing positively to the economy. The HLB Jumpstart
programme was created with the aim of making transformative societal improvements, connecting social enterprises with experts
and professionals in finance, branding and advertising, business, innovation and volunteerism, in line with our 5 Pillars of Support.
HLB Jumpstart 5 Pillars of Support
Financial Tools Branding

Commercialisation Volunteerism
Knowledge and Digitisation and Marketing
To date, we have partnered with a total of 5 social enterprises.
SURI GREEN HERO COFFEE FOR GOOD THE ASLI CO. BENAK RAYA
Collaboration partner Collaboration partner Collaboration partner Collaboration partner Collaboration partner
since September 2018 since May 2019 since December 2019 since June 2020 since June 2021
Since our partnership with these Social Enterprises, we have witnessed growth such as:
Provided job
Provided job 104,882 meals Provided training to 10 Provided job
opportunities to 70
opportunities to 40 saved from youths from the B40 opportunities to 29
mothers from the
single mothers landfills community villagers
Orang Asli community
HLB Jumpstart - Micro Business Jumpstart@65
HLISB rolled out a brand new social finance programme, Jumpstart@65 is a community hub that aims to inspire
‘HLB Jumpstart – Micro Business’ that serves to provide the community by providing education on purposeful life
funding to individuals who may not have the opportunities and digital skills, as well as to build a network of people
and means to secure full-time employment or to aspiring to co-create and collaborate in developing innovative
entrepreneurs who lack credit history and the opportunity solutions for the communities, the Bank and for the
for them to start their own small businesses. HLISB disperses Hong Leong Group. The repurposed 5-storey building
funding through its two partners - MADCash and AlfieTech, located in Jalan Tun H.S. Lee in Kuala Lumpur houses
and provides zero-profit financing and capital opportunities coworking spaces, three customer usability labs and a
to start a business, while also providing mentorship and community centre. The facility is equipped with state-
business training. Targeted to assist underserved micro- of-the-art tools like eye tracking technology and 3D
entrepreneurs, the initiative is driven to improve their printing facilities, and is aimed at being a place where
livelihoods by having a sustainable source of income. our employees can observe and participate in customer
immersion sessions. This includes focus groups and
ethnographic studies, customer-bank employee co-
creation sessions, as well as experience first-hand how
customers interact with any new experience we create, as
part of the concept and usability testing sessions.
For more details on Supporting Social Enterprises and Communities, please refer to the Sustainability Impact chapter on pages 56 to 58 of the HLB Sustainability Report 2023.
Sustainability
Statement
FINANCIAL INCLUSION AND LITERACY
Providing Access to the Visually Impaired Community
Our commitment to being an all-inclusive organisation is evidenced by our efforts to serve communities in need of access to financial
services. To that extent, we were the first bank in Malaysia to impact the visually impaired community via our speech equipped SSTs.
The HLB Talking Automated Teller Machines (“ATMs”), complete with a braille keypad and headphone socket, are designed to assist
visually-impaired banking customers. Instructions can be heard in either English, Malay or Mandarin.
In FY2023, we introduced 12 new HLB Talking ATMs across the country, bringing our total number of HLB Talking ATMs to 17 to date.
Perlis Kelantan
• Kota Bharu 1 (installed in August 2022)
• Kangar
(installed in January 2023)
Terengganu
Kedah • Kuala Terengganu
• Alor Setar (installed in September 2022)
(installed in September 2022)
Pahang
Penang • Temerloh
• New Burma House, Pulau Tikus (installed in September 2022)
(installed in June 2020)
Johor
• Taman Johor Jaya
Perak (installed in August 2022)
• Gunung Rapat (installed in September 2022) • Austin Heights
Kuala Lumpur
• Brickfields (installed in August 2016)
• Jalan Kenanga (installed in January 2018)
• Bangsar (installed in August 2022)
Negeri Sembilan
• Seremban
Melaka
• Taman Melaka Raya
(installed in June 2022)
Sabah
• Lintas
(installed in July 2022)
Sarawak
• Electra House, Kuching (installed in September 2016)
• Jalan Song Thian Cheok, Kuching (installed in September 2022)
DuitSmart
The Bank is intent on improving the financial health in the country, which motivated the launch of our DuitSmart platform in September
2019. The objective of the platform is to equip and empower Malaysians with financial knowledge to influence sound financial decisions.
DuitSmart Achievements from FY2020 to FY2023
Students Communities Digital Content

Conducted 67 Duitsmart sessions and engaged • Conducted 6 sessions for 47 single mothers Developed 39 bite-sized content with a
with 2,497 students from primary, secondary and 33 working adults collective
and tertiary level. • Recorded 30 financial literacy audio content • 440,000 reach
and disseminated to 55,000 members of the • 3.19 million engagements
societies for the blind • 3.42 million views
102 • CORPORATE
Sustainability
Statement
SUSTAINABLE OPERATIONS
Managing Our Operational Environmental Footprint
Emissions tracking is a crucial part of identifying and improving our operational impact on
the environment. In light of our Net Zero ambitions, we have ramped up efforts in managing,
tracking and mitigating our carbon footprint.
Managing Our Resources
Guided by the Bank’s Environmental Policy on Energy, Water and Waste Management, the Bank is intent on optimising the utilisation of
resources within business activities and effectively managing waste without any compromises on the Bank’s physical operations. It is
imperative for the Bank to continue monitoring and promoting resource efficiency and conservation awareness to improve energy, water and
waste management across our operational facilities.
HLB achieved significant milestones in FY2023, completing all EE&C measures for Hong Leong Tower and PJ City Tower A. We upgraded
Hong Leong Tower’s Chiller Starter System to a Variable Speed Drive (“VSD”) system to regulate the tower’s energy consumption. We
also installed solar panels on the rooftop of PJ City Tower A which supplies about 0.7% of the entire building’s energy consumption.
Additionally, we have retrofitted the LED light fittings in 21 of HLB owned branches.
In March 2023, we fully relocated our Data Centre in Wisma Hong Leong to Hong Leong Tower and received a Titanium+ Tier nod from
the Green Climate Initiative (“GCI”), an industry-leading green technology accreditation organisation. With this, the Bank’s data centre
is officially a Certified Green Computing Facility and the only facility in Malaysia to achieve the prestigious Titanium+ ranking by scoring
a near-perfect 99 out of 100 points in the Certified Green Computing Facility (“CGCF”) Weighted Scorecard.
Water Consumption Paper Consumption
The Bank seeks to promote efficient utilisation of our resources Paper is a key resource for banking activities and we believe
while effectively managing water consumption without that reducing paper consumption will significantly contribute to
compromising the safety, comfort and reliability of the Bank’s our sustainability efforts. While we have adopted practices that
physical operations. We are cognisant of the importance of allow us to reduce wastage and optimise operating costs, we also
water management in our journey towards sustainable business acknowledge that growth in business would impact our resources
operations. Despite the increase of water consumption compared as well. The increase of paper consumption in FY2023 is due to
to the previous year, which is largely due to the normalised the increased opening of external accounts, ASNB transactions,
movement of people coming back to work post pandemic, water SME growth, and disbursement of transactions and facilities.
consumption at HLB has seen a 30% reduction since FY2019. However, we have also made efforts to increase the purchase
of Forest Stewardship Council (“FSC”) and Programme for the
Endorsement of Forest Certification (“PEFC”) certified papers.
Sustainability
Statement
Energy Consumption
Hong Leong Tower (kWh) PJ City (Tower A) (kWh) Other HLB premises Total Energy Consumption
(branches and centres) across Malaysian operations
(kWh) (kWh)
FY2019 6,850,336 9,393,887 30,082,406 46,326,629
FY2020 6,634,579 8,524,211 28,906,953 44,065,743
FY2021 6,562,314 7,939,797 26,534,392 41,036,503

FY2022 6,422,184 8,067,162 23,713,199 38,202,545
FY2023 7,264,097 8,246,790 21,375,624 36,886,512
FY2021 609,369 FY2019 57,695
FY2022 599,575 FY2020 54,455
FY2023 605,259 FY2021 51,630
FY2022 50,136
Singapore Operations Hong Kong Operations

(kWh) FY2023 44,020 (kWh)
Water Consumption
Total Water Consumption

Hong Leong Tower PJ City (Tower A)
for main buildings
(in cubic metres) (in cubic metres)
(in cubic metres)
FY2019 61,823 39,223 101,046
FY2020 55,269 33,632 88,901

FY2021 47,120 28,458 75,578
FY2022 43,590 17,602 61,192
FY2023 46,370 24,725 71,095
Paper Consumption
Total Office Paper Purchased Total Paper Recycled (kg) for HLT
(in reams) for Entire Malaysia Operations and PJCA (office buildings) only
FY2021 108,796 FY2021 24,039
FY2022 71,121 FY2022 18,040
FY2023 78,953 FY2023 17,686
For more details on Optimising Resource Efficiency, please refer to the Sustainable Operations chapter on pages 63 to 65 of the HLB Sustainability Report 2023.
104 • CORPORATE
Sustainability
Statement
OUR CARBON FOOTPRINT
In FY2021, we developed our Greenhouse Gas (GHG) emissions framework with reference to the IPCC and the GHG Protocol to start
compiling our GHG inventory and monitoring our Scope 1, Scope 2 and Scope 3 GHG emissions. We established our baseline year FY2019
to start paving our decarbonisation journey towards our Net Zero ambition.
We made steady progress towards our Net Zero ambitions and carbon reduction targets last year reducing about 21% of our operational
carbon emissions (Scope 1 & 2 in Malaysia) since FY2019, ahead of the targeted reduction of 15% to 25% by the year 2026. In FY2023,
we expanded our GHG Framework to include our Singapore and Hong Kong branches and we intend to include our Cambodia and
Vietnam subsidiaries in FY2024.
Added Scope 3 emissions

Conducted 'Introduction
Expanded the GHG which is Category 7: Achieve 21% reduction
to HLB GHG Framework'
boundaries to Singapore Employee Commuting of operational carbon
webinars to employees
and Hong Kong and Category 13: emissions (Scope 1 & 2
during our sustainability
operations Downstream in Malaysia)
month
Leased Asset
GHG Emissions (in tonnes CO2eq)
Scope 1 Scope 2 Scope 3 – Category 6: Scope 3 – Category 7: Scope 3 – Category 13:

Business Travel Employee Commuting Downstream Leased
Asset
Total GHG Emissions

Malaysia Operations for Malaysian Operations
FY2019 188 34,515 1,288 10,921 490 47,402
FY2020 160 32,653 1,085 8,868 495 43,261
FY2021 141 30,154 787 6,328 465 37,875
FY2022 91 28,298 656 7,997 562 37,604
FY2023 122 27,423 1,580 9,905 731 39,761

Sustainability
Statement
GHG Emissions (in tonnes CO2eq)
Scope 1 Scope 2 Scope 3 – Category 6: Scope 3 – Category 7:

Business Travel Employee Commuting
Total GHG Emissions
Hong Kong Operations for Hong Kong Operations
FY2019 39 10 49 98
FY2020 37 7 48 92
FY2021 35 37 72
FY2022 34 34 68
FY2023 30 2 38 70
Total GHG Emissions

Singapore Operations for Singapore Operations
FY2019 115 115
FY2020 91 91
FY2021 5 247 74 326
FY2022 6 243 1 110 360
FY2023 8 246 7 121 382
For more details and explanation on each of the data, please refer to the Our Carbon Footprint on pages 66 to 67 of the HLB Sustainability Report 2023.
106 • CORPORATE
Sustainability
Statement
Sustainable Supply Chain
A sustainable supply chain upholds environmental goals and societal values of an organisation. At HLB, we are committed to integrating
environmental and social practices into our supply chain. We aim to reduce the negative environmental and social impact of our
business activities by focusing on sustainable and responsible sourcing.
As a way of accelerating the Bank’s sustainability journey, we

have implemented our Procurement Policy, integrated with 1.25% 98.75%
ESG elements, aiming to structure and standardise commercial (RM41,042,119) (RM3,231,732,403)
partnership development with suppliers. The policy also guides Non-Malaysian Malaysian
vendors to enhance their ESG risk mitigation and disclosures.
In an effort to support local businesses, 2,085 of 2,159 vendors,

approximately 96%, that supply us with products and services Proportion
are Malaysian companies. The Bank also appoints Malaysian of Spending
vendors for security services, telecommunications services, office in FY2023
equipment, furniture and fittings, maintenance, cleaning services,
real estate, data line, courier services, security devices and other
services. In addition, we employ multinational suppliers with a
local presence to guarantee that we acquire the most up-to-date
and efficient IT solutions, which reinforces our goal to develop a
Note: The amount spent include all paid invoices for FY2023.
thriving local business environment.
Cyber Security Awareness
We proactively promote and consistently reinforce a robust cyber risk awareness culture within the Bank. This involves instilling a
sense of accountability in every employee to protect the confidentiality of both our customers and the Bank. To further enhance this,
a series of cyber risk educational initiatives have been developed and launched.
e-Learning Cyber Leaders Training Cyber Comics Phishing Awareness
Conducted Bank-wide
Conducted Cyber Leaders We introduced a series
annual mandatory e-learning For the year under review,
training to give a practical of comics on cyber risk
on Cyber Security and the Technology Risk
overview of the cyber awareness with a virtual
Cyber Risk Management. To department conducted
incident handling for cyber security ambassador
ensure knowledge retention, a phishing awareness
managers to guide their in the form of an avatar that
employees are required exercise to drive staff’s
team on how to react and promotes cyber security
to complete and pass an understanding of possible
report on any potential best practices within our
assessment with a score of risks.
cyber attacks. organisation.
80%.
In FY2023, we recorded zero cases of substantiated complaints received regarding identity leaks, thefts and losses of customer data,
further solidifying the resilience and effectiveness of our internal protocols towards protecting our customers’ privacy.
Sustainability
Statement
OUR PEOPLE
Nurturing a Sustainable Employee Experience
Our overarching value of being ‘Here for the Long Term’ extends to how we care for our
employees. At HLB, we strive to create meaningful employee experiences that enable them to
have a meaningful journey with us. The following core pillars drive our efforts in nurturing a
sustainable employee experience.
Employee Well-
Workplace Workforce Talent being, Health &
Readiness Readiness Management Safety, Environment
Driving HR practices Continue to build depth Deepen and strengthen Safeguarding Well-being,
across the organisation through upskilling efforts. For end-to-end talent Health & Safety with focus
with agility via HLB@ example by incorporating ESG management processes on mental and emotional
Workday awareness into learning resilience
Workplace Readiness
Our approach to enabling workplace readiness centres around our drive to digitalise core HR processes, as well as learning experiences.
Key to our efforts is the HLB@Workday platform, which has facilitated convenience to our employees to access our resources wherever
they work even as they work remotely. This mobile-first strategy enables adaptability to how we engage and provide training for our
employees.
Learning & Development on HLB@Workday
Encouraging an ‘anytime, anywhere’ learning mindset
Our training in HLB@Workday contributed to a In addition to mandatory e-Learning, 3,323 employees
5% increase
voluntarily completed e-learning courses on the platform,
recording a
in training hours (contributed by increased training hours
for Mandatory e-Learning and uptake in weekly online 14% increase
e-learning modules). in the number of employees from FY2022
Total Training Hours Average Training Hours per Employee
650,409 79
(5% increase from FY2022) (2% increase from FY2022)
108 • CORPORATE
Sustainability
Statement
Prioritising Employee Well-Being, Health, and Safety
We believe that we have a fundamental responsibility in providing a safe and healthy working environment for our colleagues.
Developed in line with relevant health and safety-related national requirements, our robust Occupational Safety and Health Standard
Operating Procedure (“OSHA SOP”) guides the Bank to identify and manage its OSH risks.
Our OSH Committee, comprising the Bank’s management and employee-representatives, oversees the implementation of OSH-
related practices across our operations. In accordance with our OSHA SOP, our designated inspection team also conducts periodic risk
assessments to identify, assess and control safety risks and hazards at the workplace.
As part of the Bank’s obligation to ensure employees are aware and properly trained on OSH-related topics and OSHA (Amendment)
2022, the Bank’s L&D team collaborates with the Property & Facilities Management (PFM) team to roll out e-Learnings, physical
and virtual workshops to various groups of employees. In FY2023, 195 employees assigned as OSH representatives completed the
OSH training session and managed to achieve 1,560 training hours with an average of 8 hours per employee. The training was also
converted into mandatory e-learning for employees and launched in September 2022 to drive awareness of OSH bank wide.
Moving forward, the Bank is intent on improving the organisational health and safety in furtherance of managing and mitigating OSH
risks. To that end, we have developed an OSH training plan for the year 2023 with several initiatives to keep our employees abreast of
health and safety standards and protocols. This includes a First Aider Workshop, scheduled to be rolled out from September to October
2023, and OSH Coordinators training in accordance with the Occupational Safety and Health (Amendment) Act 2022 which stipulates
the requirement of an OSH Coordinator should the organisation have five or more employees.
Health and Safety FY2021 FY2022 FY2023

Percentage of absenteeism rate (%)* 1.15% 1.29% 2.39%
Total No. of accidents with fatalities NIL NIL NIL
Total No. of Days Lost due to Accidents inside the Workplace premises** 0 191.50 67
Total No. of Accidents inside the Workplace premises** 1 4 5
* The % of Absenteeism Rate is calculated using the recommended formula as per ISO standards.
** Total No. of Days Lost due to Accidents inside the Workplace premises and Total No. of Accidents inside the Workplace premises is calculated based on
reporting to DOSH.
Fostering Employee Engagement and Satisfaction
Employee engagement is key to maintaining an effective and healthy workplace environment. Our goal is to create a supportive
work environment that addresses the unique needs of our employees, regularly evaluating and enhancing policies to uphold the
Bank’s mission and values. We provide numerous channels for open communication, enabling our employees to interact with senior
management and leaders throughout the organisation. This approach allows us to actively connect with our staff, addressing diverse
topics of interest, providing financial assistance, and offering guidance on matters that concern both employees and the organisation.
This year, 18 grievances and items of concern were raised and resolved.
Sustainability
Statement
Cultivating Diversity and Inclusion
At HLB, diversity and inclusion are foundational to our culture and the growth of our business. Our Code of Conduct serves as the
cornerstone for establishing a safe and inclusive work environment, free from discrimination, where all employees receive equitable
treatment, regardless of their demographics, age, or background. Throughout the Bank, a meritocratic approach guides all HR practices,
including recruitment, remuneration, and training and development processes.
Snapshot of Our Employee Composition in FY2023
Female Female Male Others

Directors 63.3% 36.7% 3.1%
43% Indian Malay
8.6% 33.7%
Diversity of FY2023
Diversity of
HLB Board Diversity of
(by Gender) Employees
Employees
(by Gender) (by Ethnicity)
Male
Directors Chinese
57% 54.6%
Temporary More than 50 Below 30 Non-Executive Senior Manager

1% years old years old (Clerical, (M1 and above)
11% 26% Non-clerical, 3%
Officer) Manager
17% (M5 to M2)
Breakdown of 25%
Employees Breakdown of
Breakdown of
(Permanent and Employees
Employees
Temporary) (by Age)
(by Employee
Category)
30 to 50 Executive
Permanent years old (E4 to E1)
99% 63% 55%
Total Employee Turnover based on Employee Category Total Training Hours Per Employee Category
Senior Manager - 23 Senior Manager - 13,021

Manager - 367 Manager - 145,495
Executive - 1,258 Executive - 325,423
Non-Executive - 0 Non-Executive - 166,470
For more details on Employee Composition, please refer to the Appendix I: HLB in Numbers chapter on pages 88 to 91 of the HLB Sustainability Report 2023.
110 • CORPORATE
Sustainability
Statement
FOSTERING A SUSTAINABILITY DRIVEN CULTURE
Sustainability Awareness and Training Initiatives
In the last couple of years, we have employed a comprehensive strategy to promote sustainability awareness and empower our
employees to embrace a positive attitude towards ESG principles. This effort aligns with our commitment to provide enduring ESG and
VBI solutions. This year, we continued to use training programmes, brown bag sessions, and internal communication tools to actively
involve our employees in discussions about sustainability-related matters.
Every year we ensure that all of our employees sit through a mandatory e-learning on Introduction to Sustainability and additionally
for all our new hires, they will go through a virtual Introduction to Sustainability training with our Sustainability department.
Capacity Building Through Knowledge Sharing
We recognise that a core aspect of ensuring the success of our sustainability agenda lies in educating our employees on sustainability
issues and developing a green-conscious mindset within them. To that end, we have continued to conduct multiple training sessions
for our employees this year, to increase their awareness and knowledge of sustainability efforts and how these efforts can be best
implemented and practised.
9,309 employees 1,620 employees 145 BCB Customer

Coverage and Credit
of all categories 1,840 New Hires completed the
Evaluation New Hires
completed the attended the ‘Introduction non-mandatory WWF’s
attended the ESG
Sustainability Mandatory to Sustainability’ Training ASFI Sustainability
Assessment Briefing
E-Learning modules
onboarding training
In FY2023, we collaborated with WWF’s Asia Sustainable Finance Initiative (ASFI) Academy to provide fundamental knowledge on
sustainability for bankwide employees. Six modules have been released and completed by 1,620 employees voluntarily. These
modules will be continually rolled out every year to all our employees who are new and have not completed it, as an additional
capacity building for their better understanding in sustainability.
HLB Sustainability Month
In furtherance to fostering an internal sustainability culture, the Bank continues to organise the annual HLB’s Sustainability Month for
FY2023 from March to April, leading to Earth Day on 22nd April 2023. The month-long initiative was dedicated to conducting training
and raising sustainability awareness among our employees through several mediums including webinars, workshops, posters, and
social media.
Participation throughout the Sustainability Month
782 Webinar Attendees 1,910 Participants 13 Activities
782 people joined

347 people commented, shared, and 56 people joined the workshop
‘Introduction to HLB GHG
liked our infographics and posters in and learned how to transform used
Framework’, ‘Earth Chat’, and
our posting in Currents cooking oil into soap
‘Love Food, Hate Waste’ webinars
Sustainability
Statement
Employee Volunteerism
Driving The Bank’s Sustainability Agenda

Through Employee Volunteerism Five Pillars of HLB Employee CSR Programme
Aligned to our sustainability commitments, we
empower our employees to play a direct and active
role to make positive, significant and measurable
impacts in communities. In FY2023, we continued
the implementation of our HLB Employee CSR Environment Food Security Festive
(Community)
Programme which provides year-long activities
for which employees can participate. In line with
HLB's sustainability journey, the programme
gives employees the choice of volunteering in
our existing initiatives or designing their own Financial Literacy Social Enterprise
community-centric initiatives.
Employees can either choose to volunteer in our existing initiatives, such as HLB JumpStart and HLB DuitSmart, or design their own
community-centric initiatives for their division, based on the HLB Employee CSR Programme’s Five pillars, aligned with the Bank’s ESG
goals.
In FY2023, 443 employees have volunteered in various community activities which contributed to a total of 7,943 volunteering
hours. Under the Festive (Community) pillar, we have collected a total of RM31,524.30 from our employees where the money is used
to buy meals for shelters and homes during festive seasons.
Festive Season Total Meals Total RM collected from Employees

Deepavali 2022 132 11,812.30
Chinese New Year 2023 100 10,000.00
Raya 2023 100 9,712.00
Total 332 31,524.30
For more details on HLB Sustainability

and ESG initiatives, please refer to HLB
Sustainability Report 2023 or scan here to
visit the HLB Sustainability Website
112 • CORPORATE
Corporate
Information
DIRECTORS
Tan Sri Quek Leng Chan (Chairman) Lau Souk Huan
Tan Kong Khoon Cheong Soo Ching
Kwek Leng Hai Fa’izah binti Mohamed Amin
Datuk Dr Md Hamzah bin Md Kassim Datuk Manharlal A/L Ratilal
GROUP MANAGING DIRECTOR/ REGISTRAR

CHIEF EXECUTIVE OFFICER
Hong Leong Share Registration Services Sdn Bhd
Kevin Lam Sai Yoke Level 25, Menara Hong Leong
No. 6, Jalan Damanlela
GROUP COMPANY SECRETARY Bukit Damansara
50490 Kuala Lumpur
Jack Lee Tiong Jie Tel : 03-2088 8818
MAICSA 7060133 Fax : 03-2088 8990
SSM PC No. 202008001704 Email : [email protected]
AUDITORS REGISTERED OFFICE
PricewaterhouseCoopers PLT (LLP0014401-LCA & AF1146) Level 30, Menara Hong Leong
Chartered Accountants No. 6, Jalan Damanlela
Level 10, Menara TH 1 Sentral Bukit Damansara
Jalan Rakyat 50490 Kuala Lumpur
Kuala Lumpur Sentral Tel : 03-2080 9888
50706 Kuala Lumpur Fax : 03-2080 9801
Tel : 03-2173 1188 Email : [email protected]
Fax : 03-2173 1288
WEBSITE
www.hlb.com.my
Board of
Directors’ Profile
TAN SRI QUEK LENG CHAN TAN KONG KHOON
Chairman/ Executive Director/

Non-Executive/Non-Independent Non-Independent
Malaysian 80 Male Singaporean 66 Male
YBhg Tan Sri Quek Leng Chan is qualified as a Barrister- Mr Tan Kong Khoon holds a Bachelor of Business
at-Law from Middle Temple, United Kingdom. He has Administration degree from Bishop’s University, Canada
extensive business experience in various business sectors, and is an alumnus of the Harvard Business School
including financial services, manufacturing and real estate. Advanced Management Program. He is a Chartered
Banker of the Asian Institute of Chartered Bankers.
YBhg Tan Sri Quek is the Chairman of Hong Leong Bank
Berhad (“HLB”) and was appointed to the Board of Mr Tan is the President & Chief Executive Officer of HLFG.
Directors (“Board”) of HLB on 3 January 1994. He is the He was the Group Managing Director/Chief Executive
Chairman of the Credit Supervisory Committee (“CSC”) of Officer of HLB from 1 July 2013 to 4 February 2016. Prior to
HLB. joining HLB, Mr Tan was the Group Executive, Consumer
Banking Group of DBS Bank Ltd (“DBS”) from 1 December
2010 to 15 April 2013 where he led and managed strategy
He is the Chairman & Chief Executive Officer of Hong Leong
formulation and execution for consumer banking globally
Company (Malaysia) Berhad (“HLCM”), a public company;
across the DBS Group.
Chairman of Hong Leong Financial Group Berhad (“HLFG”),
a company listed on the Main Market of Bursa Malaysia
Mr Tan began his banking career with DBS in 1981.
Securities Berhad (“Bursa Securities”); and Chairman of Since then, he has successfully built consumer banking
Hong Leong Assurance Berhad (“HLA”), a public company. franchises across multiple markets in Asia for Citibank,
He is also the Chairman of the Council of Members of Hong Standard Chartered Bank and ANZ Bank.
Leong Bank Vietnam Limited (“HLBVN”).
From March 2007 to December 2009, Mr Tan was the
President and Chief Executive Officer of Bank of Ayudhya,
the fifth largest financial group in Thailand listed on
the Thailand Stock Exchange. The group businesses
included commercial and investment banking, life and
non-life insurance, stock broking, asset management and
consumer finance subsidiaries.
Mr Tan was appointed to the Board of HLB on 1 July 2013

and is a member of the CSC, Executive Committee and
Nomination Committee (“NC”) of HLB.
Mr Tan is the Chairman of Hong Leong Capital Berhad and

a Director of HLFG, both companies listed on the Main
Market of Bursa Securities; and a Director of HLA and Hong
Leong Investment Bank Berhad, both public companies.
He is also the Chairman of Hong Leong Bank (Cambodia)
PLC and Chief Controller on the Board of Controllers of
HLBVN.
114 • CORPORATE
Board of Directors’ Profile
DATUK DR MD HAMZAH
KWEK LENG HAI
BIN MD KASSIM
Non-Executive Director/ Non-Executive Director/

Non-Independent Independent
Singaporean 70 Male Malaysian 74 Male
Mr Kwek Leng Hai is qualified as a Chartered Accountant YBhg Datuk Dr Md Hamzah bin Md Kassim holds a PhD in Business
of the Institute of Chartered Accountants in England and from Aston University, United Kingdom and a Master in Business
Administration. He was inducted in 2012 into the Alumni Hall of
Wales. He has extensive experience in various business Achievement of Monmouth College in Illinois, USA where he did
sectors, including but not limited to finance, investment, his undergraduate education.
manufacturing and real estate.
YBhg Datuk Dr Md Hamzah had over 20 years of experience as
strategy and management consultant in global firms specialising
Mr Kwek was appointed to the Board of HLB on 3 January in large scale technology and business transformation, working
1994. He is also a director of HLCM, a public company in across several sectors with established organisations, ranging
Malaysia and the ultimate holding company of HLB. from banks to telecommunication companies, public institutions
and foreign governments. He is the Co-Founder of The iA Group,
where he currently serves as an Advisor. The iA Group, which
Mr Kwek is the Executive Chairman of Guoco Group Limited was established in 2002, specialises in business and public sector
(“GGL”). He was appointed as a Director of GGL in 1990 and transformation, technology and human capital.
assumed the position of President, Chief Executive Officer Prior to The iA Group, he was the Executive Director/Partner of
from 1995 to 1 September 2016. He is also the Chairman of international firm of Ernst & Young, Vice President and Country
Lam Soon (Hong Kong) Limited (“LSHK”). Both GGL and LSHK Head of the global consulting firm of Cap Gemini and member of
the global management team and Country Head of PA Consulting
are listed on The Stock Exchange of Hong Kong Limited. He
Group.
is a non-executive director of GuocoLand Limited (GGL's
subsidiary listed on Singapore Exchange Securities Trading Before joining the consulting industry in 1995, YBhg Datuk Dr Md
Hamzah held various senior positions in government for over 18
Limited). He is also a non-executive director of Bank of
years related to industrial R&D management and public policy
Chengdu Co., Ltd., an associate company of HLB and listed on technology development and innovation. He also served as
on the Shanghai Stock Exchange. a member of expert/advisory groups in various national and
international organisations such as United Nations Conference on
Trade and Development and Islamic Development Bank, Jeddah.
He was the Project Director for the Industrial Technology Master
Plan for Malaysia in the Institute of Strategic and International
Studies and subsequently took up the position as Director of
Science and Technology, Ministry of Science, Technology and
Environment to spearhead the implementation of the plan as
part of the national strategies to accelerate economic growth and
technology development.
In 2006, YBhg Datuk Dr Md Hamzah was appointed as the

Consulting Advisor to the National Implementation Task Force
chaired by the Prime Minister to oversee the 9th Malaysia
Development Plan and in 2009, he was appointed as member
of the National Economic Advisory Council (NEAC). YBhg Datuk
Dr Md Hamzah was a member of the Review and Operational
Panel to the Malaysian Anti-Corruption Commission from 2013
to February 2015. In 2015, he was appointed as member of the
Anti-Corruption Advisory Board by the DYMM Yang Di Pertuan
Agong and completed his term in 2018 and re-appointed for a
second term in 2020 until 18 May 2023.
YBhg Datuk Dr Md Hamzah was appointed to the Board of HLB on

19 May 2016 and is a member of the Remuneration Committee
("RC") and Board Information and Technology Committee (“BITC”)
of HLB and Hong Leong Islamic Bank Berhad ("HLISB").
YBhg Datuk Dr Md Hamzah is also the Board Chairman of HLISB,

a public company.
LAU SOUK HUAN CHEONG SOO CHING

Independent Independent
Malaysian 59 Female Malaysian 63 Female
Ms Lau Souk Huan holds a Bachelor Degree in Accounting Ms Cheong Soo Ching is a Certified Public Accountant
(Honours) from the University of Malaya and she is a of Malaysian Institute of Certified Public Accountants
Certified Public Accountant from the Malaysian Institute of (MICPA), a Certified Information System Auditor of the
Certified Public Accountants. Ms Lau is also a member of Information Systems Audit and Control Association
the Malaysian Institute of Accountants. (ISACA) and a member of the Malaysian Institute of
Accountants (MIA). Ms Cheong is also a fellow member of
Ms Lau has more than 30 years of experience in accounting the Life Management Institute (LOMA).
garnered from the accounting profession and the working
experience with a global international financial institution Ms Cheong has more than 35 years of experience in
and an accounting standard setter. As a former bank Chief governance, risk management, compliance and auditing
Financial Officer (“CFO”), Ms Lau has in-depth knowledge work. She began her career with Ernst and Whinney
of the banking industry, its operations, drivers and (now known as Ernst and Young (“EY”)) in 1980. She was
challenges, risk management, critical areas of corporate seconded to the London office of EY for 2 years where
governance and controls. Ms Lau was a Project Director she was trained in information system auditing. She
with the Malaysian Accounting Standards Board (“MASB”), continued her career in information system auditing in
an independent authority which develops and sets Malayan Banking Berhad for 2 years and 2 government
accounting standards in Malaysia. Prior to joining MASB agencies in Australia for 5 years.
in 2010, Ms Lau was with J.P. Morgan Chase Bank Berhad
(“JP Morgan”) primarily as the CFO for a period of 14 years. Ms Cheong joined Great Eastern Life Assurance Malaysia
In addition, Ms Lau was also co-Country Operating Officer, Berhad (“GE”) upon returning to Malaysia from Australia
Director of subsidiary entities, trustee of JP Morgan's in 1996. During her tenure in GE, she has served in key
retirement fund, country coordinator for philanthropy positions in internal audit, strategic planning, special
and company secretary for JP Morgan. Ms Lau was projects and risk management function. The last position
appointed to the Board of JP Morgan in 2002 and served she held was Chief Risk Officer where she was responsible
as the Executive Director from 2006 until June 2009. She for governance, risk management, compliance, Business
left JP Morgan in June 2009 but continued to serve as a Continuity Management, Anti-Money Laundering and
Non-Executive Director and later Independent Director of market conduct. She retired from GE in January 2020.
JP Morgan until September 2017.
Ms Cheong was appointed to the Board of HLB on 18 May
Prior to joining JP Morgan, Ms Lau was with Price 2022 and is a member of the BAC, BRMC and RC of HLB.
Waterhouse (now known as PricewaterhouseCoopers PLT)
and assumed various positions over 7 years from December
1987 to June 1995; the last being Senior Manager, Audit
and Business Advisory.
Ms Lau was appointed to the Board of HLB on 6 September

2019 and is the Chairman of Board Audit Committee ("BAC")
and NC, and a member of the Board Risk Management
Committee ("BRMC") and BITC of HLB and HLISB.
116 • CORPORATE
FA’IZAH BINTI MOHAMED AMIN DATUK MANHARLAL A/L RATILAL

Independent Independent
Malaysian 55 Female Malaysian 64 Male
Puan Fa’izah binti Mohamed Amin holds a Bachelor of Arts YBhg Datuk Manharlal A/L Ratilal holds a Masters in Business
(Honours, 2nd Upper) in Political Science from Brock University Administration from the University of Aston in Birmingham,
in Canada. United Kingdom in 1984 and a Bachelor of Arts (Honours)
degree in Accountancy from the City of Birmingham
Puan Fa’izah carries more than 20 years of cross-industry Polytechnic (now known as Birmingham City University,
credentials, in local conglomerates and multinational United Kingdom) in 1982. YBhg Datuk Manharlal is a Fellow
corporations. She began her career as a Foreign Correspondent of the Asian Institute of Chartered Bankers.
in an American News Wire in the Kuala Lumpur Bureau, before
moving on to become an Information Specialist in the United YBhg Datuk Manharlal was the Executive Vice President
States Information Agency (States Department). She then & Group Chief Financial Officer of Petroliam Nasional
joined Time Broadcast Group as its Head of News Division in Berhad (PETRONAS), a member of the Board and Executive
1995. In 1999, Puan Fa’izah joined TM Berhad, holding multiple Leadership Team of PETRONAS and sat on the Board of
portfolios until 2014, inclusive of managing TM’s New Media several subsidiaries of PETRONAS until his retirement in 2018.
Strategy, heading its Planning & Innovation Group, leading Prior to joining PETRONAS in 2003, he was attached with a
the Group’s Business Strategy and as its General Manager of local merchant bank for 18 years, concentrating in corporate
Middle East & Africa Business and eventually as its General finance where he was involved in advisory work in mergers
Manager of Technology Planning & ICT Business. and acquisitions, and the capital markets.
In 2014, Puan Fa’izah joined UMW Holdings Group and in YBhg Datuk Manharlal is an Independent Non-Executive
2015 she was appointed as the President of UMW Technology Director of Genting Berhad and Deleum Berhad, both
Sdn Bhd. She also carried the portfolio of UMW Group’s Chief companies listed on the Main Market of Bursa Securities.
Digital Officer (CDO) throughout 2015 until 2018. In mid-2018, He is also an Independent Non-Executive Director of Hong
she left UMW and joined HP Inc as its Managing Director Leong Investment Bank Berhad (“HLIB”), a public company
for Malaysia, overseeing HP’s business and manufacturing and the Chairman of the Board Audit and Risk Management
operations. She resigned in November 2020. Committee and a member of the Nomination and
Remuneration Committee of HLIB.
Her credential as an Independent Board Member started
in 2019 when she was appointed as an Independent YBhg Datuk Manharlal was appointed to the Board of HLB on
Non-Executive Director for Cradle Fund Sdn Bhd, which she 15 September 2023 and is the Chairman of the BRMC and RC,
holds until today. In the same year, she was also elected as and a member of the BAC and NC of HLB.
a Governor and Independent Director of American Chambers
of Commerce ("AMCHAM"). As a Governor, she provided Notes:
strategic guidance in the bilateral trade relationship between 1. Family Relationship with Director and/or Major Shareholder
Malaysia and United States of America. Puan Fa’izah did not YBhg Tan Sri Quek Leng Chan and Mr Kwek Leng Hai are brothers. Save as
disclosed herein, none of the Directors has any family relationship with any
seek for re-election and retired as Governor and Independent other Director and/or major shareholder of HLB.
Director of AMCHAM in August 2020. In January 2022, she was
2. Conflict of Interest
appointed as an Independent Non-Executive Director of DKSH None of the Directors has any conflict of interest with HLB.
Holdings (Malaysia) Berhad and Scicom (MSC) Berhad, both
3. Conviction of Offences
companies listed on the Main Market of Bursa Securities. None of the Directors has been convicted of any offences (excluding traffic offences)
in the past 5 years and there were no public sanctions or penalties imposed by the
relevant regulatory bodies during the financial year ended 30 June 2023.
Puan Fa’izah was appointed to the Board of HLB on
1 September 2022 and is the Chairman of BITC of HLB and 4. Attendance of Directors
Details of Board meeting attendance of each Director are disclosed in the
HLISB. Statement on Corporate Governance Overview, Risk Management and Internal
Control in the Annual Report.
Key Senior
Management of the Group
KEVIN LAM SAI YOKE MALKIT SINGH MAAN
Group Managing Director/

Chief Financial Officer
Chief Executive Officer
Singaporean 54 Male Malaysian 57 Male
Mr Kevin Lam Sai Yoke holds an undergraduate degree Mr Malkit Singh Maan is a Chartered Accountant with
in Business Administration from the National University the Malaysian Institute of Accountants and a fellow
of Singapore and is an alumnus of the Asian Financial member of CPA Australia. He graduated with a Bachelor
Leadership Program. of Business in Accounting from Curtin University of
Technology, Perth, Western Australia and a Master
Mr Kevin Lam was appointed as the Group Managing of Business Administration from Victoria University,
Director/ Chief Executive Officer of Hong Leong Bank Melbourne.
Berhad (“HLB”) on 1 July 2023. He is a member of both the
Credit Supervisory Committee and Executive Committee Mr Malkit joined HLB on 22 July 2019 as Chief Financial
Officer (“CFO”).
of HLB. Mr Kevin Lam is also a Council Member of The
Association of Banks in Malaysia (ABM).
Mr Malkit has over 32 years of banking and finance
experience. He is primary responsible for the financial
Mr Kevin Lam possesses over 30 years of experience in the
management of HLB. Prior to joining HLB, he was with
financial landscape, having assumed various key senior
BIMB Holdings Berhad as the Group CFO. Mr Malkit had
leadership roles covering 5 key markets in Southeast
also previously served as the CFO of Bank Islam Berhad,
Asia namely Thailand, Vietnam, Singapore, Indonesia CFO of ABN AMRO Bank Berhad and Vice President-
and Malaysia. He has a broad range of experiences in Finance at RHB Bank Berhad.
strategic planning, business management, marketing,
product development, sales and distribution, banking Mr Malkit is a director of HLF Credit (Perak) Bhd and
infrastructure development, digital and technology Promilia Berhad, both wholly-owned subsidiaries of
innovation. He has been instrumental in leading financial HLB.
institutions with cross-functional and cross-cultural
backgrounds to build long-term franchises.
Prior to joining HLB, Mr Kevin Lam served as the Head

of TMRW Group Digital Banking of United Overseas Bank
Limited (“UOB”), for its key regional markets based in
Singapore. He has a decade-long experience in various
ASEAN markets including in Jakarta as the President
Director of UOB Indonesia, and in Kuala Lumpur where
he headed Personal Financial Services at UOB Malaysia
and later served as its Deputy Chief Executive Officer
where he oversaw its Wholesale Banking business and
Technology and Operations.
He had also headed the consumer banking loans, sales

and distribution in Singapore with UOB, after time with
various international banks and technology firms based
in Singapore, Hong Kong and the USA.
118 • CORPORATE
Key Senior
ANDREW JONG ANN KEE YOW KUAN TUCK
Managing Director, Managing Director,

Personal Financial Services Business and Corporate Banking
Malaysian 48 Male Malaysian 52 Male
Mr Andrew Jong Ann Kee holds a LL.B. (Honours) from Mr Yow Kuan Tuck holds a Bachelor of Laws and Letters
the University of Nottingham, United Kingdom and an degree from University of Leicester, United Kingdom
MBA (Distinction) from Imperial College, London. He was as well as a Certificate of Legal Practice from the Legal
a Chevening scholar at both graduate and post-graduate Qualifying Board, Malaysia.
levels. He also holds the CFP CERT TM certification.
Mr Yow joined HLB on 2 May 2017 as Managing Director,
His most recent roles saw him leading the Mortgage Business and Corporate Banking.
and Retail Wealth businesses in the Personal Financial
Services (“PFS”) division of HLB. He also led strategy Mr Yow has over 25 years of experience in the financial
and planning initiatives for PFS. He assumed his current services sector, having built a successful track record in
growing corporate and financial institutions businesses,
position on 2 April 2022.
managing portfolios such as financial institutions, public
sector and other industry groups.
Mr Andrew Jong has over 20 years of diverse professional
experience across financial services, consultancy,
Prior to HLB, Mr Yow was with Standard Chartered
manufacturing, e-commerce and conglomerate
Bank Malaysia as Managing Director, Head of Financial
management, having built a successful track record in Institutions between 2013 and 2017. He commenced
the areas of strategic planning, banking merger and his banking career with Citibank Malaysia in Country
integration, franchise regionalisation, business growth, Compliance for a number of years before a career
capability building and consumer banking. change into institutional banking where over the next
15 years, he held various senior positions including
Mr Andrew Jong joined Hong Leong Group in 2005 and Head of Financial Institutions & Public Sector Group in
has since held numerous senior positions in different Citibank Malaysia’s Corporate Bank.
management and operating entities in the group.
Key Senior
HOR KWOK WAI KELLY ONG HFEI BOON
Managing Director, Managing Director,

Regional Wealth Management Global Markets
Malaysian 49 Male Malaysian 49 Female
Mr Hor Kwok Wai holds a Bachelor of Science in Actuarial Ms Kelly Ong Hfei Boon completed the INSEAD
Mathematics and Statistics from Heriot-Watt University, Leadership Program in 2021 and IMD Transitioning
United Kingdom. In addition to this, Mr Hor is a Chartered Business Leaders (TBL) Program in 2015. She is also
Banker awarded by AICB. a Committee Member of Financial Market Association
Malaysia in 2017/2020.
Mr Hor joined HLB on January 2011 and assumed his
current position on 2 April 2022. Ms Kelly Ong joined HLB on 18 January 2013 as Regional
Head of Institutional Sales, Global Markets. She
Mr Hor brings with him over 27 years of banking assumed her current position on 2 April 2022.
experience, mainly in the fields of fixed-income,
Ms Kelly Ong has over 20 years of experience in the
derivatives, asset-liability management and risk
financial services sector with deep expertise in Rates,
management amongst others. Prior to HLB, he was Head
Credit, Derivatives Trading and Sales, Structured
of Global Markets for The Royal Bank of Scotland Malaysia
Products, Market Risk and Asset Management.
where he spent seven years developing their sales and
trading business across foreign exchange, fixed income,
Prior to HLB, Ms Kelly Ong was the Director, Head of
derivatives and structured products. Prior to that, he had Trading for Emerging Markets in The Royal Bank of
worked for several major foreign banks in Malaysia such Scotland (M) Bhd. She also had leadership roles at CIMB
as JP Morgan Chase Bank, Standard Chartered Bank and Investment Bank Berhad with her last role as Senior
OCBC Bank in various roles. Vice President, Cross Market Trading in Group Treasury.
She is an experienced trader and institutional sales
head.
120 • CORPORATE
Key Senior
DAFINAH AHMED HILMI AARON HO WAI CHOONG
Chief Executive Officer, HLISB, Managing Director,

a wholly-owned subsidiary of HLB China Operations
Malaysian 46 Female Malaysian 68 Male
Puan Dafinah Ahmed Hilmi holds a Bachelor of Arts Mr Aaron Ho Wai Choong holds a Bachelor of Engineering
(Honours) in Accounting and Financial Management from (Honours) from University of Malaya and a Master of
University of Essex, United Kingdom and has a Master Business Administration from University of Rochester,
of Business Administration (MBA) from the Alliance USA.
Manchester Business School, University of Manchester,
United Kingdom. She is also a Certified Expert in Mr Aaron Ho joined HLB in April 2008 as Chief Operating
Sustainable Finance by the Frankfurt School of Finance Officer of International Banking of HLB China and
and Management. assumed his current position on 1 September 2016. He
was appointed as Director and Vice Chairman of Bank
of Chengdu Co., Ltd. (“BOCD”) since July 2008 and a
Puan Dafinah was appointed as the Chief Executive
member of the Board of Directors of JinCheng Consumer
Officer of HLISB on 6 June 2023.
Finance Company (“JCCFC”) since February 2010. Both
BOCD and JCCFC are associate companies of HLB.
Puan Dafinah brings with her 23 years of conventional
and Islamic banking experience. She has previously
Mr Aaron Ho has more than 36 years’ experience in the
held leadership roles across various areas of banking,
banking and financial services industry. Prior to HLB, he
including her last role as Head and Director of had held various managerial positions such as Manager
Commercial Banking at HSBC Amanah Malaysia Berhad. of Operations/Credit of American Express (Malaysia),
For the past 19 years, Puan Dafinah has been with HSBC, General Manager of MBf Card Services (Malaysia), Head
covering roles in Global Banking and Markets, Global of RHB Bank Card Center (Malaysia), Vice President,
Trade and Receivable Finance as well as managing Operations and Technology of MasterCard International
Shariah-compliant Commercial Banking products and (Singapore), Vice President/Senior Country Operations
solutions. Prior to HSBC, she was with UOB Malaysia Officer, Citibank Malaysia and Citibank Taiwan as well
where she started her career. as General Manager/Director of Citicorp Software and
Technology Services (Shanghai) Ltd under CitiGroup
China.
Key Senior
NG WEE LEE TERRENCE TEOH YIH MIN
Managing Director & Chief Executive, Managing Director & Chief Executive Officer,
HLB Singapore Branch HLBCAM, a wholly-owned subsidiary of HLB
Singaporean 55 Female Malaysian 44 Male
Ms Ng Wee Lee graduated from the National University Mr Terrence Teoh Yih Min holds a Bachelor of Business,
of Singapore with a Bachelor in Business Administration. major in Banking, Finance and International Trade from
La Trobe University, Melbourne, Australia.
Ms Ng joined HLB on 1 October 2019 as Managing Director
& Chief Executive, HLB Singapore Branch. Mr Terrence Teoh joined HLBCAM on 15 February 2021 as
Managing Director & Chief Executive Officer, HLBCAM.
Prior to HLB, Ms Ng was Managing Director, Head of
Local Corporates & Middle Markets and Deputy Head Mr Terrence Teoh has more than 20 years of working
of Commercial Banking from Standard Chartered Bank, experience in the banking industry. Prior to his current
appointment in HLBCAM, he was Head of SME Banking
Singapore. Prior to that, Ms Ng took on senior roles
of HLB Malaysia since 2012. HLB has been named Best
with CIMB, ANZ Banking Group, ABN AMRO and Citibank
SME Bank in Malaysia.
in Singapore. She brings with her more than 30 years
of experience in Corporate and Commercial Banking,
Prior to HLB, Mr Terrene Teoh spent 11 years in various
holding senior positions in relationship management,
senior positions in Citibank, Southern Bank and UOB
risk & control, product & business development and
Malaysia, his last position being the Senior Vice
marketing. President of Business Banking in UOB Malaysia.
122 • CORPORATE
Key Senior
DUONG DUC HUNG JASON WONG POH JIN
Managing Director & General Director, Managing Director & Chief Executive,
HLBVN, a wholly-owned subsidiary of HLB HLB Hong Kong Branch
Vietnamese 47 Male Malaysian 47 Male
Mr Duong Duc Hung holds a Master of Business Mr Jason Wong holds a Master of Finance and a Bachelor
Administration from Katholieke Universiteit Leuven, of Commerce from the University of Western Australia.
Belgium and a Bachelor of Arts in International Economics
at Foreign Trade University (Hanoi, Vietnam). Mr Jason Wong was appointed as the Chief Executive of
HLB Hong Kong Branch on 1 June 2023.
Mr Duong joined HLBVN on 2 January 2018 and
was appointed as General Director of HLBVN on Mr Jason Wong has been with HLB since June 2011. Before
14 February 2018. his current appointment, Mr Jason Wong had been
spearheading the Regional Credit & Equity Trading team,
Prior to HLBVN, Mr Duong had more than 20 years of which manages the Bank’s credit fixed income trading
banking and financial services experience, with his most and investments, as well as having an oversight of the
recent role as a member of Techcombank’s Management Global Markets departments in HLBCAM and HLBVN.
Committee as Transformation Director. Prior to that, he
had been with ANZ Vietnam for more than 10 years, Mr Jason Wong has over 23 years’ experience in the
holding various key portfolios in Product, Performance financial industry. He started his career as a consultant
Management, Wealth Management, Sales & Services in financial risk management and derivatives. Mr Jason
before he was appointed to head the entire Retail Wong has experience in Hong Kong’s market when he
Banking and Operations. joined Rabobank International Hong Kong as Director
of Asian Credit Debt & Derivatives. Prior to joining HLB,
He is well versed in regional and international business Mr Jason Wong was the Head of Credit Investments at
practices, having served in world class organisations such OSK Investment Bank Bhd.
as JP Morgan Chase as the Head of Financial Institutions
segment for Vietnam and Cambodia. He was also with
HSBC heading the cash management division and the
Financial Controller in Baxter Healthcare and Auditor in
KPMG, both in Vietnam and abroad.
Notes:
1. Family Relationship with Director and/or Major Shareholder

None of the Key Senior Management has any family relationship with any
Director and/or major shareholder of HLB.
2. Conflict of Interest
None of the Key Senior Management has any conflict of interest with HLB.
3. Conviction of Offences
None of the Key Senior Management has been convicted of any offences
(excluding traffic offences) in the past 5 years and there were no public sanctions
or penalties imposed by the relevant regulatory bodies during the financial year
ended 30 June 2023.
Board Audit
Committee Report
CONSTITUTION any information it requires from any Director or member of

management and all employees are directed to co-operate with
The Board Audit Committee (“BAC”) of HLB has been established any request made by the BAC.
since 18 August 1994 and was re-designated as the Board
Audit & Risk Management Committee (“BARMC”) on 10 January The BAC is authorised by the Board to obtain independent legal
2002. Subsequently, on 2 October 2006, the Board of Directors or other professional advice if it considers necessary.
decided to reconstitute the BAC separately from the Board Risk
Management Committee (“BRMC”).
MEETINGS
COMPOSITION The BAC meets at least eight (8) times a year and additional
meetings may be called at any time as and when necessary. All
MS LAU SOUK HUAN meetings to review the quarterly reports and annual financial
(Chairman, Independent Non-Executive Director) statements are held prior to such quarterly reports and annual
(Redesignated as BAC Chairman with effect from financial statements being presented to the Board for approval.
1 December 2022)
The Group Managing Director/Chief Executive Officer, Chief
MS CHEONG SOO CHING Financial Officer, Chief Risk Officer, Chief Internal Auditor, Chief
(Independent Non-Executive Director) Compliance Officer, other senior management and external
(Appointed as BAC member with effect from 1 December 2022) auditors may be invited to attend the BAC meetings whenever
required. At least twice a year, the BAC will have separate
YBHG DATUK MANHARLAL A/L RATILAL sessions with the external auditors without the presence of
(Independent Non-Executive Director) Executive Directors and management.
(Appointed as BAC Member with effect from 15 September 2023)
The BAC will also engage privately with the Chief Internal Auditor
MS CHOK KWEE BEE on a regular basis to provide the opportunity for the Chief Internal
(Independent Non-Executive Director) Auditor to discuss issues faced by the internal audit function.
(Retired with effect from 1 December 2022)
Issues raised, discussions, deliberations, decisions and conclusions
YBHG DATO’ NICHOLAS JOHN LOUGH @ SHARIF LOUGH BIN made at the BAC meetings are recorded in the minutes of the
ABDULLAH BAC meetings. A BAC member who has, directly or indirectly, an
(Independent Non-Executive Director) interest in a material transaction or material arrangement shall
(Retired with effect from 21 June 2023) not be present at the BAC meeting where the material transaction
or material arrangement is being deliberated by the BAC.
SECRETARY Two (2) members of the BAC, who shall be independent, shall
constitute a quorum and the majority of members present must
The Secretariat to the BAC is the Company Secretary(ies) of the be independent directors. No business shall be transacted at any
Bank. BAC meeting unless a quorum is present at the commencement
of the meeting and when conducting the business of the meeting.
TERMS OF REFERENCE After each meeting, the BAC shall report and update the Board on
significant issues and concerns discussed during the BAC meetings
The terms of reference of the BAC are published on the Bank’s and where appropriate, make the necessary recommendations to
website (‘www.hlb.com.my’). the Board.
AUTHORITY
The BAC is authorised by the Board to review any activity of

the Group within its Terms of Reference. It is authorised to seek
124 • CORPORATE
Board Audit Committee Report
ACTIVITIES EXTERNAL AUDIT
The BAC carried out its duties in accordance with its Terms of The external auditors of the Group for the financial year ended 30
Reference. June 2023 is PricewaterhouseCoopers PLT (“PwC PLT”). The BAC
discussed and reviewed with the external auditors, before the
During the financial year ended 30 June 2023, eight (8) BAC audit commences for the financial year:
meetings were held and the attendance of the BAC members
was as follows: (i) the audit plan and timetable for the financial audit of the
Group including the focus areas and approach to the current
Members Attendance financial year’s audit and any significant issues that can be
Ms Lau Souk Huan 8/8 foreseen, either as a result of the past year’s experience
Ms Cheong Soo Ching (1)
4/4 or due to new accounting standards or other changes in
Ms Chok Kwee Bee (2) 4/4 statutory or listing requirements; and
YBhg Dato’ Nicholas John Lough 8/8
(ii) the methodology and timetable of the Statement on Internal
@ Sharif Lough bin Abdullah (3)
Control and Risk Management.
Notes:
(1)
Appointed as BAC member with effect from 1 December 2022 The BAC reviewed the report and audit findings of the external
(2)
Retired as BAC Chairman with effect from 1 December 2022 auditors and considered management’s responses to the external
(3)
Retired as BAC member with effect from 21 June 2023 auditors’ audit findings and investigations. The BAC also had two (2)
separate sessions with the external auditors without the presence
YBhg Datuk Manharlal A/L Ratilal was appointed as BAC member of Executive Directors and management whereby matters discussed
after the close of the FY2023 and as such, did not attend any of include key reservations noted by the external auditors during the
the BAC meetings during the FY2023. course of their audit; whilst the BAC Chairman maintained regular
contact with the audit partner throughout the year.
HOW THE BAC DISCHARGES ITS RESPONSIBILITIES
The BAC reviewed the external auditors’ fees and their scope
FINANCIAL REPORTING of services. The approved and incurred fees for the financial
year ended 30 June 2023 amounted to RM4,819,548, of which
The BAC reviewed the quarterly reports and financial statements RM255,000 was payable in respect of non-audit services. Non-
of the Company and of the Group focusing particularly on: audit services accounted for 8% of the total audit fees payable.
The BAC assessed the objectivity and independence of the
(i) any changes in accounting policies and practices; external auditors prior to the appointment of the external
(ii) significant adjustments arising from the audit; auditors for ad-hoc non-audit services.
(iii) the going concern assumptions; and
(iv) compliance with accounting standards and other legal The BAC also evaluated the performance of PwC PLT in the
requirements. following areas in relation to its re-appointment as auditors for
the financial year ended 30 June 2023 and considered PwC PLT to
In the course of reviewing the quarterly reports and financial be independent:
statements, BAC had made enquiries and sought explanations
from the Senior Management including Chief Financial Officer on (a) level of knowledge, capabilities, experience and quality
any significant changes between the current and corresponding of previous work;
quarter/period.
(b) level of engagement with BAC;
(c) ability to provide constructive observations, implications

and recommendations in areas which require
improvements;
(d) adequacy in audit coverage, effectiveness in planning

and conduct of audit;
CREDIT TRANSACTIONS AND EXPOSURE WITH CONNECTED PARTIES

(e) ability to perform the audit work within the agreed
timeframe; The Group is guided by the Guidelines on Credit Transactions
and Exposures with Connected Parties to ensure that credit
(f) non-audit services rendered by PwC PLT does not impede
transactions with connected parties are carried out on an arm’s
independence;
length basis on terms and conditions not more favourable
(g) ability to demonstrate unbiased stance when interpreting than those entered into with other counterparties with similar
the standards/policies adopted by HLB; and circumstances and creditworthiness.
(h) risk of familiarity in respect of PwC PLT’s appointment as The BAC had conducted quarterly review of credit transactions of
external auditors. the Group with connected parties to ensure compliance with the
said Guidelines.
PwC PLT, in accordance with professional ethical standards, has

WHISTLEBLOWING
provided the BAC with confirmation of their independence for
the duration of the financial year ended 30 June 2023 and the
The Group has in place the Whistleblowing policy and procedures
measures used to control the quality of their work.
to provide an avenue for all employees and directors of the Group,
as well as any (legal or natural) person including those providing
The BAC has therefore recommended to the Board that PwC PLT
services to, or having a business relationship with the Group, to
be re-appointed as the auditors. Resolution concerning the re-
raise genuine concerns about any improper conduct or wrongful
appointment of PwC PLT will be proposed to shareholders at the
act (“Improper Conduct”) that is committed involving the Group
2023 Annual General Meeting.
and/or the Group’s employees and business partners through the
Group’s whistleblowing channels on a confidential basis.
RELATED PARTIES TRANSACTIONS
The BAC reviews the Group’s Whistleblowing Policy on an
The BAC conducted quarterly review of the recurrent related
annual basis and as required, to ensure the policy is adequate
party transactions (“RRPT”) entered into by the Group to ensure
and relevant to the Group, with compliance to applicable laws
that such transactions are undertaken on commercial terms and
and regulation in relation to Whistleblowing. The BAC reviews
on terms not more favourable to the related parties than those
and performs oversight on the effective implementation of the
generally available to and/or from the public.
policies and procedures on Whistleblowing for the Group.
The Group had put in place the procedures and processes to

Upon receipt of any whistleblower report over Improper Conduct
ensure the RRPT are conducted on commercial terms consistent
involving the Group, the Chairman of BAC shall decide whether
with the Group’s usual business practices and policies and on
the report should proceed to investigation and where applicable,
terms not more favourable to the related parties than those
forwarded the report to the appropriate person(s) in the Group
generally available to and/or from the public, where applicable.
to carry out the necessary actions. The BAC deliberates the
outcome of whistleblowing reports and matters in the exclusive
The BAC reviewed the said procedures and processes on an
Whistleblowing agenda at the BAC meetings in a confidential
annual basis and as and when required, to ensure that the said
manner, to:
procedures are adequate to monitor, track and identify RRPT in a
timely and orderly manner, and are sufficient to ensure that the i. discuss and review the investigation reports;
RRPT will be carried out on commercial terms consistent with
the Group’s usual business practices and policies and on terms ii. deliberate on the findings and recommendation from the
not more favourable to the related parties than those generally report; and
available to and/or from the public.
iii. decide on further steps to be taken in accordance with the
Group’s Whistleblowing policy and procedures.
126 • CORPORATE
INTERNAL AUDIT
The BAC reviewed the adequacy of internal audit scope, internal

audit plan and resources of the various internal audit functions
within Group Internal Audit Division (“GIAD”).
During the financial year, BAC noted that GIAD had effectively
carried out internal audits to all business entities of the Group,
and reviewed the GIAD’s reports on the audits performed on the
Group as set out in the Internal Audit Function section below.
The BAC has reviewed the audit findings and recommendations

of the GIAD, including any findings of internal investigations,
and has ensured that management has taken the necessary
corrective actions in a timely manner to address control
weaknesses, non-compliance with laws, regulatory requirements
and policies. The BAC also reviewed at every BAC meeting the
status update of management’s corrective action plans for the
resolution of internal audit’s findings and recommendations.
Recommendations were made by BAC to ensure that the root
causes raised by GIAD in their audit reports were effectively
resolved and that any outstanding audit findings be tracked for
timely resolution.
GROUP INTERNAL AUDIT DIVISION
The GIAD of HLB assists the BAC in the discharge of its duties and
responsibilities. GIAD employs a risk-based assessment approach
in auditing the Bank’s Group business and operational activities.
The high risk activities are given due attention and audited on a
more regular basis while the rest are prioritised to potential risk
exposure and impact.
During the financial year ended 30 June 2023, GIAD carried out
its duties covering audits on branches, and risk-based audits
on Personal Financial Services, Business Corporate Banking and
Global Markets businesses, Group Operations and Technology,
Group Functions, investigation and other assignments as directed.
These audits are performed in line with the BNM Guidelines on
Internal Audit Function.
Besides performing internal audit functions to the Bank Group,

GIAD, through a service agreement, also provides internal audit
services to Hong Leong Investment Bank Berhad, Hong Leong
Assurance Berhad, and Hong Leong MSIG Takaful Berhad in
regards to reviews of IT infrastructure, operations and information
security management. The cost incurred for the Internal Audit
function of the Bank in respect of the financial year ended 30
June 2023 was RM14.5 million.
This BAC Report is made in accordance with the resolution of the

Board of Directors.
Board Risk Management

Committee (BRMC) Report
CONSTITUTION TERMS OF REFERENCE
The Board Risk Management Committee (“BRMC”) is established RISK MANAGEMENT

to support the Board in discharging the following responsibilities:
1. To review Management’s activities in managing principal
1. Oversee Management’s implementation of the Bank’s risks such as (but are not limited to) capital adequacy,
governance framework and internal control framework/ credit risk, market risk, liquidity risk, interest rate risk in
policies. the banking book, operational risk, compliance risk, and
environmental, social and governance (ESG) risk.
2. Ensure Management meets the expectations on risk
management as set out in the policy document on Risk 2. To review Management’s reporting to the Board on measures
Governance. taken to:
3. Oversee Management’s implementation of compliance risk (a) Identify and examine principal risks faced by the
management. Company.
4. Promote the adoption of sound corporate governance (b) Implement appropriate systems and internal controls to
principles as set out in the Policy Document on Corporate manage these risks.
Governance within the Bank and its subsidiaries (collectively
known as “the Bank”). 3. To review Management’s major risk management strategies,
policies and risk tolerance for Board’s approval.
5. Consider Environmental, Social and Governance (ESG) issues
when reviewing, risk management policies, as well as 4. To review Management’s overall framework on the Internal
oversee progress against goals and targets for addressing Capital Adequacy Assessment Process (“ICAAP”), annual risk
climate related issues. appetite and Capital Management Plan for Board’s approval.
5. To review Management’s development and effective

COMPOSITION implementation of the ICAAP.
The BRMC shall: 6. To review Management’s stress testing governance including

the evaluation of the capital stress test scenarios, parameters,
(a) have at least three directors; key assumptions, climate risk pathways and results.
(b) comprise only non-executive directors, with a majority of 7. To review Management’s periodic reports on risk appetite,
them being independent directors; risk exposure, risk portfolio composition, stress testing and
risk management activities.
(c) be chaired by an independent director who is not the
Chairman of the Board; 8. To review the adequacy and effectiveness of Management’s
internal controls and risk management process.
(d) comprise directors who have the skills, knowledge and
experience relevant to the responsibilities of the board 9. To review the adequacy of risk management policies and
committee; and frameworks in identifying, measuring, monitoring and
controlling risk and the extent to which these are operating
(e) include the Chair of the Board Audit Committee. effectively.
10. To review risk management function’s infrastructure,

SECRETARY resources and systems and to ensure the staff responsible
for implementing risk management systems perform those
The Secretariat to the BRMC is the Group Risk Management duties independently of the Bank’s risk-taking activities.
(“GRM”) of the Bank.
128 • CORPORATE
Board Risk Management Committee (BRMC) Report
11. To receive and review reports from pertinent management 2. In relation to the role of the Chief Compliance Officer, support
committees. the Board in meeting the expectations on compliance
management as set out in BNM’s policy document on
12. To review Management’s implementation of risk Compliance by:
management as set out in BNM’s policy documents on Risk
Governance, Approaches to Regulating and Supervising (a) reviewing and advising on the appointment, remuneration,
Financial Group and Corporate Governance. removal and redeployment of the Chief Compliance Officer;
13. To review and advise on the appointment, remuneration, (b) ensuring that the Chief Compliance Officer has sufficient
removal and redeployment of the Chief Risk Officer. stature to allow for effective engagement with the CEO
and other members of Senior Management;
14. To engage privately with the Chief Risk Officer on a regular
basis (and in any case at least twice annually) to provide (c) engaging privately with the Chief Compliance Officer on
opportunity for the Chief Risk Officer to discuss issues faced a regular basis (and in any case at least twice annually) to
by the risk management function. provide the opportunity for the Chief Compliance Officer
to discuss issues faced by the compliance function;
15. Other risk management functions as may be agreed to by
the Board. (d) ensuring that the Chief Compliance Officer is supported
with sufficient resources to perform duties effectively; and
COMPLIANCE
(e) where the Chief Compliance Officer also carries out
1. To assist the Board in the oversight of the management of responsibilities in respect of other control functions,
compliance risk by: the BRMC shall be satisfied that a sound overall control
environment will not be compromised by the combination
(a) reviewing compliance policies and overseeing of responsibilities performed by the Chief Compliance Officer.
management’s implementation of the same;
3. Other compliance functions as may be agreed to by the Board.
(b) reviewing the establishment of the compliance function
and the position of the Chief Compliance Officer to ensure GOVERNANCE
the compliance function and Chief Compliance Officer
has appropriate standing, authority and independence; 1. Noted that:
(c) discussing and deliberating compliance issues regularly (a) The Bank, as a company with licensed subsidiary
and ensuring such issues are resolved effectively and companies has overall responsibility for ensuring the
expeditiously; establishment and operation of a clear governance
structure within its subsidiaries.
(d) reviewing annually the effectiveness of the Company’s
overall management of compliance risk, having regard (b) The Board’s responsibility is to promote the adoption of
to the assessments of Senior Management and internal sound corporate governance principles throughout the Bank.
audit and interactions with the Chief Compliance Officer;
(c) The Bank’s risk and compliance functions may propose
(e) overseeing the Management’s implementation of objectives, strategies, plans, governance framework and
the principles set out in the Policy Document on Fair policies for adoption and implementation within the Bank.
Treatment of Financial Consumers, including to promote
the adoption of a sound corporate culture within the (d) The respective subsidiaries’ board of directors and
Bank which reinforces ethical, prudent and professional Senior Management must validate that the objectives,
conduct and behaviour; and strategies, plans, governance framework and policies
set at the Bank level are fully consistent with the
(f) updating the Board on all compliance matters, including regulatory obligations and the prudential management
providing its views on (a) to (e) above. of the subsidiary and ensure that entity specific risks are
adequately addressed in the implementation of Bank
policies.
AUTHORITY REVISION OF THE TERMS OF REFERENCE
The BRMC is authorised by the Board to: Any revision or amendment to the Terms of Reference, as
proposed by the BRMC, shall first be presented to the Board
1. review any activities of the Bank within its terms of for its approval. Upon the Board’s approval, the said revision or
reference; amendment shall form part of this Terms of Reference which
shall be considered duly revised or amended.
2. seek any information it requires from any Director or member
of Senior Management and in this respect, all employees
are directed to co-operate with any request made by the ACTIVITIES
BRMC, including but not limited to providing the BRMC with
sufficient support and resources to investigate any matter The BRMC carried out its duties in accordance with its Terms of Reference
within the mandates of the BRMC; and supported by the Group Risk Management and Group Compliance
functions.
3. obtain independent legal or other professional advice if it
considers necessary. For the financial year ended 30 June 2023, eight (8) BRMC
meetings and one (1) special BRMC meeting was held and the
The Board remains fully accountable for any authority delegated attendance of the BRMC members is recorded as follows:
to the BRMC.
Members Attendance
MEETINGS @ Sharif Lough bin Abdullah (1)
Ms. Chok Kwee Bee (2) 5/5
The BRMC meets at least eight (8) times a year and additional Ms. Lau Souk Huan 9/9
meetings may be called at any time as and when necessary.
Ms. Cheong Soo Ching (3) 4/4
The Group Managing Director/Chief Executive Officer, Chief Notes:

Financial Officer, Chief Risk Officer, Chief Internal Audit, Chief (1)
Retired as a Chairman with effect from 21 June 2023
Compliance Officer, other Senior Management, employees and (2)
Retired as a Member with effect from 1 December 2022
external auditors may be invited to attend the BRMC meetings, (3)
Appointed as a Member with effect from 1 December 2022
whenever required.
The BRMC reviewed major risk management strategies, policies
Issues raised, discussions, deliberations, decisions and conclusions and risk appetite levels for Board’s approval. In addition, the BRMC
made at the BRMC meetings are recorded in the minutes of the regularly reviews risk management reports which covers global
BRMC meetings. A BRMC member who has, directly or indirectly, an and regional economic developments, risk headwinds, capital
interest in a material transaction or material arrangement shall not adequacy, stress tests, credit risk, market risk, interest rate risk in
be present at the BRMC meeting where the material transaction or the banking book, compliance risk, liquidity risk, operational risk
material arrangement is being deliberated by the BRMC. and environment, social and governance (ESG) risk.
Two (2) members of the BRMC, who shall be independent and The BRMC also regularly reviews regulatory compliance and financial
non-executive, shall constitute a quorum. No business shall be crime compliance reports which include new regulatory updates,
transacted at any BRMC meeting unless a quorum is present at compliance assurance reports, non-compliant incidents report and
the commencement of the meeting and when conducting the financial crime compliance trends. The BRMC continuously provides
business of the meeting. oversight of the Bank’s compliance activities to ensure that the Bank
is in compliance to all established policies and external regulations.
After each BRMC meeting, the BRMC shall report and update
the Board on significant issues and concerns discussed during The BRMC deliberated on stress test results formulated against
the BRMC meetings and where appropriate, make the necessary the backdrop of a highly stressed economic environment, which
recommendations to the Board. provided insightful and timely updates particularly on the Bank’s
financial, capital and liquidity impacts, as well as Management’s
efforts taken to mitigate any impact.
130 • CORPORATE
The BRMC also reviewed reports on Management’s initiatives

on integrating sustainability into the Bank’s business and
operations. The BRMC deliberated on the progress of the Bank’s
adoption of BNM’s Climate Change & Principle-based Taxonomy
(CCPT), Climate Risk Management and Scenario Analysis (CRMSA)
as well as the enhancements to ESG assessment frameworks
and initiatives. Furthermore, the BRMC evaluates our disclosure
developments through the implementation of the Taskforce
on Climate-Related Financial Disclosures (TCFD). In managing
climate-related risk, the BRMC endorsed the embedding of
a risk appetite statement on climate change resiliency, as we
set towards the Bank’s development of relevant risk metrics to
manage climate-related risks. The BRMC have also reviewed and
endorsed the recovery plan developed for the financial holding
company (FHC), which is HLFG and the Bank.
Corporate Governance Overview,

Risk Management & Internal Control Statement
Corporate Governance is the process and structure used to direct and manage the business and
affairs of the Company towards promoting business prosperity and corporate accountability
with the ultimate objective of realising long term shareholder value while taking into account
the interest of other stakeholders.
Finance Committee on Corporate Governance
The Board of Directors (“Board”) is pleased to present this statement with an overview of the corporate governance (“CG”) practices
of the Group which supports the three key principles of the Malaysian Code on Corporate Governance (“MCCG”) 2021 namely board
leadership and effectiveness; effective audit and risk management; and integrity in corporate reporting and meaningful relationship
with stakeholders.
The CG Report 2023 of the Bank in relation to this statement is published on the Bank’s website, www.hlb.com.my (“the Bank’s
Website”).
The Board also reviewed the manner in which the Bank Negara Malaysia’s (“BNM”) policy document on Corporate Governance
(“BNM CG Policy”) is applied in the Group, where applicable, as set out below.
SECTION A. ROLES AND RESPONSIBILITIES OF THE BOARD Board Committees which operate within clearly defined TOR
primarily to support the Board in the execution of its duties and
The Board assumes responsibility for effective stewardship and responsibilities.
control of the Bank and has established terms of reference
(“TOR”) to assist in the discharge of this responsibility. To discharge its oversight roles and responsibilities more
effectively, the Board has delegated the independent oversight
In discharging its responsibilities, the Board has established over, inter alia, internal and external audit functions and
functions which are reserved for the Board and those which are internal controls to the Board Audit Committee (“BAC”); and
delegated to management. The key roles and responsibilities of risk management to the Board Risk Management Committee
the Board are set out in the Board Charter, which is reviewed (“BRMC”). The Nomination Committee (“NC”) is delegated
annually by the Board and published on the Bank's Website. The the authority to, inter alia, assess and review Board, Board
Board Charter was last reviewed by the Board in July 2023. The key Committees and GMD/CEO appointments and re-appointments
roles and responsibilities of the Board broadly cover reviewing and oversee management succession planning. Although the
and approving corporate policies and strategies; overseeing and Board has granted such authority to the Board Committees, the
evaluating the conduct of the Group’s businesses; identifying ultimate responsibility and the final decision rest with the Board.
principal risks and ensuring the implementation of appropriate The chairmen of the Board Committees report to the Board on
systems to manage those risks; and reviewing and approving key matters dealt with at their respective Board Committee meetings.
matters such as financial results, investments and divestments, Minutes of Board Committee meetings are also tabled at Board
acquisitions and disposals, and major capital expenditure and meetings.
such other responsibilities that are required as specified in the
guidelines and circulars issued by BNM from time to time. There is a clear division of responsibilities between the Chairman
of the Board and the GMD/CEO. This division of responsibilities
The day-to-day business of the Bank is managed by the between the Chairman and the GMD/CEO ensures an appropriate
Group Managing Director/Chief Executive Officer (“GMD/CEO”) balance of roles, responsibilities and accountability.
who is assisted by the management team. The GMD/CEO and
his management team are accountable to the Board for the The Chairman leads the Board and ensures its smooth and
performance of the Bank. In addition, the Board has established effective functioning.
132 • CORPORATE
Corporate Governance Overview, Risk Management & Internal Control Statement
SECTION A. ROLES AND RESPONSIBILITIES OF THE BOARD (CONTINUED) appropriate targets in Board diversity including gender balance
on the Board and will take the necessary measures to meet these
The GMD/CEO is responsible for formulating the vision and targets from time to time as appropriate. The Board currently has
recommending policies and the strategic direction of the Bank eight (8) Directors, of whom three (3) are women Directors. The
for approval by the Board, implementing the decisions of the Board will continue to maintain women participation on the Board
Board, initiating business ideas and corporate strategies to create in line with the MCCG.
competitive edge and enhancing shareholder wealth, providing
management of the day-to-day operations of the Bank and Based on the review of the Board composition in July 2023, the
tracking compliance and business progress. Board is of the view that the current size and composition of the
Board are appropriate and effective for the control and direction of
Independent Non-Executive Directors (“INEDs”) are responsible the Group’s strategy and business. The composition of the Board
for providing insights, unbiased and independent views, advice also fairly reflects the investment of shareholders in the Bank.
and judgment to the Board and bring impartiality to Board
deliberations and decision-making. They also ensure effective
checks and balances on the Board. There are no relationships or SECTION C. BOARD COMMITTEES
circumstances that could interfere with or are likely to affect the
exercise of INEDs’ independent judgment or their ability to act in Board Committees have been established by the Board to assist in
the best interest of the Bank and its shareholders. the discharge of its duties.
The Group continues to operate in a sustainable manner and seeks (A) BAC
to contribute positively to the well-being of stakeholders. The
Group takes a progressive approach in integrating sustainability The composition of the BAC and a summary of its activities in
into its businesses as set out in the Sustainability Statement the discharge of its functions and duties for the financial year
which forms part of this Annual Report. and explanation on how the BAC had met its responsibilities
are set out in the BAC Report in this Annual Report.
The Board observes the Code of Ethics for Company Directors
established by the Companies Commission of Malaysia (“CCM”) The BAC’s functions and responsibilities are set out in the TOR
and Hong Leong Bank Group Code of Conduct & Ethics, which which is published on the Bank’s Website.
have been adopted by the Board and published on the Bank’s
Website. Details of the Hong Leong Bank Group Code of Conduct
(B) BRMC
& Ethics are set out in Section F of this Statement.
The composition of the BRMC and a summary of its activities

in the discharge of its functions and duties for the financial
SECTION B. BOARD COMPOSITION
year and explanation on how the BRMC had met its
responsibilities are set out in the BRMC Report of this Annual
The Board currently comprises eight (8) Directors. The eight (8)
Report.
Directors are made up of seven (7) Non-Executive Directors, of
whom five (5) are independent. The profiles of the members of
the Board are set out in this Annual Report. The BRMC’s functions and responsibilities are set out in the
TOR which is published on the Bank’s Website.
The Bank is guided by the BNM CG Policy and the Main Market
Listing Requirements (“MMLR”) of Bursa Malaysia Securities (C) NC
Berhad (“Bursa”) in determining its board composition. The Board
shall determine the appropriate size of the Board to enable an The NC was established on 17 June 2003. The composition of
efficient and effective conduct of Board deliberation. The Board the NC is as follows:
shall have a balance of skills and experience to commensurate
• Ms Lau Souk Huan (Chairman)
with the complexity, size, scope and operations of the Bank.
• Mr Tan Kong Khoon
Board members should have the ability to commit time and
• YBhg Datuk Manharlal A/L Ratilal
effort to carry out their duties and responsibilities effectively.
(Appointed as NC member with effect from
15 September 2023)
The Bank has in place a Board Diversity Policy. The Board recognises
the merits of Board diversity in adding value to collective skills, The NC’s functions and responsibilities are set out in the TOR
perspectives and strengths to the Board. The Board will consider which is published on the Bank’s Website.
SECTION C. BOARD COMMITTEES (CONTINUED)
(C) NC (CONTINUED)
The Bank has in place a Fit and Proper (“F&P”) Policy as a guide for the process and procedure for assessment of inter alia, (i)
new appointments and re-appointments of Chairman, Directors and GMD/CEO, (ii) appointment of Board Committee members,
and (iii) annual F&P assessment of Chairman, Directors and GMD/CEO, and the criteria and guidelines used for such assessments.
Upon the approval of the Board, an application on the prescribed forms will be submitted to BNM for approval in respect of new
appointments and re-appointments.
(i) New Appointments
The nomination, assessment and approval process for new appointments is as follows:
• Assessment against Assessment

Criteria and BNM Guidelines
• F&P Declaration by candidates Deliberation by the
Identification of Meeting with
• Relevant Credit Bureau Checks Board and decision
candidates candidates
• CTOS (Bankruptcy) Search thereof
• Independent Background Checks
• Recommendation by the NC
In assessing the candidates for Board appointments, the NC will take into account, inter alia, the strategic and effective fit of
the candidates for the Board, the overall desired composition and required mix of expertise and experience of the Board as
a whole and having regard to the candidates’ attributes, qualifications, management, leadership, business experience and
their F&P Declarations in respect of their probity, competence, personal integrity, reputation, qualifications, skills, experience
and financial integrity in line with the standards required under the relevant BNM Guidelines. The Bank will also conduct
independent background checks to verify the information disclosed in the F&P Declarations. The Bank has taken steps to
build and maintain a pool of potential Board candidates from internal and external introductions, recommendations and
independent sources with director databases in its search for suitable Board candidates.
In the case of GMD/CEO, the NC will take into account the candidate’s knowledge and experience in the industry, market and
segment. The NC will also consider the candidate’s F&P Declaration in line with the standards required under the relevant
BNM Guidelines.
(ii) Re-Appointments
The assessment and approval process for re-appointments is as follows:
• Assessment against Assessment Criteria and BNM Guidelines

• F&P Declaration
• Relevant Credit Bureau Checks Deliberation by the Board and
• CTOS (Bankruptcy) Search decision thereof
• Recommendation by the NC
For re-appointments, the Chairman, Directors and GMD/CEO will be evaluated on their performance in the discharge of duties
and responsibilities effectively, including, inter alia, contribution to Board deliberations and commitment, and for independent
directors, their independence. The NC will also consider the results of the Annual Board Assessment (as defined below),
their contributions during the term of office, attendance at Board meetings, F&P Declarations in respect of their probity,
competence, personal integrity, reputation, qualifications, skills, experience and financial integrity in line with the standards
required under the relevant BNM Guidelines and for Independent Directors, their continued independence. Independent
background checks will also be conducted to verify the information disclosed in their F&P Declarations.
134 • CORPORATE
(C) NC (CONTINUED)
(iii) Board Committees Appointments
The nomination, assessment and approval process for appointments to Board Committees (“Board Committees Appointments”)
is as follows:
Identification of Directors • Assessment against Assessment Criteria and BNM

Deliberation by the Board
for Board Committees Guidelines
and decision thereof
membership • Recommendation by the NC
The assessment for Board Committees Appointments will be based on the Directors’ potential contributions and value-add to
the Board Committees with regard to Board Committees’ roles and responsibilities.
(iv) Annual F&P Assessment
The annual F&P assessment process is as follows:
• Directors to complete:
- the Board Annual Assessment Form • Assessment against Assessment Criteria
Deliberation by the Board
- the F&P Declaration and Guidelines
and decision thereof
• CEO to complete the F&P Declaration • Recommendation by the NC
A formal evaluation process has been put in place to assess the effectiveness of the Board as a whole, the Board Committees and
the contribution and performance of each individual Director on an annual basis (“Annual Board Assessment”) in conjunction
with the annual F&P assessment of Chairman, Directors and GMD/CEO pursuant to the BNM Guidelines. Directors and
GMD/CEO are required to complete the F&P Declaration in respect of their probity, competence, personal integrity, reputation,
qualifications, skills, experience and financial integrity in line with the standards required under the relevant guidelines.
Independent background checks will also be conducted to verify the information disclosed in their F&P Declarations.
The NC will deliberate the results of the Annual Board Assessment and submit its recommendation to the Board for
consideration and approval. For newly appointed Directors, the Annual Board Assessment will be conducted at the next
annual assessment exercise following the completion of 1 year of service.
Assessment criteria for Board as a whole include, inter alia, the effectiveness of the Board composition in terms of size and
structure vis-à-vis the complexity, size, scope and operations of the Bank; the core skills, competencies and experience of
the Directors; and the Board’s integrity, competency, responsibilities and performance. The assessment criteria for Board
Committees include the effectiveness of the respective Board Committees’ composition in terms of mix of skills, knowledge
and experience to carry out their respective roles and responsibilities in accordance with the Board Committees’ TOR and the
contribution of the Board Committee members. Each individual Director is assessed on, inter alia, the effectiveness of his/her
competency, expertise and contributions. The skills, experience, soundness of judgment as well as contributions towards the
development of business strategies and direction of the Bank and analytical skills to the decision-making process are also
taken into consideration.
For management succession planning, it has been embedded in the Group’s process over the years to continuously identify,
groom and develop key talents from within the Group. The Group also has a talent development programme to identify, retain
and develop young high potential talents.

• Reviewed the F&P Declarations by Directors,
(C) NC (CONTINUED) GMD/CEO and Company Secretary in line with the
BNM policy document on F&P Criteria and was
(iv) Annual F&P Assessment (Continued) satisfied that the Directors, GMD/CEO and Company
Secretary met the requirements as set out in BNM
The NC meets at least once in each financial year and policy document on F&P Criteria;
additional meetings may be called at any time as and
when necessary. • Reviewed the term of office and performance of
the BAC and each of its members in accordance
During the financial year ended 30 June 2023 (“FY2023”), with the TOR of BAC and was of the view that
three (3) NC meetings were held and the attendance of the BAC and each of its members had carried out
the NC members were as follows: their duties in accordance with the BAC TOR for the
period under review;
Member Attendance • Reviewed the re-appointment of Directors in
Ms Lau Souk Huan (1) 1/1 accordance with the F&P Policy, BNM CG Policy
Mr Tan Kong Khoon 3/3 and MMLR, and recommended to the Board for
YBhg Dato’ Nicholas John Lough 3/3 consideration and approval;
• Reviewed the appointment of Directors and
Ms Chok Kwee Bee (3) 2/2
GMD/CEO in accordance with the F&P Policy, BNM
(1)
Appointed as NC Chairman with effect from 1 December 2022 CG Policy and MMLR, and recommended to the
(2)
Retired as NC member with effect from 21 June 2023 Board for consideration and approval;
(3)
Retired as NC Chairman with effect from 1 December 2022
• Considered the re-election of Directors who are
due for retirement at the Annual General Meeting
YBhg Datuk Manharlal A/L Ratilal was appointed as
("AGM") pursuant to the Constitution of the Bank;
NC member after the close of the FY2023 and as such,
did not attend any of the NC meetings held during the • Assessed potential candidates to fill vacancy(ies)
FY2023. in the Board and Board Committees, and
recommended to the Board for consideration and
The NC carried out the following activities in the approval; and
discharge of its duties in accordance with its TOR during
the FY2023: • Considered the Board Policy on Succession Planning
of the Board.
• Carried out the Annual Board Assessment and
was satisfied that the Board as a whole, Board (D) REMUNERATION COMMITTEE (“RC”)
Committees and individual Directors have
The RC was established on 17 June 2003. The composition of
continued to effectively discharge their duties and
the RC is as follows:
responsibilities in accordance with their respective
TORs, and that the current Board composition in • YBhg Datuk Manharlal A/L Ratilal (Chairman)
terms of Board balance, size and mix of skills is (Appointed as RC Chairman with effect from
appropriate and effective for the discharge of its 15 September 2023)
functions. The NC took cognisance of the merits of • YBhg Datuk Dr Md Hamzah bin Md Kassim
Board diversity including women participation on • Ms Cheong Soo Ching
the Board, in adding value to the Bank. The NC will
continue to maintain women participation on the The RC’s functions and responsibilities are set out in the TOR
Board in line with the MCCG; which is published on the Bank’s Website.
• Considered and assessed the position of

Independent Directors of the Bank and was satisfied
that the Independent Directors met the regulatory
requirements for Independent Directors;
136 • CORPORATE
SECTION C. BOARD COMMITTEES (CONTINUED) between their rewards and individual performance, based
on the provisions in the Group’s Human Resources Manual,
(D) REMUNERATION COMMITTEE (“RC”) (CONTINUED) which are reviewed from time to time to align with market/
industry practices. INEDs of the Bank are paid fixed annual
During the FY2023, two (2) RC meetings were held and the director fees, Board Committee fees and meeting allowance
attendance of the RC members were as follows: for each Board and Board Committee meeting attended. The
remuneration of INEDs is recommended and endorsed by
Member Attendance
the Board for approval by the shareholders of the Bank at
YBhg Datuk Dr Md Hamzah bin Md Kassim 2/2
its AGM, and payable in cash to INEDs upon approval of the
Ms Cheong Soo Ching 2/2
shareholders of the Bank.
YBhg Dato’ Nicholas John Lough
@ Sharif Lough bin Abdullah (1) 2/2 The detailed remuneration of each Director during the
FY2023 is as set out in Note 40 of the Audited Financial
(1)
Retired as RC Chairman with effect from 21 June 2023 Statements in this Annual Report.
YBhg Datuk Manharlal A/L Ratilal was appointed as RC Remuneration Philosophy & Framework
Chairman after the close of FY2023 and as such, did not
attend any of the RC meetings held during the FY2023. Hong Leong Bank Group’s (HLBG) remuneration strategy
supports and promotes a high performance culture to deliver
The Group’s remuneration scheme for Executive Directors the Bank’s Vision to be a highly digital & innovative ASEAN
is linked to performance, service seniority, experience and financial services company. It also forms a key part of our
scope of responsibility and is periodically benchmarked to Employer Value Proposition with the aim to drive the right
market/industry surveys conducted by human resource behaviours, create a workforce of strong values, high integrity,
consultants. Performance is measured against profits and clear sense of responsibility and high ethical standards.
targets set in the Group’s annual plan and budget.
The remuneration framework provides a balanced approach
The level of remuneration of Non-Executive Directors between fixed and variable components that is measured using
reflects the scope of responsibilities and commitment a robust and rigorous performance management process that
undertaken by them. incorporates meritocracy in performance, HLB values, prudent
risk-taking and key behaviours in accordance to our Code of
The RC, in assessing and reviewing the remuneration packages Conduct and risk and compliance management as part of the
of Executive Directors, ensures that a strong link is maintained key performance indicators for remuneration decisions.
Overview of Remuneration Policy Framework
Remuneration philosophy hinges on:

• Our values and commitment to the employees of the Bank
A. Philosophy • High performance culture
• Strong alignment between prudent risk taking and reward
Remuneration principles are based on 3 key principles:

B. Principles • Oversight by Remuneration Committee & Board of Directors
• Prudent Risk Taking
• Governance Process for Bonus, Increment and Promotion (BIP)
Remuneration practices:
• Details how the remuneration principles will be achieved in practice
C. Practices • Includes remuneration structures, design, implementation and
workflow/procedures
SECTION C. BOARD COMMITTEES (CONTINUED) Remuneration Practices
(D) REMUNERATION COMMITTEE (“RC”) (CONTINUED) Measurement of Performance
Guiding Principles The Bank’s performance is determined in accordance with

a balanced scorecard which includes key measures on
Principle 1 - Oversight by Remuneration Committee & profitability, cost, capital, shareholders’ return, medium to
Board of Directors long-term strategic initiatives, as well as risk, audit and
compliance positions.
The RC’s responsibilities are to recommend to the Board,
framework and policies that govern the remuneration of the For each employee, performance is tracked through Key
Directors, Shariah Committee, Chief Executive Officer, senior Result Areas (KRAs) in a balanced scorecard. It focuses on the
management officers and other material risk takers. The RC achievement of key objectives which are aligned to value
ensures that the remuneration system is in line with the creation for our shareholders and multiple stakeholders.
business and risk strategies, corporate values and long-term At the end of the year, performance of the employee is
interests of the Bank and that it has a strong link between assessed through the performance management framework
rewards and individual performance and is periodically which is based on 70% of KRAs (with mandatory weightage
benchmarked to market/industry. The Board must ensure for Compliance and Training) and 30% of HLB Values, which
that the CG disclosures on remuneration are accurate, clear, now includes a prompt under the Here For The Long Term
and presented in a manner that is easily understood by its value for employees to share their efforts in sustainability.
shareholders, customers and other relevant stakeholders.
The Bank shall ensure the performance measure of the
Principle 2 — Prudent Risk Taking employee promotes the Bank’s core values and desired
conduct and behaviour to achieve Fair Treatment of Financial
Remuneration for employees within the Bank must be Consumers (“FTFC”) and all relevant regulatory policies
aligned with prudent risk-taking. Hence, remuneration outcomes. Apart from quantitative targets, performance
outcomes must be symmetric with risk outcomes. This measures shall include qualitative criteria that closely reflect
includes ensuring that remuneration is adjusted to account the delivery of FTFC and all relevant regulatory policies
for all types of risk, and must be determined by both outcomes.
quantitative measures and qualitative judgement.
Every senior management officer has a responsibility to
Principle 3 — Governance Process for Bonus, Increment embed sustainability in all initiatives in their division. This
and Promotion (“BIP”) is linked to performance considerations and in turn, total
remuneration received.
The Bank has established an end-to-end BIP process to ensure
proper governance and sufficient control is in place. Provision Pay Mix Delivery and its Purpose
for variable remuneration is tied to the performance of the
Bank and the pool is allocated according to the performance The overall Total Compensation for the GMD/CEO and
of each business unit. To safeguard the independence and members of the Senior Management team generally
authority of individuals engaged in control functions, the includes base pay, fixed cash allowances, performance-
Bank ensures that the remuneration of such individuals is based variable pay, long term incentives, benefits and other
based principally on the achievement of control functions employee programmes.
objectives and determined in a manner that is independent
from the business lines they oversee. No increment and 1. Fixed Pay (base pay and fixed cash allowances)
bonus is accorded to an employee with performance rating 1
or 2 or if the employee has tendered his/her resignation. The Fixed pay is delivered at an appropriate level taking
Bank has the discretion to impose an employment bond on into account skills, experience, responsibilities,
employees who have received salary adjustments outside of competencies and performance; ensuring its
the BIP cycle. competitiveness vis-à-vis comparable institutions for
attraction and retention purposes.
138 • CORPORATE
(D) REMUNERATION COMMITTEE (“RC”) (CONTINUED)
Remuneration Practices (continued)
Pay Mix Delivery and its Purpose (continued)
2. Performance-based variable pay
Performance-linked variable pay in the form of bonuses is paid out at the end of the financial year subject to the Bank’s
performance and in recognition of individual performance and key achievements during the year. It focuses on the
achievement of key objectives which are aligned to value creation for our shareholders and multiple stakeholders. A robust
key performance indicators setting process that incorporates risk management as part of the scorecards are also in place to
ensure excessive risk taking behaviours of staff are minimised and sufficient control mechanisms are in place. Variable bonus
awards for individuals in senior management position and in excess of certain thresholds will be deferred over a period of
time.
3. Long term incentives
In addition, the Bank also recognises and rewards individuals for their contributions towards the Bank’s long-term business
achievements (both in qualitative and quantitative measures) through a combination of cash and non-cash (i.e. shares or
share-linked instruments) elements that are subject to partial deferment over a period of time (typically over a few years)
with built-in clawback mechanism.
The clawback mechanism can be triggered when there are non-compliances to regulations and policies and where Management
deemed necessary due to achievements of performance targets that are not sustainable. Clawbacks are typically (and not
limited to) applied in the case of Gross Misconduct, Financial Misstatements, Material Risks and/or Malfeasance of Fraud.
The variable portion of remuneration (both Performance-based variable pay and long-term incentives) increases along with
the individual’s level of accountability. By subjecting an adequate portion of the variable remuneration package to forfeiture,
it takes into account potential financial risks that may crystallize over a period of time, reinforces HLB’s corporate and risk
culture in promoting prudent risk taking behaviours.
4. Employee Benefits and Programmes
Employee benefits (e.g. health screening, medical, leave passage) are used to foster employee value proposition and wellness
to ensure the overall well-being of our employees. These are being reviewed annually to ensure HLB remains competitive in
the industry and that the employees are well taken care of.
Remuneration Disclosure
The following depicts the total value of remuneration awarded to the Senior Management team (including GMD/CEO) and Material
Risk Takers for the FY2023:
i) GMD/CEO
Cash Shares Total

Name Category (RM) (RM) (RM)
Fixed remuneration 2,641,200 - 2,641,200
Domenic Fuda Variable remuneration
(Retired with effect from
30 June 2023) 1. Non-deferred 22,460,625 - 22,460,625
2. Deferred - 2,553,741* 2,553,741
(D) REMUNERATION COMMITTEE (“RC”) (CONTINUED)
Remuneration Practices (continued)
The following depicts the total value of remuneration awarded to the Senior Management team (including GMD/CEO) and Material
Risk Takers for the FY2023: (continued)
ii) Senior Management
Total amount of outstanding Total amount of outstanding

deferred remuneration deferred remuneration paid out/
No. of officers Unrestricted Deferred as at 30.6.2023 share vested in FYE2023
received (RM) (RM) (RM) (RM)
Fixed Remuneration
Cash-based 23 21,625,097 - -
Shares and share-linked
instruments - - - - -
Other - - - - -
Variable Remuneration
Cash-based 23 12,939,728 1,635,805 2,315,525 1,363,006
instruments 20 - 1,537,393* 2,163,275* 3,542,201*
Other - - - - -
S enior Management refers to management staff who have primary and significant responsibility for the management and performance
of significant business activities of the Bank and any person who assumes primary or significant responsibility for key control functions of
the Bank.
iii) Material Risk Takers
Total amount of outstanding Total amount of outstanding

deferred remuneration deferred remuneration paid out/
No. of officers Unrestricted Deferred as at 30.6.2023 share vested in FYE2023
received (RM) (RM) (RM) (RM)
Fixed Remuneration
Cash-based 14 9,028,048 - -
instruments - - - - -
Other - - - - -
Variable Remuneration
Cash-based 14 3,682,095 328,982 522,803 334,208
instruments 7 - 292,215* 458,596* 290,841*
Other - - - - -
Other material risk takers refers to an officer who is not a member of Senior Management Officers of the Bank and who can materially
commit or control significant amounts of the Bank's resources or whose action are likely to have a significant impact on the Bank's risk
profile.
Note: * The value of share is based on the valuation used for MFRS2 Accounting.
140 • CORPORATE
SECTION C. BOARD COMMITTEES (CONTINUED) • Reviewed the Group’s adoption of emerging

technologies, including the adoption status and
(E) BOARD INFORMATION AND TECHNOLOGY COMMITTEE corresponding capabilities;
(“BITC”)
• Deliberated on the digital disruption, IT innovation and
The BITC was established on 1 January 2020 to jointly support ongoing development in digital trends in the financial
the Boards of Hong Leong Bank Berhad and Hong Leong Islamic services industry, and assessed impact, if any on the
Bank Berhad in discharging the following responsibilities: digital strategy of the Group;
1. Oversee technology and cyber security related matters. • Reviewed the cyber security strategy/framework and
progress update of the information security roadmap;
2. Ensure that risks assessments undertaken in relation
to material technology applications are robust and • Reviewed the progress update of key IT Projects;
comprehensive.
• Reviewed the production incidents and trends;
3. Ensure that management meets the expectations on
technology and cyber security risk management as set • Reviewed the cyber security events and incidents;
out in BNM’s policy document on Risk Management in
Technology (“BNM RMiT Policy”). • Reviewed the progress update of the information
security enhancement plan;
The composition of the BITC is as follows:
• Reviewed the management of technology obsolescence risk;
• Puan Fa’izah binti Mohamed Amin (Chairman)
(Appointed as BITC Chairman with effect from 1 December 2022) • Reviewed the state of compliance and progress updates
on action items in relation to the BNM RMiT Policy;
• YBhg Datuk Dr Md Hamzah bin Md Kassim
• Reviewed and assessed IT-related policies/ guidelines;

• Ms Lau Souk Huan
(Redesignated as BITC member with effect from 1 December 2022)
• Reviewed the risk assessment on IT outsourcing and
insourcing arrangements of the Group;
The BITC’s functions and responsibilities are set out in the
TOR which is published on the Bank’s Website.
• Reviewed the audit findings identified by the Group
Internal Audit Division and the External Auditors on
During the FY2023, four (4) BITC meetings were held and the
IT-related matters and monitored the resolutions and
attendance of the BITC members was as follows:
action items in relation thereto;
Member Attendance
• Reviewed the Business Continuity Management of the
Puan Fa’izah binti Mohamed Amin (1)
2/2
Group, including critical system downtime and disaster
YBhg Datuk Dr Md Hamzah bin Md Kassim 4/4 recovery plans;
Ms Lau Souk Huan 4/4
Ms Cheong Soo Ching(2) 2/2 • Reviewed the critical patch development activities for
(1)
Appointed as BITC Chairman with effect from 1 December 2022 critical IT infrastructure;
(2)
Resigned as BITC member with effect from 1 December 2022
• Reviewed the status of the compromise assessment
The BITC carried out the following activities in discharge of initiative and results on Compromise Assessment on the
its duties in accordance with its TOR during the FY2023: Bank’s IT infrastructure;
• Reviewed the IT Strategy and monitored the progress • Reviewed the Risk Appetite Statement of Technology
against management plan; Risk for the FY2022/2023;
• Reviewed the IT Capital Budget and updates;

SECTION C. BOARD COMMITTEES (CONTINUED) provide notifications to the Board for acceptance of any new
Board appointments. This ensures that their commitment,
(E) BITC (CONTINUED) resources and time are focused on the affairs of the Bank to
enable them to discharge their duties effectively. Board meetings
The BITC carried out the following activities in discharge are scheduled a year ahead in order to enable full attendance at
of its duties in accordance with its TOR during the FY2023: Board meetings. Additional meetings may be convened on an
(continued) ad-hoc basis as and when necessary. Where appropriate,
decisions are also taken by way of Directors’ Circular Resolutions.
• Reviewed the assessment results on Performance Directors are required to attend at least 75% of Board meetings
Review of Critical Technology Service Providers; held in each financial year pursuant to the BNM CG Policy.
• Assessed BNM Thematic Review 2022 against the Bank’s All Board members are supplied with information in a timely
position; and manner. The Bank has moved towards electronic Board reports
since 2015. Board reports are circulated electronically prior to
• Reviewed the Bank's planned initiatives in alignment Board and Board Committee meetings and the reports provide,
with BNM Financial Sector Blueprint 2022-2026. amongst others, financial and corporate information, significant
operational, financial and corporate issues, updates on the
SECTION D. INDEPENDENCE performance of the Bank and of the Group and management’s
proposals which require the approval of the Board.
The Board takes cognisance of the provisions of the MCCG,
which states that the tenure of an Independent Director should All Directors have access to the advice and services of a
not exceed a cumulative term of 9 years and upon completion qualified and competent Company Secretary to facilitate the
of the 9 years, an Independent Director may continue to serve discharge of their duties effectively. The Company Secretary is
on the Board subject to the Director’s re-designation as a qualified to act under Section 235 of the Companies Act 2016.
Non-Independent Director. It further states that in the event the The Company Secretary supports the effective functioning of the
Board wishes to retain an Independent Director who has served Board, provides advice and guidance to the Board on policies
a cumulative term of 9 years and above, shareholders’ approval and procedures, relevant rules, regulations and laws in relation
shall be annually sought with justification through a two-tier to corporate secretarial and governance functions and facilitates
voting process. effective information flow amongst the Board, Board Committees
and senior management. All Directors also have access to the
The tenure of all the Independent Directors on the Board of the advice and services of the internal auditors and in addition, to
Bank does not exceed 9 years. The Independent Directors have independent professional advice, where necessary, at the Bank’s
declared their independence, and the NC and the Board have expense, in consultation with the Chairman or the GMD/CEO of
determined, at the annual assessment carried out, that the the Bank.
Independent Directors have continued to bring independent and
objective judgment to Board deliberations and decision making. At Board meetings, active deliberations of issues by Board
members are encouraged and such deliberations, decisions and
The Bank has in place a policy in relation to the tenure for Independent conclusions are recorded by the Company Secretary accordingly.
Directors of the Bank (“Tenure Policy”) under the F&P Policy of the Any Director who has, directly or indirectly, an interest in a
Bank. Pursuant to the Tenure Policy, the tenure of an independent material transaction or material arrangement shall not be present
director shall not exceed a cumulative term of 9 years from the date at the Board meeting where the material transaction or material
of his or her first appointment in the Bank. Upon completion of the arrangement is being deliberated by the Board.
9 years, an Independent Director shall retire on the expiry date of his
or her term of office approved by BNM.
SECTION E. COMMITMENT
TThe Directors are aware of their responsibilities and devote

sufficient time to carry out such responsibilities. In line with the
MMLR, Directors are required to comply with the restrictions on
the number of directorships in public listed companies. Directors
142 • CORPORATE
SECTION E. COMMITMENT (CONTINUED)

The Bank has prepared for the use of its Directors, a Director
The Board met eight (8) times for the FY2023 with timely notices Manual which highlights, amongst others, the major duties and
of issues to be discussed. Details of attendance of each Director responsibilities of a Director vis-a-vis various laws, regulations
are as follows: and guidelines governing the same.
Director Attendance In assessing the training needs of Directors, the Board has
YBhg Tan Sri Quek Leng Chan 8/8 determined that appropriate training programmes covering
matters on corporate governance, finance, legal, risk management,
Mr Tan Kong Khoon 8/8
information technology, cyber security, sustainability, internal
Mr Kwek Leng Hai 8/8
control and/or statutory/regulatory compliance, be recommended
YBhg Datuk Dr Md Hamzah bin Md Kassim 8/8 and arranged for the Directors to enhance their contributions to
Ms Lau Souk Huan 8/8 the Board.
Ms Cheong Soo Ching 8/8
Puan Fa’izah binti Mohamed Amin (1)
7/7 During the FY2023, the Directors received regular briefings
and updates on the Bank’s businesses, strategies, operations,
Ms Chok Kwee Bee (2) 4/4
risk management and compliance, internal controls, corporate
governance, finance and any changes to relevant legislation,
rules and regulations from in-house professionals. In-house
(1)
Appointed as Director with effect from 1 September 2022 programmes were also organised for the Directors and senior
(2)
Retired as Director with effect from 1 December 2022 management of the Bank.
(3)
Retired as Director with effect from 21 June 2023
YBhg Manharlal A/L Ratilal was appointed to the Board after the The Directors of the Bank have also attended various programmes
close of the FY2023 and as such, did not attend any of the Board and forums facilitated by external professionals in accordance with
meetings held during the FY2023. their respective needs in discharging their duties as Directors.
The Bank recognises the importance of continuous professional

During the FY2023, the Directors of the Bank, collectively or on
development and training for its Directors.
their own, attended various training programmes, seminars,
The Bank is guided by a Directors’ Training Policy, which covers an briefings and/or workshops including:
Induction Programme and Continuing Professional Development
(“CPD”) for Directors of the Bank. The Induction Programme • Association of Islamic Banking and Financial Institutions
is organised for newly appointed Directors to assist them to Malaysia (AIBIM) - Global Islamic Finance Forum 2022
familiarise and to get acquainted with the Bank’s business,
governance process, roles and responsibilities as Director of • Asia School of Business (ASB) - Leadership for Enterprise
the Bank. The CPD encompasses areas related to the industry Sustainability Asia (LESA) 2023
or business of the Bank, governance, risk management and
regulations through a combination of courses and conferences. • Baker McKenzie - The Crypto Ecosystem
A training budget is allocated for Directors’ training programmes.
• Baker McKenzie - Integrating crypto into established financial
All Directors of the Bank have completed the Mandatory services – Funds and listings
Accreditation Programme (“MAP”) Part I. In line with the recent
amendments to MMLR in relation to sustainability training for • Baker McKenzie - A Deep Dive into NFTs
Directors, the Directors of the Bank will complete the MAP Part II
within the prescribed timeframe. • Bank of Singapore - The Geopolitics Turmoil and its Impact on
Family Offices with George Yeo, Former Singapore Minister of
The Bank regularly organises in-house programmes, briefings
Foreign Affairs and Chairman of Kerry Logistics - Geopolitics
and updates by its in-house professionals. The Directors are also
- is the worst yet to come?
encouraged to attend seminars and briefings in order to keep
themselves abreast with the latest developments in the business
• BNM - Engagement Session for BNM Annual Report 2022,
environment and to enhance their skills and knowledge. Directors
Economic & Monetary Review 2022, and Financial Stability
are kept informed of available training programmes on a regular
Review Second Half 2022
basis.
SECTION E. COMMITMENT (CONTINUED) • ICLIF - The Financial Institutions Directors' Education (FIDE)
Core Programme
During the FY2023, the Directors of the Bank, collectively or on
their own, attended various training programmes, seminars, • ICLIF - Building the Islamic Finance Industry’s Future:
briefings and/or workshops including: (continued) Creating Role Model Economies, Inclusive Institutions and
Impact-Driven Investment
• Bursa Malaysia - Presentation of PLC Transformation
Guidebook 2 and sharing session by panellists covering their • ICLIF - Values as a Source of Competitive Advantage
initiatives and viewpoints in embodying sustainability
• ICLIF - Corporate Governance & Remuneration Practices For
• CERT - Kuala Lumpur Islamic Finance Forum (KLIFF) 2022 The ESG World
Muzakarah Penasihat Syariah Kewangan Islam Ke-15
• ICLIF - Risk Management Committee – Banking Sector
• Emnes Events - 2nd Annual Islamic FinTech Leaders Summit
• ISRA - Islamic Finance for Board of Directors Programme
• FIDE Forum - Board Effectiveness Evaluation - Post-launch
Workshop • PIDM-FIDE Forum - PIDM Industry Forum 2022: Recovery and
Resolution Planning for Banks
• FIDE Forum - The Emerging Trends Threats and Risks to the
Financial Services Industry: Managing Global Risk Investment • SC - Audit Oversight Board Conversation with Audit
and Payment System Committees: How the Audit Committees and Auditors can
work together towards reliable audited financial statements
• FIDE Forum - FIDE Forum Business Lunch Engagement
• Singapore Institute of Directors - Listed Entity Director
• FIDE Forum - Can America Stop China's Rise? Will ASEAN Be Programme (LED): Environmental, Social and Governance
Damaged? Essentials (Core)
• HLB - The Heightened Legal & Regulatory Expectations on

Sanctions
• HLB - Corporate Liability Provision on Corruption under the

MACC Act 2009
• HLB - Environmental, Social and Governance Briefing
• HLCB - Anti-Money Laundering/Counter Financing of Terrorism

& Targeted Financial Sanctions: Prevention, Detection &
Collaboration in Fronting Compliance
• HLFG - Presentation on Insurtech by JP Morgan Securities Asia

Pte Ltd
• HLFG - Briefing on Environmental, Social and Governance by

PricewaterhouseCoopers PLT
• ICDM - Bursa Malaysia Mandatory Accreditation Programme

(MAP)
• ICDM - International Directors Summit 2022: The B Factor -

[Bold + Brave] Boards
144 • CORPORATE
SECTION F. STRENGTHENING CORPORATE GOVERNANCE CULTURE
OUR APPROACH TO CORPORATE GOVERNANCE
Nurturing a strong corporate governance culture encompasses not only the policies or processes that we already have in place but
also training that is practical and based on everyday scenarios that can be applied in an employee’s work. Our approach to corporate
governance includes the following:
1 2 3
Code of Conduct & Ethics Policies & Processes Continuous Development
The HLBG Code of Conduct & Ethics (“CoCE”) In addition to the HLBG CoCE, the Talent Continuously strengthening corporate
ensures that our employees commit to Management Board Policy, Remuneration governance through cumulative learning
a high standard of professionalism and Board Policy and the Learning & across all touchpoints: key learnings
ethics in the conduct of our business and Development Management Policy aim from Risk and Compliance Governance
professional activities. The HLBG CoCE is to promote a culture of compliance Meetings, feedback from customer
fundamental to align employee behaviour, underpinned by the Bank’s values, whilst complaint management channels, BUCO
drive a high performance culture bankwide striking a balance between prudent and BUCR meetings and bankwide/
and achieve business results risk-taking and reward divisional learning for employees
Code of Conduct & Ethics
Employees are guided by HLB Group’s values, which seek to ensure that everything we do is sustainable and adds value to the
communities we operate in (Here For The Long Term); we treat people with respect and seek win-win solutions for all parties
(Collaborate To Win); we take ownership and make things happen (Decisiveness). At the same time, employees are encouraged to
embrace change and not be afraid to do things differently (Innovation) and celebrate new learning opportunities (Have Fun).
The Bank’s values, together with the seven principles stated in the HLBG CoCE, is fundamental to align employee behaviour, drive a
high performance culture bankwide and achieve business results.
Specifically, in upholding the value of ‘‘Here for the Long Term’, the HLB Group commits to a high standard of professionalism and ethics
in the conduct of our business and professional activities as set out in the HLBG CoCE.
The HLBG CoCE is applicable to:
All employees who work in the HLB Group across the jurisdictions in which we operate – including but not limited to permanent,
part-time and temporary employees;
Board of Directors of the HLB Group; and
Any other persons permitted to perform duties or functions within the HLB Group – including but not limited to contractors,
secondees, interns, industrial attachment and agency staff.
As the HLBG CoCE forms part of the terms and conditions of employment, our employees are required to adhere to a high standard of
professionalism and ethics in the conduct of their business, professional activities and personal lives, which might otherwise reflect
poorly on the reputation of the HLB Group.
SECTION F. STRENGTHENING CORPORATE GOVERNANCE CULTURE (CONTINUED)
OUR APPROACH TO CORPORATE GOVERNANCE (CONTINUED)
Code of Conduct & Ethic (continued)
Principles
There are seven key pillars to the HLBG CoCE:
Principle 1 Principle 2 Principle 3

Competence Compliance Integrity
The HLB Group is committed to ensuring that The HLB Group operates in a highly The HLB Group’s Vision, Mission and Values
its employees develop and maintain the regulated environment and our employees identifies a strong values-based culture to
relevant knowledge, skills and behaviour are responsible to ensure that they guide decisions, actions and interactions
to ensure that our activities are conducted fully understand and comply with all with stakeholders as a key enabler for the
professionally and proficiently. applicable laws, regulations and regulatory success of the HLB Group. The HLB Group
requirements. relies on our employees to practice sound
Our employees must possess and maintain decision-making with integrity and take
the skills and knowledge needed to perform actions that will preserve our
their roles in accordance with the standards HLB Group’s values.
required by the HLB Group to meet its legal,
compliance and regulatory obligations.
Principle 4 Principle 5 Principle 6

Fairness Confidentiality Objectivity
A core mission of the HLB Group is to help The HLB Group is committed to providing Employees must not allow any conflict of
our clients succeed through simple, relevant, a safe, reliable and secured banking interest, bias or undue influence of others
personal and fair banking. We must act environment and experience for our to override their business and professional
responsibly and be fair and transparent in customers. judgment. Employees must not be influenced
our business practices, including treating our by friendships or association in performing
colleagues, customers and business partners their role.
with respect. We must consider the impact of
our decisions and actions on all stakeholders. Employees are to exercise good judgment at
all times and avoid any actions that would
create an actual, perceived, or potential
conflict of interest.
Principle 7
Work Environment
The HLB Group is committed to provide a safe and non-violent working environment and will remove any unacceptable behaviours from the
workplace. The HLB Group will not tolerate any form of discrimination, harassment (including sexual harassment) or intimidation.
In addition, the HLB Group is committed to reduce the effect of our operations on the environment so that we are able to build our franchise
in a safe and healthy environment. We aim to do this by managing the resources we use across the HLB Group and raising staff awareness
about the importance of caring for the environment.
The HLB Group will be mindful of its activities with employees, business partners and the community we operate within to ensure human
rights are safeguarded. Where there are adverse impacts, we are committed to addressing these.
146 • CORPORATE
SECTION F. STRENGTHENING CORPORATE GOVERNANCE CULTURE (CONTINUED)
OUR APPROACH TO CORPORATE GOVERNANCE (CONTINUED)
Policies & Processes
In addition to the HLBG CoCE, the Talent Management Board Policy, Remuneration Board Policy and the Learning & Development
Management Policy aim to promote a culture of compliance underpinned by the Bank’s values, whilst striking a balance between
prudent risk-taking and reward. The policies are designed to create and cultivate a highly engaged workforce, focused on delivering
strategic goals. This highly engaged workforce is expected to maintain high standards of responsibility, professional conduct and
behaviour, and are able to be role models to other employees and industry peers.
Policy Name Purpose

HLBG Code of The HLBG CoCE ensures that our employees commit to a high standard of professionalism and ethics in the
Conduct & Ethics conduct of our business and professional activities. All employees are required to attest to the CoCE on an
annual basis.
Talent The Talent Management Policy aims to set out our talent management strategy in recruiting, developing,
Management retaining talent and succession planning to support and drive the execution of the business strategy with the
Board Policy ambition to build an organization that builds talent to cater for our needs from within.
Learning & The Learning & Development (“L&D”) Policy sets out principles that will govern the Bank’s L&D strategy and
Development execution plans. The aim is to cultivate a highly engaged workforce, focused on delivering strategic goals,
Management maintain high standards of responsibility, professional conduct and behaviour, and are role models to other
Policy employees and industry peers.
Remuneration The Remuneration Policy aims to maintain a competitive remuneration strategy, enabling us to attract and
Board Policy retain talent and at the same time balance risk and performance outcomes, with an eye on prudent risk-taking.
Whistleblowing The Bank’s Whistleblowing Policy provides a structured channel for all employees of the HLB Group and any
Policy other persons providing services to, or having a business relationship with the HLB Group, to report genuine
concerns about any improper conducts or wrongful acts committed within the HLB Group. The Whistleblowing
Policy is published on the Bank’s Website.
Continuous Development SECTION G. ACCOUNTABILITY AND AUDIT
The Bank’s efforts to continuously strengthen corporate governance The Bank has put in place a framework of processes whereby Board
is the result of cumulative efforts across every touchpoint. Key committees provide oversight on critical processes of the Bank’s
learnings from each Risk and Compliance Governance Committee reporting of financial statements, in order to ensure that accountability
(RCGC) meeting is summarized and circulated to all attendees, and audit are integral components of the said processes.
BUCRs (Business Unit Compliance Representative), BUCOs (Business
Unit Compliance Officer) and respective business units to act upon. I. FINANCIAL REPORTING
BUCOs meet with the L&D team in Human Resources on a monthly
basis to review and request for any ad hoc compliance training The Board has a fiduciary responsibility to ensure the proper
requirements. Our online and offline customer touchpoints (on maintenance of accounting records of the Group. The Board
social media and via the feedback form on our website and via our receives the recommendation to adopt the financial statements
branches and contact centre respectively) also serve to provide from the BAC, which assesses the integrity of financial
feedback directly. On learning, each division is responsible for their statements with the assistance of the external auditors.
own content creation of key topics for their divisions, in addition
to the compliance topics and videos available on Workday for II. RISK MANAGEMENT AND INTERNAL CONTROL
huddles and the quarterly Mandatory eLearning. The seven pillars
of the HLBG CoCE, consists of Competence, Compliance, Integrity, The Board has overall responsibility for maintaining a system
Fairness, Confidentiality, Objectivity and Work Environment, of internal controls which covers financial and operational
provide further guidance to our people and we ensure that we controls and risk management. This system provides
have the necessary development interventions to support each reasonable but not absolute assurance against material
pillar. misstatements, losses and fraud.
SECTION G. ACCOUNTABILITY AND AUDIT (CONTINUED) SECTION I. SHAREHOLDERS
II. RISK MANAGEMENT AND INTERNAL CONTROL (CONTINUED) I. DIALOGUE BETWEEN COMPANIES AND INVESTORS
The BRMC is delegated with the responsibility to provide The Board acknowledges the importance of regular
oversight on the Bank’s management of critical risks communication with shareholders and investors via the
that the Group faces while the BAC is delegated with the annual reports, circulars to shareholders and quarterly
responsibility to review the effectiveness of internal controls financial reports and the various announcements made
implemented in the Bank. during the year, through which shareholders and investors
can have an overview of the Group’s performance and
The Statement on Risk Management and Internal Control operation.
as detailed under Section J of this Statement provides
an overview of the system of internal controls and risk Notices of general meetings and the accompanying
management framework of the Group. explanatory notes are provided within the prescribed notice
period on the Bank’s Website, Bursa’s website, in the media
III. RELATIONSHIP WITH AUDITORS and by post to shareholders. This allows shareholders to
make the necessary arrangements to attend and participate
The appointment of external auditors is recommended by in general meetings either in person, by corporate
the BAC, which determines the remuneration of the external representative, by proxy or by attorney.
auditors. The BAC reviews the suitability and independence
of the external auditors annually. In this regard, an annual Shareholders can access the Bank’s Website for information
assessment is conducted by the BAC to evaluate the such as the Board Charter, TORs of Board Committees,
performance, independence and objectivity of the external corporate information, announcements/press releases/
auditors prior to making any recommendation to the Board briefings, financial information, products information and
on the reappointment of the external auditors. investor relations. The minutes of the AGM are published on
the Bank’s Website.
The Bank also has a Policy on the Use of External Auditors for
Non-Audit Services to govern the professional relationship The Board has identified Ms Lau Souk Huan, the Chairman of
with the external auditors in relation to non-audit services. the BAC, as the Independent Non-Executive Director of the
Assessment will be conducted by the BAC for non-audit Board to whom concerns may be conveyed, and who would
services to ensure that the provision of non-audit services bring the same to the attention of the Board.
does not interfere with the exercise of independent
judgment of the external auditors. In addition, shareholders and investors can have a channel of
communication with the following persons to direct queries
During the financial year under review, the external auditors and provide feedback to the Group:
met with the BAC to:
GENERAL MANAGER, COMMUNICATION & CSR
• present the scope of the audit before the commencement
Tel No. : 03-2081 8888 ext. 61914
of audit; and
Fax No. : 03-2081 7801
• review the results of the audit as well as the E-mail address: [email protected]
management letter after the conclusion of the audit.
HEAD, CORPORATE FINANCE & INVESTOR RELATIONS
The external auditors meet with the BAC members at least twice a Tel No. : 03-2081 2972
year without the presence of Executive Directors and management. Fax No. : 03-2081 8924
E-mail address: [email protected]
SECTION H. DISCLOSURE
II. AGM
The Bank has in place a Corporate Disclosure Policy for compliance
with the disclosure requirements set out in the MMLR, and to raise
The AGM provides an opportunity for the shareholders to seek
awareness and provide guidance to the Board and management
and clarify any issues and to have a better understanding of
on the Group’s disclosure requirements and practices.
the Group’s performance. Shareholders are encouraged to
meet and communicate with the Board at the AGM and to
All timely disclosure and material information documents will be
vote on all resolutions. Senior management and the external
posted on the Bank’s Website after release to Bursa.
auditors are also available to respond to shareholders’
queries during the AGM.
148 • CORPORATE
SECTION I. SHAREHOLDERS (CONTINUED) process improvement initiatives undertaken. The Board confirms
that its Management team responsibly implements the Board
II. AGM (CONTINUED) policies, Management policies and standard operating procedures
(“SOP”) on risk management and internal control.
8 out of 9 Directors of the Bank and the GMD/CEO attended the
last AGM held on 27 October 2022 to engage with shareholders III. RISK MANAGEMENT AND INTERNAL CONTROL FRAMEWORK
and address issues of concern raised by the shareholders.
The organisational structure of the Bank clearly defines
Pursuant to Paragraph 8.29A(1) of the MMLR, all resolutions the lines of accountability and responsibility. On-going risk
tabled at the AGM held on 27 October 2022 were put to a vote assessment and evaluation are an integral part of the Bank’s
by way of a poll and the voting results were announced at the strategic planning cycle and are responsive to the business
meetings and through Bursa. The Bank had adopted electronic environment and opportunities. Management committees
voting for the conduct of poll on all resolutions at the AGM and are appropriately set up to ensure proper utilisation and
provided e-lodgement channel for shareholders to lodge form investment of the Bank’s assets for effective risk return
of proxy electronically to the Bank. rewards or to limit losses. The Group Risk Management
(“GRM”) and Group Compliance (“GC”) divisions have
SECTION J. STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL implemented an enterprise-wide risk management
framework to inculcate continuous risk and regulatory
I. INTRODUCTION compliance awareness, and the understanding of procedures
and controls, thus improving the overall control environment.
The Board recognises that the practice of good governance is
an important mandate. The Board has established the BAC and Operationally, the Bank establishes multiple lines of defence
the BRMC to ensure that the Bank maintains a sound system to effect a robust control framework. At the first level, the
of internal controls and good risk management practices that operating business and support units are responsible for
foster good governance. The processes for assessments of the day-to-day management of risks inherent in the various
risks and controls are regularly reviewed in accordance with business activities. Regulatory compliance and operational
the guidelines on the ‘Statement on Risk Management and risk units are set up in the various lines of business and
Internal Control: Guidelines for Directors of Listed Issuers’. in support departments. They oversee the day-to-day
compliance to policies, regulatory requirements, business
II. BOARD RESPONSIBILITIES and process controls. At the second level, GRM is responsible
for setting the risk management framework, reviewing
TThe Board acknowledges its overall responsibility for the portfolio risks, and developing tools and methodologies for
risk management and internal control environment and its the identification, measurement, monitoring, and control of
effectiveness in safeguarding shareholders’ interests and risks; whereas GC is responsible for ensuring that controls
the Bank’s assets. The risk management and internal control to manage compliance risks are adequate and operating as
framework is designed to manage rather than to eliminate the intended. At the third level, the Group Internal Audit division
risk of failure in the achievement of goals and objectives of the complements GRM and GC by monitoring and evaluating the
Bank, and therefore only provide reasonable assurance and not effectiveness of internal control systems. It also provides an
absolute assurance, against material misstatement or loss. independent perspective and assessment on the adequacy
and effectiveness of the risk management and compliance
The system of risk management and internal control instituted policies, process, governance and systems. The above is
throughout the Bank is updated periodically to align with the depicted in the following diagram:
dynamic changes in the business environment as well as any
FIRST LINE OF DEFENCE SECOND LINE OF DEFENCE THIRD LINE OF DEFENCE

Group Risk Management
Business and Support Units Group Internal Audit
Group Compliance
Manage inherent risks and ensure Sets policies, reviews portfolio Independent assessment of adequacy
compliance to policies and SOPs in risks and provides oversight of risk and effectiveness of policies and
day-to-day activities. management and compliance matters. processes.
SECTION J. STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (CONTINUED)
III. RISK MANAGEMENT AND INTERNAL CONTROL FRAMEWORK (CONTINUED)
(a) Risk Management
Managing risks is an integral part of the Bank’s overall business strategy. It involves a process of identifying, assessing and
managing risks and uncertainties that could inhibit the Bank’s ability to achieve its strategy and strategic objectives.
Risk governance oversight is underpinned by the core pillars of risk culture, appetite, policies, surveillance, escalation and
capacity. Above all, the approaches need to be relevant, forward looking and sustainable.
The Bank’s risk management framework incorporates the components depicted in the diagram below:
RISK GOVERNANCE OVERSIGHT

Board and management to exercise oversight and set tone from the top
Culture of risk Defined risk Clear Rigorous risk Robust Functional

ownership appetite and framework, surveillance escalation capabilities
capital strategy policies and structure and capacity
process
Risk management Clear articulation Provide clear Facilitates early Cultivation of The right
is part of the of Board’s risk direction. Defined identification of proactive risk talent pool and
PILLARS day-to-day job of appetite in pursuit business rules emerging risks and communication infrastructure are
Critical all employees, of its business and operating opportunities. to support timely key to effectively
components to driven through objectives, parameters. and informed carry out risk
put in place daily application supported by Gives clarity to decisions. surveillance
of management ICAAP, and ensuring various parties’ activities.
decisions. strategy-risk-capital accountabilities.
alignment.
Relevant
Focus on things that matter.
APPROACH Forward looking

How we Be proactive, anticipate emerging risks and opportunities.
implement
Sustainable
Strive to build for the long term.
Figure 1: Risk Management Framework

150 • CORPORATE
(a) Risk Management (continued)
In addition, the risk management framework is effected through an organisational construct and escalation structure as
depicted below:
BOARD OF DIRECTORS
Top Down
EFFECTIVE STEWARDSHIP AND CONTROL

Monitoring and
Set Risk Appetite &
Reporting
Tolerance Limit BOARD RISK MANAGEMENT COMMITTEE
PRESENT SINGLE VIEW OF RISKS AND TO ENSURE

Set Policies and ADEQUATE POLICIES AND CONTROLS WITHIN THE BANK
Capital Allocation
GROUP RISK MANAGEMENT & GROUP COMPLIANCE Bottom Up
Regulatory
Environmental,
Compliance Bribery &
Credit Market Operational Liquidity IT & Cyber Social and Crisis
Risk and Corruption
Risk Risk Risk Risk Risk Governance Related Risk
Financial Risk
(ESG) Risk
Crime Risk
DAILY MANAGEMENT OF RISK, LIMITS, POLICIES, PROCEDURES AND REPORTS
Business Distribution & Service Credit Management Operations & Shared

Divisions Channels Functions Services Functions
Figure 2: Risk Management Structure
The Board has the overall responsibility to ensure there is proper oversight of the management of risks in the Bank. The Board
sets the risk appetite and tolerance level, and allocates the Bank’s capital that is consistent with the Bank’s overall business
objectives and desired risk profile. GRM monitors and reports the Bank’s Credit, Market, Liquidity, Operational and IT Risks.
GC identifies, assesses, monitors and reports compliance matters in addition to advising, providing guidance and training on
regulatory requirements. These risks are presented to BRMC regularly.
The BRMC deliberates and evaluates the reports prepared by GRM and GC, and provides updates to the Board, and where
appropriate, make necessary recommendations to the Board.
HONG LEONG BANK’S KEY RISKS
Type of Risk Mitigating Actions Taken / Strategy
CREDIT RISK • The Bank has established a credit risk management framework (via the Board Policy
on Credit Risk Governance) to ensure that exposure to credit risk is kept within the
Credit Risk arises as a result of Bank’s financial capacity to withstand potential future losses. Financing activities are
customers or counterparties also guided by internal credit policies. The above policies are subject to reviews and
not being able to or willing enhancements, at least on an annual basis.
to fulfill their financial and
contractual obligations as and • Credit portfolio strategies are developed to achieve a desired portfolio risk tolerance
when they fall due. level and sector concentration distribution.
• To assess the credit risk of retail customers, the Bank employs risk scoring models
and lending templates that are designed to assess the credit worthiness and the
likelihood of the obligors to repay their debts.
• To assess the credit risk of small and medium enterprise, commercial and corporate
customers, they are evaluated based on the assessment of relevant factors such as
the customer’s financial position, industry outlook, types of facilities and collaterals
offered; and are assigned with a credit rating.
• The Bank has a comprehensive credit approving process. While the business units are
responsible for credit origination, the credit decisioning function rests mainly with the
Credit Evaluation Departments, the Management Credit Committee ("MCC") and the
Credit Supervisory Committee. The Board delegates the approving and discretionary
authority to the MCC and various personnel based on job function and designation.
• For any new products/product variation, credit risk assessment also forms part of
the new product/product variation sign-off process to ensure that the new product
complies with the appropriate policies and guidelines, prior to their introduction.
• Credit risk reports are presented to the relevant Management and Board level
committees. Such reports identify adverse credit trends and asset quality to enable the
Bank to take prompt corrective actions and/or take appropriate risk-adjusted decisions.
• GRM conducts independent credit reviews on a portfolio basis, which cover the
Personal Financial Services, Business and Corporate Banking, Global Markets, Financial
Institution’s portfolios and portfolios of overseas subsidiaries and branches, providing
an independent and where appropriate, countervailing perspective on credit risk
management issues including business performance, credit decisions, overall assets
quality and credit operations robustness.
• In addition, the Bank also conducts periodic stress testing of its credit portfolios to
ascertain the credit risk impact to capital under the relevant stress scenarios.
152 • CORPORATE
OPERATIONAL RISK • Management oversight on Operational Risk Management ("ORM") matters are
effected through the Risk and Compliance Governance Committee (“RCGC”) whilst
Operational Risk is the risk of Board oversight is effected through the BRMC.
loss resulting from inadequate
or failed internal processes, • The Bank’s ORM strategy is based on a framework of continuous improvements,
people and systems or from good governance structure, policies and procedures as well as the employment
external events which also of risk mitigation strategies. The objective is to create a strong risk and internal
include outsourcing and control culture by ensuring awareness of the significance of operational risk, its
business continuity risks. methodology of identification, analysis, assessment, control and monitoring.
• The Bank adopts ORM tools such as loss event reporting, risk and control self-
assessment and key risk indicators to manage operational risks and are used to
assess risk by taking into consideration key business conditions, strategies and
internal controls.
MARKET RISK • Market risk is primarily managed through various risk limits and controls following
an in-depth risk assessment and review. The types and level of market risk that the
Market Risk is the risk of loss Bank is able and willing to take in pursuit of its business objectives and risk-taking
in financial instruments or the strategies are used as a basis for setting market risk appetite for the Bank.
balance sheet due to adverse
movements in market factors • Market risk limits, the monitoring and escalation processes, delegation of authority,
such as interest and exchange model validation and valuation methodologies are built into the Bank’s market
rates, prices, spreads, risk policies, which are reviewed and concurred by the Group Asset and Liability
volatilities, and/or correlations. Management Committee ("Group ALCO"), endorsed by the BRMC and approved by
the Board.
• Regular market risk stress tests are conducted on the trading book to measure the
loss vulnerability under stressed market conditions.
LIQUIDITY RISK • The Bank adopts a prudent liquidity management approach that includes establishing
comprehensive policies and procedures, implementation of risk controls which
Liquidity risk is the risk of are supported by periodic reviews and monitoring. The liquidity risk policies and
financial loss arising from the governance are reviewed by Group ALCO, endorsed by the BRMC and approved by
inability to fund increases in the Board.
assets, inability to liquidate
assets in a timely manner and/ • The Bank seeks to manage liquidity to ensure that our obligations will continue
or inability to meet financial to be honored under normal as well as adverse circumstances. The key elements
obligations as they fall due. of liquidity risk management includes proactive monitoring and management
of cashflow, maintenance of high quality liquid assets, diversification of funding
sources and maintaining a liquidity compliance buffer to meet any unexpected cash
outflow.
• The Bank strives to develop a diversified funding base with access to funding
sources across retail and wholesale channels. The funding strategy is anchored on
the strength of our core deposit franchise. The Bank also designs and conducts
regular stress test programmes in accordance with the board-approved risk appetite
and risk management policies. The appropriate management action plans would be
developed and recommended to the Board if there are any potential vulnerabilities
identified during the stress test exercise.
IT & CYBER RISK • New technology initiatives are subjected to a rigorous evaluation process which
assesses the potential risks and readiness of the initiative prior to its implementation.
Information Technology Risk
is the risk of technological • The Bank performs continuous monitoring on system performance to ensure
failure which may disrupt minimal system disruption, while ensuring that redundancies in IT infrastructure
business operations such as and Disaster Recovery Plans are regularly tested.
system defects or service
outages. This also includes • In addition to continuously improving the Bank’s cyber resilience by upgrading
cyber security risk, which is technology capabilities to mitigate cyber threats, cyber risks are also managed by
the risk of possible threat that closely monitoring key risk metrics and progressively enhancing its cyber threat
might exploit a vulnerability intelligence gathering capabilities to improve the Bank’s situational awareness.
to breach system security and
therefore cause possible harm. • Management oversight on IT and cyber risk management matters are effected
through the IT Steering Committee (“ITSC”) and Information Security Governance
Council (“ISGC”) whilst Board oversight is effected through the BITC.
154 • CORPORATE
REGULATORY COMPLIANCE RISK • The Bank undertakes robust monitoring of developments in laws and regulations
and assesses its impact to its processes, where applicable. The assessments are
Regulatory Compliance Risk is undertaken to identify gaps in existing processes so that actions are taken within
the risk of legal or regulatory defined timeframes to ensure that the Bank is in compliance.
sanctions, material financial
loss or loss to reputation as a • The Bank participates in providing feedback to the regulators and industry through
result of failure to comply with consultation papers and exposure drafts on policy documents and enhancement
laws and regulations. activities.
FINANCIAL CRIME RISK • In mitigating the risk of financial crime, the Bank undertakes monitoring of
developments of laws and regulations and assesses its impact to internal policies,
Financial Crime Risk is the risk processes and procedures. The Bank leverages on digital automated transactions
of legal or regulatory penalties, monitoring and onboarding solutions to strengthen our capabilities in detection,
material financial loss or monitoring and reporting of potential suspicious activities.
reputational damage resulting
from the failure to comply • The Bank continuously maintains robust controls as a gatekeeper to the financial
with applicable laws and system against Money Laundering, Terrorist Financing and Proliferation Financing
regulations relating to Anti- risks.
Money Laundering, Counter
Financing of Terrorism and • Management oversight on financial crime matters is effected through the
Targeted Financial Sanctions Management level Financial Crime Governance Committee (“FCGC”), whilst Board
requirements. oversight is effected through the BRMC.
BRIBERY AND CORRUPTION • The Bank ensures that the Management team conducts bribery and corruption risk
RISK assessment of the overall Bank’s operations periodically to identify, analyse, assess and
prioritise actions needed to mitigate internal and external bribery and corruption risks.
Bribery and Corruption Risk is
the risk of offering, paying or • Management also reviews risk assessment reports, consider improvements to the Bank’s
receiving a bribe through an policies and procedures, and provides training to internal and external stakeholders in
officer, employee, subsidiary, combating corruption and bribery risks.
intermediary or any third party
(individual or corporate) acting • The Anti-Bribery and Corruption (“ABC”) policy is communicated to all our employees,
on the Bank’s behalf. who are required to undergo mandatory training and assessment on completion of
training in the subject matter.
• Clauses relating to ABC have also been incorporated in written agreements to ensure
that suppliers to the Bank understand their obligations and abide by the relevant laws
and regulations. There is continuous reinforcement of communications to our suppliers
on our expectations in relation to ABC.
• Board oversight of bribery and corruption risk is effected through the BRMC and BAC.
The Bank has a Whistleblowing Policy and accompanying procedures in place, where
whistleblowing reports can be addressed directly to the Chairman of the BAC.
ENVIRONMENTAL, SOCIAL AND • The Bank has policies, principles and codes of conduct to ensure the interests of
GOVERNANCE (ESG) RISK the Bank are aligned with the interests of stakeholders on responsible lending/
financing. These include assessments to screen for and review environmental
Environmental, Social and and social risks, financial evaluation of existing and potential customers, and the
Governance (ESG) Risk is the provision of basic banking products to those who cannot afford to pay for fees so
adverse impacts of material that they can participate in the financial system.
“Environmental”, “Social” and
“Governance” risks that could • The Bank has credit policies that require sales and credit staff to review the
subsequently translate to borrowers’ compliance with applicable environmental and social laws and review
financial risks and potential of the same at annual reviews of loan/financing facilities to ensure ongoing
losses that could affect the compliance.
business operations and
stability of the Bank. • The Bank manages its environmental footprint through reduction of waste (such as
paper and water) and efficient usage of energy.
The ‘Environmental’ factor
considers organisational • The Bank has an independent Tender Review Committee that assesses diligence
safeguards for the reviews of suppliers across a number of risks, not just financial strength and
environment, including operational performance. We take into account considerations on environment
corporate policies addressing and social track record and policies, business continuity plans and cyber security
climate change. The ‘Social’ capabilities. Suppliers have to satisfy our zero tolerance for corruption and unfair
factor examines how we practices.
manage relationships with
employees, suppliers, • Management oversight on sustainability matters is effected through the
customers and our Management level Sustainability Committee (“SC”), whilst Board oversight is
communities. The ‘Governance’ effected through the BRMC.
factor relates to the
stewardship of the organization
by its leadership, discharge of
the Board and Management’s
accountabilities in accordance
to ethical business practices,
and implementation of good
internal control frameworks.
156 • CORPORATE
CRISIS RELATED RISK • The Bank has a strategic plan in place to ensure that its operations and services
remain fully operational in the event of a crisis.
Crisis related risk is the risk
of loss arising from increased • The Bank remains cognizant of the need to continuously build and maintain
volatility and uncertainty, resilience, through close and proactive monitoring of potentially high impact events
resulting in impact to the Bank's in the short term and longer term horizon. The Bank continuously simulates and
customers, financial markets tests preparedness to navigate through crisis conditions, while challenging and
and interruption on the Bank's refining its Business Continuity Management ("BCM") plans and processes based on
operations. Such loss could various scenarios. Consequently, the Bank continuously enhances its BCM plans and
arise from disruptive events processes to strengthen its resilience to endure future crises.
such as a global pandemic,
catastrophic climate change • In managing credit risk exposures, the Bank regularly conducts stress tests which
effects, geopolitical tensions incorporate consideration for permutations arising from the pandemic. This is done
and uncertainties surrounding to assess potential vulnerabilities and provide a forward looking view on areas of
the global economic outlook. potential vulnerabilities given the current operating environment.
(b) Basel II and III For Basel III, the Bank is in compliance with the regulatory
requirements and will continuously strengthen its
The Bank places great importance on Basel II and III and capital and liquidity profile in all the countries that
views Basel II and III as a bank-wide initiative that will the Bank operates in, to ensure sufficient capital and
ensure that the Bank continues to meet international liquidity is maintained to allow for business growth and
best practices for the Bank’s credit, market, operational sound capital / liquidity buffer management.
and liquidity risk management practices. By adopting
Basel II and III, the Bank is able and will continue to (c) Internal Audit
enhance and embed sound risk management practices
within the Bank and be equipped with the right risk The Bank’s Group Internal Audit Division (“GIAD”)
management discipline, practices, processes and performs the internal auditing function for the various
systems. entities in the Bank. GIAD regularly reviews the critical
operations (as defined in BNM Guidelines on Internal
For Basel II Pillar 1, the Bank is in compliance with the Audit Function of Licensed Institutions) and critical
regulatory standards and is progressively employing controls in the Information Technology environment (as
advance risk measurement in the respective businesses. outlined in the BNM RMIT Policy) of the Bank to ensure
For Basel II Pillar 2, the Bank’s Board Policy on Internal that the internal controls are in place and working
Capital Adequacy Assessment Process (“ICAAP”) forms effectively.
an integrated approach to manage the Bank’s risk,
capital and business strategy. For Basel II Pillar 3, The results of the audits conducted by GIAD are
which is related to market discipline and disclosure reported to the BAC. Follow-up actions and the review
requirements, the Bank has provided the disclosures of the status of corrective action plans are carried out
under a separate Pillar 3 section in this Annual Report. by Management via the RCGC chaired by the GMD/CEO,
SECTION J. STATEMENT ON RISK MANAGEMENT AND INTERNAL IV. ASSESSMENT OF RISK MANAGEMENT AND INTERNAL
CONTROL (CONTINUED) CONTROL SYSTEM
III. RISK MANAGEMENT AND INTERNAL CONTROL FRAMEWORK The Board has received assurance from the GMD/CEO, Chief
(CONTINUED) Financial Officer, Chief Risk Officer, Chief Internal Auditor and
Chief Compliance Officer that the Group’s risk management
(c) Internal Audit (continued) and internal control system is operating adequately and
effectively, in all material aspects, based on the risk
whose members comprise senior management. The management and internal control system of the Bank.
minutes of meetings of RCGC are tabled to the BRMC
and BAC for notation. Based on the assurance it has received from Management,
the Board is of the view that the Bank’s risk management
Implementation of corrective action plans are followed and internal control system is operating adequately and
up on a monthly basis and reported to the BAC. effectively for the financial year under review and up to the
Highlights of the BAC meetings are submitted to the date of approval of this report.
Board for review and further deliberation.
V. REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS
In addition, internal controls are also effected through
the following processes: As required by Paragraph 15.23 of the MMLR of Bursa, the
external auditors have reviewed this Statement on Risk
• The Board receives and reviews regular reports Management and Internal Control. Their limited assurance
from Management on the key operating statistics, review was performed in accordance with Audit and
business dynamics, legal matters and regulatory Assurance Practice Guide (“AAPG”) 3 issued by the Malaysian
issues that would have implications on internal Institute of Accountants. AAPG 3 does not require the
control measures. external auditors to form an opinion on the adequacy and
effectiveness of the risk management and internal control
• The BAC regularly reviews and holds discussions systems of the Bank.
with Management on the actions taken on internal
control issues identified in reports prepared by SECTION K. DIRECTORS’ RESPONSIBILITY IN FINANCIAL REPORTING
GIAD, external auditors and regulatory authorities.
The MMLR require the Directors to prepare a statement
• Policies on delegation and authority limits are explaining the board of directors’ responsibility for preparing the
strictly implemented to ensure a culture that annual audited financial statements and the Companies Act 2016
respects integrity and honesty, and thereby requires the directors to make a statement stating whether in
reinforce internal controls. their opinion, the audited financial statements are drawn up, in
accordance with the applicable accounting standards, to give a
• Policies and procedures are set out in operation true and fair view of the financial position and of the financial
manuals and disseminated throughout the performance of the Group and of the Bank for the financial year.
organisation in support of a learning culture, so
as to reinforce an environment of internal controls The Directors are satisfied that in preparing the financial
discipline. statements of the Group and of the Bank for the FY2023, the
Group has used the appropriate accounting policies and applied
• Policies for recruitment, promotion and termination them consistently. The Directors are also of the view that the
of staff are in place to ensure the Group’s human relevant approved accounting standards have been followed in
resources comply with internal controls. the preparation of these financial statements.
This Statement on Corporate Governance Overview, Risk

Management and Internal Control is made in accordance with the
resolution of the Board.
158 • FINANCIALS
Directors’ Report
for the financial year ended 30 June 2023
The Directors have pleasure in presenting their report together with the audited financial statements of the Group and of the Bank for
the financial year ended 30 June 2023.
PRINCIPAL ACTIVITIES
The Bank is principally engaged in all aspects of commercial banking business and in the provision of related services. The principal
activity of the significant subsidiary consists of Islamic Banking services. Other subsidiary companies are primarily engaged in property
investment and management, investment holding and nominee services. The details of the subsidiary companies are disclosed in
Note 13 to the financial statements.
BUSINESS STRATEGY FOR THE CURRENT FINANCIAL YEAR
For the financial year under review, recovery in the Malaysian economy continued to gain traction, spearheaded by a combination
of improving domestic demand and better external conditions, further augmented by a low base effect in 2022. Consumer spending
continued to benefit from pent-up demand albeit at a lesser extent, with improving labour market condition and steady wage growth
serving as an added impetus to private consumption. Improvement in economic growth for the financial year under review was also
driven by increased tourism activities, where positive effects were seen spilling over to the wholesale & retail, hotels, restaurants
and other services. Private consumption growth jumped more than five-fold to 11.3% y-o-y in 2022 while both public and private
investment saw commendable pick-up. Value-added of all key sectors registered quicker expansion, except manufacturing which was
still reeling from some supply disruption in the first half of the financial year under review.
Keeping close to our brand promise of “Built Around You”, where customers are at the centre of everything we do, the Bank continuously
strive to develop and tailor our banking solutions to our customers with the objective of optimising customer experience. We place
utmost priority in managing our credit and liquidity risks and remain steadfast in navigating the ongoing business disruptions to ensure
banking and financing services requirements of individuals and businesses are met. Amidst the challenging operating environment,
we maintained discipline in our investments and expenditure which allows us to invest in new growth opportunities and continue
delivering sustainable returns to our stakeholders. In line with our carbon neutral ambition, the Bank remain committed in promoting and
integrating environmental, social and governance (“ESG”) practices internally within our own business operations and engage proactively
with all our external stakeholders to ensure that they equally emphasise ESG in their strategies and business operations.
OUTLOOK AND BUSINESS PLAN FOR NEW FINANCIAL YEAR
Overall macro outlook remains uncertain and challenging going forward against a backdrop of moderating and uneven global growth
prospects. Aftermath of the ongoing geo-political tensions, lagged impact of earlier monetary policy tightening, adverse impact of
higher inflation on real consumption, slower than expected recovery in the China economy, would continue posing downside risks to
2023 outlook. On a near to peak unprecedented rate hikes, we are hopeful that the near-conclusion of monetary policy tightening and
further resumption of tourism activities will augur well with overall global growth prospects.
In tandem with slower growth in the world economy, the Malaysian economy is expected to expand at a more moderate pace of
4-5% in 2023, as resilient domestic demand is expected to help cushion the softer external condition. Notably, private consumption
will remain the main growth pillar, with added support from further recovery in investment activities and tourism related spending.
In line with this, we will remain focus in executing our strategic priorities, where we continuously innovate and emphasise on building
products and services propositions that ring true to our brand promise of “Built Around You”. As we progress in our journey to be a
highly digital and innovative ASEAN financial services institution, we strive to transform customer journeys, build world-class digital
capabilities and continue to support and enable our employees to develop to their greatest potential. Our commitment to help mitigate
climate change continues as we incorporate sustainability action and policies into our daily operations and strategic priorities, to create
positive impact across our customers, communities and environment.
Directors’ Report
PERFORMANCE REVIEW AND MANAGEMENT REPORTS
The Board receives and reviews regular reports from the Management on key financial and operating statistics as well as legal and
regulatory matters. The performance of each business unit is assessed against the approved budgets and business objectives whilst
explanation is provided for significant variances.
CREDIT INFORMATION RATING
During the year, Rating Agency Malaysia Berhad has reaffirmed the Bank’s long-term and short-term ratings, underpinned by our
established domestic retail and SME franchises, robust asset quality and strong capitalisation. Moody’s Investors Services Ltd has also
reaffirmed the Bank’s long-term rating at A3 and short-term rating at P2, with a stable outlook.
The ratings indicate that in the long-term, the Bank is adjudged to offer high safety for timely payment of financial obligations while
in the short-term, the Bank is adjudged to have superior capacities for timely payment of obligations.
Details of the rating of the Bank and its debt securities are as follows:
Rating Agency Date Accorded Rating Classification
Rating Agency Malaysia Berhad 30 August 2023 Long-Term Rating: AAA

Subordinated Notes: AA1
Additional Tier 1 Capital Securities: A1
Moody’s Investors Services Ltd 25 August 2023 Long-Term Rating: A3

FINANCIAL RESULTS
The Group The Bank

RM’000 RM’000
Profit before taxation 4,626,631 2,728,859

Taxation (808,435) (651,823)
Net profit for the financial year 3,818,196 2,077,036
160 • FINANCIALS
Directors’ Report
DIVIDENDS
Since the last financial year ended 30 June 2022, a final single tier dividend of 37.0 sen per share amounting to RM757,931,779 in
respect of the financial year ended 30 June 2022, was paid on 17 November 2022.
An interim single tier dividend for the financial year ended 30 June 2023 of 21.0 sen per share amounting to RM430,294,305 was paid
on 28 March 2023.
The Directors have declared a final single tier dividend of 38.0 sen per share in respect of the financial year ended 30 June 2023. The
financial statements for the current financial year do not reflect this dividend and will be accounted for in equity as an appropriation
of retained profits in the next financial year ending 30 June 2024.
SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR
Significant events during the financial year are disclosed in Note 53 to the financial statements.
SUBSEQUENT EVENTS AFTER THE FINANCIAL YEAR
Subsequent events after the financial year are disclosed in Note 54 to the financial statements.
ISSUE OF SHARES AND DEBENTURES
There were no new ordinary shares or debentures issued during the financial year.
RESERVES AND PROVISIONS
There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in the financial
statements.
Directors’ Report
DIRECTORS
The Directors of the Bank who have held office during the financial year and during the period from the end of the financial year to
the date of this report are:
YBhg Tan Sri Quek Leng Chan (Chairman, Non-Executive Non-Independent)

Mr Tan Kong Khoon (Non-Independent Executive Director)
Mr Kwek Leng Hai (Non-Independent Non-Executive Director)
YBhg Datuk Dr Md Hamzah bin Md Kassim (Independent Non-Executive Director)
Ms Lau Souk Huan (Independent Non-Executive Director)
Ms Cheong Soo Ching (Independent Non-Executive Director)
Puan Fa’izah binti Mohamed Amin (Independent Non-Executive Director)
(Appointed with effect from 1 September 2022)
YBhg Datuk Manharlal A/L Ratilal (Independent Non-Executive Director)
(Appointed with effect from 15 September 2023)
Ms Chok Kwee Bee (Independent Non-Executive Director)
(Retired with effect from 1 December 2022)
YBhg Dato’ Nicholas John Lough @ Sharif Lough bin Abdullah (Independent Non-Executive Director)
(Retired with effect from 21 June 2023)
The Directors of the Bank’s subsidiaries who have held office during the financial year and during the period from the end of the
financial year to the date of this report (not including those Directors listed above) are:
Encik Alan Hamzah Sendut

Puan Rowina Ghazali Seth
Mr Tang Hong Cheong
Mr Malkiat Singh @ Malkit Singh Maan A/L Delbara Singh
Ms Han Chin May
Mr Quek Kon Sean
Mr Matthew Nicholas Rendall
Mr Tan Khee Meng
Mr Lawrence Peh Yeow Beng
Mr John Hing Vong
Mr Duong Duc Hung
Ms Stella Lo Sze Man
Ms Chan Lap Yuen
Mr Domenico Fuda (Retired with effect from 30 June 2023)
162 • FINANCIALS
Directors’ Report
DIRECTORS’ REMUNERATION
The remuneration in aggregate for Directors of the Bank and its subsidiaries for the financial year are as follows:
The Group The Bank

RM’000 RM’000
Directors of the Bank

Director fees 1,581 1,388
Directors' other emoluments 212 180
Directors of the Bank's Subsidiaries

Director fees 910 -
Directors' other emoluments 3,088 -
There was no amount paid to or receivable by any third party for services provided by Directors of the Bank and its subsidiaries.
During the financial year, Directors and Officers of the Group and the Bank are covered under the Directors’ & Officers’ Liability Insurance
in respect of liabilities arising from acts committed in their capacity as, inter alia, Directors and Officers of the Group and the Bank
subject to the terms of the policy. The total amount of Directors’ & Officers’ Liability Insurance effected for the Directors & Officers of
the holding company was RM10.0 million. The total amount of premium paid for the Directors’ & Officers’ Liability Insurance by the
holding company was RM71,250 (2022: RM84,550) and the apportioned amount of the said premium paid by the Group and the Bank
was RM60,561 (2022: RM70,405) and RM51,376 (2022: RM58,435) respectively.
Details of Directors’ remuneration are set out in Note 40 to the financial statements.
Directors’ Report
DIRECTORS’ INTERESTS
According to the Register of Directors’ Shareholdings kept by the Bank under Section 59 of the Companies Act 2016, the Directors
holding office at the end of the financial year who had beneficial interests in the ordinary shares and/or preference shares and/or loan
stocks and/or options over ordinary shares of the Bank and/or its related corporations during the financial year are as follows:
Directors’ direct interests

Number of ordinary shares/preference shares/ordinary shares issued or to
be issued or acquired arising from the exercise of options*/conversion of
redeemable convertible unsecured loan stocks**/ nominal value in Ringgit
Malaysia of Additional Tier 1 capital securities/perpetual subordinated sukuk
wakalah***/nominal value in Ringgit Malaysia of Tier 2 subordinated notes/
subordinated sukuk murabahah****/ordinary shares to be received arising
from vesting of share grant*****
As at As at
01.07.2022 Acquired Sold 30.06.2023
Interests of YBhg Tan Sri Quek Leng Chan in:

Hong Leong Company (Malaysia) Berhad 390,000 - - 390,000
Hong Leong Financial Group Berhad 5,438,664 - - 5,438,664
Interests of Mr Tan Kong Khoon in:

Hong Leong Financial Group Berhad 250,245***** - (125,123)*****(5) 125,122*****
125,123 125,123(5) - 250,246
Interests of Mr Kwek Leng Hai in:

Hong Leong Company (Malaysia) Berhad 420,500 - - 420,500
Hong Leong Industries Berhad 190,000 - - 190,000
Hong Leong Financial Group Berhad 2,526,000 - - 2,526,000
Hong Leong Bank Berhad 5,510,000 - - 5,510,000
Hume Cement Industries Berhad 205,200 - - 205,200
73,900(6) - - 73,900(6)
Malaysian Pacific Industries Berhad 71,250 - - 71,250
164 • FINANCIALS
Directors’ Report
DIRECTORS’ INTERESTS (CONTINUED)
Directors’ deemed interests

Number of ordinary shares/preference shares/ordinary shares issued or to
be issued or acquired arising from the exercise of options*/conversion of
redeemable convertible unsecured loan stocks**/nominal value in Ringgit
Malaysia of Additional Tier 1 capital securities/perpetual subordinated sukuk
wakalah***/nominal value in Ringgit Malaysia of Tier 2 subordinated notes/
subordinated sukuk murabahah****/ordinary shares to be received arising
from vesting of share grant*****
As at As at
01.07.2022 Acquired Sold 30.06.2023
Interests of YBhg Tan Sri Quek Leng Chan in:

Hong Leong Company (Malaysia) Berhad 7,651,455(1) - - 7,651,455(1)
Hong Leong Financial Group Berhad 894,714,726(1) - - 894,714,726(1)
Hong Leong Capital Berhad 173,805,058 - - 173,805,058
Hong Leong Bank Berhad 1,346,027,209 - - 1,346,027,209
800,000,000*** - (400,000,000)*** 400,000,000***
1,500,000,000**** 100,000,000**** (500,000,000)**** 1,100,000,000****
Hong Leong MSIG Takaful Berhad 130,000,000 - - 130,000,000
Hong Leong Assurance Berhad 140,000,000 - - 140,000,000
Hong Leong Islamic Bank Berhad 400,000,000*** 400,000,000*** (400,000,000)*** 400,000,000***
400,000,000**** - - 400,000,000****
Hong Leong Industries Berhad 242,700,470 (1)
21,000 - 242,721,470(1)
Hong Leong Yamaha Motor Sdn Bhd 17,352,872 - - 17,352,872
Malaysian Pacific Industries Berhad 116,205,192 - (16,667) 116,188,525
Carter Resources Sdn Bhd 5,640,607 - - 5,640,607
Carsem (M) Sdn Bhd 84,000,000 - - 84,000,000
22,400 (2)
- - 22,400(2)
Hume Cement Industries Berhad 353,486,658(1) 8,040,000(3) (9,965,000)
352,701,658(1)
1,140,000 (1)(4)
-
197,043,175**(1) - (4,020,000)** 193,023,175**(1)
1,140,000*(1) - (1,140,000)*(1)(4) -
Southern Steel Berhad 417,246,046 - - 417,246,046
Southern Pipe Industry (Malaysia) Sdn Bhd 124,964,153 560,320 - 125,524,473
Notes:
(1)
Inclusive of interest pursuant to Section 59(11)(c) of the Companies Act 2016 in shares held by family member
(2)
Redeemable Preference Shares/Cumulative Redeemable Preference Shares
(3)
Inclusive of new ordinary shares acquired arising from the conversion of redeemable convertible unsecured loan stocks
(4)
Exercise of share options
(5)
Vesting of grant shares
(6)
5-Year 5% Redeemable Convertible Unsecured Loan Stocks
Directors’ Report
DIRECTORS’ BENEFITS
Since the end of the previous financial year, no Director of the Bank received or became entitled to receive any benefit (other than a
benefit included in the aggregate amount of emoluments received or due and receivable by the Directors as shown in the financial
statements or as fixed salary of a full-time employee of the Bank or of related corporations) by reason of a contract made by the Bank
or its related corporations with the Director or with a firm of which the Director is a member, or with a company in which the Director
has a substantial financial interest except for:
YBhg Tan Sri Quek Leng Chan, who may be deemed to derive a benefit by virtue of those transactions, contracts and agreements
for the acquisitions and/or disposal of stocks and shares, stocks-in-trade, products, parts, accessories, plants, chattels, fixtures,
buildings, land and other properties or any interest in any properties; and/or for the provision of services including but not limited
to project and sales management and any other management and consultancy services; and/or for construction, development,
leases, tenancy, licensing, dealership and distributorship; and/or for the provision of treasury functions, advances in the conduct
of normal trading, banking, insurance, investment, stockbroking and/or other businesses between the Bank or its related
corporations and corporations in which YBhg Tan Sri Quek Leng Chan is deemed to have interests.
Neither at the end of the financial year, nor at any time during the financial year, did there subsist any other arrangements to which
the Bank is a party, with the object or objects of enabling the Directors of the Bank to acquire benefits by means of the acquisition
of shares in, or debentures of, the Bank or any other body corporate, other than the share options granted pursuant to the Executive
Share Scheme.
RESPONSIBILITY STATEMENT BY THE BOARD OF DIRECTORS
In the course of preparing the annual financial statements of the Group and of the Bank, the Directors are collectively responsible in
ensuring that these financial statements are drawn up in accordance with the Malaysian Financial Reporting Standards, International
Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia.
It is the responsibility of the Directors to ensure that the financial reporting of the Group and the Bank present a true and fair view of
the state of affairs of the Group and the Bank as at 30 June 2023 and of the financial results and cash flows of the Group and of the
Bank for the financial year ended 30 June 2023.
The financial statements are prepared on the going concern basis and the Directors have ensured that proper accounting records are
kept, applied the appropriate accounting policies on a consistent basis and made accounting estimates that are reasonable and fair so
as to enable the preparation of the financial statements of the Group and of the Bank with reasonable accuracy.
166 • FINANCIALS
Directors’ Report
EXECUTIVE SHARE SCHEME
The Bank has concurrently implemented two (2) Executive Share Schemes during the financial year ended 30 June 2023.
(a) Executive Share Scheme 2013 (“ESS 2013”)
The ESS 2013 of up to ten percent (10%) of the total number of issued shares (excluding treasury shares) of the Bank comprises
the Executive Share Option Scheme 2013 (“ESOS 2013”) and the Executive Share Grant Scheme 2013 (“ESGS 2013”).
(i) ESOS 2013
The ESOS 2013 which was approved by the shareholders of the Bank on 25 October 2012, was established on 12 March
2013 and had expired on 11 March 2023.
(ii) ESGS 2013
The ESGS 2013 which was approved by the shareholders of the Bank on 23 October 2013, was established on 28 February
2014 and had expired on 11 March 2023.
At any point of time during the existence of the ESS 2013, the aggregate number of shares comprised in the options and grants
under the ESS 2013 and other executive share schemes established by the Bank which are still subsisting shall not exceed 10%
of the total number of issued shares (excluding treasury shares) of the Bank at any one time (“Schemes Aggregate Maximum
Allocation”).
(i) Status on ESOS 2013
There were no share options granted under the ESOS 2013 of the Bank during the financial year ended 30 June 2023.
As at the expiry date of 11 March 2023, a total of 61,082,657 share options had been granted under the ESOS 2013, out of
which 837,504 share options had been exercised, with no share options remain outstanding. The aggregate share options
granted to Directors and chief executives of the HLB Group under the ESOS 2013 amounted to 19,326,399, none of which
were exercised and remain outstanding.
Since the commencement of the ESOS 2013, the maximum allocation applicable to Directors and senior management of
the HLB Group is 50% of the Schemes Aggregate Maximum Allocation.
As at 11 March 2023, the actual percentage of total share options granted to Directors and senior management of the HLB
Group under the ESOS 2013 was 2.37% of the total number of issued shares (excluding treasury shares) of the Bank.
(ii) Status on ESGS 2013
There were no grants granted under the ESGS 2013 of the Bank during the financial year ended 30 June 2023.
As at the expiry date of 11 March 2023, a total of 3,058,503 grants had been granted under the ESGS 2013, out of which
2,603,865 grants had been vested, with 430,786 grants remain outstanding. The aggregate grants granted to Directors
and chief executives of the HLB Group under the ESGS 2013 amounted to 2,066,828, out of which 1,882,534 grants had
been vested, with 184,294 grants remain outstanding.
Directors’ Report
EXECUTIVE SHARE SCHEME (CONTINUED)
(a) Executive Share Scheme 2013 (“ESS 2013”) (continued)
(ii) Status on ESGS 2013 (continued)
The remaining 430,786 grants granted under the ESGS 2013, including the 184,294 grants granted to Directors and chief
executives of the HLB Group, were transferred to the Executive Share Scheme 2022 of the Bank (“ESS 2022”) upon expiry
of the ESGS 2013 on 11 March 2023 and would be administered and vested to the eligible executives under the ESGS 2022.
Since the commencement of the ESGS 2013, the maximum allocation applicable to Directors and senior management of
the HLB Group is 50% of the Schemes Aggregate Maximum Allocation.
As at 30 June 2023, the actual percentage of total grants granted to Directors and senior management of the HLB Group
under the ESGS 2013 was 0.13% of the total number of issued shares (excluding treasury shares) of the Bank.
(b) Executive Share Scheme 2022 (“ESS 2022”)
The Bank had on 10 March 2022 established the ESS 2022, which comprises a new executive share option scheme (“ESOS 2022”)
and a new executive share grant scheme (“ESGS 2022”) for the eligible executives and/or directors of HLB and its subsidiaries
(Group) (such executive and directors, “Eligible Executives”). The ESS 2022 shall be in force until terminated by the Board of HLB.
The ESS 2022 will enable the Bank to align the long-term interests of Eligible Executives with those of the shareholders of the
Bank, as well as to motivate and reward them.
(i) Status on ESOS 2022
There were no share options granted under the ESOS 2022 of the Bank during the financial year ended 30 June 2023 and since
the commencement of the ESOS 2022.
(ii) Status on ESGS 2022
The Bank had granted 248,552 grants under the ESS 2022 of the Bank during the financial year ended 30 June 2023.
As at 30 June 2023, a total of 501,968 grants had been granted under the ESS 2022, out of which 125,445 grants had been
vested, with 373,997 grants remain outstanding. The aggregate grants granted to Directors and chief executives of the HLB
Group under the ESS 2022 amounted to 235,384, out of which 55,888 grants had been vested, with 179,496 grants remain
outstanding.
In addition, 430,786 grants granted under the ESGS 2013, including 184,294 grants granted to Directors and chief executives of
the HLB Group, were transferred to the ESGS 2022 upon expiry of the ESGS 2013 on 11 March 2023 and would be administered
and vested to the eligible executives under the ESGS 2022.
As at 30 June 2023, the actual percentage of total grants granted to the Directors and senior management of HLB Group under
the ESS 2022 was 0.02% of the total number of issued shares (excluding treasury shares) of the Bank and the actual percentage
granted to the Directors and senior management of the HLB Group during the financial year ended 30 June 2023 was 0.01% of
the issued shares (excluding treasury shares) of the Bank.
168 • FINANCIALS
Directors’ Report
EXECUTIVE SHARE SCHEME (CONTINUED)
A trust has been set up for the ESS and it is administered by an appointed trustee. This trustee will be entitled from time to time to
accept financial assistance from the Bank upon such terms and conditions as the Bank and the trustee may agree to purchase the
Bank’s shares from the open market for the purposes of this trust. In accordance with MFRS 132, the shares purchased for the benefit
of the ESS holdings are recorded as “Treasury Shares for ESS”, in addition to the Treasury Shares for share buy-back, in the Shareholders’
Equity on the statements of financial position.
For further details on the ESS, refer to Note 55 to the financial statements on Equity Compensation Benefits.
STATUTORY INFORMATION REGARDING THE GROUP AND THE BANK
(I) As at the end of the financial year
(a) Before the financial statements of the Group and the Bank were prepared, the Directors took reasonable steps:
(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and financing and the
making of allowance for doubtful debts and financing and had satisfied themselves that all known bad debts and
financing had been written off and that adequate allowance had been made for doubtful debts and financing; and
(ii) to ensure that any current assets, which were unlikely to be realised in the ordinary course of business including the
values of current assets as shown in the accounting records of the Group and of the Bank had been written down to
an amount which the current assets might be expected so to realise.
(b) In the opinion of the Directors, the results of the operations of the Group and the Bank during the financial year had not
been substantially affected by any item, transaction or event of a material and unusual nature.
(II) From the end of the financial year to the date of this report
(a) The Directors are not aware of any circumstances:
(i) which would render the amount written off for bad debts and financing or the amount of the allowance for doubtful
debts and financing in the financial statements of the Group and the Bank, inadequate to any substantial extent;
(ii) which would render the values attributed to current assets in the financial statements of the Group and the Bank
misleading; and
(iii) which had arisen which would render adherence to the existing method of valuation of assets or liabilities of the
Group and the Bank misleading or inappropriate.
(b) In the opinion of the Directors:
(i) the results of the operations of the Group and the Bank for the financial year ended 30 June 2023 are not likely to
be substantially affected by any item, transaction or event of a material and unusual nature which had arisen in the
interval between the end of the financial year and the date of this report; and
(ii) no contingent or other liability has become enforceable, or is likely to become enforceable, within the period of
twelve months after the end of the financial year which will or may affect the ability of the Group and the Bank to
meet their obligations as and when they fall due.
Directors’ Report
STATUTORY INFORMATION REGARDING THE GROUP AND THE BANK (CONTINUED)
(III) As at the date of this report
(a) There are no charges on the assets of the Group and the Bank which had arisen since the end of the financial year to
secure the liabilities of any other person.
(b) There are no contingent liabilities which had arisen since the end of the financial year.
(c) The Directors are not aware of any circumstances not otherwise dealt with in the report or financial statements of the
Group and the Bank which would render any amount stated in the financial statements misleading.
DISCLOSURE OF SHARIAH COMMITTEE
The Group’s Islamic banking activity is subject to compliance with Shariah governance guided by the Shariah Committee consisting of
5 members, appointed by the Board of Directors of Hong Leong Islamic Bank Berhad and approved by BNM.
The primary role of the Shariah Committee is mainly advising on matters relating to the business operations and products of the Group
and providing support by attending regular meetings with the Group to ensure that they are in conformity with Shariah principles.
HOLDING AND ULTIMATE HOLDING COMPANIES
The holding and ultimate holding companies are Hong Leong Financial Group Berhad and Hong Leong Company (Malaysia) Berhad
respectively. Both companies are incorporated in Malaysia.
SUBSIDIARIES
Details of subsidiaries are set out in Note 13 to the financial statements.
AUDITORS’ REMUNERATION
Auditors’ remuneration of the Group and the Bank are RM4,819,000 (2022: RM3,750,000) and RM3,970,000 (2022: RM3,227,000)
respectively. Details of auditors’ remuneration are set out in Note 36 to the financial statements.
AUDITORS
The auditors, PricewaterhouseCoopers PLT (LLP0014401-LCA & AF 1146), have expressed their willingness to continue in office.
This report was approved by the Board of Directors on 19 September 2023. Signed on behalf of the Board of Directors:
Tan Kong Khoon
Lau Souk Huan
Kuala Lumpur
19 September 2023
170 • FINANCIALS
Statements of Financial Position

as at 30 June 2023
The Group The Bank

2023 2022 2023 2022
Note RM’000 RM’000 RM’000 RM’000
Assets
Cash and short-term funds 3 8,206,803 6,094,729 6,362,228 5,455,788
Deposits and placements with banks and other financial institutions 4 436,877 842,506 1,343,553 2,614,335
Financial assets at fair value through profit or loss 5 5,654,937 7,244,482 4,916,952 6,940,762
Financial investments at fair value through other comprehensive income 6 33,886,670 26,196,303 30,109,200 22,416,521
Financial investments at amortised cost 7 31,194,065 32,358,414 22,201,564 23,144,545
Loans, advances and financing 8 179,902,847 166,487,621 135,092,761 126,745,536
Other assets 9 2,454,415 2,280,742 2,398,503 1,781,555
Derivative financial instruments 10 2,168,424 1,863,300 2,071,669 1,776,371
Amount due from subsidiaries 11 - - 143,862 91,110
Statutory deposits with Central Banks 12 3,396,920 520,650 2,509,021 272,138
Subsidiary companies 13 - - 2,655,317 2,625,696
Investment in associated companies 14 8,712,976 6,455,474 2,087,699 971,182
Property and equipment 15 1,055,391 1,110,606 488,040 527,989
Intangible assets 16 362,435 304,749 326,216 269,645
Right-of-use assets 17 175,946 211,718 261,308 321,446
Goodwill 18 1,831,312 1,831,312 1,771,547 1,771,547
Deferred tax assets 19 410,436 528,771 317,985 403,666
Total assets 279,850,454 254,331,377 215,057,425 198,129,832
Liabilities
Deposits from customers 20 211,651,819 197,292,459 162,732,948 155,007,304
Investment accounts of customers 21 2,250,513 2,668,408 - -
Deposits and placements of banks and other financial institutions 22 9,593,826 6,322,250 8,269,491 5,175,420
Obligations on securities sold under repurchase agreements 7,399,583 3,971,304 7,399,583 3,971,304
Bills and acceptances payable 211,431 241,361 155,202 153,419
Lease liabilities 23 178,928 210,981 269,713 325,365
Other liabilities 24 5,946,050 5,750,350 5,566,750 5,392,859
Derivative financial instruments 10 2,387,886 1,736,838 2,301,936 1,711,745
Recourse obligation on loans/financing sold to Cagamas Berhad
(“Cagamas”) 25 2,972,220 1,623,937 1,514,646 502,798
Tier 2 subordinated bonds 26 1,501,750 1,502,206 1,501,750 1,502,206
Multi-currency Additional Tier 1 capital securities 27 1,719,509 1,715,695 1,719,509 1,715,695
Provision for taxation 50,287 306,612 39,545 272,986
Total liabilities 245,863,802 223,342,401 191,471,073 175,731,101
Equity
Share capital 28 7,739,063 7,739,063 7,739,063 7,739,063
Reserves 29 26,956,355 23,963,603 16,556,055 15,373,358
Less: Treasury shares 30 (708,766) (713,690) (708,766) (713,690)
Total equity 33,986,652 30,988,976 23,586,352 22,398,731
Total equity and liabilities 279,850,454 254,331,377 215,057,425 198,129,832
Commitments and contingencies 45 260,170,634 208,116,971 246,285,659 194,469,898

The accompanying notes form an integral part of the financial statements
Statements of Income
The Group The Bank

2023 2022 2023 2022
Note RM’000 RM’000 RM’000 RM’000
Interest income 31a 7,370,454 5,505,696 7,115,026 5,303,193

Interest income for financial assets at fair value through
profit or loss 31b 160,370 217,168 160,370 217,168
Interest expense 32 (3,846,739) (1,967,533) (3,727,577) (1,893,157)
Net interest income 3,684,085 3,755,331 3,547,819 3,627,204
Income from Islamic Banking business 33 963,368 904,785 - -
4,647,453 4,660,116 3,547,819 3,627,204
Non-interest income 35 1,038,056 937,292 1,020,599 1,278,446
Net income 5,685,509 5,597,408 4,568,418 4,905,650
Overhead expenses 36 (2,233,282) (2,098,376) (1,854,063) (1,756,729)
Operating profit before allowances 3,452,227 3,499,032 2,714,355 3,148,921
(Allowance for)/written back of impairment losses on
loans, advances and financing 37 (115,382) (163,574) 11,536 46,956
Written back of impairment losses on financial investments
and other assets 38 306 851 2,968 391
3,337,151 3,336,309 2,728,859 3,196,268
Share of results of associated companies 14 1,289,480 1,030,491 - -
Profit before taxation 4,626,631 4,366,800 2,728,859 3,196,268
Taxation 41 (808,435) (1,077,517) (651,823) (984,341)
Net profit for the financial year 3,818,196 3,289,283 2,077,036 2,211,927
Attributable to:
Owners of the parent 3,818,196 3,289,283 2,077,036 2,211,927
Earnings per share for profit attributable to owners of

the parent (sen):
- basic 42 186.4 160.6 101.4 108.0
- diluted 42 186.3 160.5 101.3 107.9

172 • FINANCIALS
Statements of Comprehensive Income

The Group The Bank

2023 2022 2023 2022
Note RM’000 RM’000 RM’000 RM’000
Net profit for the financial year 3,818,196 3,289,283 2,077,036 2,211,927
Other comprehensive income/(loss) in respect of:
(i) Item that will not be reclassified to profit or loss:

Equity instruments at fair value through other
comprehensive income
- Net fair value changes 14,264 14,286 14,264 14,286
(ii) Items that may be reclassified subsequently to profit

or loss:
(a) Share of other comprehensive loss of
associated company (15,045) (16,743) - -
(b) Currency translation differences 62,380 227,635 105,538 43,324
(c) Debt instruments at fair value through other
- Net fair value changes 43 406,406 (1,161,549) 257,468 (1,010,494)
- Changes in expected credit losses 43 285 (537) 283 (542)
(d) Net fair value changes in cash flow hedge 43 362 7,574 362 7,574
Income tax relating to components of other
comprehensive (income)/loss 43 (88,321) 252,023 (66,479) 215,860
Other comprehensive income/(loss) for the financial year,
net of tax 380,331 (677,311) 311,436 (729,992)
Total comprehensive income for the financial year 4,198,527 2,611,972 2,388,472 1,481,935
Attributable to:
Owners of the parent 4,198,527 2,611,972 2,388,472 1,481,935

Statements of Changes in Equity

Attributable to owners of the parent

Share Treasury Regulatory Other Retained
capital shares* reserves ^ reserves profits Total
The Group Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
At 1 July 2022 7,739,063 (713,690) 654,386 581,235 22,727,982 30,988,976
Comprehensive income
Net profit for the financial year - - - - 3,818,196 3,818,196
Share of other comprehensive loss of
associated company - - - (15,045) - (15,045)
Financial assets measured at fair value
- Equity instruments
- Net fair value changes - - - 14,264 - 14,264
- Debt instruments 43
- Changes in expected credit losses - - - 285 - 285
Net fair value changes in cash flow
hedge 43 - - - 274 - 274
Currency translation differences - - - 62,380 - 62,380
Total comprehensive income - - - 380,331 3,818,196 4,198,527
Transactions with owners

Transfer to regulatory reserve - - 347,675 - (347,675) -
Dividends paid:
- final dividend for the financial
year ended 30 June 2022 44 - - - - (757,932) (757,932)
- interim dividend for the financial
year ended 30 June 2023 44 - - - - (430,294) (430,294)
ESS exercised - 4,924 - (12,350) 7,426 -
Option written back arising from ESS
lapsed - - - (12,625) - (12,625)
Total transactions with owners - 4,924 347,675 (24,975) (1,528,475) (1,200,851)
At 30 June 2023 7,739,063 (708,766) 1,002,061 936,591 25,017,703 33,986,652
* Treasury shares consist of two categories which are detailed in Note 30

^ Comprise regulatory reserves maintained by the Group’s banking subsidiaries of RM990,816,000 (2022: RM643,141,000) in
accordance with BNM’s Guideline and the banking subsidiary in Vietnam with the State Bank of Vietnam of RM11,245,000
(2022: RM11,245,000)

174 • FINANCIALS

Attributable to owners of the parent

Share Treasury Regulatory Other Retained
capital shares* reserves^ reserves profits Total
At 1 July 2021 7,739,063 (719,030) 423,954 1,263,751 20,751,376 29,459,114
Share of other comprehensive loss of
associated company - - - (16,743) - (16,743)
- Net fair value changes - - - (907,709) - (907,709)
- Changes in expected credit losses - - - (537) - (537)
hedge 43 - - - 5,757 - 5,757
Total comprehensive (loss)/income - - - (677,311) 3,289,283 2,611,972

Dividends paid:
year ended 30 June 2021 44 - - - - (721,238) (721,238)
year ended 30 June 2022 44 - - - - (368,704) (368,704)
ESS exercised - 5,340 - (12,121) 7,697 916
Option charge arising from ESS granted - - - 6,916 - 6,916
At 30 June 2022 7,739,063 (713,690) 654,386 581,235 22,727,982 30,988,976

^ Comprise regulatory reserves maintained by the Group’s banking subsidiaries of RM643,141,000 (2021: RM412,709,000) in
accordance with BNM’s Guideline and the banking subsidiary in Vietnam with the State Bank of Vietnam of RM11,245,000
(2021: RM11,245,000)


Non-distributable Distributable
Share Treasury Regulatory Other Retained Total
capital shares* reserve reserves profits equity
The Bank Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
At 1 July 2022 7,739,063 (713,690) 536,432 (283,556) 15,120,482 22,398,731
- Changes in expected credit losses - - - 283 - 283
hedge 43 - - - 274 - 274
Total comprehensive income - - - 311,436 2,077,036 2,388,472

Dividends paid:
year ended 30 June 2022 44 - - - - (757,932) (757,932)
year ended 30 June 2023 44 - - - - (430,294) (430,294)
ESS exercised - 4,924 - (12,350) 7,426 -
Option written back arising from ESS
lapsed - - - (12,625) - (12,625)
At 30 June 2023 7,739,063 (708,766) 825,318 2,905 15,727,832 23,586,352

176 • FINANCIALS

Non-distributable Distributable
Share Treasury Regulatory Other Retained Total
capital shares* reserve reserves profits equity
At 1 July 2021 7,739,063 (719,030) 387,677 451,641 14,139,555 21,998,906
- Net fair value changes - - - (792,817) - (792,817)
- Changes in expected credit losses - - - (542) - (542)
hedge 43 - - - 5,757 - 5,757
Total comprehensive (loss)/income - - - (729,992) 2,211,927 1,481,935

Dividends paid:
year ended 30 June 2021 44 - - - - (721,238) (721,238)
year ended 30 June 2022 44 - - - - (368,704) (368,704)
ESS exercised - 5,340 - (12,121) 7,697 916
Option charge arising from ESS granted - - - 6,916 - 6,916
At 30 June 2022 7,739,063 (713,690) 536,432 (283,556) 15,120,482 22,398,731

Statements of Cash Flows

The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Cash flows from operating activities

Adjustments for:
Depreciation of property and equipment 110,039 121,499 92,850 103,137
Depreciation of right-of-use assets 48,456 50,119 71,556 73,875
Amortisation of intangible assets 58,132 53,962 50,869 48,107
Net gain on disposal of property and equipment (228) (1,552) (133) (1,455)
Share of results of associated companies (1,289,480) (1,030,491) - -
Property and equipment written off 1,134 722 727 629
Intangible assets written off 2,607 737 2,606 416
Amortisation of upfront fees (1,228) (946) (1,228) (946)
Net realised (gain)/loss on financial instruments:
- financial assets at fair value through profit or loss (85,177) 58,657 (86,447) 59,239
- derivatives financial instruments 53,230 (20,792) 55,103 (19,328)
- financial investments at fair value through other
comprehensive income (34,943) (87,887) (34,943) (87,887)
Allowance for impairment losses on loans,
advances and financing 343,095 393,506 176,517 151,453
Impaired loans, advances and financing written off 29,519 20,038 22,962 13,893
Modification loss on contractual cash flows arising from
financial assets - 45,416 - 27,472
Net unrealised loss/(gain) on revaluation of financial instruments:
- financial assets at fair value through profit or loss 5,403 (208,290) 6,631 (207,569)
- derivatives financial instruments (111,379) (100,366) (112,433) (99,238)
Net realised (gain)/loss on fair value changes arising from fair
value hedges (8,265) 7,489 (8,265) 7,489
Net (gain)/loss arising from fair value hedges (853) 2,141 (853) 2,141
Written back of impairment losses on financial investments and
other assets (306) (851) (2,968) (391)
Interest expense on:
- Recourse obligation on loans/financing sold to Cagamas 77,409 44,702 29,263 15,450
- Tier 2 subordinated bonds 66,958 66,600 66,958 66,600
- Multi-currency Additional Tier 1 capital securities 81,186 46,315 81,255 46,481
- Lease liabilities 8,737 9,154 13,251 14,785
178 • FINANCIALS

The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Interest income from:

comprehensive income (871,880) (669,165) (871,573) (672,355)
- financial investments at amortised cost (669,395) (619,506) (668,660) (618,725)
- Multi-currency Additional Tier 1 subordinated sukuk wakalah - - (2,219) (56)
Dividend income from:
- subsidiary company - - (330) (36,800)
- associated companies - - (5,992) (334,115)
- financial assets at fair value through profit or loss (88,826) (101,001) (89,277) (102,768)
comprehensive income (2,175) (406) (2,175) (406)
Share option expenses (12,625) 6,916 (12,625) 6,916
Operating profit before working capital changes 2,335,776 2,453,520 1,499,286 1,652,312
Decrease/(Increase) in operating assets

Cash and short-term funds and deposits and placements with
banks and other financial institutions with original maturity of
more than three months 237,426 (477,104) 534,285 (1,042,650)
Financial assets at fair value through profit or loss 1,694,133 1,068,766 2,103,626 1,248,789
Loans, advances and financing (13,789,491) (12,898,199) (8,548,355) (7,874,985)
Derivative financial instruments (547,176) (1,084,504) (500,604) (1,003,736)
Other assets (168,814) 2,018 (612,089) 94,046
Amount due from subsidiaries - - (52,752) (75,240)
Statutory deposits with Central Banks (2,876,270) (27,045) (2,236,883) 29,290
Increase/(Decrease) in operating liabilities

Deposits from customers 14,667,682 14,362,994 7,996,401 10,992,100
Investment accounts of customers (417,895) 1,523,254 - -
Deposits and placements of banks and other financial institutions 3,271,576 (5,807,789) 3,094,071 (6,839,877)
Securities sold under repurchase agreements 3,428,279 3,228,554 3,428,279 3,228,554
Bills and acceptances payable (29,930) 51,719 1,783 2,986
Derivative financial instruments 651,354 827,172 590,497 831,759
Other liabilities 195,922 373,781 172,826 308,347
Cash flows generated from operations 8,652,572 3,597,137 7,470,371 1,551,695
Taxation paid (1,030,371) (1,095,221) (859,773) (896,290)
Net cash generated from operating activities 7,622,201 2,501,916 6,610,598 655,405

The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Cash flows from investing activities

Net (purchases of)/proceeds from financial investments at fair
value through other comprehensive income (7,479,290) 7,863,800 (7,630,850) 7,812,472
Net proceeds from/(purchases of) financial investments at
amortised cost 1,833,797 (8,104,000) 1,611,641 (5,967,070)
Purchase of property and equipment (132,069) (115,678) (129,203) (109,898)
Net proceeds from sale of property and equipment 377 1,890 161 1,772
Purchase of intangible assets (37,156) (35,442) (30,773) (27,177)
Investment in subordinated facilities - - (27,402) (69,112)
Dividends received from:
- subsidiary company - - 330 36,800
- associated company - - - 268,591
- financial assets at fair value through profit or loss 88,826 101,001 89,277 102,768
comprehensive income 2,175 406 2,175 406
Net cash (used in)/generated from investing activities (5,723,340) (288,023) (6,114,644) 2,049,552
180 • FINANCIALS

The Group The Bank

2023 2022 2023 2022
Note RM’000 RM’000 RM’000 RM’000
Cash flows from financing activities

Dividends paid (1,188,226) (1,089,942) (1,188,226) (1,089,942)
Cash received from ESOS exercised - 916 - 916
Repayment of Innovative Tier 1 capital securities (400,000) - (400,000) -
Repayment of Tier 2 subordinated loan (500,000) - (500,000) -
Repayment of lease liabilities (44,402) (44,321) (66,236) (65,272)
Repayment of recourse obligation on loans/financing sold
to Cagamas (962,930) (64,174) (300,020) -
Proceeds from debt issuance:
- Recourse obligation on loans/financing sold to Cagamas 2,300,000 650,000 1,300,000 200,000
- Tier 2 subordinated bonds 500,000 - 500,000 -
- Multi-currency Additional Tier 1 capital securities 400,000 900,000 400,000 900,000
Interest paid:
- Recourse obligation on loans/financing sold to Cagamas (66,196) (40,430) (17,395) (13,224)
- Tier 2 subordinated bonds (66,533) (66,734) (66,533) (66,734)
- Multi-currency Additional Tier 1 capital securities (78,858) (39,346) (78,927) (39,512)
- Lease liabilities (8,737) (9,154) (13,251) (14,785)
Net cash (used in)/generated from financing activities (115,882) 196,815 (430,588) (188,553)
Net increase in cash and cash equivalents 1,782,979 2,410,708 65,366 2,516,404
Effects of exchange rate changes 160,892 96,466 104,577 42,044
Cash and cash equivalents at the beginning of
financial year 5,981,992 3,474,818 6,119,034 3,560,586
Cash and cash equivalents at the end of financial year 7,925,863 5,981,992 6,288,977 6,119,034
Cash and cash equivalents comprise the following:

Cash and short-term funds 3 8,206,803 6,094,729 6,362,228 5,455,788
Deposits and placements with banks and other
financial institutions 4 436,877 842,506 1,343,553 2,614,335
8,643,680 6,937,235 7,705,781 8,070,123
Less:
Cash and short-term funds and deposits and placements
with banks and other financial institutions with original
maturity of more than three months (717,817) (955,243) (1,416,804) (1,951,089)
7,925,863 5,981,992 6,288,977 6,119,034


An analysis of changes in liabilities arising from financing activities is as follows:
Recourse
obligation Multi-
on loans/ currency
financing Tier 2 Additional
sold to subordinated Tier 1 capital Lease
Cagamas bonds securities liabilities Total
The Group RM’000 RM’000 RM’000 RM’000 RM’000
2023
Balance at the beginning of the financial year 1,623,937 1,502,206 1,715,695 210,981 5,052,819
Proceeds from issuance 2,300,000 500,000 400,000 - 3,200,000
Repayment and redemption (962,930) (500,000) (400,000) (44,402) (1,907,332)
Interest paid (66,196) (66,533) (78,858) (8,737) (220,324)
Accrued interest 77,409 66,958 81,186 8,737 234,290
Amortisation - (881) (347) - (1,228)
Other non-cash - - 1,833 12,349 14,182
Balance at the end of the financial year 2,972,220 1,501,750 1,719,509 178,928 6,372,407
2022
Balance at the beginning of the financial year 1,033,839 1,502,340 806,390 209,761 3,552,330
Proceeds from issuance 650,000 - 900,000 - 1,550,000
Repayment and redemption (64,174) - - (44,321) (108,495)
Interest paid (40,430) (66,734) (39,346) (9,154) (155,664)
Amortisation - - (946) - (946)
Other non-cash - - 3,282 45,541 48,823
182 • FINANCIALS

An analysis of changes in liabilities arising from financing activities is as follows: (continued)
Recourse
obligation Multi-
on loans/ currency
financing Tier 2 Additional
sold to subordinated Tier 1 capital Lease
Cagamas bonds securities liabilities Total
The Bank RM’000 RM’000 RM’000 RM’000 RM’000
2023
Balance at the beginning of the financial year 502,798 1,502,206 1,715,695 325,365 4,046,064
Proceeds from issuance 1,300,000 500,000 400,000 - 2,200,000
Repayment and redemption (300,020) (500,000) (400,000) (66,236) (1,266,256)
Interest paid (17,395) (66,533) (78,927) (13,251) (176,106)
Amortisation - (881) (347) - (1,228)
Other non-cash - - 1,833 10,584 12,417
2022
Balance at the beginning of the financial year 300,572 1,502,340 806,390 341,591 2,950,893
Proceeds from issuance 200,000 - 900,000 - 1,100,000
Repayment and redemption - - - (65,272) (65,272)
Interest paid (13,224) (66,734) (39,512) (14,785) (134,255)
Amortisation - - (946) - (946)
Other non-cash - - 3,282 49,046 52,328
Balance at the end of the financial year 502,798 1,502,206 1,715,695 325,365 4,046,064
Notes to the Financial Statements

The following accounting policies have been used consistently in dealing with items that are considered material in relation to the
financial statements.
1 BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS
The financial statements of the Group and the Bank have been prepared in accordance with the Malaysian Financial Reporting
Standards (“MFRS”), International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia.
The financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial
assets at fair value through other comprehensive income, financial assets and financial liabilities at fair value through profit or
loss (including derivative financial instruments).
The financial statements incorporate the activities relating to Islamic Banking which have been undertaken by the Group in
compliance with Shariah principles. Islamic Banking business refers generally to the acceptance of deposits and granting of
financing under the Shariah principles.
The preparation of financial statements in conformity with MFRS requires the use of certain critical accounting estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements, and the reported amounts of revenue and expenses during the reported financial year. It also
requires Directors to exercise their judgement in the process of applying the Group and the Bank’s accounting policies. Although
these estimates and judgement are based on the Directors’ best knowledge of current events and actions, actual results may
differ.
The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to
the financial statements are disclosed in Note 57.
A Standards, amendments to published standards and interpretations that are effective and applicable to the Group
and the Bank
The Group and the Bank have applied the following amendments for the first time for the financial year beginning on
1 July 2022:
* Annual improvements to MFRS 9 ‘Fees in the 10% test for derecognition of financial liabilities’
* Amendments to MFRS 3 ‘Business Combinations’ - Reference to the Conceptual Framework
* Amendments to MFRS 116 ‘Proceeds before Intended Use’
* Amendments to MFRS 137 ‘Onerous Contracts - Cost of Fulfilling a Contract’
(i) Annual improvements to MFRS 9 ‘Fees in the 10% test for derecognition of financial liabilities’
When entities restructure their loans with the existing lenders, MFRS 9 requires management to quantitatively
assess the significance of the difference between cash flows of the existing and new loans (commonly known as
the ‘10% test’).
This amendment to MFRS 9 clarifies that only fees paid or received between the borrower and the lender are
included in the 10% test. Any fees paid to third parties should be excluded. This amendment will impact the result
of the 10% test and accordingly affect the amount of gain or loss recognised in the income statements.
An entity shall apply the amendment to financial liabilities that are modified or exchanged on or after the beginning
of the annual reporting period in which the entity first applies the amendment.
184 • FINANCIALS

1 BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (CONTINUED)
A Standards, amendments to published standards and interpretations that are effective and applicable to the Group
and the Bank (continued)
(ii) Amendments to MFRS 3 ‘Business Combinations’ - Reference to the Conceptual Framework
The amendments replace the reference to Framework for Preparation and Presentation of Financial Statements with
2018 Conceptual Framework. The amendments did not change the current accounting for business combinations on
acquisition date.
The amendments provide an exception for the recognition of liabilities and contingent liabilities should be
in accordance with the principles of MFRS 137 ‘Provisions, Contingent Liabilities and Contingent Assets’ and
IC Interpretation 21 ‘Levies’ when falls within their scope. It also clarifies that contingent assets should not be
recognised at the acquisition date.
The amendments shall be applied prospectively.
(iii) Amendments to MFRS 116 ‘Proceeds before Intended Use’
The amendments prohibit an entity from deducting from the cost of a property, plant and equipment (‘PPE’) the
proceeds received from selling items produced by the PPE before it is ready for its intended use. The sales proceeds
would have met the revenue definition and therefore should be recognised in statements of income.
The amendments also clarify that ‘testing’ in MFRS 116 refers to assessing the technical and physical performance
of the PPE rather than its financial performance.
The amendments shall be applied retrospectively.
(iv) Amendments to MFRS 137 ‘Onerous Contracts - Cost of Fulfilling a Contract’
The amendments clarify that direct costs of fulfilling a contract include both the incremental cost of fulfilling the
contract as well as an allocation of other costs directly related to fulfilling contracts. The amendments also clarify
that before recognising a separate provision for an onerous contract, impairment loss that has occurred on assets
used in fulfilling the contract should be recognised.
The amendments shall be applied retrospectively.
The adoption of the annual improvements and amendments to published standards above did not have any impact on the
current period or any prior period and is not likely to affect future periods.
B Standards, amendments to published standards and interpretations to existing standards that are applicable to
the Group and the Bank that have been issued but not yet effective
(i) Financial year beginning on/after 1 July 2023
* Amendments to MFRS 101, MFRS Practice Statement 2 and MFRS 108 on disclosure of accounting policies and
definition of accounting estimates - effective 1 January 2023

the Group and the Bank that have been issued but not yet effective (continued)
(i) Financial year beginning on/after 1 July 2023 (continued)
Amendments on disclosure of accounting policies (Amendments to MFRS 101 and MFRS Practice Statement 2)
The amendments to MFRS 101 require companies to disclose material accounting policies rather than
significant accounting policies. Entities are expected to make disclosure of accounting policies specific to
the entity and not generic disclosures on MFRS applications. The amendment explains an accounting policy
is material if, when considered together with other information included in an entity’s financial statements,
it can reasonably be expected to influence decisions that the primary users of general purpose financial
statements make on the basis of those financial statements. Also, accounting policy information is expected to
be material if, without it, the users of the financial statements would be unable to understand other material
information in the financial statements.
Accordingly, immaterial accounting policy information need not be disclosed. However, if it is disclosed, it
should not obscure material accounting policy information. MFRS Practice Statement 2 was amended to
provide guidance on how to apply the concept of materiality to accounting policy disclosures.
Amendments on definition of accounting estimates (Amendments to MFRS 108)
The amendments to MFRS 108, redefined accounting estimates as ‘monetary amounts in financial statements
that are subject to measurement uncertainty’. To distinguish from changes in accounting policies, the
amendments clarify that effects of a change in an input or measurement technique used to develop an
accounting estimate is a change in accounting estimate, if they do not arise from prior period errors. Examples
of accounting estimates include expected credit losses; net realisable value of inventory; fair value of an asset
or liability; depreciation for property, plant and equipment; and provision for warranty obligations.
* Amendments to MFRS 112 ‘Deferred Tax related to Assets and Liabilities arising from a Single Transaction’
(effective 1 January 2023)
The amendments clarify that the initial exemption rule does not apply to transactions where both an asset
and a liability are recognised at the same time such as leases and decommissioning obligations. Accordingly,
entities are required to recognise both deferred tax assets and liabilities for all deductible and taxable
temporary differences arising from such transactions.
The adoption of the above accounting standards, amendments to published standards and interpretation to existing
standards are not expected to give rise to any material financial impact to the Group and the Bank.
(ii) Financial year beginning on/after 1 July 2024
* Amendments to MFRS 101 ‘Classification of liabilities as current or non-current’ (‘2020 amendments’) and
‘Non-current Liabilities with Covenants’ (‘2022 amendments’) – effective 1 January 2024
There are two amendments to MFRS 101 ‘Presentation of Financial Statements’. The 2020 amendments
clarify that a liability is classified as non-current if an entity has the right to defer settlement for at least
12 months after the reporting period. Such a right exists when an entity complies with covenants based on
its circumstances at the reporting date, even if compliance with such covenants were tested only within 12
months after that date.
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the Group and the Bank that have been issued but not yet effective (continued)
(ii) Financial year beginning on/after 1 July 2024 (continued)
The 2022 amendments were in response to concerns raised on applying the 2020 amendments explained in
the preceding paragraph on the current vs non-current classification of liabilities with covenants that would
have become effective for annual periods beginning on or after 2023. The 2022 amendments specify that
covenants of loan arrangements which an entity must comply with only after the reporting date would not
affect classification of a liability as current or non-current at the reporting date. However, those covenants that
an entity is required to comply with on or before the reporting date would affect classification of a liability as
current or non-current, even if the covenant is only assessed after the reporting date.
Both amendments are effective for annual reporting periods beginning on or after 1 January 2024 and shall
be applied retrospectively. Earlier application of the 2022 amendments is permitted but only if the 2020
amendments are also applied from the same date.
* Amendments to MFRS 16 ‘Lease Liability in a Sale and Leaseback’ – effective 1 January 2024
The amendments specify that the measurement of the lease liability arises in a sale and leaseback transaction
which satisfies the requirements in MFRS 15 ‘Revenue from Contracts with Customers’ to be accounted for as a
sale. In accordance with the amendments, the seller-lessee shall determine the “lease payments” or “revised
lease payments” in a way that it does not result in the seller-lessee recognising any amount of the gain or loss
that relates to the right of use it retains.
The amendments shall be applied retrospectively to sale and leaseback transactions entered into after the
date when the seller-lessee initially applied MFRS 16.
The adoption of the above accounting standards, amendments to published standards and interpretation to existing
standards are not expected to give rise to any material financial impact to the Group and the Bank.
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A Consolidation
(i) Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an
entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has
the ability to affect those returns through its power to direct the relevant activities of the entity. Subsidiaries are
fully consolidated from the date on which control is transferred to the Group and are de-consolidated from the date
control ceases.
The consolidated financial statements include the financial statements of the Bank and all its subsidiaries made up
to the end of the financial year.
The Group applies the acquisition method to account for business combinations.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
A Consolidation (continued)
(i) Subsidiaries (continued)
The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the
liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration
transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement
and fair value of any pre-existing equity interest in the subsidiary. Identifiable assets acquired and liabilities and
contingent liabilities assumed in a business combination are with limited exceptions, measured initially at their fair
values at the acquisition date. The Group recognises any non-controlling interest in the acquiree on an acquisition-
by-acquisition basis, either at fair value or at the non-controlling interest’s proportionate share of the recognised
amounts of acquiree’s identifiable net assets.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the
acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the identifiable
net assets acquired is recognised as goodwill. If the total of consideration transferred, non-controlling interest
recognised and previously held interest measured is less than the fair value of the net assets of the subsidiary
acquired in the case of a bargain purchase, the difference is recognised directly in the statements of income.
Acquisition-related costs are expensed as incurred.
If the business combination is achieved in stages, carrying value of the acquirer’s previously held equity interest in
the acquiree is remeasured to fair value at the acquisition date, any gains or losses from such remeasurement are
recognised in the statements of income.
Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date.
Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is
recognised in accordance with MFRS 9 in the statements of income. Contingent consideration that is classified as
equity is not remeasured, and its subsequent settlement is accounted for within equity.
The Group applies predecessor accounting to account for business combinations under common control. Under
predecessor accounting, assets and liabilities acquired are not restated to their respective fair values. They are
recognised at the carrying amounts from the consolidated financial statements of the ultimate holding company
of the Group and adjusted to conform with the accounting policies adopted by the Group. The difference between
any consideration given and the aggregate carrying amounts of the assets and liabilities (as of the date of the
transaction) of the acquired entity is recognised as an adjustment to equity. No additional goodwill is recognised.
The acquirer only incorporates the acquired entity’s results and statements of financial position prospectively from
the date on which the business combination between entities under common control occurred. Consequently,
the consolidated financial statements do not reflect the results of the acquired entity for the period before the
transaction occurred. The corresponding amounts for the previous financial year are also not restated.
Predecessor accounting may lead to a difference between the cost of the transaction and the carrying value of the
net assets. The difference is recorded in retained profits.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transfer
assets. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the
policies adopted by the Group.
188 • FINANCIALS

(ii) Changes in ownership interests in subsidiaries without change of control
Transactions with non-controlling interests that do not result in loss of control are accounted for as transactions with
equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts
of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference
between the amount of the adjustment to non-controlling interests and any consideration paid or received is
recognised in equity attributable to owners of the Group.
(iii) Disposal of subsidiaries
When the Group ceases to consolidate because of loss of control, any retained interest in the entity is remeasured
to its fair value at the date when control is lost, with the change in carrying amount recognised in statements of
income. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained
interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other
comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the
related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are
reclassified to statements of income.
Gains and losses of the disposal of subsidiaries include the carrying amount of goodwill relating to the subsidiaries sold.
(IV) Joint arrangements
A joint arrangement is an arrangement of which there is contractually agreed sharing of control by the Group
with one or more parties, where decisions about the relevant activities relating to the joint arrangement require
unanimous consent of the parties sharing control. The classification of a joint arrangement as a joint operation or a
joint venture depends upon the rights and obligations of the parties to the arrangement. A joint venture is a joint
arrangement whereby the joint venturers have rights to the net assets of the arrangement. A joint operation is a
joint arrangement whereby the joint operators have rights to the assets and obligations for the liabilities, relating to
the arrangement.
The Group’s interest in a joint venture is accounted for in the financial statements by the equity method of
accounting. Under the equity method of accounting, interests in joint ventures are initially recognised at cost and
adjusted thereafter to recognise the Group’s share of the post-acquisition profits or losses and the Group’s share of
movements in other comprehensive income of the joint venture in other comprehensive income. Dividends received
or receivable from a joint venture are recognised as a reduction in the carrying amount of the investment. When
the Group’s share of losses in a joint venture equals or exceeds its interests in the joint ventures (which includes any
long-term interests that, in substance, form part of the Group’s net investment in the joint ventures), the Group does
not recognise further losses, unless it has incurred obligations or made payments on behalf of the joint ventures.
The Group determines at each reporting date whether there is any objective evidence that the investment in the
joint venture is impaired. An impairment loss is recognised for the amount by which the carrying amount of the joint
venture exceeds its recoverable amount. The Group presents the impairment loss adjacent to ‘share of results of joint
venture’ in the statements of income.
Unrealised gains on transactions between the Group and its joint ventures are eliminated to the extent of the
Group’s interest in the joint ventures. Unrealised losses are also eliminated unless the transaction provides evidence
of an impairment of the asset transferred. Accounting policies of the joint ventures have been changed where
necessary to ensure consistency with the policies adopted by the Group.

(IV) Joint arrangements (continued)
If the ownership interest in a joint venture is reduced but joint control is retained, only a proportionate share of the
amounts previously recognised in other comprehensive income is reclassified to statements of income where
appropriate.
(V) Associated companies
Associates are all entities over which the Group has significant influence but not control or joint control, generally
accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for
using the equity method of accounting. Under the equity method, the investment in an associate is initially recognised
at cost, and adjusted thereafter to recognise the Group’s share of the post-acquisition profits or losses of the associate
in statements of income, and the Group’s share of movements in other comprehensive income of the associate in
other comprehensive income. Dividends received or receivable from an associate are recognised as a reduction in the
carrying amount of the investment. When the Group’s share of losses in an associate equals or exceeds its interests
in the associate, including any long-term interests that, in substance, form part of the Group’s net investment in the
associate, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made
payments on behalf of the associate. The Group’s investment in associates includes goodwill identified on acquisition.
The Group determines at each reporting date whether there is any objective evidence that the investment in
the associate is impaired. An impairment loss is recognised for the amount by which the carrying amount of the
associate exceeds its recoverable amount. The Group presents the impairment loss adjacent to ‘share of results of
associated company’ in the statements of income.
Profits and losses resulting from upstream and downstream transactions between the Group and its associate are
recognised in the Group’s financial statements only to the extent of unrelated investor’s interests in the associates.
Unrealised losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Accounting policies of associates have been changed where necessary to ensure consistency with the policies
adopted by the Group.
If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the
amounts previously recognised in other comprehensive income is reclassified to statements of income where appropriate.
Dilution gains and losses arising in investments in associates are recognised in the statements of income.
(VI) Loss of joint control or significant influence
When the Group ceases to equity account its joint venture or associate because of a loss of joint control or significant
influence, any retained interest in the entity is remeasured to its fair value with the change in carrying amount
recognised in profit or loss. This fair value becomes the initial carrying amount for the purposes of subsequently
accounting for the retained interest as a financial asset. In addition, any amount previously recognised in other
comprehensive income in respect of the entity is accounted for as if the Group had directly disposed of the related
assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are
reclassified to statements of income.
190 • FINANCIALS

(VII) Investments in subsidiaries and associated companies
In the Bank’s separate financial statements, investments in subsidiaries and associated companies are carried at cost less
any accumulated impairment losses. On disposal of investments in subsidiaries and associated companies, the difference
between disposal proceeds and the carrying amount of investments are recognised in the statements of income.
Investments in debt instruments issued by subsidiary companies at amortised cost are measured in accordance with
Note D.
B Recognition of interest/profit income and interest/profit expense
Interest and financing income and expense for all interest/profit bearing financial instruments are recognised within
interest income and interest expense and income from Islamic Banking business in the statements of income using the
effective interest/profit method. Interest/profit income from financial assets at fair value through profit or loss is disclosed
as separate line item in statements of income.
The effective interest/profit method is a method of calculating the amortised cost of a financial asset or a financial liability
and of allocating the interest and financing income or interest/profit expense over the relevant period. The effective
interest/profit rate is the rate that discounts estimated future cash payments or receipts through the expected life of the
financial instruments or, when appropriate, a shorter period to the net carrying amount of the financial asset or financial
liability. When calculating the effective interest/profit rate, the Group and the Bank take into account all contractual terms
of the financial instrument and includes any fees or incremental costs that are directly attributable to the instrument and
are an integral part of the effective interest/profit rate, but not future credit losses.
Interest/profit income is calculated by applying the effective interest/profit rate to the gross carrying amount of a financial
asset except for financial assets that subsequently become credit-impaired. For credit-impaired financial assets, the
effective interest/profit rate is applied to the net carrying amount of the financial asset (after deduction of the loss
allowance).
C Recognition of fees and other income
The Group and the Bank earn fee and commission income from a diverse range of products and services provided to its
customers. Fee and commission income are recognised when the Group and the Bank have satisfied its performance
obligation in providing the promised products and services to the customer, and are recognised based on contractual rates
or amount agreed with customers, and net of expenses directly related to it. The Group and the Bank generally satisfy its
performance obligation and recognises the fee and commission income on the following basis:
* Transaction-based fee and commission income is recognised on the completion of the transaction. Such fees include
fees related to the completion of corporate advisory transactions, commissions, service charges and fees, credit card
related fees and fees on loans, advances and financing. These fees constitute a single performance obligation.
* For a service that is provided over a period of time, fee and commission income is recognised on an equal proportion
basis over the period during which the related service is provided or credit risk is undertaken. This basis of recognition
most appropriately reflects the nature and pattern of provision of these services to the customers over time. Fees for
these services will be billed periodically over time. Such fees include guarantee fees and commitment fees.

C Recognition of fees and other income (continued)
The Group and the Bank do not provide any significant credit terms to customers for the above products and services.
Directly related expenses typically include card-related expenses and sales commissions, but do not include expenses for
services delivered over a period (such as service contracts) and other expenses that are not specifically related to fee and
commission income transactions.
Other income recognition are as follows:
a) Dividends are recognised when the right to receive payment is established. This applies even if they are paid out of
pre-acquisition profits. However, the investment may need to be tested for impairment as a consequence. Dividend
income received from subsidiary companies, joint venture, associated companies, financial assets at fair value
through profit or loss and financial investments at fair value through other comprehensive income are recognised
as non-interest income in statements of income. Dividends that clearly represent a recovery of part of the cost
of investment is recognised in other comprehensive income if it relates to an investment in equity instruments
measured at fair value through other comprehensive income.
b) Net gain or loss from disposal of financial assets at fair value through profit or loss and debt instruments at fair value
through other comprehensive income are recognised in statements of income upon disposal of the securities, as the
difference between net disposal proceeds and the carrying amount of the securities.
D Financial assets
(i) Classification
The Group and the Bank have applied MFRS 9 and classified its financial assets in the following measurement
categories in accordance with MFRS 9 requirements:
• those to be measured subsequently at fair value (either through other comprehensive income (“OCI”) or
through profit or loss); and
• those to be measured at amortised cost.
The Group and the Bank reclassify debt investments when and only when its business model for managing those
assets changes. The Group and the Bank do not change the classification of the remaining financial assets held in
the business model, but consider the circumstances leading to the model change when assessing newly originated
or newly purchased financial assets going forward.
Business model assessment
The Group and the Bank conduct assessment of the objective of a business model to align with how an asset held
within a portfolio is being managed. Factors that are being considered include the key objectives of a portfolio
whether the business strategy is to earn contractual interest revenue, matching the duration of the financial assets
to the duration of the liabilities that are funding those assets or realising a portfolio through sale of assets. Other
factors considered also include the frequency and volume of sales in prior periods, how the asset’s performance is
evaluated and reported to key management personnel.
192 • FINANCIALS

D Financial assets (continued)
(i) Classification (continued)
Assessment whether contractual cash flows are solely payments of principal and interest (“SPPI”)
Where the business model is to hold the financial assets to collect contractual cash flows, or to collect contractual
cash flows and sell, the Group and the Bank assess whether the financial assets’ contractual cash flows represent
solely payment of principal and interest. In applying the SPPI test, the Group and the Bank consider whether the
contractual cash flows are consistent with a basic lending arrangement, i.e. interest includes only consideration for
time value of money, credit risk, other basic lending risks and a profit margin that is consistent with a basic lending
arrangement. Where the contractual terms introduce exposure to risk or volatility that are inconsistent with a basic
lending arrangement, the related financial asset is classified and measured at fair value through profit or loss.
Financial assets with embedded derivatives are considered in their entirety when determining whether their cash
flows are solely payment of principal and interest.
(ii) Recognition and derecognition
Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the Group and
the Bank commit to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash
flows from the financial assets have expired or have been transferred and the Group and the Bank have transferred
substantially all the risks and rewards of ownership.
(iii) Measurement
At initial recognition, the Group and the Bank measure a financial asset at its fair value plus, in the case of a financial
asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of
the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in
statements of income.
Debt instruments
Subsequent measurement of debt instruments depends on the Group’s and the Bank’s business model for managing
the financial asset and the cash flow characteristics of the financial asset. There are three measurement categories
into which the Group and the Bank classify its debt instruments:
(a) Amortised cost
Financial assets that are held for collection of contractual cash flows where those cash flows represent SPPI,
and that are not designated at fair value through profit or loss, are measured at amortised cost using the
effective interest method. Interest/profit income from these financial assets is included in interest income and
income from Islamic Banking business using the effective interest/profit rate method. Any gain or loss arising
on derecognition is recognised directly in statements of income as presented in net realised gain or loss on
financial instruments. Impairment losses are presented as separate line item (as per Note 37 and Note 38) in
the statements of income.

(iii) Measurement (continued)
Debt instruments (continued)
(b) Fair value through other comprehensive income
Financial assets that are held for collection of contractual cash flows and for selling the financial assets, where
the financial assets’ cash flows represent SPPI, and that are not designated at fair value through profit or
loss, are measured at fair value through other comprehensive income. Movements in the carrying amount
are taken through OCI, except for the recognition of impairment gains or losses, interest/profit income and
foreign exchange gains and losses which are recognised in statements of income. When the financial asset is
derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to statements
of income and recognised in net realised gain or loss on financial instruments. Interest/profit income from
these financial assets is included in interest income and income from Islamic Banking business using the
effective interest/profit rate method. Foreign exchange gains and losses are presented in other income and
impairment losses are presented as separate line item (as per Note 38) in the statements of income.
(c) Fair value through profit or loss
Financial assets that do not meet the criteria for amortised cost or fair value through other comprehensive
income are measured at fair value through profit or loss. The Group and the Bank may also irrevocably designate
financial assets at fair value through profit or loss if doing so significantly reduces or eliminates a mismatch
created by assets and liabilities being measured on different basis. Fair value changes are recognised in
statements of income and presented net within net unrealised gain or loss on revaluation in the period which
it arises.
Equity instruments
The Group and the Bank subsequently measure all equity investments at fair value through profit or loss, except
where the management has elected, at initial recognition to irrevocably designate an equity instrument at fair value
through other comprehensive income. Where the Group’s and the Bank’s management have elected to present fair
value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value gains and
losses to statements of income following the derecognition of the investment. Cumulative gain or loss previously
recognised in OCI is not subsequently reclassified to statements of income, but is to be transferred to retained
profits. Dividends from such investments continue to be recognised in statements of income as other income when
the Group’s and the Bank’s right to receive payments is established.
Changes in the fair value of equity instruments designated as financial assets at fair value through profit or loss are
recognised in net unrealised gain or loss on revaluation in the statements of income.
(iv) Reclassification policy
Reclassification of financial assets is required when, and only when, the Group and the Bank change their business
model for managing the assets. In such cases, the Group and the Bank are required to reclassify all affected financial
assets.
194 • FINANCIALS

(iv) Reclassification policy (continued)
However, it will be inappropriate to reclassify financial assets that have been designated at fair value through profit
or loss, or equity instruments that have been designated as at fair value through other comprehensive income even
when there is a change in business model. Such designations are irrevocable.
E Financial liabilities
Financial liabilities are measured at amortised cost, except for trading liabilities designated at fair value, which are held at
fair value through profit or loss. Financial liabilities are initially recognised at fair value plus transaction costs for all financial
liabilities not carried at fair value through profit or loss. Financial liabilities at fair value through profit or loss are initially
recognised at fair value, and transaction costs are expensed in statements of income. Financial liabilities are de-recognised
when extinguished.
(i) Financial liabilities at fair value through profit or loss
This category comprises two sub-categories: financial liabilities as held-for-trading and financial liabilities designated
at fair value through profit or loss upon initial recognition.
A financial liability is classified as held-for-trading if it is acquired or incurred principally for the purpose of selling
or repurchasing it in the near term or if it is part of a portfolio of identified financial instruments that are managed
together and for which there is evidence of a recent actual pattern of short term profit-taking. Derivatives are also
categorised as held-for-trading unless they are designated as hedges.
The Group and the Bank have also designated certain structured deposits at fair value through profit or loss as
permitted under MFRS 9 ‘Financial Instruments’ as it significantly reduces accounting mismatch that would otherwise
arise from measuring the corresponding assets and liabilities on different basis.
(ii) Financial liabilities at amortised cost
Financial liabilities that are not classified as fair value through profit or loss fall into this category and are measured
at amortised cost. Financial liabilities are initially recognised at fair value plus transaction costs. Subsequently,
financial liabilities are remeasured at amortised cost using the effective interest/profit rate.
Financial liabilities measured at amortised cost are deposits from customers, investment accounts of customers,
deposits and placements of banks and other financial institutions, obligations on securities sold under repurchase
agreements, bills and acceptances payable, lease liabilities, other financial liabilities, recourse obligation on loans/
financing sold to Cagamas, Tier 2 subordinated bonds and Multi-currency additional Tier 1 capital securities.

F Property and equipment and depreciation
Property and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the Group and the Bank and the
cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and
maintenance are charged to the statements of income during the financial period in which they are incurred.
Freehold land is not depreciated as it has an infinite life. Other property and equipment are depreciated on a straight line
basis to write off the cost of the assets to their residual values over their estimated useful lives, summarised as follows:
Leasehold land Over the remaining period of the lease or 100 years (1%) whichever is shorter
Buildings on freehold land 2%
Buildings on leasehold land Over the remaining period of the lease or 50 years (2%) whichever is shorter
Office furniture, fittings,
equipment and renovations
and computer equipment 10% - 33%
Motor vehicles 25%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
Depreciation on assets under construction commences when the assets are ready for their intended use.
Property and equipment are reviewed for indication of impairment at each statements of financial position date and
whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Where the
carrying amount of an asset is greater than its estimated recoverable amount, it is written down to its recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount and are included in non-
interest income.
Leased assets presented under Property and equipment and Prepaid lease payments are right-of-use assets within the
scope of MFRS 16. See Note H for the accounting policies on right-of-use assets.
G Intangible assets
(i) Computer software
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use
the specific software. These costs are amortised over their estimated useful lives of 3 years to 8 years.
(ii) Goodwill
Goodwill arises on the acquisition of subsidiaries and represents the excess of the aggregate of the acquisition
date fair value of consideration transferred, the amount of any non-controlling interest in the acquiree and the
acquisition-date fair value of any previous equity interest in the acquiree over the net of the acquisition date fair
value of the identifiable assets acquired and liabilities assumed. If the fair value of consideration transferred, the
amount of non-controlling interest and the fair value of previously held interest in the acquiree are less than the fair
value of the net identifiable assets of the acquiree, the resulting gain is recognised in the statements of income.
196 • FINANCIALS

G Intangible assets (continued)
(ii) Goodwill (continued)
Goodwill is allocated to cash-generating units (“CGUs”) for the purpose of impairment testing. The allocation is made
to those cash-generating units or groups of cash-generating units that are expected to benefit from the synergies of
the business combination in which the goodwill arose. Each unit or group of units to which the goodwill is allocated
represents the lowest level within the entity at which goodwill is monitored for internal management purposes.
Goodwill is tested annually for impairment or more frequently if events or changes in circumstances indicate a
potential impairment. The carrying value of goodwill is compared to the recoverable amount, which is the higher of
value in use and the fair value less cost of disposal. Any impairment is recognised immediately as an expense and
is not subsequently reversed.
H Leases
Leases are recognised as right-of-use (“ROU”) asset and a corresponding liability at the date on which the leased asset is
available for use by the Group and the Bank (i.e. the commencement date).
Contracts may contain both lease and non-lease components. The Group and the Bank allocate the consideration in the
contract to the lease and non-lease components based on their relative stand-alone prices.
Lease term
In determining the lease term, the Group and the Bank considers all facts and circumstances that create an economic
incentive to exercise an extension option, or not to exercise a termination option. Extension options (or periods after
termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not to be
terminated).
The Group and the Bank reassess the lease term upon the occurrence of a significant event or change in circumstances
that is within the control of the Group and the Bank, and affects whether the Group and the Bank is reasonably certain
to exercise an option not previously included in the determination of lease term, or not to exercise an option previously
included in the determination of lease term. A revision in lease term results in remeasurement of the lease liabilities. See
accounting policy below on reassessment of lease liabilities.
ROU assets
ROU assets are initially measured at cost comprising the following:
• the amount of the initial measurement of lease liability;

• any lease payments made at or before the commencement date less any lease incentive received;
• any initial direct costs; and
• decommissioning or restoration costs.
ROU assets that are not investment properties are subsequently measured at cost, less accumulated depreciation and
impairment loss (if any). The ROU assets are generally depreciated over the shorter of the asset’s useful life and the lease
term on a straight-line basis. If the Group and the Bank are reasonably certain to exercise a purchase option, the ROU asset
is depreciated over the underlying asset’s useful life. In addition, the ROU assets are adjusted for certain remeasurement
of the lease liabilities.

H Leases (continued)
Lease liabilities
Lease liabilities are initially measured at the present value of the lease payments that are not paid at that date. The lease
payments include the following:
• Fixed payments (including in-substance fixed payments), less any lease incentive receivable;
• Amounts expected to be payable by the Group and the Bank under residual value guarantees;
• The exercise price of a purchase and extension options if the Group and the Bank are reasonably certain to
exercise that option; and
• Payments of penalties for terminating the lease, if the lease term reflects the Group and the Bank exercising that
option.
Lease payments are discounted using the interest/profit rate implicit in the lease. If that rate cannot be readily determined,
which is generally the case for leases in the Group and the Bank, an incremental borrowing rate is used in determining
the discount rate which assumes the interest/profit rate that the Group and the Bank would have to pay to borrow over a
similar term, the funds necessary to obtain the asset.
Lease payments are allocated between principal and finance cost. The finance cost is charged to statements of income
over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each
period.
The Group and the Bank present the lease liabilities as a separate line item in the statements of financial position. Interest
expense on the lease liability is presented within the other interest expenses in the statements of income.
Short term leases and leases of low value assets
The Group and the Bank elect to apply MFRS 16 recognition exemption such as short-term leases and leases for which the
underlying asset is of low value. Short-term leases are leases with a lease term of 12 months or less with no purchase
option. Low-value assets comprise IT equipment and small items of office furniture. Payments associated with short-term
leases of equipment and vehicles and all leases of low-value assets are recognised on a straight-line basis as an expense
in the statements of income.
I Impairment of non-financial assets
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets
that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that
the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the carrying
amount of the assets exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less
cost of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for
which separately identifiable cash flows which are largely independent of the cash inflows from other assets or groups
of assets (cash generating units). Non-financial assets other than goodwill that suffered impairment are reviewed for
possible reversal of the impairment at each reporting date.
The impairment loss is charged to the statements of income unless it reverses a previous revaluation in which case it is
charged to the revaluation surplus. Any subsequent increase in recoverable amount of non-financial assets (other than
goodwill) is recognised in the statements of income unless it reverses an impairment loss on a revalued asset in which
case it is taken to revaluation surplus.
198 • FINANCIALS

J Current and deferred income taxes
The tax expense for the period comprises current and deferred income tax. The income tax expense or credit for the period
is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction
adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.
Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or
directly in equity. In this case, the tax is recognised in other comprehensive income or directly in equity, respectively. The
liabilities in relation to tax penalties or its associated interest are included within the taxation liability on the statements
of financial position and charged to the tax expense in the statements of income as under provision of prior year tax.
Current income tax expense is determined according to the tax laws enacted or substantively enacted at the end of the
reporting period of each jurisdiction in which the Group operates and generates taxable income and includes all taxes
based upon the taxable profits.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax
regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be
paid to the tax authorities. This liability is measured using the single best estimate of the most likely outcome.
Deferred income tax is recognised in full, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial statements. However, deferred tax liabilities are
not recognised if they arise from the initial recognition of goodwill. Deferred income tax is not accounted for if it arises
from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the
transaction affects neither accounting nor taxable profit or loss.
Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against
which the temporary differences of unused tax losses or unused tax credits can be utilised.
Deferred tax liability is recognised on temporary differences arising on investments in subsidiaries, associates and joint
ventures except where the timing of the reversal of the temporary difference can be controlled by the Group and it is
probable that the temporary difference will not reverse in the foreseeable future. Generally the Group is unable to control
the reversal of the temporary difference for associates and joint ventures. Only where there is an agreement in place that
gives the Group the ability to control the reversal of the temporary difference, a deferred tax liabilities is not recognised.
Deferred income tax assets are recognised on deductible temporary differences arising from investments in subsidiaries,
associates and joint arrangements only to the extent that it is probable the temporary difference will reverse in the future
and there is sufficient taxable profit available against which the deductible temporary difference can be utilised.
Deferred income tax related to fair value remeasurement of financial instruments at fair value through other comprehensive
income, which are charged or credited directly to equity, is also credited or charged directly to equity and is subsequently
recognised in the statements of income together with the deferred gain or loss.
Deferred income tax is determined using tax rates (and tax laws) that have been enacted or substantively enacted by the
end of the reporting period and are expected to apply when the related deferred tax asset is realised or the deferred tax
liability is settled.
Deferred and income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
assets against current tax liabilities and when the deferred income tax assets and liabilities relate to taxes levied by the
same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the
balances on a net basis.

K Derivative financial instruments and hedging
The Group and the Bank have elected an accounting policy choice under MFRS 9 to continue to apply the hedge accounting
requirements under MFRS 139 for fair value macro hedges on the adoption of MFRS 9 on 1 July 2018.
Derivatives are initially recognised at fair value on the date on which a derivative contract is entered into and are
subsequently remeasured at their fair value at the end of each reporting period. Fair values are obtained from quoted
market prices in active markets, including recent market transactions, and valuation techniques, including discounted
cash flow models and option pricing models, as appropriate. All derivatives are carried as assets when fair value is
positive and as liabilities when fair value is negative. Changes in the fair value of any derivatives that do not qualify for
hedge accounting are recognised immediately in the statements of income. Cash collateral held in relation to derivative
transactions are carried at amortised cost.
The best evidence of fair value of a derivative at initial recognition is the transaction price (i.e. the fair value of the
consideration given or received) unless the fair value of the instrument is evidenced by comparison with other observable
current market transactions in the same instrument (i.e. without modification or repackaging) or based on a valuation
technique whose variables include only data from observable markets. When such evidence exists, the Group and the
Bank recognise profits immediately.
The method of recognising the resulting fair value gain or loss depends on whether the derivative is designated as
a hedging instrument, and if so, the nature of the item being hedged. The Group and the Bank designated certain
derivatives as either: (1) hedges of the fair value of recognised assets or liabilities or firm commitments (fair value hedge)
or (2) hedges of highly probable future cash flows attributable to a recognised asset or liability, or a forecasted transaction
(cash flow hedge) or (3) hedges of a net investment in a foreign operation (net investment hedge). Hedge accounting is
used for derivatives designated in this way provided certain criteria are met.
The Group and the Bank have applied the following Phase 1 reliefs provided by the Amendments to MFRS 9 and MFRS 7
‘Interest Rate Benchmark Reform’ until the uncertainty arising from IBOR reform no longer being present:
* When considering the ‘highly probable’ requirement, the Group and the Bank have assumed that the IBOR interest
rate on which the Group’s and the Bank’s hedged borrowings is based does not change as a result of IBOR reform.
* In assessing whether the hedge is expected to be highly effective on a forward-looking basis, the Group and the
Bank have assumed that the IBOR interest rate on which the cash flows of the hedged borrowings and the interest
rate swap that hedges it are based is not altered by IBOR reform.
* The Group and the Bank had recycled the cash flow hedge reserve for designated hedges that are subject to the
IBOR reform.
200 • FINANCIALS

K Derivative financial instruments and hedging (continued)
The Group and the Bank have applied the following reliefs provided by the Amendments to MFRS 9 and MFRS 7 ‘Interest
Rate Benchmark Reform - Phase 2’:
* Hedge designation: When the Phase 1 amendments cease to apply, the Group and the Bank will amend its hedge
designation to reflect changes which are required by IBOR reform, but only to make one or more of the following
changes:
a) designating an alternative benchmark rate (contractually or non-contractually specified) as a hedged risk;
b) amending the description of the hedged item, including the description of the designated portion of the
cash flows or fair value being hedged; or
c) amending the description of the hedging instrument.
The Group and the Bank amends its hedge documentation to reflect this change in designation by the end of the reporting
period in which the changes are made. These amendments to the hedge documentation do not require the Group and the
Bank to discontinue its hedge relationships.
The fair values of various derivative instruments used for hedging purposes are disclosed in Note 10 to the financial
statements. Movements on the hedging reserve in shareholders’ equity are shown in Note 29.
(i) Fair value hedge
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the
statements of income, together with any changes in the fair value of the hedged assets or liabilities that are
attributable to the hedged risk.
The Group and the Bank apply fair value hedge accounting for hedging fixed interest risk on loans, advances and
financing and financial assets at FVOCI. The gain or loss relating to the effective portion of interest rate swaps
hedging fixed rate loans, advances and financing is recognised in statements of income within other operating
income. The gain or loss relating to the ineffective portion is recognised in statements of income within net gain or
loss on fair value hedges.
For fair value hedge of financial assets designated as FVOCI, any changes in fair value of the hedged financial assets
FVOCI are recycled from FVOCI reserves to statements of income, while the changes in fair value of the derivatives
that is related to the effective portion of the hedge is recognised in statements of income within other operating
income. The ineffective portion of the aforesaid hedging derivatives is recognised in statements of income with net
gain or loss on fair value changes of derivatives.
If the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedged
item for which the effective interest method is used is amortised to statements of income over the period to
maturity using a recalculated effective interest rate.

K Derivative financial instruments and hedging (continued)
(ii) Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges
are recognised in equity. The gain and loss relating to the ineffective portion is recognised immediately in the
statements of income. Amounts accumulated in equity are recycled to the statements of income in the financial
periods in which the hedged item will affect statements of income.
When a hedging instrument expires or is sold or transferred, or when a hedge no longer meets the criteria for hedge
accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when
the forecast transaction is ultimately recognised in the statements of income. When a forecast transaction is no
longer expected to occur, the cumulative gain or loss that was reported in equity is immediately reclassified to the
statements of income.
(iii) Derivatives that do not qualify for hedge accounting
Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative
instrument that does not qualify for hedge accounting are recognised immediately in the statements of income.
L Currency translations
(i) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the
primary economic environment in which the entity operates (“the functional currency”). The consolidated financial
statements are presented in Ringgit Malaysia, which is the Bank’s functional and presentation currency.
(ii) Foreign currency transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the
dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting
from the settlement of such transactions and from the translation at financial year-end exchange rates of monetary
assets and liabilities denominated in foreign currencies are recognised in the statements of income, except when
deferred in equity as qualifying cash flow hedges and qualifying net investment hedges or are attributable to items
that form part of the net investment in a foreign operation.
Changes in the fair value of monetary securities denominated in foreign currency classified as financial instruments
at fair value through other comprehensive income are analysed between translation differences resulting from
changes in the amortised cost of the security and other changes in the carrying amount of the security. Translation
differences related to changes in the amortised cost are recognised in the statements of income, and other changes
in the carrying amount are recognised in other comprehensive income.
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates
at the date when the fair value is determined. Translation differences such as equity held at fair value through profit
or loss and assets and liabilities carried at fair value are reported as part of the fair value gain or loss. Translation
differences on non-monetary financial assets such as equities held at fair value through profit or loss are recognised
in income as part of the fair value gain or loss. Translation differences on non-monetary financial assets such as
equities classified as financial assets at fair value through other comprehensive income are included in the fair value
reserve in other comprehensive income.
202 • FINANCIALS

L Currency translations (continued)
(iii) Group companies
The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary
economy) that have a functional currency different from the presentation currency are translated into the presentation
currency as follows:
• assets and liabilities for each statements of financial position presented are translated at the closing rate at
the date of the statements of financial position;
• income and expenses for each statements of income are translated at average exchange rates (unless this
average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction
dates, in which case income and expenses are translated at the rate on the dates of the transactions); and
• all resulting exchange differences are recognised as a separate component of other comprehensive income.
On consolidation, exchange differences arising from the translation of the net investment in foreign operations,
and of borrowings and other currency instruments designated as hedges of such investments, are recognised in
other comprehensive income.
On the disposal of a foreign operation (that is, a disposal of the Group’s entire interest in a foreign operation, or
a disposal involving loss of control over a subsidiary that includes a foreign operation, a disposal involving loss
of joint control over a jointly controlled entity that includes a foreign operation, or a disposal involving loss of
significant influence over an associate that includes a foreign operation), all of the exchange differences relating
to that foreign operation recognised in other comprehensive income and accumulated in the separate component
of equity are reclassified to statements of income. In the case of a partial disposal that does not result in the
Group losing control over a subsidiary that includes a foreign operation, the proportionate share of accumulated
exchange differences are re-attributed to non-controlling interests and are not recognised in profit or loss. For
all other partial disposals (that is, reductions in the group’s ownership interest in associates or jointly controlled
entities that do not result in the group losing significant influence or joint control) the proportionate share of the
accumulated exchange difference is reclassified to statements of income.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities
of the foreign entity and translated at the closing rate. Exchange differences arising are recognised in other
comprehensive income.
M Employee benefits
(i) Short-term employee benefits
Wages, salaries, paid annual leave and sick leave, bonuses, and non-monetary benefits that are expected to be
settled wholly within 12 months after the end of the period in which the employees render the related services
are recognised in respect of employees’ services up to the end of the reporting period and are measured at the
amounts expected to be paid when the liabilities are settled.
The Group and the Bank recognise a liability and an expense for bonuses. The Group and the Bank recognise a
provision where contractually obliged or where there is a past practice that has created a constructive obligation.

M Employee benefits (continued)
(ii) Defined contribution plan
A defined contribution plan is a pension plan under which the Group and the Bank pay fixed contributions into
a separate entity (a fund) on a mandatory, contractual or voluntary basis and the Group and the Bank has no
legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all
employees benefits relating to employee service in the current and prior financial periods.
The Group and the Bank contributes to a national defined contribution plan (the Employee Provident Fund) on a
mandatory basis and the amounts contributed to the plan are charged to the statements of income in the financial
period to which they relate. Once the contributions have been paid, the Group and the Bank have no further
payment obligations.
Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future
payments is available.
(iii) Share-based compensation
The Bank operates an equity-settled, share-based compensation plan for the employees of the Bank under which
the Bank receives services from employees as consideration for equity instruments (options) of the Bank. The
fair value of the employee services received in exchange for the grant of the share options is recognised as an
expense in the statements of income over the vesting periods of the grant with a corresponding increase to share
options reserve within equity.
The total amount to be expensed over the vesting period is determined by reference to the fair value of the share
options granted, excluding the impact of any non-market vesting conditions. Non-market vesting conditions are
included in assumptions about the number of options that are expected to vest. At each statements of financial
position date, the Bank revises its estimates of the number of share options that are expected to vest based on
the non-market vesting conditions. It recognises the impact of the revision of original estimates, if any, in the
statements of income, with a corresponding adjustment to share options reserve in equity.
A trust has been set up for the Executive Share Option Scheme (“ESOS”) and is administered by an appointed
trustee. The trustee will be entitled from time to time to accept financial assistance from the Bank upon such
terms and conditions as the Bank and the trustee may agree to purchase the Bank’s shares from the open market
for the purposes of this trust.
In accordance with MFRS 132 ‘Financial Instruments: Presentation’, the shares purchased for the benefit of the
ESOS holders are recorded as “Treasury Shares” in equity on the statements of financial position. The cost of
operating the ESOS scheme would be charged to the statements of income when incurred in accordance with
accounting standards.
When the options are exercised, the Bank transfers the Treasury shares for ESOS scheme to the ESOS holder. The
Treasury shares and share options reserve would be adjusted against the retained earnings.
When the options are exercised, the Bank may also issue new shares. The proceeds received net of any directly
attributable transaction costs are credited to share capital.
When options are not exercised and lapsed, the share options reserve is transferred to retained earnings.
204 • FINANCIALS

N Impairment of financial assets
The Group and the Bank assess on a forward-looking basis the expected credit losses (“ECL”) associated with its financial
assets carried at amortised cost and fair value through other comprehensive income. The impairment methodology applied
depends on whether there has been a significant increase in credit risk.
The Group and the Bank assess whether the credit risk on an exposure has increased significantly on an individual or
collective basis. The Group and the Bank first assess whether objective evidence of impairment exists for financial assets
which are individually significant. If the Group and the Bank determine the objective evidence of impairment exists, i.e.
credit-impaired for an individually assessed financial asset, a lifetime ECL will be recognised for impairment loss. Financial
assets which are collectively assessed are grouped on the basis of similar credit risk characteristics.
The Group and the Bank have adopted the general approach for ECL.
Financial assets accounted for at amortised cost, fair value through other comprehensive income and with the
exposure arising from loan commitments and financial guarantee contracts - General Approach
ECL will be assessed using an approach which classified financial assets into three stages which reflects the change in
credit quality of the financial assets since initial recognition:
(a) Stage 1: 12-months ECL - not credit impaired
Stage 1 includes financial assets which have not had a significant increase in credit risk since initial recognition or
which have low credit risk at reporting date. 12-months ECL is recognised and interest income is calculated on the
gross carrying amount of the financial assets.
(b) Stage 2: Lifetime ECL - not credit impaired
Stage 2 includes financial assets which have had a significant increase in credit risk since initial recognition (unless
they have low credit risk at the reporting date) but do not have objective evidence of impairment. Lifetime ECL is
recognised and interest income is calculated on the gross carrying amount of the financial assets.
(c) Stage 3: Lifetime ECL - credit impaired
Stage 3 includes financial assets that have objective evidence of impairment at the reporting date. Lifetime ECL is
recognised and interest income is calculated on the net carrying amount of the financial assets.
Significant increase in credit risk
At each reporting date, the Group and the Bank assess whether there has been a significant increase in credit risk for
exposures since initial recognition to determine whether the exposure is subject to 12-month ECL or lifetime ECL. This is
performed by comparing the risk of default occurring over the remaining expected life from the reporting date and the date
of initial recognition. When determining whether the risk of default has increased significantly since initial recognition, the
Group and the Bank consider both quantitative and qualitative information and assessments based on the Group’s and the
Bank’s historical experience and credit risk assessments, including forward-looking information. A backstop of 30 days or 1
month past due from its contractual payment is applied and a financial asset will still be designated as having significant
increase in credit risk regardless if it meets both the quantitative and qualitative assessments.

N Impairment of financial assets (continued)
exposure arising from loan commitments and financial guarantee contracts - General Approach (continued)
Definition of default and credit-impaired financial assets
At each reporting period, the Group and the Bank assess whether financial assets are impaired. Qualitative and quantitative
information are used to determine if a financial asset is credit impaired. Nevertheless, a backstop is applied and a financial
asset is considered as credit impaired if it is more than 90 days or 3 months past due on its contractual payments.
As part of the assessment of impairment of financial assets under ECL model, the default definition, which is largely align
with regulatory reporting purposes, has been applied to three main components, which is a probability of default (“PD”)
model, a loss given default (“LGD”) model and exposure at default (“EAD”) model respectively.
Where measurement of ECL is relying on external published sources, in determining if a financial asset is credit-impaired,
the Group and the Bank will consider factors, such as, but not limited to, rating agencies’ assessment of creditworthiness
and country’s ability to access to capital markets for new debt issuance.
Measurement of ECL
ECL are measured using three main components, which include PD, LGD and EAD. These components are derived from
internally developed statistical models and adjusted to reflect forward-looking information as set out below.
The 12-month and lifetime PD represent the expected point-in-time probability of default over the next 12 months
and remaining lifetime of a financial instrument, based on conditions that exist at the reporting date and taking into
consideration of future economic conditions that affect credit risk. The LGD component represents that expected loss if
a default event occurs at a given time, taking into account the mitigating effect of collateral, its expected value when
realised and time value of money. The EAD represents the expected exposure at default, taking into account the repayment
of principal and interest from the reporting date to the default event together with expected drawdown and utilisation
of a facility. The 12-month ECL is equal to the discounted sum over the next 12 months of monthly PD multiplied by LGD
and EAD. The discount rate used in the ECL measurement is the original effective interest/profit rate or an approximation
thereof.
The measurement of ECL reflects an unbiased and probability-weighted amount that is derived by evaluating a range of
possible macroeconomic outcome, the time value of money together with reasonable and supportable information that
is available without undue cost or effort at the reporting date about past events, current conditions and forecast of future
economic conditions.
Forward-looking information
The Group and the Bank have internally developed methodologies for the application of forward-looking macroeconomic
variables (“MEV”) which consist of economic indicators and industry statistics in the measurement of ECL. This involves the
incorporation of MEV forward-looking into PD estimation, which is determined based on probability-weighted outcome
from a range of economic scenarios.
206 • FINANCIALS

Forward-looking information (continued)
The measurement of ECL incorporates a broad range of forward-looking information as economic inputs, such as but not
limited to:
- Gross Domestic Product (“GDP”)

- Unemployment Rate
- Consumer Price Index
- House Price Index
The Group and the Bank apply three economic scenarios to reflect an unbiased probability-weighted range of possible
future outcome in estimating ECL:
Base case: This represents ‘most likely outcome’ of future economic conditions which are backed by consensus forecast
from various sources.
Best and Worst case: These represent the ‘upside’ and ‘downside’ outcome of future economic conditions by making
references to past historical cyclical conditions together with incorporation of best estimates and judgements on an
unbiased basis.
Modification of loans/financing
The Group and the Bank may renegotiate or otherwise modify the contractual cash flows of loans/financing to customers.
When this happens, the Group and the Bank assess whether or not the new terms are substantially different to the original
terms.
The Group and the Bank do this by considering, among others, the following factors:
• If the borrower is in financial difficulty, whether the modification merely reduces the contractual cash flows to
amounts the borrower is expected to be able to pay.
• Whether any substantial new terms are introduced, such as a profit share/equity-based return that substantially
affects the risk profile of the loan.
• Significant extension of the loan term when the borrower is not in financial difficulty.
• Significant change in the interest/profit rate.
• Change in the currency the loan/financing is denominated in.
• Insertion of collateral, other security or credit enhancements that significantly affect the credit risk associated
with the loan/financing.

Modification of loans/financing (continued)
If the terms are substantially different, the Group and the Bank derecognise the original financial asset and recognises
a ‘new’ asset at fair value and recalculates a new effective interest/profit rate for the asset. The date of renegotiation
is consequently considered to be the date of initial recognition for impairment calculation purposes, including for the
purpose of determining whether a significant increase in credit risk has occurred. However, the Group and the Bank also
assess whether the new financial asset recognised is deemed to be credit-impaired at initial recognition, especially in
circumstances where the renegotiation was driven by the debtor being unable to make the originally agreed payments.
Differences in the carrying amount are also recognised in statements of income as a gain or loss on derecognition.
If the terms are not substantially different, the renegotiation or modification does not result in derecognition, and
the Group and the Bank recalculate the gross carrying amount based on the revised cash flows of the financial asset
and recognises a modification gain or loss in statements of income. The new gross carrying amount is recalculated by
discounting the modified cash flows at the original effective interest/profit rate (or credit–adjusted effective interest/profit
rate for purchased or originated credit-impaired financial assets).
The impact of modifications of financial assets on the expected credit loss calculation is discussed in Note 34.
O Derecognition of financial assets and financial liabilities other than on a modification
Financial assets are derecognised when the contractual rights to receive the cash flows from these assets have ceased to
exist or the assets have been transferred and substantially all the risks and rewards of ownership of the assets are also
transferred. Financial liabilities are derecognised when they have been redeemed or otherwise extinguished.
Collateral furnished by the Bank under standard repurchase agreements transactions is not derecognised because the
Bank retains substantially all the risks and rewards on the basis of the predetermined repurchase price, and the criteria for
derecognition are therefore not met.
P Offsetting financial instruments
Financial assets and liabilities are offset and the net amount is presented in the statements of financial position where
there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or
realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future
events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy.
Q Financial guarantee contracts
Financial guarantee contracts are contracts that require the Group or the Bank to make specified payments to reimburse
the holder for a loss it incurs because a specified debtor fails to make payments when due, in accordance with the terms
of a debt instrument.
Financial guarantee contracts are recognised as a financial liability at the time the guarantee is issued and the liability is
initially measured at fair value.
208 • FINANCIALS

Q Financial guarantee contracts (continued)
The fair value of financial guarantees is determined based on the present value of the difference in cash flows between
the contractual payments required under the debt instrument and the payments that would be required without the
guarantee, or the estimated amount that would be payable to a third party for assuming the obligations.
Financial guarantee contracts are subsequently measured at the higher of the amount determined in accordance with the
ECL model under MFRS 9 ‘Financial Instruments’ and the amount initially recognised less cumulative amount of income
recognised in accordance with the principles of MFRS 15 ‘Revenue from Contracts with Customers’, where appropriate.
R Foreclosed properties
Foreclosed properties are stated at the lower of carrying amount and fair value less cost to sell.
S Bills and acceptances payable
Bills and acceptances payable represent the Group’s and the Bank’s own bills and acceptances rediscounted and outstanding
in the market.
T Provisions
Provisions are recognised by the Group and the Bank when all of the following conditions have been met:
(i) the Group and the Bank have a present legal or constructive obligation as a result of past events;
(ii) it is probable that an outflow of resources to settle the obligation will be required; and
(iii) a reliable estimate of the amount of obligation can be made.
Where the Group and the Bank expect a provision to be reimbursed by another party, the reimbursement is recognised as
a separate asset but only when the reimbursement is virtually certain. Provisions are not recognised for future operating
losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined
by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with
respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of management’s best estimate of the expenditures expected to be required
to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and risks
specific to the obligation. The increase in the provision due to passage of time is recognised as interest expense.
U Cash and cash equivalents
Cash and short-term funds in the statements of financial position comprise cash balances and deposits with financial
institutions and money at call with a maturity of one month or less, which are subject to an insignificant risk of changes
in value.
For the purpose of the statements of cash flows, cash and cash equivalents comprise cash and short-term funds and
deposits and placements with financial institutions, with original maturity of 3 months or less.

V Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker is the person or group that allocates resources and assesses the
performance of the operating segments of an entity. The Group has determined the Board of Directors as the collective
body of chief operating decision makers.
Segment revenue, expense, assets and liabilities are those amount resulting from the operating activities of a segment
that are directly attributable to the segment and the relevant portion that can be allocated on a reasonable basis to the
segment. Segment revenue, expense, assets and liabilities are determined before intra-group balances and intra-group
transactions are eliminated as part of the consolidation process, except to the extent that such intra-group balances and
transactions are between group enterprises within a single segment.
W Share capital
(i) Classification
Ordinary shares are classified as equity. Other shares are classified as equity and/or liability according to the substance
of the particular instrument.
(ii) Share issue costs
Incremental external costs directly attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
(iii) Dividends
Distributions to shareholders are recognised directly in equity. Liability is recognised for the amount of any dividend
declared, being appropriately authorised and no longer at the discretion of the Group, on or before the end of the
reporting period but not distributed at the end of the reporting period.
(iv) Purchase of own shares
The Bank has repurchased its shares and designated as treasury shares in accordance with MFRS 132 ‘Financial
Instruments: Presentation’. Treasury shares consist of those own shares purchased pursuant to Section 127 of the
Companies Act 2016 and those purchased pursuant to ESOS scheme.
Where the Bank or its subsidiaries purchases the Bank’s equity share capital (treasury shares), the consideration
paid, including any directly attributable incremental costs, net of tax, is deducted from equity attributable to the
Bank’s equity holders as treasury shares until they are cancelled, reissued or disposed off. Where such shares are
subsequently sold or reissued, any consideration received, net of any directly attributable incremental transaction
costs and the related tax effects, is adjusted against treasury shares.
210 • FINANCIALS

X Contingent assets and contingent liabilities
The Group does not recognise contingent assets and liabilities other than those arising from business combinations, but
discloses its existence in the financial statements. A contingent liability is a possible obligation that arises from past
events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events
beyond the control of the Group or a present obligation that is not recognised because it is not probable that an outflow
of resources will be required to settle the obligation. A contingent liability also arises in the extremely rare case where
there is a liability that cannot be recognised because it cannot be measured reliably. However, contingent liabilities do not
include financial guarantee contracts. A contingent asset is a possible asset that arises from past events whose existence
will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the
Group. The Group does not recognise contingent assets but discloses its existence where inflows of economic benefits are
probable, but not virtually certain.
Y Sale and repurchase agreements
Securities purchased under resale agreements are securities which the Group and the Bank had purchased with a
commitment to re-sell at future dates. The commitment to re-sell the securities is reflected as an asset on the statements
of financial position.
Conversely, obligations on securities sold under repurchase agreements are securities which the Group had sold from its
portfolio, with a commitment to repurchase at future dates. Such financing transactions and the obligation to repurchase
the securities are reflected as a liability on the statements of financial position.
The difference between the sale and repurchase price as well as purchase and resale price is treated as interest and
accrued over the life of the resale/repurchase agreement using the effective yield method.
Z Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing:
* the profit attributable to owners of the Bank, excluding any costs of servicing equity other than ordinary
shares.
* by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus
elements in ordinary shares issued during the year and excluding treasury shares.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures in the determination of basic earnings per share to take into account:
* the after income tax effect of interest and other financing costs associated with dilutive potential ordinary
shares; and
* the weighted average number of additional ordinary shares that would have been outstanding assuming the
conversion of all dilutive potential ordinary shares.

AA Investment Account
Unrestricted Investment Account-i (“URIA”) refers to a type of investment account structured based on a profit sharing
(Mudarabah) contract. Mudarabah is a Shariah-compliant contract between Investment Account Holders (“IAH”) as capital
providers or investor (Rabbul-mal) and the Bank’s subsidiary, Hong Leong Islamic Bank Berhad (“HLISB”) as the fund manager
(Mudarib). Any profit generated from the investment is shared between the IAH and HLISB according to a mutually pre-agreed
Profit Sharing Ratio. Financial losses from the investment activities are borne by the IAH except where such losses are due to
HLISB misconduct, negligence, or breach of specified terms. The URIA and financing assets funded by the URIA are recorded in
HLISB and the Group’s financial statement as its liabilities and assets in accordance with MFRS 9. Risk weighted assets funded
by the Investment Account are excluded from the calculation of capital ratio of HLISB and the Group.
Restricted Investment Account-i (“RIA”) refers to a type of investment account where the IAH, provides a specific investment
mandate to the Bank such as purpose and/or period for investment. The RIA is based on shariah principle of Wakalah bi
Al-Istithmar, an agency contract where the investor authorises the Bank’s subsidiary, HLISB, as investment agent (Wakil)
to manage the customers’ investment on their behalf. Profit generated from the investment will be distributed to the IAH
during the Profit Distribution Period.
AB Financial assistance scheme
Financing under a government scheme is recognised and measured in accordance with MFRS 9 ‘Financial Instruments’,
with the benefit at a below market rate measured as the difference between the initial carrying amount or fair value of
the financing and the amount received.
The benefits of such schemes that addresses identified costs or expenses incurred by the Group and the Bank is recognised
in the statements of income in the same financial period in accordance with MFRS 120 ‘Accounting for Government Grants
and Disclosure of Government Assistance’.
212 • FINANCIALS

3 CASH AND SHORT-TERM FUNDS
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Cash and balances with banks and other financial

institutions 2,429,758 1,782,374 1,898,001 1,425,591
Money at call and deposit placements maturing within one
month 5,777,248 4,312,695 4,465,228 4,031,249
8,207,006 6,095,069 6,363,229 5,456,840
Less: Expected credit losses (203) (340) (1,001) (1,052)
8,206,803 6,094,729 6,362,228 5,455,788
4 DEPOSITS AND PLACEMENTS WITH BANKS AND OTHER FINANCIAL INSTITUTIONS
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Licensed banks 422,332 586,095 1,344,797 2,618,370

Central banks 14,565 256,420 - -
436,897 842,515 1,344,797 2,618,370
Less: Expected credit losses (20) (9) (1,244) (4,035)
436,877 842,506 1,343,553 2,614,335

5 FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (‘’FVTPL’’)
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Money market instruments

Bank Negara Malaysia bills 1,197,414 49,806 997,852 49,806
Government treasury bills 620,126 2,083,409 225,937 1,786,542
Malaysian Government securities 305,143 321,783 305,143 321,783
Malaysian Government investment certificates 1,518,578 158,570 1,353,463 158,570
Cagamas bonds 15,078 65,587 15,078 65,587
3,656,339 2,679,155 2,897,473 2,382,288
Quoted securities
Shares in Malaysia 62,637 56,693 11,249 -
Shares outside Malaysia 9,352 - 9,352 -
Wholesale fund/unit trust 1,307,176 2,780,869 1,380,727 2,859,382
Portfolio Investment Accounts (Note) 1,282 9,097 - -
Foreign currency bonds in Malaysia - 11,938 - 11,938
Foreign currency bonds outside Malaysia - 31,120 - 31,120
Convertible bonds outside Malaysia - 1,108,752 - 1,190,942
1,380,447 3,998,469 1,401,328 4,093,382
Unquoted securities
Government sukuk - 101,766 - -
Corporate bonds and sukuk 190,885 84,472 190,885 84,472
Shares in Malaysia 364,985 355,620 364,985 355,620
Foreign currency bonds in Malaysia 37,281 - 37,281 -
Redeemable preference shares 25,000 25,000 25,000 25,000
618,151 566,858 618,151 465,092
5,654,937 7,244,482 4,916,952 6,940,762
Note:
Included in financial assets at FVTPL are the underlying assets for the Portfolio Investment Accounts (“PIA”). PIA is the restricted
investment account offered to investors based on the Shariah principle of Wakalah bi Al-Istithmar, an agency contract where the
investor authorises Hong Leong Islamic Bank to manage the customers’ investment on their behalf.
214 • FINANCIALS

6 FINANCIAL INVESTMENTS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME (“FVOCI”)
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
At fair value
(a) Debt instruments 33,789,020 26,112,917 30,011,550 22,333,135
(b) Equity instruments 97,650 83,386 97,650 83,386
33,886,670 26,196,303 30,109,200 22,416,521
(a) Debt instruments

Government treasury bills 1,820,701 - 1,820,701 -
Malaysian Government securities 4,493,298 3,670,109 4,493,298 3,670,109
Malaysian Government investment certificates 9,726,037 8,954,723 6,297,637 5,571,427
Negotiable instruments of deposit 1,306,322 1,796,800 1,306,322 1,796,800
Cagamas bonds 2,535,068 821,260 2,535,068 795,929
Khazanah bonds 363,416 348,079 363,416 348,079
20,244,842 15,590,971 16,816,442 12,182,344
Quoted securities
Government sukuk 860,644 831,321 860,644 831,321
Foreign currency bonds in Malaysia 1,873,035 1,216,476 1,873,035 1,216,476
Foreign currency bonds outside Malaysia 1,703,172 842,415 1,703,172 842,415
4,436,851 2,890,212 4,436,851 2,890,212
Unquoted securities
Government sukuk 30,768 417,257 30,768 417,257
Corporate bonds and sukuk 7,896,424 6,783,878 7,553,461 6,420,235
Foreign currency bonds in Malaysia 847,674 175,112 847,674 175,112
Foreign currency bonds outside Malaysia 332,461 255,487 326,354 247,975
9,107,327 7,631,734 8,758,257 7,260,579
33,789,020 26,112,917 30,011,550 22,333,135
Included in the debt instruments at FVOCI are securities which are pledged as collateral for obligations on securities sold under
repurchase agreements for the Group and the Bank amounting to RM2,918,310,000 (2022: RM1,292,472,000).
The carrying amount of debt instruments at FVOCI is equivalent to their fair value. The expected credit losses is recognised in
other comprehensive income and does not reduce the carrying amount in the statement of financial position.

6 FINANCIAL INVESTMENTS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME (“FVOCI”) (CONTINUED)
Movements in expected credit losses of debt instruments at FVOCI are as follows:
Stage 1 Stage 2 Stage 3

Lifetime ECL Lifetime ECL
12 Months not credit credit
ECL impaired impaired Total ECL
The Group RM’000 RM’000 RM’000 RM’000
2023
At 1 July 1,729 - 4,287 6,016
New financial assets originated or purchased 959 - - 959
Financial assets derecognised (199) - - (199)
Changes due to change in credit risk (576) - - (576)
Exchange differences 101 - - 101
At 30 June 2,014 - 4,287 6,301

2022
At 1 July 2,266 - 4,287 6,553
At 30 June 1,729 - 4,287 6,016
216 • FINANCIALS

Movements in expected credit losses of debt instruments at FVOCI are as follows: (continued)

The Bank RM’000 RM’000 RM’000 RM’000
2023
At 1 July 1,724 - 4,287 6,011
At 30 June 2,007 - 4,287 6,294

2022
At 1 July 2,266 - 4,287 6,553
At 30 June 1,724 - 4,287 6,011
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
(b) Equity instruments
Unquoted securities:
Shares in Malaysia 97,650 83,386 97,650 83,386

The Group and the Bank designated certain investments shown in the following table as equity instruments under FVOCI, which
is held for socio-economic purposes or not for trading purposes.
Dividend
income
recognised
during the
Fair value financial year
The Group and The Bank RM’000 RM’000
2023
Securities:
RAM Holdings Berhad 6,432 2,175
Payments Network Malaysia Sdn Bhd 89,975 -
Others 1,243 -
97,650 2,175
Dividend
income
recognised
during the
Fair value financial year
The Group and The Bank RM’000 RM’000
2022
Securities:
RAM Holdings Berhad 7,764 406
Payments Network Malaysia Sdn Bhd 74,544 -
Others 1,078 -
83,386 406
218 • FINANCIALS

7 FINANCIAL INVESTMENTS AT AMORTISED COST
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000

Government treasury bills 60,676 57,612 60,676 57,612
Malaysian Government securities 5,427,423 4,787,205 5,427,423 4,787,205
Malaysian Government investment certificates 22,985,651 22,720,790 14,847,344 14,950,431
Cagamas bonds 1,658,260 416,700 954,692 265,439
Khazanah bonds 14,393 13,889 14,393 13,889
Other Government securities 421,343 419,246 357,609 357,270
30,567,746 28,415,442 21,662,137 20,431,846
Quoted securities
Foreign currency bonds outside Malaysia 19,117 62,174 19,117 62,174
Unquoted securities
Government sukuk 30,611 2,583,133 30,611 1,617,188
Corporate bonds and sukuk 576,609 1,297,733 489,699 1,033,337
607,220 3,880,866 520,310 2,650,525
Less: Expected credit losses (18) (68) - -
31,194,065 32,358,414 22,201,564 23,144,545
Included in the financial investments at amortised cost are foreign currency bonds, which are pledged as collateral for
obligations on securities sold under repurchase agreements for the Group and the Bank amounting to RM4,478,710,000
(2022: RM2,692,688,000).

7 FINANCIAL INVESTMENTS AT AMORTISED COST (CONTINUED)
Movements in expected credit losses of financial investments at amortised cost are as follows:

2023
At 1 July 68 - - 68
Changes in models/risk parameters (1) - - (1)
At 30 June 18 - - 18

2022
At 1 July 68 - - 68
At 30 June 68 - - 68
220 • FINANCIALS

Movements in expected credit losses of financial investments at amortised cost are as follows: (continued)

2023
At 1 July/30 June - - - -

2022
At 1 July 23 - - 23
At 30 June - - - -

Movements in the carrying amount of financial investments at amortised cost that contributed to changes in the expected credit
losses are as follows:
Stage 1 Stage 2 Stage 3 Total

2023
At 1 July 32,358,482 - - 32,358,482
New financial assets originated or purchased 556,100 - - 556,100
Financial assets derecognised (5,506,752) - - (5,506,752)
Changes due to change in credit risk 3,749,738 - - 3,749,738
Exchange differences 36,515 - - 36,515
At 30 June 31,194,083 - - 31,194,083

2022
At 1 July 23,634,975 - - 23,634,975
At 30 June 32,358,482 - - 32,358,482
222 • FINANCIALS

Movements in the carrying amount of financial investments at amortised cost that contributed to changes in the expected credit
losses are as follows: (continued)

2023
At 1 July 23,144,545 - - 23,144,545
At 30 June 22,201,564 - - 22,201,564

2022
At 1 July 16,558,749 - - 16,558,749
At 30 June 23,144,545 - - 23,144,545

8 LOANS, ADVANCES AND FINANCING
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Overdrafts 4,077,891 3,546,936 2,603,155 2,418,512

Term loans/financing:
- Housing and shop loans/financing 97,387,797 91,169,501 75,068,963 70,818,806
- Hire purchase receivables 19,914,072 18,035,880 14,287,272 13,757,762
- Ijarah receivables 249,054 247,445 - -
- Other term loans/financing and syndicated term loans 35,065,848 31,953,779 23,546,880 21,668,500
Credit/charge card receivables 3,202,663 2,923,883 3,202,663 2,923,883
Bills receivable 1,936,868 1,539,682 1,522,981 1,226,517
Trust receipts 441,074 417,252 301,326 219,633
Claims on customers under acceptance credits 8,936,884 8,817,344 7,558,692 7,484,462
Revolving credit 10,339,502 9,455,248 8,142,773 7,423,951
Staff loans/financing 125,058 127,075 108,093 111,524
Gross loans, advances and financing 181,676,711 168,234,025 136,342,798 128,053,550
Fair value changes arising from fair value hedges and

unamortised fair value changes arising from terminated
fair value hedges (14,700) (9,962) (11,788) (6,919)
Allowance for impairment losses:

- Expected credit losses (1,759,164) (1,736,442) (1,238,249) (1,301,095)
Total net loans, advances and financing 179,902,847 166,487,621 135,092,761 126,745,536
Included in loans, advances and financing are housing loans sold to Cagamas with recourse to the Group and the Bank amounting
to RM2,917,197,000 (2022: RM1,572,077,000) and RM1,463,428,000 (2022: RM481,662,000) respectively.
224 • FINANCIALS

8 LOANS, ADVANCES AND FINANCING (CONTINUED)
(i) The maturity structure of loans, advances and financing is as follows:
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Maturing within:
- one year 32,945,837 30,652,059 26,641,266 25,192,137
- one year to three years 7,231,435 6,799,754 5,321,960 4,984,708
- three years to five years 10,654,145 11,278,670 8,184,124 8,521,519
- over five years 130,845,294 119,503,542 96,195,448 89,355,186
(ii) The loans, advances and financing are disbursed to the following types of customers:
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Domestic non-bank financial institutions other than

stockbroking companies 2,228,815 1,916,763 1,878,916 1,589,487
Domestic business enterprises:
- small and medium enterprises 33,030,609 30,114,790 23,810,665 22,093,010
- others 27,819,048 25,126,789 20,975,027 18,824,683
Government and statutory bodies 1,108 1,387 - -
Individuals 115,372,002 107,602,406 86,802,501 82,391,900
Other domestic entities 100,246 103,122 5,374 9,529
Foreign entities 3,124,883 3,368,768 2,870,315 3,144,941

(iii) Loans, advances and financing analysed by interest rate/profit rate sensitivity are as follows:
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Fixed rate:
- Housing and shop loans/financing 4,875,610 1,387,937 3,661,786 841,055
- Hire purchase receivables 19,856,028 17,965,989 14,248,349 13,709,506
- Credit card 3,202,663 2,923,883 3,202,663 2,923,883
- Other fixed rate loans/financing 5,438,263 6,589,216 4,190,957 4,954,285
Variable rate:
- Standardised base rate/base rate/
base lending rate plus 123,357,618 116,345,805 93,672,546 89,645,540
- Cost plus 24,846,899 22,881,491 17,358,416 15,973,965
- Other variable rates 99,630 139,704 8,081 5,316
(iv) Loans, advances and financing analysed by their economic purposes are as follows:
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Purchase of securities 945,964 976,120 769,222 723,762

Purchase of transport vehicles 19,574,851 17,653,587 13,920,233 13,359,480
Residential property (housing) 89,114,464 82,434,133 67,773,624 63,214,707
Non-residential property 21,976,096 20,519,124 16,577,973 15,916,196
Purchase of fixed assets (excluding landed properties) 1,672,034 1,613,109 1,140,245 1,152,867
Personal use 3,885,235 3,706,863 2,616,759 2,487,061
Credit card 3,202,663 2,923,883 3,202,663 2,923,883
Construction 4,197,939 3,531,187 2,886,552 2,545,847
Working capital 35,949,262 33,770,002 26,681,549 25,022,038
Other purpose 1,158,203 1,106,017 773,978 707,709
226 • FINANCIALS

(v) Loans, advances and financing analysed by their geographical distribution are as follows:
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
In Malaysia 167,711,542 156,478,949 126,928,323 120,407,820

Outside Malaysia:
- Singapore 9,367,686 7,624,640 9,367,686 7,624,640
- Hong Kong 46,789 21,090 46,789 21,090
- Vietnam 1,956,082 1,652,819 - -
- Cambodia 2,594,612 2,456,527 - -
(vi) Impaired loans, advances and financing analysed by their economic purposes are as follows:
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Purchase of securities 125 232 - 220

Purchase of transport vehicles 42,881 35,282 27,129 24,091
Residential property (housing) 404,337 314,945 254,059 237,431
Non-residential property 119,107 151,278 105,087 132,400
Purchase of fixed assets (excluding landed properties) 4,627 485 4,627 485
Personal use 47,205 44,522 27,991 22,823
Credit card 30,445 21,419 30,445 21,419
Construction 24,851 9,271 5,575 7,292
Working capital 274,325 207,698 201,728 172,273
Other purpose 93,981 34,618 19,959 29,212
Gross impaired loans, advances and financing 1,041,884 819,750 676,600 647,646
(vii) Impaired loans, advances and financing analysed by their geographical distribution are as follows:
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
In Malaysia 982,267 805,638 675,119 646,805

Outside Malaysia:
- Singapore 1,481 841 1,481 841
- Vietnam 928 1,585 - -
- Cambodia 57,208 11,686 - -
Gross impaired loans, advances and financing 1,041,884 819,750 676,600 647,646

(viii) Movements in expected credit losses for loans, advances and financing are as follows:

2023
At 1 July 976,919 423,876 335,647 1,736,442
Changes in ECL due to transfer within stages (44,041) (203,150) 247,191 -
Transfer to Stage 1 35,330 (35,233) (97) -
Transfer to Stage 2 (76,350) 145,877 (69,527) -
Transfer to Stage 3 (3,021) (313,794) 316,815 -
New financial assets originated 46,534 855 54 47,443
Financial assets derecognised (15,723) (30,658) (25,835) (72,216)
Changes due to change in credit risk (5,294) 186,477 172,701 353,884
Modifications to contractual cash flows of
financial asset 366 1,078 203 1,647
Changes in models/risk parameters 5,747 2,706 - 8,453
Amount written off - - (306,145) (306,145)
Exchange difference 1,757 571 (615) 1,713
Other movements - - (12,057) (12,057)
At 30 June 966,265 381,755 411,144 1,759,164

2022
At 1 July 1,074,984 459,674 234,509 1,769,167
Changes in models/risk parameters (4,986) (7,335) (384) (12,705)
Exchange difference 996 374 903 2,273
Other movements - - (3,735) (3,735)
At 30 June 976,919 423,876 335,647 1,736,442
228 • FINANCIALS

(viii) Movements in expected credit losses for loans, advances and financing are as follows: (continued)

2023
At 1 July 745,735 296,203 259,157 1,301,095
financial asset 366 1,103 (76) 1,393
At 30 June 712,146 265,808 260,295 1,238,249

2022
At 1 July 818,437 326,761 186,098 1,331,296
Exchange difference 476 52 12 540
At 30 June 745,735 296,203 259,157 1,301,095

(ix) Movements in the gross carrying amount of loans, advances and financing that contributed to changes in the expected
credit losses are as follows:

2023
At 1 July 150,930,362 16,483,913 819,750 168,234,025
Total transfer within stages 8,010,442 (8,717,341) 706,899 -
Transfer to Stage 1 11,965,339 (11,962,495) (2,844) -
Transfer to Stage 2 (3,890,107) 4,788,028 (897,921) -
Transfer to Stage 3 (64,790) (1,542,874) 1,607,664 -
New financial assets originated 20,914,513 802,354 1,011 21,717,878
Financial assets derecognised (7,178,642) (326,908) (63,199) (7,568,749)
Changes due to change in credit risk 4,374 (1,568,124) (116,749) (1,680,499)
Modifications to contractual cash flows
and unwinding of modification impact 63,763 29,870 - 93,633
Exchange difference 1,181,668 4,583 632 1,186,883
At 30 June 173,926,480 6,708,347 1,041,884 181,676,711

2022
At 1 July 145,379,302 9,725,500 717,407 155,822,209
Total transfer within stages (8,080,053) 7,410,161 669,892 -
Transfer to Stage 1 10,337,231 (10,335,663) (1,568) -
New financial assets originated 17,350,775 2,626,969 327 19,978,071
Changes due to change in credit risk 352,394 (2,942,768) (88,136) (2,678,510)
and unwinding of modification impact 56,999 (132) - 56,867
Exchange difference 534,890 5,615 1,561 542,066
At 30 June 150,930,362 16,483,913 819,750 168,234,025
230 • FINANCIALS

(ix) Movements in the gross carrying amount of loans, advances and financing that contributed to changes in the expected
credit losses are as follows: (continued)

2023
At 1 July 115,303,564 12,102,340 647,646 128,053,550
Total transfer within stages 6,035,464 (6,442,609) 407,145 -
Transfer to Stage 1 8,688,017 (8,689,569) 1,552 -
New financial assets originated 15,112,650 12,801 1,011 15,126,462
Changes due to change in credit risk (1,100,494) (633,176) (102,008) (1,835,678)
and unwinding of modification impact 38,990 19,071 - 58,061
Exchange difference 970,889 1,583 79 972,551
At 30 June 130,850,369 4,815,829 676,600 136,342,798

2022
At 1 July 112,428,479 7,390,586 582,517 120,401,582
Total transfer within stages (5,594,426) 5,225,493 368,933 -
Transfer to Stage 1 7,658,177 (7,663,340) 5,163 -
New financial assets originated 12,527,693 18,105 253 12,546,051
Changes due to change in credit risk (1,214,824) (280,997) (79,917) (1,575,738)
and unwinding of modification impact 29,080 105 - 29,185
Exchange difference 405,065 849 143 406,057
At 30 June 115,303,564 12,102,340 647,646 128,053,550

9 OTHER ASSETS
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Foreclosed properties 46 46 46 46
Sundry debtors and other prepayments 209,513 163,872 199,360 155,655
Settlement accounts 850,808 708,194 849,543 707,138
Treasury related receivables 159,021 578,958 159,021 106,758
Cash collateral pledged for derivative transactions 1,076,611 678,909 1,076,611 678,909
Other receivables 158,416 150,763 113,922 133,049
2,454,415 2,280,742 2,398,503 1,781,555
10 DERIVATIVE FINANCIAL INSTRUMENTS
The Group The Bank

2023 2022 2023 2022
Note RM’000 RM’000 RM’000 RM’000
Derivatives at fair value through profit or loss:

- interest rate swaps 715,585 698,835 715,585 698,833
- cross currency swaps 217,004 211,722 217,004 210,478
- foreign currency forwards 993,558 731,174 892,575 648,433
- foreign currency options 46,942 52,967 46,975 52,967
- futures 26,173 9,909 26,173 9,909
- equity options 63,994 104,802 63,994 104,802
- swaption 908 - 7,213 225
- commodity swap 1,142 4,348 1,142 4,348
- total return swap 92,605 39,156 92,605 39,156
Derivatives designated as fair value hedge:
- interest rate swaps (b) 10,513 10,387 8,403 7,220
Total derivative financial instruments assets 2,168,424 1,863,300 2,071,669 1,776,371
232 • FINANCIALS

10 DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED)
The Group The Bank

2023 2022 2023 2022
Note RM’000 RM’000 RM’000 RM’000
Derivatives at fair value through profit or loss:

- interest rate swaps (909,410) (1,034,387) (878,339) (1,016,254)
- cross currency swaps (415,845) (224,152) (415,845) (224,154)
- foreign currency forwards (852,853) (240,765) (797,941) (233,802)
- foreign currency options (33,915) (50,603) (33,948) (50,603)
- futures (874) (31,678) (874) (31,678)
- equity options (61,479) (103,510) (61,479) (103,510)
- swaption (19,739) (7,767) (19,739) (7,768)
- commodity swap (1,131) (4,346) (1,131) (4,346)
- total return swap (92,605) (39,156) (92,605) (39,156)
Derivatives designated as cash flow hedge:
- interest rate swaps (a) - (361) - (361)
Derivatives designated as fair value hedge:
- interest rate swaps (b) (35) (113) (35) (113)
Total derivative financial instruments liabilities (2,387,886) (1,736,838) (2,301,936) (1,711,745)
(a) Cash flow hedge
The Group and the Bank’s cash flow hedges principally consist of interest rate swaps that are used to protect against
exposures to variability in future interest cash flows on interest incurring liabilities. The amount and timing of the interest
cash flows, are projected on the basis of their contractual terms and other relevant factors, including estimates of renewal
of interest incurring liabilities. The aggregate projected interest cash flows over time form the basis for identifying gains
and losses on the effective portions of derivatives designated as cash flow hedges to forecast transactions. Gains and
losses are initially recognised directly in equity, in the cash flow hedge reserve, and are transferred to profit or loss when
the forecast cash flows affect the profit or loss.
The effectiveness of hedging relationship is assessed by comparing the changes in fair value of the interest rate swaps
with changes in the fair value of the hedged items attributable to the hedged risk to ensure there is an economic
relationship between the hedged items and the hedging instruments. During the financial year ended 30 June 2023, all
cash flow hedges have been unwind and the cumulative loss in equity has been reclassified to the statements of income
following the maturity of the cash flow hedge.

10 DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED)
(a) Cash flow hedge (continued)
The cash flows of the hedging instruments and the hedged items are detailed below:
The Group and The Bank

2023 2022
>1-3 >1-3
months months
RM’000 RM’000
Cash inflows (hedging instruments) - 569

Cash outflows (hedged items) - (491)
Net cash inflows - 78
(b) Fair value hedge
The Group and the Bank’s fair value hedges principally consist of interest rate swaps that are used to protect against
changes in the fair value of financial assets due to movement in interest rates. The Group and the Bank have undertaken
fair value hedges on interest rate risk of RM541,667,000 (2022: RM563,095,000) at Group and Bank respectively on certain
receivables using interest rate swaps. The total fair value gain of the said interest rate swaps related to these hedges
amounted to RM8,368,000 (2022: fair value loss of RM7,107,000) at Group and Bank, respectively.
On 29 April 2022, the Bank issued a nominal value of RM900.0 million Basel III-compliant Additional Tier 1 Green capital
securities (“Green Capital Securities”), pursuant to its Multi-currency Additional Tier 1 capital securities programme. The
Bank has hedged the interest rate risk arising from these Green Capital Securities.
Included in the net non-interest income is the net gains and losses arising from fair value hedges that were effective
during the financial year as follows:
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Gain on hedging instruments 9,903 23,061 9,903 23,061

Loss on the hedged items attributable to the
hedged risks (9,050) (25,202) (9,050) (25,202)
853 (2,141) 853 (2,141)
234 • FINANCIALS

11 AMOUNT DUE FROM SUBSIDIARIES
The Bank
2023 2022
RM’000 RM’000
Intercompany settlement 143,862 91,110
Amount due from subsidiaries is unsecured, interest free, repayable on demand and is denominated in Ringgit Malaysia.
12 STATUTORY DEPOSITS WITH CENTRAL BANKS
The non-interest bearing statutory deposits are maintained by the Bank and its subsidiaries with Bank Negara Malaysia in
compliance with Section 26(2)(c) of the Central Bank of Malaysia Act 2009, the amounts of which are determined at set
percentages of total eligible liabilities. A foreign subsidiary of the Group and a foreign branch of the Bank also maintained non-
interest bearing statutory deposits with their respective central banks in compliance with the respective applicable legislations.
13 SUBSIDIARY COMPANIES
The Bank
2023 2022
RM’000 RM’000
Investment in subsidiary companies

Unquoted shares, at cost:
- in Malaysia 961,322 961,322
- outside Malaysia 775,989 775,989
1,737,311 1,737,311
Subordinated facilities issued by subsidiary companies, at amortised cost:

Multi-currency Additional Tier 1 subordinated sukuk wakalah financing facility issued by HLISB 404,018 401,799
Tier 2 subordinated sukuk murabahah financing facility issued by HLISB 400,788 400,788
Subordinated financing facility issued by Hong Leong Bank (Cambodia) PLC 113,200 85,798
918,006 888,385
2,655,317 2,625,696

13 SUBSIDIARY COMPANIES (CONTINUED)
The subsidiary companies of the Bank are as follows:
Percentage (%) of
equity held
Name 2023 2022 Principal activities
(a) Hong Leong Islamic Bank Berhad (“HLISB”) 100 100 Islamic Banking business and related
financial services
(b) HLB Principal Investments (L) Limited and its 100 100 Investment holding
subsidiary company:
- Promino Sdn Bhd 100 100 Holding of pooled motor vehicles
for HLBB group's usage
(c) EB Nominees (Tempatan) Sendirian Berhad 100 100 In member’s voluntary liquidation
(d) EB Realty Sendirian Berhad 100 100 In member’s voluntary liquidation
(e) OBB Realty Sdn Bhd 100 100 Property investment
(f) HLF Credit (Perak) Bhd and its subsidiary companies: 100 100 Investment holding
(i) Gensource Sdn Bhd and its subsidiary company: 100 100 Investment holding
- Pelita Terang Sdn Bhd 100 100 Dormant
(ii) Promidah Sdn Bhd* 100 100 Dormant
(iii) Promizul Sdn Bhd 100 100 In member's voluntary liquidation
(iv) HLB Realty Sdn Bhd 100 100 Property investment
(g) HLB Nominees (Tempatan) Sdn Bhd 100 100 Agent and nominee for Malaysian
clients
(h) HLB Nominees (Asing) Sdn Bhd 100 100 Agent and nominee for foreign
clients
(i) HLB Trade Services (Hong Kong) Limited* 100 100 Ceased operations
(j) Hong Leong Bank Vietnam Limited* 100 100 Commercial banking business
(k) Hong Leong Bank (Cambodia) PLC*+ 100 100 Commercial banking business
(l) Promilia Berhad 100 100 Holding of motor vehicles for HLBB
group’s usage
(m) DC Tower Sdn Bhd 100 100 Property management
(n) Unincorporated trust for ESOS Ω * - - Special purpose vehicle
(o) Hong Leong Wholesale Equity Fund 2 Ω 100 100 Unit trust funds
* Not audited by PricewaterhouseCoopers PLT

+ Audited by member firm of PricewaterhouseCoopers International Limited
Ω Deemed subsidiaries pursuant to MFRS 10 ‘Consolidated Financial Statements’
All the subsidiary companies are incorporated in Malaysia with the exception of HLB Trade Services (Hong Kong) Limited which
is incorporated in Hong Kong, Hong Leong Bank Vietnam Limited which is incorporated in Vietnam and Hong Leong Bank
(Cambodia) PLC which is incorporated in Cambodia.
236 • FINANCIALS

14 INVESTMENT IN ASSOCIATED COMPANIES
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Quoted shares outside Malaysia, at cost 2,054,828 938,311 2,063,022 946,505

Unquoted shares in Malaysia, at cost 20 20 20 20
Unquoted shares outside Malaysia, at cost 24,657 24,657 24,657 24,657
Cumulative share of results, net of dividends received 5,793,135 4,508,513 - -
Equity conversion option 57,937 82,751 - -
Cumulative share of changes in other comprehensive loss (17,141) (2,096) - -
Exchange fluctuation reserve 799,540 903,318 - -
8,712,976 6,455,474 2,087,699 971,182
(a) Information about associated companies
The Group
Percentage (%) of
Country of equity held
Name incorporation 2023 2022 Principal activities
Bank of Chengdu Co., Ltd. (“BOCD”) China 19.8% 18.0% Commercial banking
Community CSR Sdn Bhd (“CCSR”) Malaysia 20.0% 20.0% Investment holding
Sichuan Jincheng Consumer Finance
Limited Company (“JCCFC”) China 12.0% 12.0% Consumer financing
Nature of relationship
(i) BOCD
On 25 October 2007, HLB entered into a Share Subscription Agreement with BOCD to subscribe for new shares
representing 19.99% equity interest of the Enlarged Capital in BOCD. BOCD is a leading commercial bank in Western
and Central China with its base in Chengdu, the capital of Sichuan Province. The Subscription enables HLB to enter
into a strategic alliance with BOCD to tap into the promising and growing financial services sector of China. It will
strengthen and diversify the earnings base of HLB.
On 31 January 2018, BOCD was officially listed on the Shanghai Stock Exchange after completing its initial public
offering (“IPO”) of 361 million shares and raised 2.53 billion yuan. Arising from the IPO, the Bank’s equity interest of
the enlarged capital in BOCD reduced to 18% from 20%. BOCD remains an associate by virtue of the representation
held on BOCD’s Board of Directors.
In March 2022, HLB subscribed convertible bonds issued by BOCD. During the financial year, HLB has fully converted
the bonds and the Bank’s equity interest in BOCD has been revised to 19.8% as at 30 June 2023.
The market value of BOCD’s shares held by the Bank is RM5.94 billion (2022: RM7.09 billion) at RM7.88
(2022: RM10.91) per share as at 30 June 2023.
The Group deems BOCD as a material associated company.


14 INVESTMENT IN ASSOCIATED COMPANIES (CONTINUED)
(a) Information about associated companies (continued)
Nature of relationship (continued)
(i) BOCD (continued)
As at 30 June 2023, the market value of investment in BOCD was below the carrying amount. The Group has
performed impairment assessment on the carrying amount of the investment in BOCD, which confirmed that no
impairment is required as at 30 June 2023 as the recoverable amount as determined by a value-in-use (“VIU”)
calculation was higher than the carrying value. Management believes that any reasonable possible change to the
key assumptions applied would not cause the carrying value to exceed its recoverable amount.
The VIU calculation uses discounted cash flows projections based on BOCD management’s best estimates of future
earnings taking into account of past performance and BOCD’s expectation of market development. This calculation
uses cash flows projections being the amount attributable to the shareholders based on the budget for the financial
year ending 2024 with a further projection of 4 years, which was approved by BOCD management. Cash flows
beyond the 5 year period are extrapolated using an estimated growth rate of 4.93% (2022: 5.65%) representing the
forecasted Gross Domestic Product growth rate of the country.
The discount rate of 13.6% (2022: 13.6%) used in determining the recoverable amount is derived based on a capital
asset pricing model calculation, using available market data.
(ii) CCSR
In 2011, HLB subscribed to RM50 million Cumulative Redeemable Preference Shares (“CRPS”) in Jana Pendidikan
Malaysia Sdn Bhd. For every RM1 million of subscription of CRPS, the Bank is entitled to subscribe for 1 ordinary
share of RM1 each in CCSR. As such, the Bank subscribed for 50 CCSR shares of RM1 each for cash at par which
represent 20% equity interest of CCSR.
In November 2014, HLB subscribed to additional 19,950 CCSR Rights Issue of RM1 each.
CCSR is a private company and there is no quoted market price available for its shares.
(iii) JCCFC
On 1 March 2010, HLB together with BOCD, obtained operation approval from China Banking Regulatory Commission
(“CBRC”) for JCCFC, a joint venture company that is part of the first batch of approved companies, to start consumer
finance operations in Central and Western China. JCCFC focuses primarily in the consumer financing business with
HLB having a 49% equity interest and BOCD having a 51% equity interest in JCCFC. This strategic alliance between
HLB and BOCD to tap into the promising and growing financial services sector in China further cements the Bank’s
strategic partnership in BOCD and affirms the Bank’s vision and belief in the huge potential of China.
In March 2017, the Board of Directors had approved the divestment of 37% of the Bank’s stake through non-
subscription of the issuance of new share capital by JCCFC and selling down the original share capital held by the
Bank to new strategic investors through an exercise via Southwest United Equity Exchange. The sale was completed
upon obtaining approval from CBRC vide its letter dated 3 September 2018. In 2019, the net gain on divestment of
joint venture of RM90,106,000 was recognised in the Group’s statements of income.
Post completion of the divestment exercise, the retained interest of 12% was derecognised from the investment
in joint venture and classified as investment in associated companies. JCCFC remains an associate by virtue of the
representation held on JCCFC’s Board of Directors.
238 • FINANCIALS

(b) The summarised financial information of the material associated companies which is accounted for using the equity
method is as follows:
(i) BOCD
The Group
2023 2022
RM’000 RM’000
Total assets 663,055,407 587,601,391

Total liabilities (619,627,516) (552,359,573)
Net assets 43,427,891 35,241,818
The Group
2023 2022
RM’000 RM’000
Interest income 23,809,371 20,952,823

Interest expenses (12,550,167) (10,666,498)
Non-interest income 2,460,679 2,410,797
Profit before taxation 8,538,581 6,675,167
Profit after taxation 6,869,924 5,629,205
Total comprehensive income 6,785,363 5,536,137
Dividends paid/declared by the associated company during the financial year - 1,493,002
Share of results of associated companies (%) 19.8% 18.0%

Share of results of associated companies (RM’000) 1,266,273 1,012,694
Dividends received/accrued from the associated company (RM’000) - 268,591
(ii) JCCFC
The Group
2023 2022
RM’000 RM’000
Total assets 6,788,841 6,810,330

Total liabilities (5,691,966) (5,848,075)
Net assets 1,096,875 962,255

(b) The summarised financial information of the material associated companies which is accounted for using the equity
method is as follows: (continued)
(ii) JCCFC (continued)
The Group
2023 2022
RM’000 RM’000
Interest income 923,853 948,882

Interest expenses (238,288) (305,565)
Non-interest income 15,257 17,703
Profit before taxation 258,435 196,993
Profit after taxation 193,392 148,308
Dividends declared by the associated company during the financial year 40,488 19,275
Share of results of associated companies (%) 12.0% 12.0%

Share of results of associated companies (RM'000) 23,207 17,797
Dividends accrued from the associated company (RM'000) 4,859 2,313
(c) Reconciliation of the summarised financial information to the carrying amount of the interest in the material associated
companies recognised in the consolidated financial statements:
(i) BOCD
The Group
2023 2022
RM’000 RM’000
Opening net assets as at 1 July 35,241,818 30,038,111

Effect arising from conversion of convertible bonds 2,524,428 -
Profit for the financial year 6,869,924 5,629,205
Other comprehensive loss for the financial year (84,561) (93,068)
Dividends paid/declared - (1,493,002)
Equity conversion option (166,780) 459,983
Exchange fluctuation reserve (956,938) 700,589
Closing net assets as at 30 June 43,427,891 35,241,818
Interest in associated companies (%) 19.8% 18.0%

Interest in associated companies (RM'000) 8,581,351 6,340,003
240 • FINANCIALS

(c) Reconciliation of the summarised financial information to the carrying amount of the interest in the material associated
companies recognised in the consolidated financial statements: (continued)
(ii) JCCFC
The Group
2023 2022
RM’000 RM’000
Opening net assets as at 1 July 962,255 814,047

Profit for the financial year 193,392 148,308
Dividends declared (40,488) (19,275)
Exchange fluctuation reserve (18,284) 19,175
Closing net assets as at 30 June 1,096,875 962,255
Interest in associated companies (%) 12.0% 12.0%

Interest in associated companies (RM'000) 131,625 115,471
The summarised financial information above represents amount shown in the material associates’ financial statements
prepared in accordance with MFRSs. The information is based on the financial statements of the associated companies
after reflecting adjustments made by the Group when using the equity method, such as fair value adjustments made at
the time of acquisition and differences in accounting policies between the Group and the associated companies.
142
241 ANNUAL REPORT 2023

15 PROPERTY AND EQUIPMENT
Buildings Buildings Office

on on furniture,
Buildings Leasehold Leasehold leasehold leasehold fittings,
on land less land land less land equipment Capital
Freehold freehold than 50 50 years than 50 50 years and Computer Motor work-in-
land land years* or more* years or more renovations equipment vehicles progress Total
The Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
2023
Cost
At 1 July 133,847 583,033 1,092 40,547 2,636 111,637 528,138 977,005 6,230 68,523 2,452,688
Additions 10,342 - - - - - 5,822 28,075 1,312 86,518 132,069
Reclassification/Transfer - - - - - - 1,674 6,700 - (85,490) (77,116)
Disposals/Write off - - - - - - (10,481) (112,240) (762) (14) (123,497)
Exchange fluctuation - - - - - - 2,403 2,272 196 270 5,141
At 30 June 144,189 583,033 1,092 40,547 2,636 111,637 527,556 901,812 6,976 69,807 2,389,285
Accumulated depreciation
At 1 July - 74,523 486 5,815 1,534 28,991 445,258 780,986 4,489 - 1,342,082
Charge for the financial year - 11,641 17 423 50 2,102 23,034 71,775 997 - 110,039
Reclassification/Transfer - - - - - - - 65 - - 65
Disposals/Write off - - - - - - (10,327) (111,124) (762) - (122,213)
Exchange fluctuation - - - - - - 2,002 1,766 153 - 3,921
At 30 June - 86,164 503 6,238 1,584 31,093 459,967 743,468 4,877 - 1,333,894
Net book value as at
ANNUAL REPORT 2023
30 June 2023 144,189 496,869 589 34,309 1,052 80,544 67,589 158,344 2,099 69,807 1,055,391
* These are the right-of-use assets within the scope of MFRS 16. Refer to accounting policies for leases as disclosed in Note 2H.
242 • FINANCIALS

15 PROPERTY AND EQUIPMENT (CONTINUED)

on on furniture,
The Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
2022
Cost
At 1 July 133,847 583,033 1,092 40,805 2,636 113,545 542,723 970,129 5,880 71,515 2,465,205
Additions - - - - - - 4,065 18,724 853 92,036 115,678
Reclassification/Transfer - - - - - (1,536) 1,258 14,489 - (95,598) (81,387)
Disposals/Write off - - - (258) - (372) (21,570) (27,651) (560) (34) (50,445)
Exchange fluctuation - - - - - - 1,662 1,314 57 604 3,637
At 30 June 133,847 583,033 1,092 40,547 2,636 111,637 528,138 977,005 6,230 68,523 2,452,688
At 1 July - 62,875 469 5,480 1,480 27,131 437,881 728,053 4,048 - 1,267,417
Disposals/Write off - - - (91) - (227) (21,003) (27,505) (560) - (49,386)
Exchange fluctuation - - - - - - 1,404 1,097 51 - 2,552
At 30 June - 74,523 486 5,815 1,534 28,991 445,258 780,986 4,489 - 1,342,082
30 June 2022 133,847 508,510 606 34,732 1,102 82,646 82,880 196,019 1,741 68,523 1,110,606
243


on on furniture,
The Bank RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
2023
Cost
At 1 July 53,485 51,161 628 40,116 3,269 107,210 485,615 934,406 4,629 64,522 1,745,041
Additions 10,342 - - - - - 4,357 27,467 1,000 86,037 129,203
Reclassification/Transfer - - - - - - 1,675 6,700 - (84,467) (76,092)
Disposals/Write off - - - - - - (8,668) (109,825) (645) (15) (119,153)
Exchange fluctuation - - - - - - 897 1,184 140 (1) 2,220
At 30 June 63,827 51,161 628 40,116 3,269 107,210 483,876 859,932 5,124 66,076 1,681,219
At 1 July - 19,635 207 5,796 1,297 25,489 414,274 746,840 3,514 - 1,217,052
Reclassification/Transfer - - - - - - - 54 - - 54
Disposals/Write off - - - - - - (8,551) (109,202) (645) - (118,398)
Exchange fluctuation - - - - - - 680 824 117 - 1,621
At 30 June - 20,652 222 6,220 1,386 27,515 426,647 706,921 3,616 - 1,193,179
ANNUAL REPORT 2023
30 June 2023 63,827 30,509 406 33,896 1,883 79,695 57,229 153,011 1,508 66,076 488,040
244 • FINANCIALS


on on furniture,
The Bank RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
2022
Cost
At 1 July 53,485 51,161 628 40,374 3,269 109,118 501,934 930,103 4,828 61,386 1,756,286
Additions - - - - - - 2,539 18,052 319 88,988 109,898
Reclassification/Transfer - - - - - (1,536) 938 13,216 - (85,852) (73,234)
Exchange fluctuation - - - - - - 278 357 37 - 672
At 30 June 53,485 51,161 628 40,116 3,269 107,210 485,615 934,406 4,629 64,522 1,745,041
At 1 July - 18,613 192 5,460 1,208 23,705 410,382 698,109 3,392 - 1,161,061
Exchange fluctuation - - - - - - 201 263 25 - 489
At 30 June - 19,635 207 5,796 1,297 25,489 414,274 746,840 3,514 - 1,217,052
30 June 2022 53,485 31,526 421 34,320 1,972 81,721 71,341 187,566 1,115 64,522 527,989

16 INTANGIBLE ASSETS
Computer
software Total
The Group RM’000 RM’000
2023
Cost
At 1 July 868,355 868,355
Additions 37,156 37,156
Reclassification/Transfer 77,116 77,116
Disposals/Write off (57,397) (57,397)
Exchange fluctuation 11,108 11,108
At 30 June 936,338 936,338
Amortisation and impairment

At 1 July 563,606 563,606
Amortisation during the financial year 58,132 58,132
Reclassification/Transfer (65) (65)
At 30 June 573,903 573,903
Net book value as at 30 June 2023 362,435 362,435
Computer
software Total
2022
Cost
At 1 July 762,502 762,502
Additions 35,442 35,442
Reclassification 79,851 79,851
At 30 June 868,355 868,355

At 1 July 520,185 520,185
At 30 June 563,606 563,606
246 • FINANCIALS

16 INTANGIBLE ASSETS (CONTINUED)
Computer
software Total
The Bank RM’000 RM’000
2023
Cost
At 1 July 784,389 784,389
Additions 30,773 30,773
Reclassification/Transfer 76,092 76,092
At 30 June 841,292 841,292

At 1 July 514,744 514,744
Reclassification/Transfer (54) (54)
At 30 June 515,076 515,076
Computer
software Total
2022
Cost
At 1 July 697,362 697,362
Additions 27,177 27,177
Reclassification 71,698 71,698
At 30 June 784,389 784,389

At 1 July 479,085 479,085
At 30 June 514,744 514,744

17 RIGHT-OF-USE ASSETS
Properties Total
2023
At 1 July 211,718 211,718
Depreciation charge for the financial year (48,456) (48,456)
Modification (6,387) (6,387)
Addition 23,613 23,613
Disposals (8,934) (8,934)
At 30 June 175,946 175,946
Properties Total
2022
At 1 July 214,726 214,726
Modification 990 990
Addition 56,084 56,084
Disposals (10,478) (10,478)
Exchange fluctuation 515 515
At 30 June 211,718 211,718
248 • FINANCIALS

17 RIGHT-OF-USE ASSETS (CONTINUED)
Properties Total
2023
At 1 July 321,446 321,446
Addition 22,520 22,520
Disposals (8,091) (8,091)
At 30 June 261,308 261,308
Properties Total
2022
At 1 July 344,387 344,387
Addition 63,587 63,587
Disposals (10,478) (10,478)
Exchange fluctuation 80 80
At 30 June 321,446 321,446
18 GOODWILL
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Cost
As at 1 July/30 June 1,831,312 1,831,312 1,771,547 1,771,547

18 GOODWILL (CONTINUED)
Allocation of goodwill to cash-generating units (“CGUs”)
Goodwill has been allocated to the following CGUs:
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Personal Financial Services 1,188,705 1,188,705 1,149,911 1,149,911

Business & Corporate Banking 479,437 479,437 463,791 463,791
Global Markets 163,170 163,170 157,845 157,845
1,831,312 1,831,312 1,771,547 1,771,547
Impairment test for goodwill
The recoverable amount of CGUs is determined based on value-in-use calculations. Value-in-use is the present value of the future
cash flows expected to be derived from the CGUs or groups of CGUs. This calculation uses pre-tax cash flow projections based
on the 2024 financial budget, which is approved by the Board of Directors with a further projection of 3 years (2022: 3 years).
Cash flows beyond the 4 years period are extrapolated using an estimated growth rate of 4.2% (2022: 4.4%) representing the
forecasted Gross Domestic Product growth rate of the country for all cash generating units. The cash flow projections are derived
based on a number of key factors including past performance and management’s expectation of market developments.
In addition, the recoverable amount is assessed by incorporating multiple scenarios with variation in the assumptions used
including discount rate and haircut on the cash flow projections, to allow assessment on the sensitivity of goodwill recoverable
amount taking into consideration assumed probabilities of different future events and/or scenarios.
The discount rates used in determining the recoverable amount are as follows:
Discount rate
2023 2022
% %
Personal Financial Services 11.66 9.72

Business & Corporate Banking 11.79 9.79
Global Markets 11.91 9.96
The discount rates used are pre-tax and reflect specific risks relating to the CGUs.
Based on the impairment test performed, impairment was not required for goodwill arising from all CGUs for the financial year
ended 30 June 2023. Management believes that any reasonable possible change to the key assumptions applied would not
cause the carrying value of any CGU to exceed its recoverable amount.
250 • FINANCIALS

19 DEFERRED TAXATION
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current
tax liabilities and when the deferred taxes relate to the same authority. The following amounts determined after appropriate set
off, are shown in the statements of financial position:
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Deferred tax assets 410,436 528,771 317,985 403,666
The analysis of deferred tax assets and deferred tax liabilities after appropriate set off is as follows:
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Deferred tax assets

- To be recovered within 12 months 341,317 365,178 274,767 288,329
- To be recovered after more than 12 months 69,119 163,593 43,218 115,337
410,436 528,771 317,985 403,666

19 DEFERRED TAXATION (CONTINUED)
The movements in deferred tax assets and liabilities during the financial year are as follows:
Property
and
equipment
and Financial Cash flow Expected
right-of-use instruments hedge credit
assets at FVOCI reserve losses Provisions Total
Deferred tax assets/(liabilities)
2023
At 1 July (70,460) 235,181 88 248,106 115,856 528,771
Charged to statements of income 41 (8,512) - - (10,389) (11,169) (30,070)
Charged to equity 43 - (88,233) (88) - - (88,321)
Exchange difference (455) 868 - 139 (496) 56
At 30 June (79,427) 147,816 - 237,856 104,191 410,436
2022
At 1 July (63,626) (18,620) 1,905 249,546 106,465 275,670
(Charged)/Credited to statements of
income 41 (6,781) - - (1,550) 9,264 933
Credited/(Charged) to equity 43 - 253,840 (1,817) - - 252,023
Exchange difference (53) (39) - 110 127 145
At 30 June (70,460) 235,181 88 248,106 115,856 528,771
252 • FINANCIALS

19 DEFERRED TAXATION (CONTINUED)
The movements in deferred tax assets and liabilities during the financial year are as follows: (continued)
Property
and
equipment
and Financial Cash flow Expected
right-of-use instruments hedge credit
assets at FVOCI reserve losses Provisions Total
Deferred tax assets/(liabilities)
2023
At 1 July (68,985) 185,509 88 177,197 109,857 403,666
(Charged)/Credited to statements of
income 41 (8,140) - - 582 (12,030) (19,588)
Charged to equity 43 - (66,391) (88) - - (66,479)
Exchange difference (482) 868 - - - 386
At 30 June (77,607) 119,986 - 177,779 97,827 317,985
2022
At 1 July (62,114) (32,129) 1,905 176,758 99,093 183,513
(Charged)/Credited to statements
of income 41 (6,738) - - 439 10,764 4,465
Credited/(Charged) to equity 43 - 217,677 (1,817) - - 215,860
Exchange difference (133) (39) - - - (172)
At 30 June (68,985) 185,509 88 177,197 109,857 403,666

20 DEPOSITS FROM CUSTOMERS
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Amortised cost
Fixed deposits 112,228,229 93,856,333 82,199,282 68,772,681
Negotiable instruments of deposits 10,914,720 8,626,532 7,472,536 6,299,840
Short-term placements 19,449,279 26,244,055 15,682,791 22,181,987
142,592,228 128,726,920 105,354,609 97,254,508
Demand deposits 42,617,712 41,279,128 35,491,124 35,060,757
Savings deposits 22,479,000 24,771,649 18,473,887 20,420,243
Others 398,549 449,369 255,610 287,918
208,087,489 195,227,066 159,575,230 153,023,426
At fair value through profit and loss

Structured deposits linked to interest rate derivatives 3,874,742 2,425,376 3,430,059 2,325,345
Fair value changes arising from designation at fair value
through profit or loss * (310,412) (359,983) (272,341) (341,467)
3,564,330 2,065,393 3,157,718 1,983,878
211,651,819 197,292,459 162,732,948 155,007,304
* The Group and the Bank have issued structured deposits which are linked to interest rate derivatives and designated
them at fair value through profit or loss. This designation is permitted under MFRS 9 as it significantly reduces accounting
mismatch. These instruments are managed by the Group on the basis of fair value and includes terms that have
substantive derivative characteristics.
The fair value changes of the structured deposits which are linked to interest rate derivatives that are attributable to the
changes in own credit risk are not significant.
The carrying amount of the structured deposits of the Group is RM292,750,000 (2022: RM353,117,000) lower than the
contractual amount at maturity and the Bank is RM255,672,000 (2022: RM334,632,000) lower than the contractual
amount at maturity.
(i) The maturity structure of fixed deposits, negotiable instruments of deposits and short-term placements are as follows:
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Due within:
- six months 119,505,166 103,914,125 87,245,822 77,555,688
- six months to one year 20,115,668 20,170,955 16,140,440 16,272,452
- one year to five years 2,196,854 3,835,461 1,204,005 2,633,850
- more than five years 774,540 806,379 764,342 792,518
142,592,228 128,726,920 105,354,609 97,254,508
254 • FINANCIALS

20 DEPOSITS FROM CUSTOMERS (CONTINUED)
(ii) The deposits are sourced from the following customers:
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Government and statutory bodies 4,821,242 3,149,204 1,041,589 532,038

Business enterprises 99,971,567 92,431,255 75,325,101 71,326,600
Individuals 104,615,970 99,404,508 84,671,220 81,309,351
Others 2,243,040 2,307,492 1,695,038 1,839,315
211,651,819 197,292,459 162,732,948 155,007,304
21 INVESTMENT ACCOUNTS OF CUSTOMERS
The Group The Bank

2023 2022 2022 2022
RM’000 RM’000 RM’000 RM’000
Unrestricted investment accounts

Mudarabah with maturity 2,249,231 2,659,311 - -
Restricted investment accounts
Wakalah bi Al-Istithmar 1,282 9,097 - -
2,250,513 2,668,408 - -

21 INVESTMENT ACCOUNTS OF CUSTOMERS (CONTINUED)
(i) Movement in the investment account holder
Unrestricted Restricted
investment investment
accounts accounts
Mudarabah Wakalah
2023
At 1 July 2,659,311 9,097
Funding inflows/(outflows)
New placement/Renewal during the year 11,645,422 1,316
Redemption during the year (12,068,129) (9,097)
2,236,604 1,316
Profit payable to Investment Account Holder 12,627 (34)
At 30 June 2,249,231 1,282
2022
At 1 July 1,145,154 -
Funding inflows/(outflows)
New placement/Renewal during the year 5,730,758 10,262
Redemption during the year (4,226,969) (236)
2,648,943 10,026
Profit payable to Investment Account Holder 10,368 (929)
At 30 June 2,659,311 9,097
256 • FINANCIALS

21 INVESTMENT ACCOUNTS OF CUSTOMERS (CONTINUED)
(i) Movement in the investment account holder (continued)
Unrestricted Restricted
investment investment
accounts accounts
Mudarabah Wakalah
2023
Investment Asset
House financing 580,926 -
Term financing 1,115,411 -
Personal financing 268,392 -
Cash and cash equivalent 271,875 -
Unit trusts - 1,316
Total investment 2,236,604 1,316
2022
Investment Asset
House financing 688,725 -
Term financing 1,323,448 -
Personal financing 317,873 -
Cash and cash equivalent 318,897 -
Unit trusts - 10,026
Total investment 2,648,943 10,026
(ii) Profit Sharing Ratio (“PSR”) and Rate of Return (“ROR”):
2023 2022
Average Average Average Average
PSR ROR PSR ROR
The Group % % % %
Unrestricted investment accounts:

- 1 Month 85 2.88 85 2.16
- 2 Months 85 3.04 85 2.19
- 3 Months 85 3.64 85 2.18
- 4 Months 85 3.18 85 2.20
- 6 Months 84 3.88 83 2.35
- 12 Months 82 3.27 84 2.56

22 DEPOSITS AND PLACEMENTS OF BANKS AND OTHER FINANCIAL INSTITUTIONS
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Licensed banks 7,866,784 4,742,649 6,564,588 3,617,792

Licensed investment banks 230,021 - 230,021 -
Central banks (Note) 1,497,021 1,579,601 1,474,882 1,557,628
9,593,826 6,322,250 8,269,491 5,175,420
Note:
Deposits and placements from central banks includes monies received by the Group and the Bank under the various
government financing scheme as part of the government support measure in response to COVID-19 pandemic for the purpose
of SME lending amounting to RM1,497,021,000 (2022: RM1,579,601,000) and RM1,474,882,000 (2022: RM1,557,628,000)
respectively at concession rates.
23 LEASE LIABILITIES
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Lease liabilities 178,928 210,981 269,713 325,365
Scheduled repayment of lease liabilities

- Not later than one year 39,773 40,790 66,654 64,213
- Later than one year and not later than five years 107,561 129,456 169,023 216,891
- Later than five years 31,594 40,735 34,036 44,261
178,928 210,981 269,713 325,365
258 • FINANCIALS

24 OTHER LIABILITIES
The Group The Bank

2023 2022 2023 2022
Note RM’000 RM’000 RM’000 RM’000
Zakat 350 350 - -

Post employment benefits obligation
- defined contribution plan 300 278 300 278
Loan advance payment 3,666,443 3,829,956 3,016,782 3,120,374
Amount due to subsidiary companies - - 432,107 432,107
Treasury and cheque clearing 204,026 128,773 123,742 96,711
Cash collateral pledged for derivative transactions 298,332 213,260 299,063 213,260
Sundry creditors and accruals 418,352 348,272 401,350 331,414
Provision for bonus and staff related expenses 170,302 179,683 157,584 166,171
Expected credit losses on financial guarantee
contracts (a) 8,110 3,657 7,413 3,352
Provision for reinstatement cost 21,137 21,911 26,360 27,160
Settlement accounts 889,467 824,436 885,337 824,144
Others 269,231 199,774 216,712 177,888
5,946,050 5,750,350 5,566,750 5,392,859
(a) Movements in expected credit losses of financial guarantee contracts are as follows:

2023
At 1 July 3,116 541 - 3,657
Changes in ECL due to transfer within stages (4) 4 - -
Transfer to Stage 1 41 (41) - -
Transfer to Stage 2 (45) 45 - -
Transfer to Stage 3 - - - -
New financial assets originated 8,386 - - 8,386
Changes due to change in credit risk (4,839) 833 - (4,006)
Exchange difference 555 14 - 569
At 30 June 6,718 1,392 - 8,110

24 OTHER LIABILITIES (CONTINUED)
(a) Movements in expected credit losses of financial guarantee contracts are as follows: (continued)

2022
At 1 July 3,378 1,185 - 4,563
Changes in ECL due to transfer within stages 15 (199) 184 -
Transfer to Stage 3 - (184) 184 -
New financial assets originated 170 - - 170
Financial assets derecognised (1,143) (4) - (1,147)
Changes due to change in credit risk 647 (425) (184) 38
Changes in models/risk parameters (92) (38) - (130)
At 30 June 3,116 541 - 3,657

2023
At 1 July 2,849 503 - 3,352
Changes in ECL due to transfer within stages (1) 1 - -
Transfer to Stage 3 - - - -
New financial assets originated 8,386 - - 8,386
Changes due to change in credit risk (5,237) 844 - (4,393)
At 30 June 6,051 1,362 - 7,413
260 • FINANCIALS

24 OTHER LIABILITIES (CONTINUED)
(a) Movements in expected credit losses of financial guarantee contracts are as follows: (continued)

2022
At 1 July 1,979 1,169 - 3,148
Changes in ECL due to transfer within stages 20 (204) 184 -
Transfer to Stage 3 - (184) 184 -
New financial assets originated 122 - - 122
Financial assets derecognised (57) (4) - (61)
Changes due to change in credit risk 712 (443) (184) 85
Changes in models/risk parameters (66) (37) - (103)
At 30 June 2,849 503 - 3,352
25 RECOURSE OBLIGATION ON LOANS/FINANCING SOLD TO CAGAMAS
This represents the proceeds received from housing loans sold directly to Cagamas with recourse to the Group and the Bank.
Under this agreement, the Group and the Bank undertake to administer the loans on behalf of Cagamas and to buy back
any loans which are regarded as defective based on prudential criteria set by Cagamas. Such financing transactions and the
obligation to buy back the loans are reflected as a liability on the statements of financial position. These financial liabilities are
stated at amortised cost.

26 TIER 2 SUBORDINATED BONDS
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
RM1.5 billion Tier 2 subordinated notes, at par 1,500,000 1,500,000 1,500,000 1,500,000
Add: Interest payable 2,661 2,236 2,661 2,236
1,502,661 1,502,236 1,502,661 1,502,236
Less: Unamortised discounts (911) (30) (911) (30)
1,501,750 1,502,206 1,501,750 1,502,206
On 25 June 2018, the Bank issued a second tranche of RM500.0 million nominal value of 10-year non-callable 5 years Sub
Notes callable on 26 June 2023 (and thereafter) and due on 23 June 2028 out of its RM10.0 billion Multi-Currency Sub Notes
Programme. The coupon rate for this second tranche of the Sub Notes is 4.86% per annum, which is payable semi-annually in
arrears from the date of the issue.
On 26 June 2023, HLB had fully redeemed the RM500.0 million nominal value of this Sub Notes.
On 14 June 2019, the Bank issued a third tranche of RM1.0 billion nominal value of 10-year non-callable 5 years Sub Notes
callable on 14 June 2024 (and thereafter) and due on 14 June 2029 out of its RM10.0 billion Multi-Currency Sub Notes Programme.
The coupon rate for this third tranche of the Sub Notes is 4.23% per annum, which is payable semi-annually in arrears from the
date of the issue.
On 19 June 2023, the Bank issued a fourth tranche of RM500.0 million nominal value of 10-year non-callable 5 years Sub
Notes callable on 19 June 2028 (and thereafter) and due on 17 June 2033 out of its RM10.0 billion Multi-Currency Sub Notes
Programme. The coupon rate for this fourth tranche of the Sub Notes is 4.20% per annum, which is payable semi-annually in
arrears from the date of the issue.
262 • FINANCIALS

27 MULTI-CURRENCY ADDITIONAL TIER 1 CAPITAL SECURITIES
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
RM1.7 billion Multi-currency Additional Tier-1 and Additional

Tier-1 Green capital securities, at par 1,700,000 1,700,000 1,700,000 1,700,000
Add: Interest payable 15,902 13,574 15,902 13,574
1,715,902 1,713,574 1,715,902 1,713,574
Less: Unamortised discounts (1,508) (1,161) (1,508) (1,161)
Add: Fair value changes arising from fair value hedges 5,115 3,282 5,115 3,282
1,719,509 1,715,695 1,719,509 1,715,695
On 30 November 2017, the Bank issued a nominal value RM400.0 million perpetual Multi-currency Additional Tier 1 capital
securities (“Capital Securities”) under the RM10.0 billion Capital Securities Programme of which was fully subscribed by its
holding company, HLFG. The Capital Securities, which qualify as Additional Tier 1 capital for the Bank, carry a distribution rate of
5.13% per annum. The Capital Securities are perpetual with an Issuer’s call option to redeem at the end of year 5. The proceeds
from the issuance was used to subscribe the RM400.0 million Multi-currency Additional Tier 1 subordinated sukuk wakalah
issued by HLISB, a wholly-owned subsidiary of the Bank.
On 30 November 2022, HLB had fully redeemed the RM400.0 million nominal value of this Capital Securities.
On 29 March 2019, the Bank issued a second tranche nominal value of RM400.0 million perpetual Capital Securities fully
subscribed by HLFG. The Capital Securities carry a distribution rate of 4.72% per annum and are perpetual with an Issuer’s call
option to redeem at the end of year 5. The proceeds from the issuance shall be utilised to fulfill the requirements of Additional
Tier 1 capital as per BNM’s Capital Adequacy Framework (Capital Components) issued on 2 February 2018 and without limitation,
to on-lend to HLB’s subsidiaries, for investment into HLB’s subsidiaries, for working capital, general banking and other corporate
purposes and/or if required, the refinancing of any existing financing obligations of HLB and/or any existing capital securities
issued under the Capital Securities Programme.
On 29 April 2022, the Bank issued a nominal value of RM900.0 million Basel III-compliant Additional Tier 1 Green capital
securities (“Green Capital Securities”), pursuant to its Multi-currency Additional Tier 1 capital securities programme. The Green
Capital Securities carry a distribution rate of 4.45% per annum and are perpetual and non-callable for 5 years with an Issuer’s call
option to redeem at the end of year 5. Proceeds from the issuance of the Green Capital Securities shall be utilised for purposes
that meet the criteria as set out in the HLB Green Bond Framework, which was established by HLB on 20 February 2022 and
revised in April 2022 (as may be amended, revised and/or substituted from time to time) in accordance with the ASEAN Green
Bond Standards issued by the ASEAN Capital Markets Forum in November 2017 and revised in October 2018 and the Green Bond
Principles issued by the International Capital Market Association in June 2021.
On 14 October 2022, the Bank issued a nominal value of RM400.0 million Additional Tier 1 capital securities (“HLB Capital
Securities”), pursuant to its multi-currency Additional Tier 1 capital securities programme. The HLB Capital Securities, which
qualify as Additional Tier 1 capital for the Bank, carry a distribution rate of 4.70% per annum. The Capital Securities are
perpetual with an Issuer’s call option to redeem at the end of year 5. The proceeds from the issuance shall be utilised to
fulfill the requirements of Additional Tier 1 capital as per BNM’s Capital Adequacy Framework (Capital Components) issued on
9 December 2020 and as updated from time to time and for the refinancing of an existing tranche of RM400.0 million in nominal
value of HLB Capital Securities issued previously under the HLB AT1 Programme on 30 November 2017.

28 SHARE CAPITAL

2023 2022
Number of Number of
ordinary ordinary
shares shares
'000 RM'000 '000 RM'000
Ordinary shares issued and fully paid:

At 1 July/30 June - ordinary shares with no par value 2,167,718 7,739,063 2,167,718 7,739,063
29 RESERVES
The Group The Bank

2023 2022 2023 2022
Note RM’000 RM’000 RM’000 RM’000
Retained profits (a) 25,017,703 22,727,982 15,727,832 15,120,482

Other reserves:
Share options reserve (b) 33,206 58,181 33,206 58,181
Fair value reserve (c)
- Financial investments at FVOCI (477,814) (795,491) (406,932) (612,556)
Exchange fluctuation reserve (d) 1,381,199 1,318,819 376,631 271,093
Cash flow hedge reserve (e) - (274) - (274)
Regulatory reserves (f) 1,002,061 654,386 825,318 536,432
1,938,652 1,235,621 828,223 252,876
26,956,355 23,963,603 16,556,055 15,373,358
(a) The Bank can distribute dividends out of its entire retained earnings under the single-tier system.
(b) The share options reserve arose from share options and ordinary shares granted to eligible executives of the Bank pursuant
to the Bank’s ESS. Terms of the Bank’s ESS are disclosed in Note 55 to the financial statements.
264 • FINANCIALS

29 RESERVES (CONTINUED)
(c) Movement of the fair value reserve is as follows:
The Group The Bank

2023 2022 2023 2022
Note RM’000 RM’000 RM’000 RM’000
At 1 July (795,491) 115,212 (612,556) 166,517

Equity instruments
- Net fair value changes 14,264 14,286 14,264 14,286
Debt instruments
- Net fair value changes 432,963 (1,094,755) 284,025 (943,700)
- Changes in expected credit losses 285 (537) 283 (542)
Reclassification to net profit on disposal and
impairment (26,557) (66,794) (26,557) (66,794)
Deferred taxation 43 (88,233) 253,840 (66,391) 217,677
Share of fair value reserve of associated
company (15,045) (16,743) - -
Net change in fair value reserve 317,677 (910,703) 205,624 (779,073)
At 30 June (477,814) (795,491) (406,932) (612,556)
(d) Currency translation differences arising from translation of the Bank’s foreign branches, subsidiaries and associated
companies are recognised in exchange fluctuation reserve.
(e) Cash flow hedge reserve arises from cash flow hedge activities undertaken by the Bank to hedge the changes in the cash
flow of customer deposits arising from the movement of market interest rates. The reserve is non-distributable and has
been reversed to the statements of income during the financial year ended 30 June 2023 following the maturity of the
cash flow hedge.
(f) Regulatory reserves represent the Group’s and the Bank’s compliance with BNM’s Revised Policy Documents on Financial
Reporting and Financial Reporting for Islamic Banking Institutions with effect from 1 July 2018, whereby the Bank and
its domestic banking subsidiaries must maintain, in aggregate, loss allowance for non-credit impaired exposures and
regulatory reserves of no less than 1% of total credit exposures, net of loss allowance for credit-impaired exposures.
During the financial year, an amount of RM347.7 million at Group and RM288.9 million at Bank respectively have been
transferred from retained profits to regulatory reserves.
Included in the Group is the regulatory reserve maintained by the Group’s banking subsidiary company in Vietnam of
RM11.2 million (2022: RM11.2 million) in line with the requirements of the State Bank of Vietnam.

30 TREASURY SHARES
The Group The Bank

2023 2022 2023 2022
Note RM’000 RM’000 RM’000 RM’000
Purchase of own shares pursuant to Section 127,

Companies Act 2016 (a) 431,829 431,829 431,829 431,829
Treasury shares for ESS (b) 276,937 281,861 276,937 281,861
708,766 713,690 708,766 713,690
(a) Purchase of own shares pursuant to Section 127 of the Companies Act 2016
The shareholders of the Bank, via an ordinary resolution passed at the Annual General Meeting held on 23 October 2013,
had approved the Bank’s plan to purchase its own shares up to 10% of the issued and paid-up share capital. The Directors
of the Bank are committed to enhance the value of the Bank to its shareholders and believe that the share buyback plan
can be applied in the best interests of the Bank and its shareholders.
As at 30 June 2023, the total number of shares bought was 81,101,700 (2022: 81,101,700) and the shares held were
accounted as treasury shares in accordance with the provisions of Section 127 of the Companies Act 2016.
There was no resale or cancellation of treasury shares during the financial year. The number of issued shares with voting
rights as at 30 June 2023 after deducting treasury shares purchased is 2,086,616,584 shares (2022: 2,086,616,584).
Treasury shares have no rights to vote nor participation in dividends or other distribution.
(b) Treasury shares for ESS
A trust has been set up for the ESS and it is administered by an appointed trustee. This trustee will be entitled from time to
time to accept financial assistance from the Bank upon such terms and conditions as the Bank and the trustee may agree
to purchase the Bank’s shares from the open market for the purposes of this trust. In accordance with MFRS 132, the shares
purchased for the benefit of the ESS holdings are recorded as “Treasury Shares for ESS”, in addition to the Treasury Shares
for share buy-back, in the Shareholders’ Equity on the statements of financial position.
During the financial year ended 30 June 2023, a total of 668,524 ordinary shares were vested and transferred pursuant to
the Bank’s ESS. As at 30 June 2023, the total number of shares held was 37,596,086 (2022: 38,264,610).
266 • FINANCIALS

31a INTEREST INCOME
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Loans, advances and financing 5,566,975 4,127,244 5,259,695 3,898,648

Money at call and deposit placements with financial
institutions 245,954 88,013 299,163 111,716
Securities purchased under resale agreements 867 758 867 758
Financial investments at FVOCI 871,880 669,165 871,573 672,355
Financial investments at amortised cost 669,395 619,506 668,660 618,725
Others 15,383 1,010 15,068 991
7,370,454 5,505,696 7,115,026 5,303,193
Accretion of discount less amortisation of premium (7,961) (143,093) (7,961) (143,093)

Interest income earned on impaired loans, advances and
financing during the financial year 41,342 26,008 40,548 25,950
31b INTEREST INCOME FOR FINANCIAL ASSETS AT FVTPL
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Financial assets at FVTPL 160,370 217,168 160,370 217,168
32 INTEREST EXPENSE
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Deposits and placements of banks and other financial

institutions 370,036 79,316 405,917 93,136
Deposits from customers 2,667,726 1,572,067 2,508,100 1,478,074
Short-term placements 622,833 178,631 622,833 178,631
Tier 2 subordinated bonds 66,958 66,600 66,958 66,600
Multi-currency Additional Tier-1 capital securities 81,186 46,315 81,255 46,481
Recourse obligation on loans sold to Cagamas 29,263 15,450 29,263 15,450
Others 8,737 9,154 13,251 14,785
3,846,739 1,967,533 3,727,577 1,893,157

33 INCOME FROM ISLAMIC BANKING BUSINESS
The Group
2023 2022
RM’000 RM’000
Income derived from investment of depositors' funds and others 1,894,039 1,409,048
Income derived from investment of shareholders' funds 259,365 168,618
Income derived from investment of investment account 118,629 68,451
Income attributable to depositors (1,229,550) (702,907)
Income attributable to depositors on investment account (79,115) (38,425)
963,368 904,785
Financing income earned on impaired financing and advances during the financial year 6,556 3,417
34 FINANCIAL EFFECTS OF LOSS FROM THE MODIFICATION OF CASH FLOWS
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Loss on modification of cash flow

included in interest income (Note 31a) - (27,472) - (27,472)
included in income from Islamic Banking business
(Note 33) - (17,944) - -
Total - (45,416)* - (27,472)*
* The Group and the Bank supported its customers impacted by the COVID-19 pandemic by providing targeted assistance to
customers through various government support measures such as PEMULIH and URUS. As a result, the Group and the Bank
recognised a loss from the modification of cash flows of the loan/financing.
268 • FINANCIALS

35 NON-INTEREST INCOME
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Fee income
Commissions 185,374 201,496 182,954 198,888
Service charges and fees 38,491 37,999 37,434 37,151
Guarantee fees 27,807 15,913 27,684 15,723
Credit card related fees 210,975 193,684 210,975 193,684
Commitment fees 37,124 36,696 35,603 35,236
Fee on loans, advances and financing 50,576 49,760 42,517 37,589
Other fee income 48,506 74,115 48,100 73,823
598,853 609,663 585,267 592,094
Net income from securities
Net realised gain/(loss) on financial instruments:
- Financial assets at FVTPL 85,177 (58,657) 86,447 (59,239)
- Derivative financial instruments (53,230) 20,792 (55,103) 19,328
- Financial investments at FVOCI 34,943 87,887 34,943 87,887
Dividend income from:
- Subsidiary companies - - 330 36,800
- Associated companies - - 5,992 334,115
- Financial assets at FVTPL 88,826 101,001 89,277 102,768
- Financial investments at FVOCI 2,175 406 2,175 406
Net unrealised gain on revaluation of:
- Financial assets at FVTPL (5,403) 208,290 (6,631) 207,569
- Derivative financial instruments 111,379 100,366 112,433 99,238
Net realised gain/(loss) on fair value changes arising from
fair value hedges 8,265 (7,489) 8,265 (7,489)
Net unrealised gain/(loss) on fair value changes arising
from fair value hedges 853 (2,141) 853 (2,141)
272,985 450,455 278,981 819,242
Other income
Foreign exchange gain/(loss) 144,564 (143,943) 143,357 (146,510)
Rental income 17,042 16,162 8,846 9,063
Gain on disposal of property and equipment 233 1,555 138 1,458
Other non-operating income 4,379 3,400 4,010 3,099
166,218 (122,826) 156,351 (132,890)
1,038,056 937,292 1,020,599 1,278,446

36 OVERHEAD EXPENSES
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Personnel costs 1,202,989 1,153,764 939,249 914,252

Establishment costs 532,023 520,575 446,877 445,199
Marketing expenses 195,975 171,471 169,153 148,190
Administration and general expenses 302,295 252,566 298,784 249,088
2,233,282 2,098,376 1,854,063 1,756,729
The overhead expenses of the Bank are net of shared services costs charged to subsidiaries.
(i) Personnel costs comprise the following:
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Salaries, bonus and allowances 1,140,724 1,076,567 892,446 849,983

Medical expenses 31,483 29,978 24,982 24,249
Training and convention expenses 16,794 14,658 14,047 12,880
Staff welfare 9,507 12,096 7,476 9,920
Other employees benefits 4,481 20,465 298 17,220
1,202,989 1,153,764 939,249 914,252
(ii) Establishment costs comprise the following:
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Depreciation of property and equipment 110,039 121,499 92,850 103,137

Depreciation of right-of-use assets 48,456 50,119 71,556 73,875
Amortisation of intangible assets 58,132 53,962 50,869 48,107
Rental of premises 2,438 2,090 2,237 2,317
Information technology expenses 226,163 210,468 189,586 181,991
Security services 20,937 19,354 15,705 14,482
Electricity, water and sewerage 21,546 20,797 16,101 15,845
Hire of plant and machinery 13,671 12,575 2,889 1,342
Others 30,641 29,711 5,084 4,103
532,023 520,575 446,877 445,199
270 • FINANCIALS

36 OVERHEAD EXPENSES (CONTINUED)
The overhead expenses of the Bank are net of shared services costs charged to subsidiaries. (continued)
(iii) Marketing expenses comprise the following:
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Advertisement and publicity 31,092 29,175 27,926 26,713

Sales commission and credit card related fees 146,393 127,692 127,933 111,541
Others 18,490 14,604 13,294 9,936
195,975 171,471 169,153 148,190
(iv) Administration and general expenses comprise the following:
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Teletransmission expenses 20,410 21,541 19,858 21,019

Stationery and printing expenses 10,579 11,001 10,006 10,470
Professional fees 108,835 93,378 103,857 89,707
Insurance fees 45,365 33,438 37,928 28,443
Stamp, postage and courier 13,948 14,227 13,650 13,924
Travelling and transport expenses 3,533 2,711 2,718 2,179
Registration and license fees 8,774 8,805 7,562 7,638
Brokerage and commission 11,926 10,981 7,700 6,791
Credit card fees 74,168 48,527 74,168 48,527
Others 4,757 7,957 21,337 20,390
302,295 252,566 298,784 249,088
The above expenditure includes the following statutory disclosures:
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Auditors’ remuneration:
Malaysian firm
- statutory audit 2,210 2,025 1,975 1,778
- regulatory related fees 908 390 602 275
- tax compliance 70 67 43 41
- other services 255 250 255 250
PwC overseas affiliated firms
- statutory audit 1,052 731 771 596
- regulatory related fees 223 194 223 194
- tax compliance 101 93 101 93
Loss on disposal of property and equipment 5 3 5 3
Property and equipment disposal/written off 1,134 722 727 629
Intangible assets disposal/written off 2,614 737 2,606 416

37 ALLOWANCE FOR/(WRITTEN BACK OF) IMPAIRMENT LOSSES ON LOANS, ADVANCES AND FINANCING
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Allowance for impairment losses on loans, advances and

financing:
- expected credit losses 343,095 393,506 176,517 151,453
Impaired loans, advances and financing:
- written off 29,519 20,038 22,962 13,893
- recovered from bad debt written off (257,232) (249,970) (211,015) (212,302)
115,382 163,574 (11,536) (46,956)
38 WRITTEN BACK OF IMPAIRMENT LOSSES ON FINANCIAL INVESTMENTS AND OTHER ASSETS
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Expected credit losses and impairment losses on:

- Financial investments at FVOCI 184 (613) 185 (620)
- Financial investments at amortised cost (53) (1) - (24)
- Cash and short-term funds (155) 85 (114) 435
- Deposits and placements with banks and other financial
institutions (282) (322) (3,039) (182)
(306) (851) (2,968) (391)
272 • FINANCIALS

39 SIGNIFICANT RELATED PARTY TRANSACTIONS AND BALANCES
(a) Related parties and relationships
The related parties of and their relationships with the Bank are as follows:
Related parties Relationship
Hong Leong Company (Malaysia) Berhad Ultimate holding company
Hong Leong Share Registration Services Sdn Bhd, HLCM Capital Subsidiary companies of ultimate holding company
Sdn Bhd, Hong Leong Fund Management Sdn Bhd and
HL Management Co Sdn Bhd
Hong Leong Financial Group Berhad Holding company
Subsidiary companies of Hong Leong Financial Group Berhad as Subsidiary companies of holding company
disclosed in its financial statements
Hong Leong Industries Berhad and its subsidiary and associated Subsidiary and associated companies of ultimate
companies as disclosed in its financial statements holding company
HLMG Management Co Sdn Bhd Subsidiary companies of ultimate holding company

(formerly known as HLI-Hume Management Co Sdn Bhd)
Hume Cement Sdn Bhd
Hume Construction Sdn Bhd
Hume Plastics (Malaysia) Sdn Berhad
Hume Quarry (Sarawak) Sdn Bhd
Hongvilla Development Sdn Bhd
HIMB Overseas Limited
HIMB Trading Limited and Delta Touch Limited
Guoco Group Limited and its subsidiary and associated Subsidiary and associated companies of ultimate
GuocoLand (Malaysia) Berhad and its subsidiary and associated Subsidiary and associated companies of ultimate
Southern Steel Berhad and its subsidiary and associated Subsidiary and associated companies of ultimate
companies holding company
Subsidiary companies of the Bank as disclosed in Note 13 Subsidiary companies of the Bank
Associated companies of the Group as disclosed in Note 14 Associated companies of the Group
Key management personnel The key management personnel of the Bank consists of:
- All Directors of the Bank and nine members of senior
management of the Bank
Related parties of key management personnel deemed as (i) Close family members and dependents of key
related to the Bank management personnel
(ii) Entities that are controlled, jointly controlled or

significantly influenced by, or for which significant
voting power in such entity resides with, directly
or indirectly by key management personnel or its
close family members

39 SIGNIFICANT RELATED PARTY TRANSACTIONS AND BALANCES (CONTINUED)
(b) Related party transactions and balances
Other Key
Parent related Associated management
company companies companies personnel
2023
Income
Interest:
- loans - 3,203 - 145
- redeemable preference shares - 3,037 - -
Commitment fee and bank charges - - - 39
Dividend income - 79,457 - -
Commission on Group products/services sold - 54,817 - -
Brokerage commission - 99 - -
Reimbursement of shared service cost 511 10,775 - -
511 151,388 - 184
Expenditure
Rental and maintenance - 15,050 - -
Insurance 54 37,150 - -
Interest on current accounts and fixed deposits - 2,578 - 1,913
Interest on short-term placements 44 10,917 - 4,093
Interest on subordinated notes and capital securities - 3,990 - -
Management fees 6,729 45,924 - -
Other miscellaneous expenses 3,134 8,357 - -
9,961 123,966 - 6,006
Amounts due from

Current accounts - - 21,715 -
Redeemable preference shares - 25,000 - -
Loans - 35,172 - 3,105
Wholesale funds - 1,307,176 - -
Derivative assets - 136,668 - -
Credit card balances - - - 699
Advance rental and deposit - 2,530 - -
Others - 146 - -
- 1,506,692 21,715 3,804
Amounts due to
Current accounts and fixed deposits - 42,604 - 136,665
Short-term placements 2,501 395,423 - 93,429
Subordinated notes and capital securities - 95,000 - -
Derivative liabilities - 10,149 - -
Others 278 1,192 - -
2,779 544,368 - 230,094
Commitments and contingencies

Derivative related contracts - 1,893,395 - -
274 • FINANCIALS

(b) Related party transactions and balances (continued)
Other Key
Parent related Associated management
company companies companies personnel
2022
Income
Interest:
- loans - 3,446 - 78
- redeemable preference shares - 132 - -
Commitment fee and bank charges - - - 24
Dividend income - 89,174 - -
Commission on Group products/services sold - 46,292 - -
Brokerage commission - 1,357 - -
Reimbursement of shared service cost 662 10,065 - -
662 150,466 - 102
Expenditure
Rental and maintenance - 14,095 - -
Insurance 65 35,492 - -
Interest on current accounts and fixed deposits - 1 - 218
Interest on short-term placements 58 3,755 - 2,340
Interest on subordinated notes and capital securities - 200 - -
Management fees 4,859 41,842 - -
Other miscellaneous expenses 285 6,947 - -
5,267 102,332 - 2,558
Amounts due from

Current accounts - - 21,809 -
Redeemable preference shares - 25,000 - -
Loans - 87,745 - 3,718
Wholesale funds - 2,776,857 - -
Derivative assets - 124,149 - -
Credit card balances - - - 407
Advance rental and deposit - 5,756 - -
Others 115 261 - -
115 3,019,768 21,809 4,125
Amounts due to
Current accounts and fixed deposits - 25,817 - 31,368
Short-term placements 17,504 258,619 - 148,466
Subordinated notes and capital securities - 24,993 - -
Derivative liabilities - 10,849 - -
Others - 15,751 - -
17,504 336,029 - 179,834

Derivative related contracts - 1,954,308 - -

Other Key
Parent Subsidiary Associated related management
company companies companies companies personnel
2023
Income
Interest:
- loans - 11,870 - 3,203 145
- interbank placements - 51,498 - - -
- current accounts - - 325 - -
- redeemable preference shares - - - 3,037 -
- subordinated facilities - 6,089 - - -
Dividend income - 330 5,992 79,457 -
Commitment fee and bank charges - - - - 39
Commission on Group products/
services sold - - - 54,817 -
Brokerage commission - - - 99 -
Reimbursement of shared service cost 511 231,599 - 10,775 -
511 301,386 6,317 151,388 184
Expenditure
Rental and maintenance - 921 - 15,050 -
Insurance 54 - - 37,150 -
Interest on current accounts and fixed
deposits - 1,153 - 1 1,859
Interest on short-term placements 44 - - 10,917 4,093
Interest on lease liabilities - 4,851 - - -
Interest on interbank placements - 32,403 - - -
Interest on subordinated notes and
capital securities - - - 3,990 -
Management fees 6,729 - - 45,924 -
Other miscellaneous expenses 3,134 2,930 - 8,357 -
9,961 42,258 - 121,389 5,952
276 • FINANCIALS

Other Key
2023
Amounts due from
Interbank placements - 560,622 - - -
Current accounts - - 21,715 - -
Redeemable preference shares - - - 25,000 -
Loans - 287,774 - 35,172 3,105
Right-of-use assets - 94,149 - - -
Wholesale funds - - - 1,380,727 -
Credit card balances - - - - 699
Derivative assets - 69,236 - 136,668 -
Advance rental and deposit - 8,783 - 2,530 -
Intercompany settlement - 143,532 - - -
Others - 330 - 146 -
- 1,164,426 21,715 1,580,243 3,804
Amounts due to
Current accounts and fixed deposits - 53,823 - 42,604 134,013
Short-term placements 2,501 - - 395,423 93,429
Subordinated notes and capital
securities - - - 95,000 -
Derivative liabilities - 13,213 - 10,149 -
Lease liabilities - 102,688 - - -
Provision for reinstatement cost - 6,940 - - -
Others - - - 122 -
2,501 1,458,927 - 543,298 227,442

Derivative related contracts - 2,075,506 - 1,893,395 -

Other Key
2022
Income
Interest:
- loans - 9,223 - 3,446 78
- interbank placements - 11,543 - - -
- current accounts - - 329 - -
- negotiable instruments of deposits - 3,502 - - -
- redeemable preference shares - - - 132 -
- subordinated facilities - 2,914 - - -
Dividend income - 36,800 334,115 89,174 -
Commitment fee and bank charges - - - - 24
Commission on Group products/
services sold - - - 46,292 -
Brokerage commission - - - 1,357 -
Reimbursement of shared service cost 662 209,376 - 10,065 -
662 273,358 334,444 150,466 102
Expenditure
Rental and maintenance - 918 - 14,053 -
Insurance 65 - - 35,492 -
Interest on current accounts and fixed
deposits - 840 - 1 164
Interest on short-term placements 58 - - 3,755 2,340
Interest on lease liabilities - 5,995 - - -
Interest on interbank placements - 3,174 - - -
Interest on subordinated notes and
capital securities - - - 200 -
Management fees 4,859 - - 41,842 -
Other miscellaneous expenses 285 536 - 6,947 -
5,267 11,463 - 102,290 2,504
278 • FINANCIALS

Other Key
2022
Amounts due from
Interbank placements - 2,844,303 - - -
Current accounts - - 21,809 - -
Redeemable preference shares - - - 25,000 -
Loans - 295,929 - 87,745 3,718
Right-of-use assets - 123,664 - - -
Wholesale funds - - - 2,859,384 -
Credit card balances - - - - 407
Derivative assets - 29,775 - 124,149 -
Advance rental and deposit - 8,783 - 5,756 -
Others 115 301 - 261 -
115 3,393,564 21,809 3,102,295 4,125
Amounts due to
Current accounts and fixed deposits - 49,186 - 25,817 28,896
Short-term placements 17,504 - - 258,619 148,466
Subordinated notes and capital
securities - - - 24,993 -
Derivative liabilities - 3,554 - 10,849 -
Lease liabilities - 126,538 - - -
Provision for reinstatement cost - 6,940 - - -
17,504 1,316,809 - 320,278 177,362

Derivative related contracts - 983,352 - 1,954,308 -


2023 2022
RM’000 RM’000
The approved limit on loans, advances and financing for key management personnel 10,544 12,414
(c) Key management personnel
Key management compensation
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Salaries and other short-term employee benefits 43,388 28,186 43,388 28,186
Director fees 1,581 1,381 1,388 1,198
ESS expenses 8,190 14,306 8,190 14,306
Included in the above is the Directors’ remuneration which is disclosed in Note 40 to the financial statements.
Loans made to key management personnel of the Group and the Bank will be on similar terms and conditions generally
available to other employees within the Group. No impairment allowances were required in 2023 and 2022 for loans made
to key management personnel.
(d) Credit transactions and exposures with connected parties
Credit exposures with connected parties as per BNM’s revised “Guidelines on Credit Transactions and Exposures with
Connected Parties” which became effective on 1 January 2008 are as follows:
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Outstanding credit exposures with connected parties 3,478,898 2,629,055 3,108,181 2,554,151
Percentage of outstanding credit exposures to
connected parties as a proportion of total credit
exposures 1.72% 1.40% 2.03% 1.77%
Percentage of outstanding credit exposures with
connected parties which is non-performing or in
default 0.0000% 0.0000% 0.0000% 0.0000%
280 • FINANCIALS

(e) Intercompany charges
Breakdown of intercompany charges by type of services received and geographical distribution as per BNM’s Guidelines on Financial Reporting issued on 29 April 2022 are as follows:
Interest on
deposits and Interest on
placements of Interest on subordinated
banks and other Interest on deposits notes and Rental
financial lease from capital and Management
institutions liabilities customers securities maintenance fees Insurance Others
The Bank RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
2023
Malaysia - 4,851 11,995 3,990 4,934 52,308 37,126 13,963
Singapore - - 120 - 8,127 - - 12
Hong Kong - - - - 2,910 345 10 437
Vietnam 25,356 - - - - - - 6
Cambodia 7,047 - - - - - 68 3
32,403 4,851 12,115 3,990 15,971 52,653 37,204 14,421
2022
Malaysia - 5,995 4,413 200 5,735 46,376 35,545 7,364
Singapore - - 241 - 6,408 - - -
Hong Kong - - - - 2,828 325 12 373
Vietnam 2,523 - - - - - - -
Cambodia 651 - - - - - - 31
3,174 5,995 4,654 200 14,971 46,701 35,557 7,768
1281

40 CHIEF EXECUTIVE OFFICER (“CEO”) AND DIRECTORS’ REMUNERATION
Forms of remuneration in aggregate for CEO and all Directors and for the financial year are as follows:
The Group The Bank

Salaries, bonuses, Salaries, bonuses,
allowances Estimated allowances Estimated
and defined money value and defined money value
contribution for benefits- contribution for benefits-
retirement plan Director fees in-kind Total retirement plan Director fees in-kind Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
2023
CEO
Mr Domenic Fuda(1) 27,129 - 6,173 33,302 27,129 - 6,173 33,302
Executive Director
Mr Tan Kong Khoon - - - - - - - -
Non-executive Directors
YBhg Tan Sri Quek Leng Chan - - - - - - - -
Mr Kwek Leng Hai - - - - - - - -
Ms Chok Kwee Bee (2) 24 130 - 154 24 130 - 154
YBhg Dato’ Nicholas John Lough @ Sharif
Lough bin Abdullah (3) 45 311 - 356 45 311 - 356
YBhg Datuk Dr Md Hamzah bin Md Kassim 51 388 - 439 19 195 - 214
Ms Lau Souk Huan 46 332 - 378 46 332 - 378
Ms Cheong Soo Ching 32 256 - 288 32 256 - 288
Puan Fa’izah binti Mohamed Amin (4) 14 164 - 178 14 164 - 178
212# 1,581 - 1,793 180# 1,388 - 1,568
Directors of subsidiaries 2,588 910 500 3,998 - - - -
Total CEO and Directors’ remuneration 29,929 2,491 6,673 39,093 27,309 1,388 6,173 34,870
The movement and details of the Directors of the Group and the Bank in office and interests in shares and share options are reported in the Directors’ report.
(1)
Retired with effect from 30 June 2023
(2)
Retired with effect from 1 December 2022
(3)
Retired with effect from 21 June 2023
(4)
Appointed with effect from 1 September 2022
#
Directors’ meeting allowances
Note: During the financial year, Directors and Officers of the Group and the Bank are covered under the Directors’ & Officers’ Liability Insurance in respect of liabilities arising from acts committed in their capacity as, inter alia, Directors and Officers
of the Group and the Bank subject to the terms of the policy. The total amount of Directors’ & Officers’ Liability Insurance effected for the Directors & Officers of the holding company was RM10.0 million. The total amount of premium paid
for the Directors’ & Officers’ Liability Insurance by the holding company was RM71,250 and the apportioned amount of the said premium paid by the Group and the Bank was RM60,561 and RM51,376 respectively.
282 • FINANCIALS

40 CHIEF EXECUTIVE OFFICER (“CEO”) AND DIRECTORS’ REMUNERATION (CONTINUED)
Forms of remuneration in aggregate for CEO and all Directors and for the financial year are as follows: (continued)
The Group The Bank

Salaries, bonuses, Salaries, bonuses,
allowances Estimated allowances Estimated
and defined money value and defined money value
contribution for benefits- contribution for benefits-
retirement plan Director fees in-kind Total retirement plan Director fees in-kind Total
2022
CEO
Mr Domenic Fuda 12,525 - 5,514 18,039 12,525 - 5,514 18,039
Executive Director
Mr Tan Kong Khoon - - - - - - - -
Non-executive Directors
YBhg Tan Sri Quek Leng Chan - - - - - - - -
Mr Kwek Leng Hai - - - - - - - -
Ms Chok Kwee Bee 32 290 - 322 32 290 - 322
YBhg Dato’ Nicholas John Lough @ Sharif
Lough bin Abdullah 35 300 - 335 35 300 - 335
YBhg Datuk Dr Md Hamzah bin Md Kassim 35 358 - 393 16 175 - 191
Ms Chong Chye Neo * 11 122 - 133 11 122 - 133
Ms Lau Souk Huan 33 293 - 326 33 293 - 326
Ms Cheong Soo Ching ** 1 18 - 19 1 18 - 19
147# 1,381 - 1,528 128# 1,198 - 1,326
Directors of subsidiaries 2,761 710 96 3,567 - - - -
Total CEO and Directors’ remuneration 15,433 2,091 5,610 23,134 12,653 1,198 5,514 19,365
The movement and details of the Directors of the Group and the Bank in office and interests in shares and share options are reported in the Directors’ report.
* Retired with effect from 21 February 2022
** Appointed with effect from 18 May 2022
#
Directors’ meeting allowances
Note: The Directors’ Remuneration in the current financial year represents remuneration for Directors of the Group, the Bank and its subsidiaries to comply with the requirements of Companies Act 2016. The names of Directors of subsidiaries and their
remuneration details are set out in the respective subsidiaries’ statutory accounts and the said information is deemed incorporated herein by such reference and made a part hereof.
During the financial year, Directors and Officers of the Group and the Bank are covered under the Directors’ & Officers’ Liability Insurance in respect of liabilities arising from acts committed in their capacity as, inter alia, Directors and
Officers of the Group and the Bank subject to the terms of the policy. The total amount of Directors’ & Officers’ Liability Insurance effected for the Directors & Officers of the holding company was RM10.0 million. The total amount of
premium paid for the Directors’ & Officers’ Liability Insurance by the holding company was RM84,550 and the apportioned amount of the said premium paid by the Group and the Bank was RM70,405 and RM58,435 respectively.

41 TAXATION
The Group The Bank

2023 2022 2023 2022
Note RM’000 RM’000 RM’000 RM’000
Income tax:
- Current year 818,960 1,105,607 656,255 1,014,643
- Over accrual in prior years (40,595) (27,157) (24,020) (25,837)
778,365 1,078,450 632,235 988,806
Deferred tax 19 30,070 (933) 19,588 (4,465)

Taxation 808,435 1,077,517 651,823 984,341
The effective tax rate for the Group and Bank differed from the statutory rate of taxation due to:
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Tax calculated at a rate of 24% 1,110,391 1,048,032 654,926 767,104

Effects of incremental tax rate (Note) - 309,663 - 277,372
Tax effects of:
- Income not subject to tax (19,188) (39,988) (23,822) (63,115)
- Share of net income of foreign associated companies (309,467) (247,318) - -
- Expenses not deductible for tax purposes 67,294 34,285 44,739 28,817
Over accrual in prior years (40,595) (27,157) (24,020) (25,837)
Taxation 808,435 1,077,517 651,823 984,341
Note: In order to support the Government’s initiative to assist parties affected by the pandemic, for year of assessment (‘YA’)
2022, a special one-off tax which is called ‘Cukai Makmur’ will be imposed on non-micro, small and medium enterprise
companies which generate high profits during the period of the pandemic. Chargeable income in excess of RM100.0
million will be charged an income tax rate of 33% for YA 2022.
The Group
2023 2022
RM’000 RM’000
Unused tax losses from a wholly owned subsidiary for which no deferred tax is recognised in
the financial statements * 28,248 28,248
* Under the Malaysian Finance Act 2021 which was gazetted on 31 December 2021, the Group’s unutilised tax losses can be
utilised up to a maximum of ten consecutive years effective retrospectively from YA 2019.
284 • FINANCIALS

42 EARNINGS PER SHARE
Basic earnings per share
Basic earnings per share from operations is calculated by dividing the net profit attributable to ordinary equity holders of the
Bank after taxation by the weighted average number of ordinary shares in issue during the financial year, excluding the average
number of ordinary shares purchased by the Bank and held as treasury shares.
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Net profit attributable to equity holders 3,818,196 3,289,283 2,077,036 2,211,927

Weighted average number of ordinary shares in issue (‘000) 2,048,753 2,048,093 2,048,753 2,048,093
Basic earnings per share (sen) 186.4 160.6 101.4 108.0
Diluted earnings per share
The Bank has two categories of dilutive potential ordinary shares, which are the share options and ordinary shares granted
under the ESS. For the share options, a calculation is done to determine the number of shares that could have been acquired
at fair value (determined as the average annual market share price of the Bank’s shares) based on the monetary value of the
subscription rights attached to outstanding share options. The number of shares calculated as below is compared with the
number of shares that would have been issued assuming the exercise of the share options.
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Net profit attributable to equity holders 3,818,196 3,289,283 2,077,036 2,211,927

Weighted average number of ordinary shares in issue (‘000) 2,048,753 2,048,093 2,048,753 2,048,093
- adjustment for ESS 805 1,227 805 1,227
2,049,558 2,049,320 2,049,558 2,049,320
Diluted earnings per share (sen) 186.3 160.5 101.3 107.9

43 INCOME TAX RELATING TO COMPONENTS OF OTHER COMPREHENSIVE INCOME/(LOSS)
2023 2022
Net of Net of
Before Tax tax Before Tax tax
tax benefits amount tax benefits amount
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
The Group
Debt instruments at fair
value through other
- net fair value changes
and changes in
expected credit losses 406,691 (88,233) 318,458 (1,162,086) 253,840 (908,246)
Cash flow hedge

- net fair value gain/
(loss) 362 (88) 274 7,574 (1,817) 5,757
The Bank
Debt instruments at fair
value through other
- net fair value changes
and changes in
expected credit losses 257,751 (66,391) 191,360 (1,011,036) 217,677 (793,359)
Cash flow hedge

- net fair value gain/
(loss) 362 (88) 274 7,574 (1,817) 5,757
286 • FINANCIALS

44 DIVIDENDS

2023 2022
Gross Amount Gross Amount
dividends of dividends dividends of dividends
per share net of tax per share net of tax
sen RM’000 sen RM’000
Final dividend paid

- for financial year ended 30 June 2022 37.0 757,932 - -
- for financial year ended 30 June 2021 - - 35.2 721,238
Interim dividend paid
- for financial year ended 30 June 2023 21.0 430,294 - -
- for financial year ended 30 June 2022 - - 18.0 368,704
58.0 1,188,226 53.2 1,089,942
The Directors have declared a final single tier dividend of 38.0 sen per share in respect of the financial year ended 30 June
2023. The financial statements for the current financial year do not reflect this dividend and will be accounted for in equity as
an appropriation of retained profits in the next financial year ending 30 June 2024.

45 COMMITMENTS AND CONTINGENCIES
In the normal course of business, the Group and the Bank make various commitments and incur certain contingent liabilities
with legal recourse to its customers. No material losses are anticipated as a result of these transactions. These commitments
and contingencies are also not secured over the assets of the Group.
The notional amounts of the commitments and contingencies constitute the following:
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Direct credit substitutes * 224,515 137,103 217,046 129,077

Certain transaction related contingent items 2,594,402 2,024,547 1,819,394 1,444,276
Short-term self liquidating trade related contingencies 1,063,924 853,412 849,981 803,334
Irrevocable commitments to extend credit:
- maturity more than one year 17,073,556 17,538,803 12,463,084 12,942,713
- maturity less than one year 26,457,159 23,913,907 21,025,525 19,450,920
Foreign exchange related contracts: ^
- less than one year 63,906,468 55,995,785 60,747,086 51,999,925
- over five years 737,005 396,495 737,005 396,495
Interest rate related contracts: ^
- less than one year 45,361,203 34,692,744 45,361,203 34,692,744
- over five years 4,399,525 4,395,228 4,291,746 4,208,323
Equity related contracts: ^
- less than one year 487,429 245,878 487,429 245,878
- one year to five years 668,393 102,699 668,393 102,699
- over five years - 270,542 - 270,542
Credit related contracts: ^
- less than one year 121,391 - 121,391 -
- over five years 1,225,853 938,327 1,225,853 938,327
Commodity related contracts:
- less than one year 554,082 438,428 554,082 438,428
- one year to five years - 493,416 - 493,416
Unutilised credit card lines 6,902,344 7,090,121 6,902,344 7,090,121
260,170,634 208,116,971 246,285,659 194,469,898
^ These derivatives are revalued at gross position basis and the fair value have been reflected in Note 10 to the financial
statements as derivatives assets or derivatives liabilities.
* Included in direct credit substitutes above are the financial guarantee contracts of RM163,630,721 and RM163,599,720
at Group and Bank, respectively (2022: RM79,527,616 and RM79,527,616 at Group and Bank, respectively), of which
fair value at the time of issuance is nil.
288 • FINANCIALS

46 CAPITAL COMMITMENTS
The capital commitments are in respect of:

- property and equipment
- intangible assets
Capital expenditure approved by the Directors but not provided for in the financial statements are as follows:
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Authorised and contracted for 83,867 88,953 78,697 84,718

Authorised but not contracted for 17,913 21,785 14,593 20,172
101,780 110,738 93,290 104,890
47 HOLDING AND ULTIMATE HOLDING COMPANIES
The holding and ultimate holding companies are Hong Leong Financial Group Berhad and Hong Leong Company (Malaysia)
Berhad, respectively. Both companies are incorporated in Malaysia.

48 FINANCIAL INSTRUMENTS
(a) Financial risk management objectives and policies
Overview and organisation
The Bank has implemented a risk management framework with the objective to ensure the overall financial soundness
and stability of the Bank’s business operations. The risk management framework outlines the overall governance
structure, aspiration, values and risk management strategies which aligns the Bank’s risk profile, capital strategies and
return objectives. Appropriate methodologies and measurements have been developed to manage uncertainties such that
deviations from intended strategic objectives are closely monitored and kept within tolerable levels.
From a governance perspective, the Board has the overall responsibility to define the Bank’s risk appetite and ensure
that a robust risk management and compliance culture prevails. The Board is supported by the Board Risk Management
Committee (“BRMC”) in approving the Bank’s risk management framework as well as the attendant capital management
and planning policy, risk appetite statements, risk management strategies and risk policies.
Dedicated management level committees are established to oversee the development and the effectiveness of risk
management policies, to review risk exposures and portfolio composition as well as to ensure appropriate infrastructures,
resources and systems are put in place for effective risk management activities.
BRMC is supported by the Group Risk Management (“GRM”) function. The GRM function has been established to provide
independent oversight on the adequacy, effectiveness and integrity of risk management practices at all levels within the
Bank. The core responsibilities of the GRM function is to support line management in identification and management of
key and emerging risks for the Bank, to measure these risks, to manage the risk positions and to determine the optimum
capital allocations. The Bank regularly reviews its risk management framework to reflect changes in market, products,
regulatory requirements and emerging best market practices.
Credit Risk Management
Credit risk arises as a result of customers or counterparties not being able to or willing to fulfil their financial and contractual
obligations as and when they fall due. These obligations arise from lending, trade finance and other activities undertaken
by the Bank.
The Bank has established a Board Policy on Credit Risk Governance to ensure that exposure to credit risk is kept within the
Bank’s financial capacity to withstand potential future losses. Lending activities are guided by the internal credit policies
and guidelines which are reviewed and concurred by the Management Credit Committee (“MCC”), endorsed by the Credit
Supervisory Committee (“CSC”) and the BRMC, and approved by the Board. These policies are subject to review and
enhancements, at least on an annual basis.
Credit portfolio strategies and significant exposures are reviewed by both the BRMC and the Board. These portfolio
strategies are designed to achieve a desired portfolio risk tolerance level and sector distribution.
The Bank’s credit approving process encompasses pre-approval evaluation, approval and post-approval evaluation.
While the business units are responsible for credit origination, the credit approving function rests mainly with the Credit
Evaluation Departments, the MCC and the CSC. The Board delegates the approving and discretionary authority to the MCC,
CSC and the various personnel of the Bank based on job function and designation.
290 • FINANCIALS

48 FINANCIAL INSTRUMENTS (CONTINUED)
(a) Financial risk management objectives and policies (continued)
Credit Risk Management (continued)
For any new products/product variation, credit risk assessment also forms part of the new product/product variation sign-
off process to ensure that the new product complies with the appropriate policies and guidelines, prior to the introduction
of the product.
The Bank’s exposure to credit risk is mainly from its retail, small and medium enterprise (“SME”), commercial and corporate
customers. The credit assessment for retail customers is managed on a portfolio basis and the risk scoring models and
lending templates are designed to assess the credit worthiness and the likelihood of the obligors to repay their debts.
The SME, commercial and corporate customers are individually assessed and assigned with a credit rating, which is based
on the assessment of relevant factors such as the customer’s financial position, industry outlook, types of facilities and
collaterals offered. In addition, the Bank’s credit risk assessment methods are progressively being enhanced to consider
the effects of climate-related risks, as well as, its impact on the ability and willingness of customers to honour their credit
obligations.
The Bank also conducts periodic stress testing of its credit portfolios to ascertain the credit risk impact to capital under the
relevant stress scenarios.
The Bank’s Independent Credit Review function conducts independent post approval reviews on sampling basis to ensure
that the quality of credit appraisals, approval standards and operational robustness are in accordance with the credit
standards, lending policies and the directives established and approved by the Bank’s management.
Market Risk Management
Market risk is the risk of financial loss arising from exposure to adverse changes in values of financial instruments caused
by changes in market prices or rates, which include changes to interest rates.
The Bank adopts a systematic approach in managing such risks by types of instruments and nature of exposure. Market
risk is primarily controlled via a series of cut-loss limits and potential loss limits, i.e. Value at Risk (“VaR”), set in accordance
with the size of positions and risk tolerance appetites.
Portfolios held under the Bank’s trading books are tracked using daily mark-to-market positions, which are compared
against preset limits. The daily tracking of positions is supplemented by sensitivity analysis and stress tests, using VaR and
other measurements.
Foreign exchange risks arising from adverse exchange rate movements, is managed by the setting of preset limits,
matching of open positions against these preset limits and imposition of cut-loss mechanisms.
Interest rate risk is identified, measured and controlled through various types of limits. In addition, the Bank regularly
reviews the interest rate outlook and develops strategies to protect the total net interest income from adverse changes
in market interest rates. This applies to both interest rate risk exposures in the trading book and the banking book. In
managing interest rate risk in the banking book, the Bank measures Earnings at Risk (“EAR”) and economic value or Capital
at Risk (“CAR”).
The Bank also conducts periodic stress testing of the respective portfolios and on an overall basis to ascertain market risk
under abnormal market conditions.

Liquidity Risk Management
Liquidity risk is the risk of financial loss arising from the inability to fund increases in assets and/or meet obligations as
they fall due. Financial obligations arise from the withdrawal of deposits, funding of loans committed and repayment of
borrowed funds. It is the Bank’s policy to ensure there is adequate liquidity across all business units to sustain ongoing
operations, as well as sufficient liquidity to fund asset growth and strategic opportunities.
Besides adhering to the Regulatory Liquidity Requirements, the Bank has put in place a robust and comprehensive liquidity
risk management framework consisting of risk appetite, policies, triggers and controls which are reviewed and concurred
by the Group Assets and Liabilities Committee, endorsed by the BRMC and approved by the Board. The key elements of the
framework cover proactive monitoring and management of cashflow, maintenance of high quality long-term and short-
term marketable debt securities, diversification of funding base as well as maintenance of a liquidity compliance buffer to
meet any unexpected cash outflows.
The Bank has in place a liquidity contingency funding plan and stress test programs to minimise the liquidity risk that may
arise due to unforeseen adverse changes in the marketplace. The contingency funding plan sets out the crisis escalation
process, various strategies to be employed to preserve liquidity and includes an orderly communication channel during
liquidity crisis scenarios. Liquidity stress tests are conducted regularly to ensure there are adequate liquidity contingency
funds to meet potential shortfalls in the event of a liquidity crisis. Furthermore, the Bank has established a recovery plan
framework, which identifies recovery thresholds to be monitored for liquidity, cash outflow and capital-related ratios. The
framework also includes governance process for escalation of excess in thresholds and a strategy for the Bank’s execution
of a suite of recovery options in order to restore long-term viability, in idiosyncratic and system-wide stress events.
Crisis Related Risk Management
Crisis related risk is the risk of loss arising from increased volatility and uncertainty, resulting in impact to the Bank’s
customers, financial markets and interruption on the Bank’s operations. Such loss could arise from disruptive events such
as a global pandemic, catastrophic climate change effects, geopolitical tensions and uncertainties surrounding the global
economic outlook.
The Bank has put in place a strategic plan to ensure that its operations and services are maintained fully functional in
the event of a crisis. The Bank remains cognizant of the need to continuously build and maintain resilience, through
close and active monitoring of potentially high impact events in the short term and longer term horizon. The Bank
continuously simulates and tests our preparedness to navigate through crisis conditions and has subjected its Business
Continuity Management (“BCM”) plans and processes through challenges based on various scenarios. Consequently, the
Bank continuously enhances its BCM plans and processes to strengthen its resilience to endure future crises.
Environment, Social and Governance Risk Management
Environment, Social and Governance (“ESG”) Risks are a complex collective action problem that gives rise to financial loss
arising from current or prospective impacts of ESG factors. Financial risks may arise from Physical, Transition and Liability
Risk which spreads across most key assets of the Bank.
292 • FINANCIALS

Environment, Social and Governance Risk Management (continued)
The Bank has integrated ESG and sustainability considerations within its business practices to ensure creation of long-term
socioeconomic benefits for the communities it serves. The Bank has in place a Sustainability Risk Governance Framework
which is aligned to the Bank’s overall Risk Management Framework. This provides a structured approach towards
identifying, evaluating, quantifying, monitoring, mitigating and reporting ESG risks. The Sustainability Risk Governance
Framework acts as a guide for the Bank to adopt pragmatic measures to ensure sustainable value to its stakeholders whilst
generating a positive impact to the communities and the environment that the Bank operates in.
The Bank’s ESG Policy and Assessment Framework incorporates ESG considerations in the Bank’s credit evaluation of its
corporate customers as the transition to a low carbon and climate-resilient economy. This framework includes an internal
ESG risk rating system and additional guidelines to deal with high-risk sectors such as forestry, metals and mining/
quarrying, non-renewable energy and palm oil.
Although ESG presents risks, the Bank has introduced initiatives that mitigate and adapt to these risks which allows it to
capitalise on potential opportunities to enhance resource efficiencies, adopt low-emission energy sources, develop new
green products and services, access new markets and further strengthen its resiliency against risks in general.
Recognising the urgency for financial institutions to accelerate efforts to manage climate-related risks, the Bank has
established ESG related strategies, practices, processes and procedures to ensure it is able to continue to deliver long-term
value to its stakeholders in tandem with ESG related developments and aspirations.

(b) Market risk
Market risk sensitivity assessment is based on the changes in key variables, such as interest rates and foreign currency
rates, while all other variables remain unchanged. The sensitivity factors used are assumptions based on parallel shifts in
the key variables to project the impact on the assets and liabilities position of the Group and the Bank.
The scenarios used are simplified whereby it is assumed that all key variables for all maturities move at the same time
and by the same magnitude and do not incorporate actions that would be otherwise taken by the business units and risk
management to mitigate the effect of this movement in key variables. In reality, the Group and the Bank proactively seek
to ensure that the interest rate risk profile is managed to minimise losses and optimise net revenues.
(i) Interest/Profit rate risk sensitivity analysis
The interest/profit rate sensitivity results below shows the impact on profit after tax and equity of financial assets
and financial liabilities bearing floating interest/profit rates and fixed rate financial assets and financial liabilities
carried at fair value.
The Group The Bank

Impact Impact
on profit Impact on profit Impact
after tax on equity after tax on equity
RM’000 RM’000 RM’000 RM’000
2023
Increase/(Decrease)
+100 basis points (‘bps’) 105,584 (592,562) 102,594 (509,424)
-100 bps (105,584) 592,562 (102,594) 509,424
2022
Increase/(Decrease)
+100 basis points (‘bps’) 117,071 (489,276) 121,733 (395,710)
-100 bps (117,071) 489,276 (121,733) 395,710

294 • FINANCIALS

(b) Market risk (continued)
(ii) Foreign currency risk sensitivity analysis
The Group and the Bank take on exposure to the effects of fluctuations in the prevailing foreign currency exchange
rates on their financial position and cash flows.
The table below sets out the principal structure of foreign exchange exposures of the Group and the Bank:
2023 2022
Asset/(Liability)
United States Dollar (“USD”) (496,728) (229,978)
Euro (“EUR”) 42,693 7,247
Great Britain Pound (“GBP”) 30,143 3,388
Singapore Dollar (“SGD”) (119,925) (190,659)
Australian Dollar (“AUD”) (16,118) 21,696
Chinese Yuan Renminbi (“CNY”) (16,116) (227,065)
Hong Kong Dollar (“HKD”) (220,890) (160,379)
Others 275,243 295,445
(521,698) (480,305)
2023 2022
Asset/(Liability)
Euro (“EUR”) 47,735 2,856
Great Britain Pound (“GBP”) 7,070 (3,697)
Australian Dollar (“AUD”) (26,273) 19,080
Chinese Yuan Renminbi (“CNY”) (15,192) (243,205)
Others 143,121 241,985
(602,894) (525,245)

(ii) Foreign currency risk sensitivity analysis (continued)
An analysis of the exposures to assess the impact of a one per cent change in the foreign currency exchange rates
to the profit after tax are as follows:
2023 2022
Increase/(Decrease)
-1%
United States Dollar (“USD”) 3,775 1,748
Euro (“EUR”) (324) (55)
Great Britain Pound (“GBP”) (229) (26)
Singapore Dollar (“SGD”) 911 1,449
Australian Dollar (“AUD”) 122 (165)
Chinese Yuan Renminbi (“CNY”) 122 1,726
Hong Kong Dollar (“HKD”) 1,679 1,219
Others (2,092) (2,245)
3,964 3,651
+1%
Euro (“EUR”) 324 55
Great Britain Pound (“GBP”) 229 26
Singapore Dollar (“SGD”) (911) (1,449)
Australian Dollar (“AUD”) (122) 165
Chinese Yuan Renminbi (“CNY”) (122) (1,726)
Others 2,092 2,245
(3,964) (3,651)
296 • FINANCIALS

(ii) Foreign currency risk sensitivity analysis (continued)
An analysis of the exposures to assess the impact of a one per cent change in the foreign currency exchange rates
to the profit after tax are as follows: (continued)
2023 2022
Increase/(Decrease)
-1%
United States Dollar (“USD”) 2,964 1,387
Euro (“EUR”) (363) (22)
Great Britain Pound (“GBP”) (54) 28
Singapore Dollar (“SGD”) 1,069 1,459
Australian Dollar (“AUD”) 200 (145)
Chinese Yuan Renminbi (“CNY”) 115 1,848
Hong Kong Dollar (“HKD”) 1,739 1,275
Others (1,088) (1,839)
4,582 3,991
+1%
Euro (“EUR”) 363 22
Great Britain Pound (“GBP”) 54 (28)
Australian Dollar (“AUD”) (200) 145
Chinese Yuan Renminbi (“CNY”) (115) (1,848)
Others 1,088 1,839
(4,582) (3,991)
7
297

Interest/Profit rate risk
The tables below summarise the Group’s and the Bank’s exposure to interest/profit rate risks. Included in the tables are the Group’s and the Bank’s financial assets and financial liabilities at their carrying amounts, categorised
by the earlier of contractual repricing or maturity dates. The net interest sensitivity gap for items not recognised in the statements of financial position represents the net notional amounts of all interest/profit rate sensitive
derivative financial instruments. As interest rates and yield curves change over time, the Group and the Bank may be exposed to loss in earnings due to the effects of interest rates on the structure of the statement of financial
position. Sensitivity to interest/profit rates arises from mismatches in the repricing dates, cash flows and other characteristics of the financial assets and their corresponding financial liabilities funding.
The Group
2023
Non-trading book
Up to 1 to 3 3 to 12 1 to 5 Over 5 Non-interest/ Trading
1 month months months years years profit rate sensitive book Total
Financial assets
Cash and short-term funds 6,380,482 - - - - 1,826,321 - 8,206,803
Deposits and placements with banks and other financial
institutions - 280,607 146,781 - - 9,489 - 436,877
Financial assets at fair value through profit or loss - - - - - 1,672,161 3,982,776 5,654,937
Financial investments at fair value through other
comprehensive income 1,762,429 2,461,825 1,956,743 26,621,416 730,756 353,501 - 33,886,670
Financial investments at amortised cost 719,795 - 938,218 28,200,667 1,036,012 299,373 - 31,194,065
Loans, advances and financing
- performing 147,202,285 3,079,387 1,510,768 7,828,961 19,650,706 - - 179,272,107
- impaired ^ 60,276 9,123 6,134 89,603 465,604 - - 630,740
Other assets 100,381 - - - - 2,233,739 - 2,334,120
Derivative financial instruments
- trading derivatives - - - - - - 2,157,911 2,157,911
- hedging derivatives - - - 6,647 3,866 - - 10,513
Statutory deposits with Central Banks - - - - - 3,396,920 - 3,396,920
ANNUAL REPORT 2023
Total financial assets 156,225,648 5,830,942 4,558,644 62,747,294 21,886,944 9,791,504 6,140,687 267,181,663
^ This represents outstanding impaired loans after deducting expected credit losses.
298 • FINANCIALS

Interest/Profit rate risk (continued)
The Group
2023
Non-trading book
Financial liabilities
Deposits from customers 78,758,174 41,884,491 43,922,638 5,364,619 841,095 40,880,802 - 211,651,819
Investment accounts of customers 448,208 859,166 930,546 - - 12,593 - 2,250,513
Deposits and placements of banks and other financial institutions 2,800,306 4,945,210 310,766 1,478,344 22,139 37,061 - 9,593,826
Obligations on securities sold under repurchase agreements 2,678,098 4,718,922 - - - 2,563 - 7,399,583
Bills and acceptances payable 4,314 29,963 30,168 - - 146,986 - 211,431
Lease liabilities 3,512 6,785 29,476 107,561 31,594 - - 178,928
Other liabilities 1,894 434 1,019 183 - 5,635,151 - 5,638,681
- hedging derivatives - - - 35 - - - 35
Recourse obligation on loans sold to Cagamas - - - 2,950,040 - 22,180 - 2,972,220
Tier 2 subordinated bonds - - 1,000,000 499,089 - 2,661 - 1,501,750
Multi-currency Additional Tier 1 Capital Securities - - 399,345 1,304,261 - 15,903 - 1,719,509
Total financial liabilities 84,694,506 52,444,971 46,623,958 11,704,132 894,828 46,755,900 2,387,851 245,506,146
Net interest sensitivity gap 71,531,142 (46,614,029) (42,065,314) 51,043,162 20,992,116
Financial guarantees - - - - - 1,044,877

Credit related commitments and contingencies - - - - - 50,433,059
Treasury related commitments and contingencies (hedging) - - - 469,048 72,619 -
Net interest sensitivity gap - - - 469,048 72,619 51,477,936
9
299

The Group
2022
Non-trading book
Financial assets
institutions - 495,601 340,408 - - 6,497 - 842,506
comprehensive income 911,016 973,918 853,407 18,497,573 4,661,194 299,195 - 26,196,303
Financial investments at amortised cost 4,170,728 199,952 1,068,147 21,505,181 5,067,716 346,690 - 32,358,414
- performing 140,227,950 732,314 1,447,743 8,941,011 14,654,500 - - 166,003,518
- impaired ^ 69,568 5,164 6,489 52,546 350,336 - - 484,103
Other assets 126,024 - - - - 2,067,938 - 2,193,962
- hedging derivatives - - - 707 9,680 - - 10,387
Statutory deposits with Central Banks - - - - 248,512 272,138 - 520,650
300 • FINANCIALS

The Group
2022
Non-trading book
Deposits from customers 78,610,597 35,811,228 37,912,562 4,727,875 1,704,736 38,525,461 - 197,292,459
Investment accounts of customers 975,147 1,457,150 226,672 - - 9,439 - 2,668,408
Deposits and placements of banks and other financial institutions 3,069,668 1,106,265 534,761 1,557,628 21,973 31,955 - 6,322,250
Obligations on securities sold under repurchase agreements 1,117,131 2,662,226 - - 187,726 4,221 - 3,971,304
Other liabilities 1,894 434 1,019 183 - 5,442,086 - 5,445,616
- hedging derivatives - 361 - 113 - - - 474
Recourse obligation on loans sold to Cagamas - 362,918 600,039 650,012 - 10,968 - 1,623,937
Tier 2 subordinated bonds - - 499,970 1,000,000 - 2,236 - 1,502,206
Multi-currency Additional Tier 1 Capital Securities - - 399,916 1,298,923 3,282 13,574 - 1,715,695
Total financial liabilities 83,780,927 41,423,005 40,216,710 9,364,190 1,958,452 44,251,407 1,736,364 222,731,055
Financial guarantees - - - - - 744,430

Treasury related commitments and contingencies (hedging) - - 100,000 476,190 86,905 -
Net interest sensitivity gap - - 100,000 476,190 86,905 49,287,261
1301

The Bank
2023
Non-trading book
Financial assets
institutions - 753,000 146,781 434,283 - 9,489 - 1,343,553
comprehensive income 1,732,427 2,461,825 1,881,168 22,992,676 730,756 310,348 - 30,109,200
Financial investments at amortised cost 629,789 - 683,474 19,634,856 1,036,012 217,433 - 22,201,564
- performing 113,325,166 2,603,472 729,056 5,802,037 12,216,725 - - 134,676,456
- impaired ^ 45,742 1,518 1,976 43,640 323,429 - - 416,305
Other assets 100,381 - - - - 2,184,233 - 2,284,614
- hedging derivatives - - - 6,482 1,921 - - 8,403
Amount due from subsidiaries - - - - - 143,862 - 143,862
Statutory deposits with Central Banks - - - - - 2,509,021 - 2,509,021
302 • FINANCIALS

The Bank
2023
Non-trading book
Deposits from customers 60,636,743 29,129,468 33,850,302 4,319,864 790,374 34,006,197 - 162,732,948
institutions 2,501,869 4,050,410 194,672 1,476,742 - 45,798 - 8,269,491
Obligations on securities sold under repurchase agreements 2,678,098 4,718,922 - - - 2,563 - 7,399,583
Other liabilities 1,820 377 871 157 - 5,315,629 - 5,318,854
- hedging derivatives - - - 35 - - - 35
Recourse obligation on loans sold to Cagamas - - - 1,500,019 - 14,627 - 1,514,646
Tier 2 subordinated bonds - - 1,000,000 499,089 - 2,661 - 1,501,750
Multi-currency Additional Tier 1 Capital Securities - - 399,345 1,304,261 - 15,903 - 1,719,509
Total financial liabilities 65,827,766 37,933,969 35,519,550 9,269,190 824,410 39,506,846 2,301,901 191,183,632

Treasury related commitments and contingencies (hedging) - - - 469,048 72,619 -
Net interest sensitivity gap - - - 469,048 72,619 41,218,550
3
303

The Bank
2022
Non-trading book
Financial assets
institutions - 1,847,853 340,408 - 419,577 6,497 - 2,614,335
comprehensive income 911,016 973,918 807,974 16,234,606 3,233,190 255,817 - 22,416,521
Financial investments at amortised cost 3,030,751 199,952 714,320 15,335,841 3,612,778 250,903 - 23,144,545
- performing 109,432,328 289,294 705,648 6,806,828 9,122,949 - - 126,357,047
- impaired ^ 61,050 1,024 4,595 44,428 277,392 - - 388,489
Other assets 126,024 - - - - 1,574,322 - 1,700,346
- hedging derivatives - - - 502 6,718 - - 7,220
Amount due from subsidiaries - - - - - 91,110 - 91,110
Statutory deposits with Central Banks - - - - - 272,138 - 272,138
304 • FINANCIALS

The Bank
2022
Non-trading book
institutions 1,973,371 1,199,366 411,332 1,557,628 - 33,723 - 5,175,420
Obligations on securities sold under repurchase agreements 1,117,131 2,662,226 - - 187,726 4,221 - 3,971,304
Other liabilities 1,820 377 871 157 - 5,147,698 - 5,150,923
- hedging derivatives - 361 - 113 - - - 474
Recourse obligation on loans sold to Cagamas - - 300,028 200,010 - 2,760 - 502,798
Tier 2 subordinated bonds - - 499,970 1,000,000 - 2,236 - 1,502,206
Multi-currency Additional Tier 1 Capital Securities - - 399,916 1,298,923 3,282 13,574 - 1,715,695
Total financial liabilities 65,724,315 28,955,277 30,861,000 8,055,163 1,858,296 38,050,857 1,711,271 175,216,179

Treasury related commitments and contingencies (hedging) - - 100,000 476,190 86,905 -
Net interest sensitivity gap - - 100,000 476,190 86,905 40,174,553
503

(c) Liquidity risk
Liquidity risk is defined as the current and prospective risk arising from the inability of the Group and the Bank to meet its contractual or regulatory obligations when they become due without incurring substantial losses.
The liquidity risk is identified based on concentration, volatility of source of fund and funding maturity structure and it is measured primarily using BNM’s New Liquidity Framework and depositor’s concentration ratios.
The Group and the Bank seek to project, monitor and manage its liquidity needs under normal as well as adverse circumstances.
The table below analyses the carrying amount of assets and liabilities (including non-financial instruments) as at 30 June 2023 based on the remaining contractual maturity:
The Group
2023
Up to 1 week to 1 to 3 3 to 6 6 to 12 Over 1 No specific
1 week 1 month months months months year maturity Total
Assets
Cash and short-term funds 7,005,872 1,200,931 - - - - - 8,206,803
financial institutions - - 289,248 147,629 - - - 436,877
Financial assets at fair value through profit or loss 103,473 1,372,049 - 272,331 342,852 3,200,809 363,423 5,654,937
Financial investments at fair value through
other comprehensive income 291,161 1,424,461 1,664,600 244,175 1,715,650 28,448,973 97,650 33,886,670
Financial investments at amortised cost 787,556 387 22,048 98,358 876,173 29,409,543 - 31,194,065
Loans, advances and financing 14,373,246 7,321,276 7,192,416 2,685,273 979,177 147,351,459 - 179,902,847
Other assets 1,213,753 15,030 29,260 38,878 12,570 2,047 1,142,877 2,454,415
Derivative financial instruments 67,367 173,596 576,425 181,326 141,775 1,027,935 - 2,168,424
Statutory deposits with Central Banks - - - - - - 3,396,920 3,396,920
Investment in associated companies - - - - - - 8,712,976 8,712,976
Property and equipment - - - - - - 1,055,391 1,055,391
Intangible assets - - - - - - 362,435 362,435
Right-of-use assets - - - - - - 175,946 175,946
Goodwill - - - - - - 1,831,312 1,831,312
Deferred tax assets - - - - - - 410,436 410,436
Total assets 23,842,428 11,507,730 9,773,997 3,667,970 4,068,197 209,440,766 17,549,366 279,850,454
306 • FINANCIALS

(c) Liquidity risk (continued)
The table below analyses the carrying amount of assets and liabilities (including non-financial instruments) as at 30 June 2023 based on the remaining contractual maturity: (continued)
The Group
2023
Liabilities
Investment accounts of customers 124,237 328,935 864,075 908,983 24,283 - - 2,250,513
Deposits and placements of banks and other
financial institutions 1,776,790 1,058,774 4,945,901 142,636 169,243 1,500,482 - 9,593,826
Obligations on securities sold under repurchase
agreements 1,175,840 1,505,098 4,718,645 - - - - 7,399,583
Bills and acceptances payable 314 4,000 29,963 30,168 - - 146,986 211,431
Lease liabilities - 3,512 6,785 9,972 19,504 139,155 - 178,928
Other liabilities 5,667,523 157,488 16,701 632 14,602 50 89,054 5,946,050
Recourse obligation on loans sold to Cagamas - - 15,203 6,977 - 2,950,040 - 2,972,220
Tier 2 subordinated bonds - - - 2,661 1,000,000 499,089 - 1,501,750
Multi-currency Additional Tier 1 Capital Securities - - 4,862 11,040 399,345 1,304,262 - 1,719,509
Taxation - - - - - - 50,287 50,287
Total liabilities 94,472,370 35,199,337 53,279,101 25,688,833 21,712,236 15,225,598 286,327 245,863,802
Total equity - - - - - - 33,986,652 33,986,652

Total liabilities and equity 94,472,370 35,199,337 53,279,101 25,688,833 21,712,236 15,225,598 34,272,979 279,850,454
Net liquidity gap (70,629,942) (23,691,607) (43,505,104) (22,020,863) (17,644,039) 194,215,168 17,263,039 33,986,652
7
307

The Group
2022
Assets
financial institutions - - 500,105 342,401 - - - 842,506
Financial assets at fair value through profit or
loss 316,574 1,110,143 583,736 186,583 122,908 3,481,985 1,442,553 7,244,482
other comprehensive income 399,843 512,543 961,513 119,090 579,180 23,540,748 83,386 26,196,303
Financial investments at amortised cost 96,866 4,149,024 220,780 255,838 877,455 26,758,451 - 32,358,414
Other assets 1,304,443 13,623 17,631 23,109 8,096 3,641 910,199 2,280,742
Derivative financial instruments 45,657 162,463 431,253 135,954 121,036 966,937 - 1,863,300
Statutory deposits with Central Banks - - - - - - 520,650 520,650
Property and equipment - - - - - - 1,110,606 1,110,606
Goodwill - - - - - - 1,831,312 1,831,312
Total assets 19,143,724 16,611,499 7,898,399 3,870,990 2,426,012 190,981,335 13,399,418 254,331,377
308 • FINANCIALS

The Group
2022
Liabilities
Investment accounts of customers 232,455 744,106 1,463,800 105,564 122,483 - - 2,668,408
financial institutions 1,745,155 1,354,153 1,107,373 419,733 116,236 1,579,600 - 6,322,250
agreements 96,323 1,022,185 2,664,629 - - 188,167 - 3,971,304
Bills and acceptances payable 143 2,901 15,461 11,382 8 - 211,466 241,361
Other liabilities 5,454,610 165,732 27,917 705 12,995 - 88,391 5,750,350
Recourse obligation on loans sold to Cagamas - - 372,882 601,042 - 650,013 - 1,623,937
Tier 2 subordinated bonds - - - 2,236 499,970 1,000,000 - 1,502,206
Multi-currency Additional Tier 1 Capital Securities - - 4,862 408,628 - 1,302,205 - 1,715,695
Taxation - - - - - - 306,612 306,612
Total equity - - - - - - 30,988,976 30,988,976

903

The Bank
2023
Assets
Cash and short-term funds 6,092,697 269,531 - - - - - 6,362,228
financial institutions - - 761,641 147,629 - 434,283 - 1,343,553
Financial assets at fair value through profit or loss 103,473 1,071,721 - 271,884 48,595 3,035,693 385,586 4,916,952
other comprehensive income 260,523 1,424,461 1,664,600 244,175 1,639,556 24,778,235 97,650 30,109,200
Financial investments at amortised cost 695,640 387 22,048 78,270 640,326 20,764,893 - 22,201,564
Other assets 1,351,391 14,302 27,828 36,731 12,496 2,047 953,708 2,398,503
Amount due from subsidiaries - - - - - - 143,862 143,862
Statutory deposits with Central Banks - - - - - - 2,509,021 2,509,021
Subsidiary companies - - - - - - 2,655,317 2,655,317
Property and equipment - - - - - - 488,040 488,040
Goodwill - - - - - - 1,771,547 1,771,547
ANNUAL REPORT 2023

Total assets 19,721,595 8,987,165 9,617,169 2,942,318 2,947,220 158,844,019 11,997,939 215,057,425
310 • FINANCIALS

The Bank
2023
Liabilities
financial institutions 1,573,319 964,196 4,057,912 80,495 116,826 1,476,743 - 8,269,491
agreements 1,175,840 1,505,098 4,718,645 - - - - 7,399,583
Bills and acceptances payable 274 3,396 23,655 24,410 - - 103,467 155,202
Other liabilities 4,874,548 157,391 16,561 582 4,640 432,643 80,385 5,566,750
Recourse obligation on loans sold to Cagamas - - 12,359 2,268 - 1,500,019 - 1,514,646
Tier 2 subordinated bonds - - - 2,661 1,000,000 499,089 - 1,501,750
Multi-currency Additional Tier 1 Capital
Securities - - 4,862 11,040 399,345 1,304,262 - 1,719,509
Taxation - - - - - - 39,545 39,545
Total equity - - - - - - 23,586,352 23,586,352

1311

The Bank
2022
Assets
financial institutions - - 1,852,356 342,402 - 419,577 - 2,614,335
Financial assets at fair value through profit or loss 316,574 1,002,347 493,952 94,233 5,109 3,481,985 1,546,562 6,940,762
other comprehensive income 399,843 512,543 961,513 103,920 548,714 19,806,602 83,386 22,416,521
Financial investments at amortised cost 96,866 2,988,803 220,780 238,232 538,425 19,061,439 - 23,144,545
Other assets 916,773 13,120 16,625 21,600 8,020 4,770 800,647 1,781,555
Derivative financial instruments 39,421 155,368 364,219 133,978 120,584 962,801 - 1,776,371
Amount due from subsidiaries - - - - - - 91,110 91,110
Statutory deposits with Central Banks - - - - - - 272,138 272,138
Subsidiary companies - - - - - - 2,625,696 2,625,696
Investment in associated companies - - - - - - 971,182 971,182
Property and equipment - - - - - - 527,989 527,989
Goodwill - - - - - - 1,771,547 1,771,547
Total assets 16,566,972 13,052,892 8,459,143 3,151,904 1,575,306 145,638,601 9,685,014 198,129,832
312 • FINANCIALS

The Bank
2022
Liabilities
financial institutions 1,269,051 735,288 1,200,913 296,304 116,236 1,557,628 - 5,175,420
agreements 96,323 1,022,185 2,664,629 - - 188,167 - 3,971,304
Bills and acceptances payable 123 2,199 13,312 9,738 8 - 128,039 153,419
Other liabilities 4,686,301 165,717 27,870 675 2,313 432,107 77,876 5,392,859
Recourse obligation on loans sold to Cagamas - - 2,216 300,572 - 200,010 - 502,798
Tier 2 subordinated bonds - - - 2,236 499,970 1,000,000 - 1,502,206
Multi-currency Additional Tier 1 Capital Securities - - 4,862 408,628 - 1,302,205 - 1,715,695
Taxation - - - - - - 272,986 272,986
Total equity - - - - - - 22,398,731 22,398,731


The following table shows the contractual undiscounted cash flows payable for financial liabilities by remaining contractual
maturities. The balances in the table below will not agree to the balances reported in the statements of financial position
as the table incorporates all contractual cash flows, on an undiscounted basis, relating to both principal and interest
payments. The contractual maturity profile does not necessarily reflect the behavioural cash flows.
The Group
2023
Up to 1 to 3 3 to 12 1 to 5 Over 5
1 month months months years years Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Deposits from customers 62,683,402 47,910,711 55,088,291 48,259,124 1,684,848 215,626,376
Investment accounts of
customers 444,931 919,787 968,025 - - 2,332,743
Deposits and placements of
banks and other financial
institutions 3,992,684 3,920,181 353,504 1,099,967 397,054 9,763,390
Obligations on securities
sold under repurchase
agreements 2,682,317 4,719,522 - - - 7,401,839
Bills and acceptances payable 146,986 5,700 12,087 - - 164,773
Lease liabilities 4,224 8,211 35,344 123,680 34,044 205,503
Other liabilities 5,637,045 434 1,019 183 - 5,638,681
- Gross settled derivatives
- Inflow (11,614,176) (13,484,469) (4,650,782) (3,972,926) (118,311) (33,840,664)
- Outflow 12,029,722 14,140,906 4,919,664 4,284,947 131,787 35,507,026
- Net settled derivatives 41,385 70,617 347,681 629,419 109,254 1,198,356
Recourse obligation on loans
sold to Cagamas - 27,256 90,684 3,101,511 - 3,219,451
Tier 2 subordinated bonds - - 1,063,473 584,058 - 1,647,531
Multi-currency Additional Tier
1 Capital Securities - 9,518 468,425 1,485,976 - 1,963,919
Total financial liabilities 76,048,520 58,248,374 58,697,415 55,595,939 2,238,676 250,828,924
314 • FINANCIALS

payments. The contractual maturity profile does not necessarily reflect the behavioural cash flows. (continued)
The Group
2022
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Investment accounts of
customers 518,105 1,125,721 1,076,127 - - 2,719,953
institutions 3,230,023 1,058,963 592,906 1,062,663 516,938 6,461,493
agreements 1,119,639 2,670,623 - - - 3,790,262
Bills and acceptances payable 211,666 - - - - 211,666
Other liabilities 5,443,980 434 1,019 183 - 5,445,616
- Inflow (8,421,523) (4,750,485) (4,486,715) (2,728,214) (113,232) (20,500,169)
- Outflow 8,535,963 4,872,766 4,614,467 2,877,443 118,371 21,019,010
- Net settled derivatives (488) 51,544 283,664 876,692 93,925 1,305,337
sold to Cagamas 10,498 376,820 626,213 691,934 - 1,705,465
Tier 2 subordinated bonds - - 541,420 1,016,966 - 1,558,386

The Bank
2023
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
institutions 3,222,967 3,530,323 203,389 1,099,967 374,915 8,431,561
agreements 2,682,317 4,719,522 - - - 7,401,839
Bills and acceptances payable 103,467 3,294 8,942 - - 115,703
Other liabilities 5,317,449 377 871 157 - 5,318,854
- Inflow (10,944,539) (12,682,513) (3,509,248) (3,972,926) (118,311) (31,227,537)
- Outflow 11,307,885 13,304,214 3,756,109 4,284,947 131,787 32,784,942
- Net settled derivatives 41,169 70,081 342,634 594,601 108,331 1,156,816
sold to Cagamas - 22,631 35,922 1,571,642 - 1,630,195
Tier 2 subordinated bonds - - 1,063,473 584,058 - 1,647,531
316 • FINANCIALS

The Bank
2022
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
institutions 2,134,065 1,204,299 415,435 1,062,663 494,965 5,311,427
agreements 1,119,639 2,670,623 - - - 3,790,262
Bills and acceptances payable 128,039 - - - - 128,039
Other liabilities 5,149,518 377 871 157 - 5,150,923
- Inflow (7,746,259) (4,530,206) (4,420,749) (2,728,214) (113,232) (19,538,660)
- Outflow 7,853,191 4,649,024 4,547,576 2,877,443 118,371 20,045,605
- Net settled derivatives (488) 51,895 280,834 860,106 92,590 1,284,937
sold to Cagamas - 2,763 308,099 208,358 - 519,220
Tier 2 subordinated bonds - - 541,420 1,016,966 - 1,558,386

The following table presents the contractual expiry by maturity of the Group’s and Bank’s commitments and contingencies:
Less than Over

1 year 1 year Total
RM’000 RM’000 RM’000
The Group
2023
Direct credit substitutes 152,828 71,687 224,515
Short-term self liquidating trade related contingencies 820,362 - 820,362
Irrevocable commitments to extend credit 26,457,159 17,073,556 43,530,715
Unutilised credit card lines 6,902,344 - 6,902,344
Total commitments and contingencies 34,332,693 17,145,243 51,477,936
2022
Direct credit substitutes 136,903 200 137,103
The Bank
2023
Direct credit substitutes 146,896 70,150 217,046
2022
Direct credit substitutes 128,877 200 129,077
Undrawn loan commitments are recognised at activation stage and include commitments which are unconditionally
cancellable by the Group and the Bank. The Group and the Bank expect that not all of the contingent liabilities and
undrawn loan commitments will be drawn before expiry.
318 • FINANCIALS

(d) Credit risk
(i) Maximum exposure to credit risk
The maximum exposure to credit risk for financial assets recognised in the statements of financial position is their
carrying amounts. For contingent liabilities, the maximum exposure to credit risk is the maximum amount that
the Group and the Bank would have to pay if the obligations of the instruments issued are called upon. For credit
commitments, the maximum exposure to credit risk is the full amount of the undrawn credit facilities granted to
customers. The table below shows the maximum exposure to credit risk for the Group and the Bank on financial
instruments subject to impairment:
The Group
2023 2022
RM’000 RM’000
Credit risk exposure relating to on-balance sheet assets:

Short-term funds and placements with banks and other financial institutions
(exclude cash in hand) 7,125,036 5,561,508
Financial assets and investments portfolios (exclude shares):
- Financial investments at FVOCI 33,789,020 26,112,917
- Financial investments at amortised cost 31,194,065 32,358,414
Loans, advances and financing 179,902,847 166,487,621
Other assets 2,233,739 2,067,938
Credit risk exposure relating to off-balance sheet items:

Credit related commitments and contingencies 51,477,936 49,287,261
Total maximum credit risk exposure that are subject to impairment 305,722,643 281,875,659

(d) Credit risk (continued)
(i) Maximum exposure to credit risk (continued)
The Bank
2023 2022
RM’000 RM’000
Credit risk exposure relating to on-balance sheet assets:

Short-term funds and placements with banks and other financial institutions
(exclude cash in hand) 6,485,385 6,935,424
Financial assets and investments portfolios (exclude shares):
- Financial investments at FVOCI 30,011,550 22,333,135
- Financial investments at amortised cost 22,201,564 23,144,545
Loans, advances and financing 135,092,761 126,745,536
Other assets 2,184,233 1,574,322
Amount due from subsidiaries 143,862 91,110
Credit risk exposure relating to off-balance sheet items:

Credit related commitments and contingencies 41,218,550 40,174,553
Total maximum credit risk exposure that are subject to impairment 237,337,905 220,998,625
The table below shows the credit exposure of the Group and the Bank on financial instruments that are not subject
to impairment:
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Financial assets at FVTPL (exclude shares and

wholesale funds) 3,910,787 2,942,548 3,150,639 2,534,818
Derivative assets 2,168,424 1,863,300 2,071,669 1,776,371
6,079,211 4,805,848 5,222,308 4,311,189
320 • FINANCIALS

(ii) Collaterals
The main types of collateral obtained by the Group and the Bank are as follows:
(a) Fixed deposits, Mudharabah General Investment Account, negotiable instrument of deposits, foreign currency
deposits and cash deposits/margins
(b) Land and buildings
(c) Aircrafts, vessels and automobiles
(d) Quoted shares, unit trust, Malaysian Governments Bonds and securities and private debt securities
(e) Endowment life policies with cash surrender value
(f) Other tangible business assets, such as inventory and equipment
The Group and the Bank also accept non-tangible securities such as support, guarantees from individuals, corporates
and institutions, bank guarantees, debentures, assignment of contract payments, which are subject to internal
guidelines on eligibility.
The outstanding balance for credit impaired loans, advances and financing under individual assessment for which no
allowances is recognised because of collateral as at 30 June 2023 amounted to RM90,179,000 (2022: RM94,440,000)
and RM77,165,000 (2022: RM90,227,000) respectively for the Group and the Bank.
The financial effect of collateral (quantification to the extent to which collateral and other credit enhancements mitigate
credit risk) held for loans, advances and financing for the Group and the Bank is 87.35% (2022: 87.35%) and 85.32%
(2022: 86.04%) respectively. The financial effects of collateral held for the remaining financial assets are insignificant.
The financial effect of collateral (quantification to the extent to which collateral and other credit enhancements
mitigate credit risk) held for net loans, advances and financing that are credit impaired as at 30 June 2023 for the
Group and the Bank is 72.15% (2022: 76.19%) and 74.05% (2022: 75.77%) respectively.
(iii) Credit exposure by stage
Financial assets of the Group and the Bank are classified into three stages as below:
Stages Description
Stage 1: 12 months ECL Stage 1 includes financial assets which have not had a significant increase in credit
- not credit impaired risk since initial recognition or which have low credit risk at reporting date. 12-months
ECL is recognised and interest income is calculated on the gross carrying amount of
the financial assets.
Stage 2: Lifetime ECL Stage 2 includes financial assets which have had a significant increase in credit risk
- not credit impaired since initial recognition (unless they have low credit risk at the reporting date) but do
not have objective evidence of impairment. Lifetime ECL is recognised and interest
income is calculated on the gross carrying amount of the financial assets.
Stage 3: Lifetime ECL Stage 3 includes financial assets that have objective evidence of impairment at the
- credit impaired reporting date. Lifetime ECL is recognised and interest income is calculated on the net
carrying amount of the financial assets.
For further details on the stages, refer to accounting policy Note 2N.

(iv) Credit quality
The Group and the Bank assess credit quality of loans, advances and financing using internal rating techniques
tailored to the various categories of products and counterparties. These techniques have been developed internally
and combine statistical analysis with credit officers judgement.
Credit quality description is summarised as follows:
Credit Quality Description

Good Obligors in this category exhibit strong capacity to meet financial commitments.
Adequate Obligors in this category have a fairly acceptable capacity to meet financial
commitments.
Marginal Obligors in this category have uncertain capacity to meet financial commitments and
are under closer monitoring.
No rating Obligors which are currently not assigned with credit ratings as it do not satisfy the
criteria to be rated based on internal credit rating system.
Credit impaired Obligors assessed to be impaired.
The credit quality of financial instruments other than loans, advances and financing are determined based on the
ratings of counterparties as defined equivalent ratings of other internationals rating agencies as defined below:
Credit Quality Description

Sovereign Refer to financial asset issued by federal government or guarantee by federal
government.
Investment grade Refers to the credit quality of the financial asset that the issuer is able to meet
payment obligation and exposure bondholder to low credit risk of default.
Non-investment grade Refers to low credit quality of the financial asset that is highly exposed to default risk.
Un-graded Refers to financial asset which are currently not assigned with ratings due to
unavailability of ratings models.
Credit impaired Refers to the asset that is being impaired.

322 • FINANCIALS

(iv) Credit quality (continued)
The following table shows an analysis of the credit exposure by stages, together with the ECL allowance provision:

2023
Short-term funds and placements with banks and
other financial institutions (exclude cash in hand)
Sovereign 4,396,204 - - 4,396,204
Investment grade 2,685,940 - - 2,685,940
Non-investment grade 43,115 - - 43,115
Gross carrying amount 7,125,259 - - 7,125,259
Expected credit losses (223) - - (223)
Net carrying amount 7,125,036 - - 7,125,036
Financial investments at FVOCI

Sovereign 22,063,364 - - 22,063,364
Expected credit losses (2,014) - - (2,014)
Financial investments at amortised cost

Sovereign 29,452,972 - - 29,452,972

Good 150,504,650 112,027 - 150,616,677
Adequate 23,418,533 1,285,854 - 24,704,387
Marginal - 5,310,466 - 5,310,466
No rating 3,297 - - 3,297
Credit impaired - - 1,041,884 1,041,884
Gross carrying amount 173,926,480 6,708,347 1,041,884 181,676,711
Expected credit losses (966,265) (381,755) (411,144) (1,759,164)
Others * (14,700) - - (14,700)
Net carrying amount 172,945,515 6,326,592 630,740 179,902,847
* Included fair value changes arising from fair value hedges and unamortised fair value changes arising from
terminated fair value hedges.

The following table shows an analysis of the credit exposure by stages, together with the ECL allowance provision: (continued)

2022
Sovereign 1,852,125 - - 1,852,125

Sovereign 18,181,504 - - 18,181,504

Sovereign 31,817,634 - - 31,817,634
Investment grade 540,848 - - 540,848

Good 130,843,774 188,273 - 131,032,047
Adequate 20,086,074 1,767,203 - 21,853,277
Marginal - 14,525,676 - 14,525,676
No rating 514 2,761 - 3,275
Credit impaired - - 819,750 819,750
Gross carrying amount 150,930,362 16,483,913 819,750 168,234,025
Others * (9,962) - - (9,962)
324 • FINANCIALS


2023
Sovereign 3,277,503 - - 3,277,503

Sovereign 18,292,001 - - 18,292,001

Sovereign 21,227,755 - - 21,227,755
Expected credit losses - - - -

Good 114,676,337 88,735 - 114,765,072
Adequate 16,170,735 1,085,019 - 17,255,754
Marginal - 3,642,075 - 3,642,075
No rating 3,297 - - 3,297
Others * (11,788) - - (11,788)


2022
Sovereign 1,331,584 - - 1,331,584
Non-investment grade 1,026,281 - - 1,026,281

Sovereign 14,434,565 - - 14,434,565

Sovereign 22,816,933 - - 22,816,933
Expected credit losses - - - -

Good 101,082,322 161,583 - 101,243,905
Adequate 14,221,242 1,269,270 - 15,490,512
Marginal - 10,668,856 - 10,668,856
No rating - 2,631 - 2,631
Others * (6,919) - - (6,919)
326 • FINANCIALS

Credit risk exposure analysed by industry in respect of the Group’s and the Bank’s financial assets are set out below:
The Group
2023
Short-term
funds and Undrawn Guarantees,
placements Financial Loans, loan endorsements
with banks and Financial Financial investments advances Total commitments and other
other financial assets investments at amortised and Other Derivative credit risk and other contingent
institutions at FVTPL at FVOCI cost financing assets assets exposures facilities items
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Agriculture - - 41,232 - 2,787,470 - - 2,828,702 1,266,113 491

Mining and quarrying - - - - 115,556 - - 115,556 89,612 -
Manufacturing - 14,136 - - 15,342,174 - - 15,356,310 9,720,440 411,096
Electricity, gas and water - 70,431 2,289,844 5,024 738,051 - - 3,103,350 306,418 6,651
Construction - 10,098 349,270 158,951 6,358,806 - - 6,877,125 4,025,838 187,063
Wholesale and retail - - 33,156 - 16,176,215 - - 16,209,371 7,911,734 223,573
Transport, storage and communications - 9,868 181,083 - 5,706,490 - - 5,897,441 1,118,925 2,643
Finance, insurance, real estate and
business services 2,728,832 164,994 13,058,003 2,035,363 16,528,907 2,231,584 2,168,424 38,916,107 2,995,420 159,543
Government and government agencies 4,396,204 3,641,260 17,836,432 28,994,727 - 2,155 - 54,870,778 - 50,857
Education, health and others - - - - 1,538,040 - - 1,538,040 393,439 -
Household - - - - 114,541,027 - - 114,541,027 22,603,337 2,960
Others - - - - 70,111 - - 70,111 1,783 -
7,125,036 3,910,787 33,789,020 31,194,065 179,902,847 2,233,739 2,168,424 260,323,918 50,433,059 1,044,877
7
327

Credit risk exposure analysed by industry in respect of the Group’s and the Bank’s financial assets are set out below: (continued)
The Group
2022
Short-term
with banks and Financial Financial investments advances Total commitments and other
other financial assets investments at amortised and Other Derivative credit risk and other contingent
institutions at FVTPL at FVOCI cost financing assets assets exposures facilities items
Agriculture - 24,365 41,252 - 3,161,634 - - 3,227,251 1,104,840 6,625

Mining and quarrying - - - - 126,477 - - 126,477 77,169 -
Manufacturing - - - - 14,120,195 - - 14,120,195 7,817,397 315,298
Electricity, gas and water - 15,418 1,826,396 431,237 720,058 - - 2,993,109 246,455 10,224
Construction - 10,195 287,553 160,904 4,954,202 - - 5,412,854 3,507,501 30,853
Wholesale and retail - - 31,847 - 15,666,440 - - 15,698,287 7,003,440 251,317
Transport, storage and communications - - 118,864 - 5,271,899 - - 5,390,763 1,390,757 2,406
Finance, insurance, real estate and
business services 3,709,383 172,153 9,044,626 1,122,291 14,112,171 2,066,385 1,863,300 32,090,309 3,199,487 72,841
Government and government agencies 1,852,125 2,720,417 14,762,379 30,643,982 - 1,553 - 49,980,456 - 46,795
Education, health and others - - - - 1,714,066 - - 1,714,066 524,211 3,843
Household - - - - 106,595,675 - - 106,595,675 23,669,416 3,004
Others - - - - 44,804 - - 44,804 2,158 1,224
5,561,508 2,942,548 26,112,917 32,358,414 166,487,621 2,067,938 1,863,300 237,394,246 48,542,831 744,430
328 • FINANCIALS

The Bank
2023
Short-term
with banks and Financial Financial investments advances Amount Total commitments and other
other financial assets investments at amortised and Other due from Derivative credit risk and other contingent
institutions at FVTPL at FVOCI cost financing assets subsidiaries assets exposures facilities items
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Agriculture - - 41,232 - 1,345,007 - - - 1,386,239 1,021,888 -

Mining and quarrying - - - - 88,340 - - - 88,340 73,402 -
Manufacturing - 14,136 - - 11,302,215 - - - 11,316,351 7,812,905 380,948
Electricity, gas and water - 70,431 2,284,638 5,024 357,742 - - - 2,717,835 81,890 6,651
Construction - 10,098 349,270 158,951 4,974,419 - - - 5,492,738 3,003,137 20,703
Wholesale and retail - - 33,156 - 12,036,274 - - - 12,069,430 6,344,541 204,668
Transport, storage and
communications - 9,868 181,083 - 5,178,405 - - - 5,369,356 916,616 2,643
Finance, insurance, real estate
and business services 3,207,882 163,712 12,807,144 1,244,885 12,766,941 2,182,078 143,862 2,071,669 34,588,173 1,935,788 158,538
Government and
government agencies 3,277,503 2,882,394 14,315,027 20,792,704 - 2,155 - - 41,269,783 - 50,857
Education, health and others - - - - 720,459 - - - 720,459 201,442 -
Household - - - - 86,261,100 - - - 86,261,100 18,999,344 2,589
Others - - - - 61,859 - - - 61,859 - -
6,485,385 3,150,639 30,011,550 22,201,564 135,092,761 2,184,233 143,862 2,071,669 201,341,663 40,390,953 827,597
9
329

The Bank
2022
Short-term
with banks and Financial Financial investments advances Amount Total commitments and other
other financial assets investments at amortised and Other due from Derivative credit risk and other contingent
institutions at FVTPL at FVOCI cost financing assets subsidiaries assets exposures facilities items
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Agriculture - 24,365 41,252 - 1,693,048 - - - 1,758,665 822,576 5,551

Mining and quarrying - - - - 95,998 - - - 95,998 63,816 -
Manufacturing - - - - 10,655,006 - - - 10,655,006 6,330,689 288,354
Electricity, gas and water - 15,418 1,800,892 264,181 296,288 - - - 2,376,779 129,499 10,224
Construction - 10,195 287,553 160,904 3,911,381 - - - 4,370,033 2,765,794 25,451
Wholesale and retail - - 31,847 - 12,039,302 - - - 12,071,149 5,569,259 238,980
communications - - 118,864 - 4,761,090 - - - 4,879,954 1,165,014 2,406
Finance, insurance, real estate
and business services 5,603,840 163,056 8,765,571 873,690 10,801,366 1,572,776 91,110 1,776,371 29,647,780 2,423,438 70,284
Government and
government agencies 1,331,584 2,321,784 11,287,156 21,845,770 - 1,546 - - 36,787,840 - 46,795
Education, health and others - - - - 891,452 - - - 891,452 331,214 -
Household - - - - 81,566,321 - - - 81,566,321 19,880,969 2,754
Others - - - - 34,284 - - - 34,284 1,486 -
6,935,424 2,534,818 22,333,135 23,144,545 126,745,536 1,574,322 91,110 1,776,371 185,135,261 39,483,754 690,799
330 • FINANCIALS

(v) Repossessed collaterals
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Industrial and residential properties, lands and

automobiles 377,172 352,321 279,067 274,467
Repossessed collaterals are made available-for-sale in an orderly fashion, with the proceeds used to reduce or repay
the outstanding indebtedness. The Group and the Bank generally do not utilise the repossessed collaterals for its
business use.
(vi) Write-off policy
The Group and the Bank write off financial assets, in whole or in part, when it has exhausted all practical recovery efforts
and has concluded there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of
recovery include (i) ceasing enforcement activity and (ii) where the Group’s and the Bank’s recovery method is foreclosing
on collateral and the value of the collateral is such that there is no reasonable expectation of recovering in full.
A write-off constitutes a derecognition event. The Group and the Bank may apply enforcement activities to financial
assets written off. Recoveries resulting from the Group’s and the Bank’s enforcement activities will be written back
as bad debts recovered in the statements of income.
The contractual amount outstanding on loans, advances and financing and securities portfolio that were
written off during the financial year ended, and are still subject to enforcement activities was RM388.4 million
(2022: RM418.9 million) for the Group and RM310.1 million (2022: RM173.1 million) for the Bank.
(vii) Modification of contractual cash flows
Where the original contractual terms of a financial asset have been modified for credit reasons and the instrument has
not been derecognised, the resulting modification loss is recognised in the statements of income with a corresponding
decrease in the gross carrying value of the asset. If the modification involved a concession that the Group and the Bank
would not otherwise consider, the instrument is considered to be credit impaired and is considered forborne.
ECL for modified financial assets that have not been derecognised and are not considered to be credit-impaired will
be recognised on a 12-month basis, or a lifetime basis, if there is a significant increase in credit risk. These assets are
assessed to determine whether there has been a significant increase in credit risk subsequent to the modification.
Although loans and financing may be modified for non-credit reasons, a significant increase in credit risk may occur.
The Group and the Bank may determine that the credit risk has significantly improved after restructuring, so that the
assets are moved from stage 3 or stage 2 to stage 1. This is only the case for assets which have been monitored for
consecutive six months observation period or more.
The amounts of loans, advances and financing whose cash flows are modified and of which modification
loss is recognised during the year for the Group and the Bank are Nil (2022: RM3,546.8 million) and Nil
(2022: RM2,393.5 million) respectively.

(viii) Sensitivity analysis
The Group and the Bank have performed ECL sensitivity assessment on loans, advances and financing based on
the changes in key macroeconomic variables, such as consumer price index, private consumption, house price
index, unemployment rates, banking system credit and gross domestic product while all other variables remain
unchanged. The sensitivity factors used are assumptions based on parallel shifts in the key variables to project the
impact on the ECL of the Group and the Bank.
The table below outlines the effect of ECL on the changes in key variables used while other variables remain
constant:
(a) Retail
The Group The Bank

RM’000 RM’000
2023 Changes
Private consumption +/- 100 bps
House price index +/- 100 bps
Unemployment rate +/- 200 bps
Total decrease in ECL on the positive changes in key variables (3,793) (3,719)
Total increase in ECL on the negative changes in key variables 229 319
2022 Changes
Private consumption +/- 100 bps
House price index +/- 100 bps
Unemployment rate +/- 200 bps
Total increase in ECL on the negative changes in key variables 566 405
332 • FINANCIALS

(viii) Sensitivity analysis (continued)
The table below outlines the effect of ECL on the changes in key variables used while other variables remain
constant: (continued)
(b) Non-retail
The Group The Bank

RM’000 RM’000
2023 Changes
Banking system credit +/- 100 bps
Gross domestic product +/- 100 bps
Total increase in ECL on the negative changes in key variables 3,787 2,493
2022 Changes
Banking system credit +/- 100 bps
Gross domestic product +/- 100 bps
Total increase in ECL on the negative changes in key variables 3,448 2,386
(ix) Overlays and adjustments for expected credit losses
As the current MFRS 9 models are not expected to generate levels of ECL with sufficient reliability, ECL overlays and
post-model adjustments have been applied to determine a sufficient overall level of ECL of loans, advances and
financing for the financial year ended 30 June 2023.
These ECL overlays and post-model adjustments reflect the latest macroeconomic outlook and the potential impact
to delinquencies and defaults when the various relief and support measures expire in the future.
The overlays and post-model adjustments involved significant level of judgement and reflect the management’s
views of possible severities of the post-pandemic uncertainties as well as emerging risks and paths of recovery in the
forward-looking assessment for ECL estimation purposes.
The adjusted downside scenario has taken into consideration the current operating environment, which includes
downside risks from geopolitical conflicts, cost pressures, global monetary tightening and China’s pre-opening/
slowdown. As at 30 June 2023, the impact of these overlays and post-model adjustments continues to remain
outside the MFRS 9 ECL Model. The ECL overlays amounted to RM574.2 million (2022: RM628.5 million) and
RM421.1 million (2022: RM475.4 million) at the Group and the Bank respectively.

49 FAIR VALUE OF FINANCIAL INSTRUMENTS
Financial instruments comprise of financial assets and financial liabilities. Fair value is the price that would be received to sell
an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The
information presented herein represents the estimates of fair values as at the statements of financial position date.
Where available, quoted and observable market prices are used as the measure of fair values. Where such quoted and observable
market prices are not available, fair values are estimated based on a range of methodologies and assumptions regarding risk
characteristics of various financial instruments, discount rates, estimates of future cash flows and other factors. Changes in the
uncertainties and assumptions could materially affect these estimates and the resulting fair value estimates.
(a) Determination of fair value and fair value hierarchy
The Group and the Bank measure fair values using the following fair value hierarchy that reflects the significance of the
inputs used in making the measurements:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Quoted prices for identical or similar instruments in markets that are not active; and model-derived
valuations in which inputs other than quoted prices included within Level 1 that are observable for the
asset or liability, either directly or indirectly.
Level 3: Valuations derived from valuation techniques in which one or more significant inputs are not based on
observable market data.
Valuation techniques
Financial instruments are classified as Level 1 if their value is observable in an active market. Such instruments are valued
by reference to unadjusted quoted prices for identical assets or liabilities in active markets where the quoted prices are
readily available, and the price represents actual and regularly occurring market transactions. An active market is one in
which transactions occur with sufficient volume and frequency to provide pricing information on an on-going basis. These
would include actively traded listed equities and actively exchange-traded derivatives.
Where fair value is determined using unquoted market prices in less active markets or quoted prices for similar assets and
liabilities, such instruments are generally classified as Level 2. In cases where quoted prices are generally not available,
the Group and the Bank then determine fair value based upon valuation techniques such as discounted cash flow that
uses inputs such as market parameters including but not limited to yield curves, volatilities and foreign exchange rates.
The majority of valuation techniques employ only observable market data and so reliability of the fair value measurement
is high. These would include certain corporate bonds, government bonds and derivatives.
Financial instruments are classified as Level 3 if their valuation incorporates significant inputs that are not based on
observable market data (unobservable inputs). Such inputs are generally determined based on observable inputs of a
similar nature, historical observations on the level of the input or other analytical techniques. This category includes
unquoted shares held for socio-economic reasons. Fair value for shares held for socio-economic reasons are based on the
net tangible assets of the affected companies.
334 • FINANCIALS

49 FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)
(a) Determination of fair value and fair value hierarchy (continued)
The table below analyses financial instruments carried at fair value analysed by level within the fair value hierarchy:
The Group
2023
Fair Value
Level 1 Level 2 Level 3 Total
RM’000 RM’000 RM’000 RM’000
Recurring fair value measurements

Financial Assets
Financial assets at FVTPL
- Money market instrument - 3,656,339 - 3,656,339
- Quoted securities 1,380,447 - - 1,380,447
- Unquoted securities - 253,166 364,985 618,151
- Unquoted securities - 9,107,327 97,650 9,204,977
Derivative financial instruments 26,174 2,067,896 74,354 2,168,424
5,843,472 35,329,570 536,989 41,710,031
Financial Liabilities
Derivative financial instruments 874 2,315,173 71,839 2,387,886
Financial liabilities designated at fair value
- Structured deposits linked to interest rate
derivatives - 3,564,330 - 3,564,330
874 5,879,503 71,839 5,952,216
The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which
the transfer has occurred. The fair value of an asset to be transferred between levels is determined as of the date of the
event or change in circumstances that caused the transfer. There were no transfers between Level 1 and Level 2 of the fair
value hierarchy during the financial year (2022: RM Nil).

(continued)
The Group
2022
Fair Value
RM’000 RM’000 RM’000 RM’000

Financial Assets
6,898,590 27,861,687 543,808 35,304,085
derivatives - 2,065,393 - 2,065,393
104 3,698,617 103,510 3,802,231
336 • FINANCIALS

(continued)
The Bank
2023
Fair Value
RM’000 RM’000 RM’000 RM’000

Financial Assets
5,864,353 30,706,839 526,629 37,097,821
derivatives - 3,157,718 - 3,157,718
874 5,397,301 61,479 5,459,654
The Bank recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which
the transfer has occurred. The fair value of an asset to be transferred between levels is determined as of the date of the
event or change in circumstances that caused the transfer. There were no transfers between Level 1 and Level 2 of the fair
value hierarchy during the financial year (2022: RM Nil).

(continued)
The Bank
2022
Fair Value
RM’000 RM’000 RM’000 RM’000

Financial Assets
6,993,503 23,596,343 543,808 31,133,654
derivatives - 1,983,878 - 1,983,878
104 3,592,009 103,510 3,695,623
338 • FINANCIALS

Reconciliation of fair value measurements in Level 3 of the fair value hierarchy, is as below:
Financial Assets Financial

Liability
Financial Financial Derivative Derivative
assets investments financial financial
at FVTPL at FVOCI instruments instruments
2023
At 1 July 355,620 83,386 104,802 103,510
Fair value changes recognised in statements of income 9,365 - 18,418 18,418
Net fair value changes recognised in other
comprehensive income - 14,264 - -
Purchases - - 57,400 56,257
Settlements - - (106,266) (106,346)
At 30 June 364,985 97,650 74,354 71,839
Fair value changes recognised in statements of income

relating to assets/liability held on 30 June 2023 9,365 - 18,418 18,418
Total gain recognised in other comprehensive income

relating to assets held on 30 June 2023 - 14,264 - -

Reconciliation of fair value measurements in Level 3 of the fair value hierarchy, is as below: (continued)

Liability
2022
At 1 July 348,869 69,094 76,913 76,913
Purchases - - 2,155 863
Settlements - - (2,342) (2,342)
At 30 June 355,620 83,386 104,802 103,510


340 • FINANCIALS


Liability
2023
At 1 July 355,620 83,386 104,802 103,510
Purchases - - 47,039 45,897
Settlements - - (106,265) (106,346)
At 30 June 364,985 97,650 63,994 61,479




Liability
2022
At 1 July 348,869 69,094 76,913 76,913
Purchases - - 2,155 863
Settlements - - (2,342) (2,342)
At 30 June 355,620 83,386 104,802 103,510


342 • FINANCIALS

Quantitative information about fair value measurements using significant unobservable inputs (Level 3)
The Group and the Bank Inter-relationship between

Fair value Fair value Range significant unobservable
assets liabilities Valuation Unobservable (weighted inputs and fair value
Description RM’000 RM’000 technique(s) input average) measurement
2023
Financial assets
at FVTPL
Net tangible Net tangible Not Higher net tangible assets

Unquoted shares 364,985 -
assets assets applicable results in higher fair value
Financial
investments
at FVOCI

Derivative financial
instruments
Higher volatility, would

Monte Carlo Equity generally result in higher fair
6% to 47%
Simulation volatility valuation for long volatility
positions and vice versa
Equity derivatives 74,354 (71,839)
Equity / FX An increase in correlation,
Monte Carlo Correlation would generally result
-30% to -13%
Simulation between in a higher fair value
underliers measurement and vice versa
2022
Financial assets
at FVTPL

Financial
investments
at FVOCI

Derivative financial
instruments
Higher volatility, would

Monte Carlo Equity generally result in higher fair
7% to 121%
Simulation volatility valuation for long volatility
positions and vice versa
Equity derivatives 104,802 (103,510)
Equity / FX An increase in correlation,
Monte Carlo Correlation would generally result
-16% to 16%
Simulation between in a higher fair value
underliers measurement and vice versa

Sensitivity analysis for Level 3
Effect of reasonably possible

Sensitivity alternative assumptions to:
Type of of significant Statements of income
unobservable unobservable Favourable/(Unfavourable) changes
The Group and the Bank input input RM’000
2023
Financial assets
- Equity derivatives Equity volatility +10% (22)
-10% 19
Equity / FX +10% (1)

Correlation -10% (181)
Total* (185)
- Equity derivatives Equity volatility +10% 22
-10% (19)
Equity / FX +10% 1
Correlation -10% 181
Total* 185
* No or insignificant impact to the Group. All equity link derivatives with unobservable inputs are hedged back-to-
back with external parties.
344 • FINANCIALS

Sensitivity analysis for Level 3 (continued)
Effect of reasonably possible

Sensitivity alternative assumptions to:
Type of of significant Statements of income
unobservable unobservable Favourable/(Unfavourable) changes
The Group and the Bank input input RM’000
2022
Financial assets
- Equity derivatives Equity volatility +10% 271
-10% (355)
Equity / FX +10% 35
Correlation -10% 121
Total* 72
- Equity derivatives Equity volatility +10% (271)
-10% 355
Equity / FX +10% (35)

Correlation -10% (121)
Total* (72)
* No or insignificant impact to the Group. All equity link derivatives with unobservable inputs are hedged back-to-
back with external parties.

(b) Fair values of financial instruments not carried at fair value
Set out below is the comparison of the carrying amounts and fair values of the financial instruments of the Group and
the Bank which are not carried at fair value in the financial instruments, but for which fair value is disclosed. It does not
include those short term/on demand financial assets and financial liabilities where the carrying amounts are reasonable
approximation of their fair values:
2023 2022
Carrying Fair Carrying Fair
Amount Value Amount Value
Financial Assets
- Money market 30,567,728 31,205,088 28,415,374 28,758,328
- Quoted securities 19,117 18,668 62,174 61,526
- Unquoted securities 607,220 615,773 3,880,866 3,887,721
211,096,912 212,626,618 198,846,035 200,118,437
Deposits from customers
- At amortised cost 208,087,489 208,355,494 195,227,066 194,983,213
Recourse obligation on loans sold to Cagamas 2,972,220 2,976,763 1,623,937 1,808,376
Tier 2 subordinated bonds 1,501,750 1,504,841 1,502,206 1,508,555
Multi-currency Additional Tier 1 capital securities 1,719,509 1,712,997 1,715,695 1,718,931
214,280,968 214,550,095 200,068,904 200,019,075
The Bank
Financial Assets
- Money market 21,662,137 22,106,027 20,431,846 20,715,391
- Quoted securities 19,117 18,668 62,174 61,526
- Unquoted securities 520,310 527,832 2,650,525 2,657,914
157,294,325 158,274,919 149,890,081 150,859,275
- At amortised cost 159,575,230 159,755,827 153,023,426 152,760,886
Recourse obligation on loans sold to Cagamas 1,514,646 1,514,129 502,798 695,926
Tier 2 subordinated bonds 1,501,750 1,504,841 1,502,206 1,508,555
164,311,135 164,487,794 156,744,125 156,684,298
346 • FINANCIALS

(b) Fair values of financial instruments not carried at fair value (continued)
The following table analyses within the fair value hierarchy of the Group’s and the Bank’s assets and liabilities not measured
at fair value at 30 June 2023 but for which fair value is disclosed:
2023
Carrying Fair Value

Amount Level 1 Level 2 Level 3
RM’000 RM’000 RM’000 RM’000
The Group
Financial Assets
- Money market 30,567,728 - 31,205,088 -
- Quoted securities 19,117 - 18,668 -
- Unquoted securities 607,220 - 615,773 -
Loans, advances and financing 179,902,847 - 180,787,089 -
211,096,912 - 212,626,618 -
- At amortised cost 208,087,489 - 208,355,494 -
Recourse obligation on loans sold to Cagamas 2,972,220 - 2,976,763 -
Tier 2 subordinated bonds 1,501,750 - 1,504,841 -
Multi-currency Additional Tier 1 capital securities 1,719,509 - 1,712,997 -
214,280,968 - 214,550,095 -
The Bank
Financial Assets
- Money market 21,662,137 - 22,106,027 -
- Unquoted securities 520,310 - 527,832 -
157,294,325 - 158,274,919 -
164,311,135 - 164,487,794 -

(b) Fair values of financial instruments not carried at fair value (continued)
The following table analyses within the fair value hierarchy of the Group’s and the Bank’s assets and liabilities not measured
at fair value at 30 June 2022 but for which fair value is disclosed:
2022
Carrying Fair Value

Amount Level 1 Level 2 Level 3
RM’000 RM’000 RM’000 RM’000
The Group
Financial Assets
- Money market 28,415,374 - 28,758,328 -
- Unquoted securities 3,880,866 - 3,887,721 -
198,846,035 - 200,118,437 -
200,068,904 - 200,019,075 -
The Bank
Financial Assets
- Money market 20,431,846 - 20,715,391 -
- Unquoted securities 2,650,525 - 2,657,914 -
149,890,081 - 150,859,275 -
Recourse obligation on loans sold to Cagamas 502,798 - 695,926 -
156,744,125 - 156,684,298 -
348 • FINANCIALS

(c) Fair value methodologies and assumptions
Short-term funds and placements with financial institutions
For short-term funds and placements with financial institutions with maturities of less than six months, the carrying
value is a reasonable estimate of fair value. For short-term funds and placements with maturities six months and above,
estimated fair value is based on discounted cash flows using prevailing money market interest rates at which similar
deposits and placements would be made with financial institutions of similar credit risk and remaining period to maturity.
Securities purchased under resale agreements
The fair values of securities purchased under resale agreements with maturities of less than six months approximate the
carrying values. For securities purchased under resale agreements with maturities of six months and above, the estimated
fair values are based on discounted cash flows using market rates for the remaining term to maturity.
FVTPL, FVOCI and financial investments at amortised cost
The estimated fair value is generally based on quoted and observable market prices. Where there is no ready market in
certain securities, the Group and the Bank establish the fair value by using valuation techniques.
For floating rate loans, the carrying value is generally a reasonable estimate of fair value. For fixed rate loans, the fair value
is estimated by discounting the estimated future cash flows using the prevailing market rates of loans with similar credit
risks and maturities.
For deposits from customers with maturities of less than six months, the carrying amounts are reasonable estimates of
their fair values. For deposit with maturities of six months and above, fair values are estimated using discounted cash
flows based on prevailing market rates for similar deposits from customers.
Deposits and placements of banks and other financial institutions, bills and acceptances payable
The estimated fair values of deposits and placements of banks and other financial institutions, bills and acceptances
payable with maturities of less than six months approximate the carrying values. For the items with maturities of six
months and above, the fair values are estimated based on discounted cash flows using prevailing money market interest
rates with similar remaining period to maturities.
Recourse obligation on loans sold to Cagamas Berhad
For amounts due to Cagamas Berhad with maturities of less than one year, the carrying amounts are a reasonable estimate
of their fair values. For amounts due to Cagamas Berhad with maturities of more than one year, fair value is estimated
based on discounted cash flows using prevailing money market interest rates with similar remaining period to maturity.
Subordinated obligations and capital securities
The fair value of subordinated obligations and capital securities are based on quoted market prices where available.

(c) Fair value methodologies and assumptions (continued)
Other financial assets and liabilities
The carrying value less any estimated allowance for financial assets and liabilities included in “other assets and liabilities”
are assumed to approximate their fair values as these items are not materially sensitive to the shift in market interest
rates.
Credit related commitment and contingencies
The net fair value of these items was not calculated as estimated fair values are not readily ascertainable. These financial
instruments generally relate to credit risks and attract fees in line with market prices for similar arrangements. They are
not presently sold nor traded. The fair value may be represented by the present value of fees expected to be received, less
associated costs.
Foreign exchange and interest rate related contracts
The fair values of foreign exchange and interest rate related contracts are the estimated amounts the Group or the Bank
would receive to sell or pay to transfer the contracts at the date of statements of financial position.
350 • FINANCIALS

50 OFFSETTING OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES
Financial assets and financial liabilities subject to offsetting, enforceable master netting arrangements and similar agreements are as follows:
The Group The Bank

Related amount not set off in the Related amount not set off in the
statements of financial position statements of financial position
Gross amount Gross amount
of recognised Net amount of recognised Net amount
financial assets/ presented financial assets/ presented
liabilities in the in the Cash liabilities in the in the Cash
statements statements Values of collateral statements statements Values of collateral
of financial of financial the financial received/ of financial of financial the financial received/
position position instruments pledged Net amount position position instruments pledged Net amount
30 June 2023
Financial assets
Derivatives/financial
instruments 2,168,424 2,168,424 (867,623) (81,625) 1,219,176 2,071,669 2,071,669 (839,157) (81,625) 1,150,887
Total 2,168,424 2,168,424 (867,623) (81,625) 1,219,176 2,071,669 2,071,669 (839,157) (81,625) 1,150,887
instruments 2,387,886 2,387,886 (867,623) (904,928) 615,335 2,301,936 2,301,936 (839,157) (904,928) 557,851
Obligations on
securities sold
under repurchase
agreements 7,399,583 7,399,583 (7,399,583) - - 7,399,583 7,399,583 (7,399,583) - -
Total 9,787,469 9,787,469 (8,267,206) (904,928) 615,335 9,701,519 9,701,519 (8,238,740) (904,928) 557,851
351

50 OFFSETTING OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES (CONTINUED)
Financial assets and financial liabilities subject to offsetting, enforceable master netting arrangements and similar agreements are as follows: (continued)
The Group The Bank

Related amount not set off in the Related amount not set off in the
statements of financial position statements of financial position
Gross amount Gross amount
of recognised of recognised
financial Net amount financial Net amount
assets/ presented assets/ presented
liabilities in in the Cash liabilities in in the Cash
the statements statements Values of collateral the statements statements Values of collateral
of financial of financial the financial received/ of financial of financial the financial received/
position position instruments pledged Net amount position position instruments pledged Net amount
30 June 2022
Financial assets
instruments 1,863,300 1,863,300 (908,870) (146,644) 807,786 1,776,371 1,776,371 (904,000) (146,644) 725,727
Total 1,863,300 1,863,300 (908,870) (146,644) 807,786 1,776,371 1,776,371 (904,000) (146,644) 725,727
instruments 1,736,838 1,736,838 (908,870) (567,124) 260,844 1,711,745 1,711,745 (904,000) (567,124) 240,621
Obligations on
securities sold
under repurchase
agreements 3,971,304 3,971,304 (2,755,310) - 1,215,994 3,971,304 3,971,304 (2,755,310) - 1,215,994
Total 5,708,142 5,708,142 (3,664,180) (567,124) 1,476,838 5,683,049 5,683,049 (3,659,310) (567,124) 1,456,615
352 • FINANCIALS

51 CAPITAL ADEQUACY
The Group’s and the Bank’s regulatory capital is governed by BNM’s Capital Adequacy Framework guidelines. The capital adequacy
ratios of the Group and the Bank are computed in accordance with BNM’s Capital Adequacy Framework (Capital Components) and
Capital Adequacy Framework for Islamic Banks (Capital Components), which set out the approach for computing the regulatory
capital adequacy ratios, the minimum levels of the ratios at which banking institutions are required to operate as well as
requirements on Capital Conservation Buffer (“CCB”) and Counter-Cyclical Capital Buffer (“CCyB”). The Group and the Bank are
also required to maintain CCB of up to 2.5% of total risk-weighted assets (“RWA”). The CCyB, which could range from 0% up to
2.5%, is currently assessed at 0% in Malaysia. The minimum capital adequacy including CCB for Common Equity Tier I (“CET I”)
capital ratio, Tier I capital ratio and Total capital ratio for year 2019 onwards are 7.0%, 8.5% and 10.5% respectively.
On 19 April 2023, BNM increased the allocation under the BNM’s Fund for SMEs by RM1.3 billion through selected facilities namely
the High Tech and Green Facility (“HTG”), Automation and Digitalisation Facility (“ADF”) and Agrofood Facility (“AF”) to further
support the micro, small and medium enterprises (SMEs). The Bank will continue to provide support to SMEs involved in strategic
sectors or critical technology segments through the HTG facility, incentivise the automation of processes and digitalisation of
operations through the ADF facility, and provide financing to increase agrofood production through the AF facility.
The Group and the Bank have adopted the Standardised Approach for Credit Risk and Market Risk, and the Basic Indicator
Approach for Operational Risk computation in deriving the RWA.
Individual entities within the Group comply with all externally imposed capital requirements to which they are subject to.
(a) The capital adequacy ratios of the Group and the Bank are as follows:
The Group The Bank

2023 2022 2023 2022
Before deducting proposed dividends

CET I capital ratio 13.310% 13.935% 13.000% 13.912%
Tier I capital ratio 14.353% 15.050% 14.029% 14.999%
Total capital ratio 16.399% 17.176% 16.009% 17.051%
After deducting proposed dividends


51 CAPITAL ADEQUACY (CONTINUED)
(b) The components of CET I, Tier I and Tier II capital under the revised Capital Components Framework are as follows:
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
CET I capital
Share capital 7,739,063 7,739,063 7,739,063 7,739,063
Retained profits 25,017,703 22,727,982 15,727,832 15,120,482
Other reserves 947,836 592,754 2,905 (283,282)
Less: Treasury shares (708,766) (713,690) (708,766) (713,690)
Less: Deferred tax assets (410,436) (528,771) (317,985) (403,666)
Less: Other intangible assets (362,435) (304,749) (326,216) (269,645)
Less: Goodwill (1,831,312) (1,831,312) (1,771,547) (1,771,547)
Less: Investment in subsidiary companies/associated
companies (8,712,976) (6,455,474) (3,938,210) (2,794,291)
Total CET I capital 21,678,677 21,225,803 16,407,076 16,623,424
Additional Tier I capital

Additional Tier I capital before regulatory adjustments 1,698,491 1,698,839 1,698,491 1,698,839
Less: Investment in Additional Tier 1 perpetual
subordinated sukuk wakalah - - (400,000) (400,000)
Additional Tier I capital after regulatory adjustments 1,698,491 1,698,839 1,298,491 1,298,839
Total Tier I capital 23,377,168 22,924,642 17,705,567 17,922,263
Tier II capital
Stage 1 and Stage 2 expected credit loss allowances
and regulatory reserves # 1,832,523 1,738,471 1,399,403 1,350,820
Subordinated bonds 1,499,089 1,499,970 1,499,089 1,499,970
Less: Investment in Tier 2 Subordinated
Sukuk Murabahah - - (400,000) (400,000)
Total Tier II capital 3,331,612 3,238,441 2,498,492 2,450,790
Total capital 26,708,780 26,163,083 20,204,059 20,373,053
# Includes the qualifying regulatory reserves for non-impaired loans of the Group and the Bank of RM990,816,000
(2022: RM643,141,000) and RM825,318,000 (2022: RM536,432,000) respectively.
354 • FINANCIALS

51 CAPITAL ADEQUACY (CONTINUED)
(c) The breakdown of RWA by each major risk category is as follows:
The Group The Bank

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
Credit risk * 146,601,855 139,077,644 111,952,229 108,065,582

Market risk 6,124,089 3,917,894 6,120,834 3,934,497
Operational risk 10,143,761 9,327,630 8,131,845 7,485,705
Total RWA 162,869,705 152,323,168 126,204,908 119,485,784
* In accordance with BNM Investment Account Policy, the credit RWA of HLISB funded by Investment Account of
RM1,588,912,000 (2022: RM1,899,820,000) is excluded from the calculation of capital adequacy ratio of the
Group.
(d) The capital adequacy ratios of the banking subsidiary company of the Group are as follows:
Hong Leong Islamic

Bank Berhad
2023 2022

CET I capital ratio 11.423% 11.176%
Tier I capital ratio 12.653% 12.550%
Total capital ratio 15.051% 15.101%


52 SEGMENT REPORTING
Business segment reporting
The business segment results are prepared based on the Group’s internal management reporting reflective of the organisation’s
management reporting structure.
The various business segments are described below:
Personal Financial Services focuses mainly on servicing individual customers and small businesses. Products and services that
are extended to customers include mortgages, credit cards, hire purchase and others.
Business & Corporate Banking focuses mainly on corporate and small medium enterprises. Products offered include trade
financing, working capital facilities, other term financing and corporate advisory services.
Global Markets refers to the Group’s domestic treasury and capital market operations and includes foreign exchange, money
market operations as well as capital market securities trading and investments.
Overseas/International Operations refers to Hong Leong Bank Berhad Overseas Branches, Subsidiaries and Associates. The
overseas operations are mainly in commercial banking and treasury business.
Other operations refers to head office and other subsidiaries.

356 • FINANCIALS

52 SEGMENT REPORTING (CONTINUED)
Business segment reporting (continued)
Personal Business & Overseas/ Inter-

Financial Corporate Global International Other Segment
Services Banking Markets Operations Operations Elimination Total
The Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
2023
Revenue
- external 3,489,591 1,062,596 916,144 378,173 (125,409) (35,586) 5,685,509
- inter-segment ^ (277,500) 575,743 (638,327) 4,542 335,542 - -
Segment revenue 3,212,091 1,638,339 277,817 382,715 210,133 (35,586) 5,685,509
Overhead expenses of which: (1,402,549) (396,436) (116,399) (277,174) (27,307) (13,417) (2,233,282)
Depreciation of property and
equipment 38,972 5,025 2,514 5,189 58,204 135 110,039
Amortisation of intangible
assets 9,569 4,729 2,396 15,123 26,315 - 58,132
(Allowance for)/written back of
impairment losses on loans,
advances and financing (39,957) (64,545) - (10,883) - 3 (115,382)
Written back of/(allowance for)
impairment losses on financial
investments and other assets - - 3,093 63 - (2,850) 306
Share of results of associated
companies - - - 1,289,480 - - 1,289,480
Segment results 1,769,585 1,177,358 164,511 1,384,201 182,826 (51,850) 4,626,631
Taxation (808,435)
Net profit for the financial year 3,818,196
Segment assets 117,470,664 49,536,437 73,326,625 24,149,486 - - 264,483,212

Unallocated assets 15,367,242
Total assets 279,850,454
Segment liabilities 107,753,684 63,913,698 41,221,530 22,967,144 - - 235,856,056

Unallocated liabilities 10,007,746
Total liabilities 245,863,802
Other significant segment items

Capital expenditure 38,945 11,580 3,020 18,575 97,105 - 169,225
^ Inter-segment transfer is based on internally computed cost of funds.
Note:
1. Total segment revenue comprises net interest income, income from Islamic Banking business and non-interest income.
2. Unallocated assets and liabilities are not directly attributed to the business segments and cannot be allocated on a
reasonable basis.

Business segment reporting (continued)
Personal Business & Overseas/ Inter-

Financial Corporate Global International Other Segment
Services Banking Markets Operations Operations Elimination Total
2022
Revenue
- external 2,918,509 1,107,574 1,240,295 358,549 371,236 (398,755) 5,597,408
- inter-segment ^ (83,039) 381,506 (558,977) - 260,510 - -
Segment revenue 2,835,470 1,489,080 681,318 358,549 631,746 (398,755) 5,597,408
Overhead expenses of which: (1,329,780) (373,323) (120,314) (243,938) (17,863) (13,158) (2,098,376)
Depreciation of property and
equipment 44,772 5,348 3,437 6,107 61,700 135 121,499
Amortisation of intangible
assets 8,899 3,122 2,051 12,130 27,760 - 53,962
Written back of/(allowance for)
impairment losses on loans,
advances and financing 24,545 (198,875) - (5,993) 18,482 (1,733) (163,574)
Written back of impairment losses
on financial investments and
other assets - - 280 26 - 545 851
Share of results of associated
companies - - - 1,030,491 - - 1,030,491
Segment results 1,530,235 916,882 561,284 1,139,135 632,365 (413,101) 4,366,800
Taxation (1,077,517)
Net profit for the financial year 3,289,283
Segment assets 109,645,119 46,241,725 71,619,480 19,376,615 - - 246,882,939

Unallocated assets 7,448,438
Total assets 254,331,377
Segment liabilities 106,909,492 52,396,000 39,316,576 18,273,006 - - 216,895,074

Unallocated liabilities 6,447,327
Total liabilities 223,342,401
Other significant segment items

Capital expenditure 43,504 24,091 5,705 24,581 53,239 - 151,120
^ Inter-segment transfer is based on internally computed cost of funds.
Note:
1. Total segment revenue comprises net interest income, income from Islamic Banking business and non-interest income.
2. Unallocated assets and liabilities are not directly attributed to the business segments and cannot be allocated on a
reasonable basis.
358 • FINANCIALS

The Group operates in two main geographical areas:
- Malaysia, the home country of the Group, which includes all the areas of operations in the primary business segments.
- Overseas operations, which includes branch, subsidiary, associate and joint venture operations in Singapore, Hong Kong,
China, Vietnam and Cambodia. The overseas operations are mainly in commercial banking and treasury business.
Non-current Total Total Capital

Revenue assets assets liabilities expenditure
2023
Malaysia 5,307,336 3,293,611 255,700,968 222,896,658 150,650
Overseas operations 378,173 8,844,449 24,149,486 22,967,144 18,575
5,685,509 12,138,060 279,850,454 245,863,802 169,225
2022
Malaysia 5,238,859 3,323,753 234,954,762 205,069,395 126,539
Overseas operations 358,549 6,590,106 19,376,615 18,273,006 24,581
5,597,408 9,913,859 254,331,377 223,342,401 151,120
53 SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR
(a) On 14 October 2022, the Bank issued a nominal value of RM400.0 million Additional Tier 1 capital securities (“HLB Capital
Securities”), pursuant to its multi-currency Additional Tier 1 capital securities programme. The HLB Capital Securities carry a
distribution rate of 4.70% per annum and are perpetual and non-callable for 5 years with an Issuer’s call option to redeem
at the end of year 5. The proceeds from the issuance shall be utilised to fulfill the requirements of Additional Tier 1 capital
as per BNM’s Capital Adequacy Framework (Capital Components) issued on 9 December 2020 and as updated from time
to time and for the refinancing of an existing tranche of RM400.0 million in nominal value of HLB Capital Securities issued
previously under the HLB AT1 Programme on 30 November 2017.
(b) On 30 November 2022, the Bank had fully redeemed the RM400.0 million nominal value of Multi-currency Additional Tier 1
capital securities bearing coupon rate of 5.13% per annum.
(c) On 17 January 2023, the Bank announced that it had placed EB Nominees (Tempatan) Sendirian Berhad (“EB
Nominees (Tempatan)”), a wholly-owned subsidiary of the Bank, under member’s voluntary winding-up pursuant to
Section 439(1)(b) of the Companies Act 2016. EB Nominees (Tempatan) is dormant.
(d) On 19 June 2023, the Bank issued a fourth tranche of RM500.0 million nominal value of 10-year non-callable 5 years
Tier 2 Subordinated Notes (“Sub Notes”) callable on 19 June 2028 (and thereafter) and due on 17 June 2033 out of its
RM10.0 billion Multi-Currency Sub Notes Programme. The coupon rate for this fourth tranche of the Sub Notes is 4.20% per
annum, which is payable semi-annually in arrears from the date of the issue.
(e) On 26 June 2023, the Bank had fully redeemed the RM500.0 million nominal value Tier 2 Subordinated Notes bearing
coupon rate of 4.86% per annum.

53 SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (CONTINUED)
(f) Pursuant to Section 247(3) of the Companies Act 2016, the Companies Commission of Malaysia had granted its approval
for HLBCAM, a wholly-owned subsidiary of the Bank incorporated in the Kingdom of Cambodia, to have a different financial
year end from its holding company. The financial year end of HLBCAM is 31 December as required under the Prakas on
Annual Audit of Financial Statement of Banks and Financial Institutions issued by the National Bank of Cambodia.
54 SUBSEQUENT EVENTS AFTER THE FINANCIAL YEAR
There are no material subsequent events after the financial year that require disclosure or adjustments to the financial statements.
55 EQUITY COMPENSATION BENEFITS
Executive Share Scheme
The Bank has concurrently implemented two (2) Executive Share Schemes during the financial year ended 30 June 2023.
(a) Executive Share Scheme 2013 (“ESS 2013”)
The ESS 2013 of up to ten percent (10%) of the total number of issued shares (excluding treasury shares) of the Bank
comprises the Executive Share Option Scheme 2013 (“ESOS 2013”) and the Executive Share Grant Scheme 2013 (“ESGS
2013”).
The main features of the ESS 2013 are, inter alia, as follows:
1. Eligible executives are persons as defined by the ESS 2013 Bye-Laws.
2. The maximum allowable allotments for the full time Executive Directors had been approved by the shareholders of
the Bank in the annual general meeting held on 23 October 2013 and 25 October 2012. The Board, as defined by the
ESS 2013 Bye-Laws, may from time to time at its absolute discretion select and identify suitable eligible executives
to be offered options or grants.
3. At any point of time during the existence of the ESS 2013, the aggregate number of shares comprised in the options
and grants under the ESS 2013 and any other executive share schemes established by the Bank which are still
subsisting shall not exceed 10% of the total number of issued shares (excluding treasury shares) of the Bank at any
one time.
4. The exercise of the options under the ESOS 2013 or the vesting of shares under the ESGS 2013 may, at the absolute
discretion of the Board, be satisfied by way of issuance of new shares; transfer of existing shares purchased by a
trust established for the ESS 2013; or a combination of both new shares and existing shares.
(i) ESOS 2013
The ESOS 2013 which was approved by the shareholders of the Bank on 25 October 2012, was established on
12 March 2013 and had expired on 11 March 2023.
360 • FINANCIALS

55 EQUITY COMPENSATION BENEFITS (CONTINUED)
(a) ESS 2013 (continued)
(i) ESOS 2013 (continued)
The main features of the ESOS 2013 are, inter alia, as follows:
1. The option price for the options to be granted under the ESOS 2013 shall not be at a discount of more than ten
percent (10%) (or such discount as the relevant authorities shall permit) from the 5-day volume weighted average
market price of the shares of the Bank preceding the date of offer as defined by the ESS Bye-Laws.
2. The options granted to an option holder under the ESOS 2013 is exercisable by the option holder during his
employment or directorship with the HLB Group and upon meeting the vesting conditions of each ESOS 2013 plan
as stated in the following pages, subject to any maximum limit as may be determined by the Board under the Bye-
Laws of the ESS.
During the financial year ended 30 June 2023, there were no share options remain outstanding under the ESOS 2013.
The ordinary share options of the Bank granted under the ESOS 2013 that are still outstanding for the financial year
ended 30 June 2022 is as follows:
(A) 37,550,000 share options at an exercise price of RM14.24 (adjusted to RM13.77 following the completion of the
Rights Issue):
2022 Adjustment Outstanding Exercisable

As at for As at As at
Grant date Expiry date 1-Jul-21 rights issue Forfeited Exercised 30-Jun-22 30-Jun-22
2 April 2015 28 July 2021 66,502 - - (66,502) - -

66,502 - - (66,502) - -
(B) 22,750,000 share options at an exercise price of RM16.46:
2022 Outstanding Exercisable

As at As at As at
Grant date Expiry date 1-Jul-21 Granted Forfeited Exercised 30-Jun-22 30-Jun-22
15 December 2017 31 August 2021 4,760,000 - (4,760,000) - - -

15 December 2017 31 August 2022 4,760,000 - (4,760,000) - - -
15 December 2017 31 August 2023 2,380,000 - (2,380,000) - - -
11,900,000 - (11,900,000)* - - -
* During the financial year ended 30 June 2022, a total of 11,900,000 options were forfeited and in lieu converted to
1,292,356 ordinary shares under ESGS 2013.

(ii) ESGS 2013
The ESGS 2013 which was approved by the shareholders of the Bank on 23 October 2013, was established on
28 February 2014 and had expired on 11 March 2023.
The shares to be vested to a grant holder under the ESGS 2013 will be vested to the grant holder only during his
employment or directorship with the HLB Group and subject to any other terms and conditions as may be determined
by the Board.
(A) 250,514 ordinary shares at date of grant:

As at As at As at
Grant date Vesting date 1-Jul-21 Granted Forfeited Transferred 30-Jun-22 30-Jun-22
8 January 2020 31 July 2021 115,254 - (167) (115,087) - -
(B) 228,728 ordinary shares at date of grant:

As at As at As at
15 January 2021 31 July 2022 112,400 - (106) (112,294) - -

As at As at As at
15 January 2021 31 January 2022 114,300 - (1,739) (112,561) - -

15 January 2021 31 July 2022 114,300 - (1,900) - 112,400 -
228,600 - (3,639) (112,561) 112,400 -
(C) 1,292,356 ordinary shares at date of grant:

As at As at As at
3 November 2021 24 November 2022 430,785 - - (430,785) - -

3 November 2021 24 November 2023 430,786 - - - 430,786 -
861,571 - - (430,785) 430,786 -
362 • FINANCIALS

(ii) ESGS 2013 (continued)
(C) 1,292,356 ordinary shares at date of grant: (continued)

As at As at As at
3 November 2021 24 November 2021 - 430,785 - (430,785) - -

3 November 2021 24 November 2022 - 430,785 - - 430,785 -
3 November 2021 24 November 2023 - 430,786 - - 430,786 -
- 1,292,356 - (430,785) 861,571 -
During the financial year ended 30 June 2023, a total of 543,079 ordinary shares were vested and transferred pursuant to
the Bank’s ESGS 2013, 106 ordinary shares forfeited with 430,786 ordinary shares remain outstanding.
The invested grant shares consisting of 430,785 ordinary shares granted under ESGS 2013 had been transferred to the new
ESS 2022 established on 10 March 2023 due to the expiry of the ESS 2013 on 11 March 2023.
(b) Executive Share Scheme 2022 (“ESS 2022”)
The ESS 2022, which is governed by the bye-laws (“Bye-Laws”), entails the making of one (1) or more of the following
offers to the Eligible Executives:
(i) option(s) under the ESOS which entitle an Eligible Executive who has accepted the offer (“Option Holder(s)”) to
acquire ordinary shares in HLB (“Shares”) at an exercise price to be determined by the Board at its discretion (“Option
Price”) (“Option(s)”); and/or
(ii) grant(s) under the ESGS which entitle an Eligible Executive who has accepted the offer (“Grant Holder(s)”) to receive
Shares without any consideration payable by the Grant Holder (“Grant(s)”).
The Board may at its discretion impose such vesting conditions (including financial and performance targets, the
performance period and vesting period, if any) as it deems fit with the offer of the Options and/or Grants (“Offer(s)”). In
determining whether to make an Option Offer and/or a Grant Offer, the Board may take into consideration various factors
such as market practice, the quantum of the award, the length of the performance period and the performance targets.
In implementing the ESS 2022, it is the intention of the Bank to have the flexibility, at the absolute discretion of the Board,
to enable the satisfaction of the Options and/or Grants through the following:
(i) transfer of existing Shares (other than treasury Shares); and/or
(ii) cash settlement pursuant to the Bye-Laws.


(b) ESS 2022 (continued)
ESGS 2022
(A) 253,416 ordinary shares at date of grant:

As at As at As at
21 March 2022 31 January 2023 126,708 - (1,263) (125,445) - -

21 March 2022 31 July 2023 126,708 - (1,263) - 125,445 -
253,416 - (2,526) (125,445) 125,445 -

As at As at As at
21 March 2022 31 January 2023 - 126,708 - - 126,708 -

21 March 2022 31 July 2023 - 126,708 - - 126,708 -
- 253,416 - - 253,416 -
(B) 124,944 ordinary shares at date of grant:

As at As at As at
1 March 2023 31 January 2024 - 62,472 - - 62,472 -

1 March 2023 31 July 2024 - 62,472 - - 62,472 -
- 124,944 - - 124,944 -
(C) 123,608 ordinary shares at date of grant:

As at As at As at
15 May 2023 31 January 2024 - 61,804 - - 61,804 -

15 May 2023 31 July 2024 - 61,804 - - 61,804 -
- 123,608 - - 123,608 -
During the financial year ended 30 June 2023, 124,944 ordinary shares and 123,608 ordinary shares have been
granted on 1 March 2023 and 15 May 2023 respectively to eligible executives of the Bank pursuant to the Bank’s
ESS 2022.
364 • FINANCIALS

(b) ESS 2022 (continued)
ESGS 2022 (continued)
During the financial year ended 30 June 2023, a total of 125,445 ordinary shares were vested and transferred
pursuant to the Bank’s ESS 2022, 2,526 ordinary shares forfeited with 373,997 ordinary shares remain outstanding.
During the financial year ended 30 June 2023, the Group and the Bank had written back the provision of share-based
compensation expense arising from ESS of RM12.6 million (2022: a charge of RM6.9 million).
(c) Treasury shares for ESS
A trust has been set up for the ESS and it is administered by an appointed trustee. This trustee will be entitled from time to
time to accept financial assistance from the Bank upon such terms and conditions as the Bank and the trustee may agree
to purchase the Bank’s shares from the open market for the purposes of this trust. In accordance with MFRS 132, the shares
purchased for the benefit of the ESS holdings are recorded as “Treasury Shares for ESS” in the Shareholders’ Funds on the
statements of financial position. The cost of operating the Schemes is charged to the statements of income.
The number and market values of the ordinary shares held by the Trustee are as follows:

2023 2022
Number of Number of
trust shares Market trust shares Market
held value held value
'000 RM’000 '000 RM’000
As at end of the financial year 37,596 712,820 38,265 782,902


56 IBOR REFORM
Following the financial crisis, the reform and replacement of benchmark interest rates such as Kuala Lumpur Interbank Offered
Rate (“KLIBOR”), London Interbank Offered Rate denominated in USD (“USD LIBOR”) and other inter-bank offered rates (“IBORs”)
has become a priority for global regulators. There is currently uncertainty around the timing and precise nature of these changes.
The Group and the Bank have designated hedge relationships where hedged items and/or hedging instruments has reference
to IBORs. The Group’s and the Bank’s risk exposure that is directly affected by the IBOR reform through its fair value hedges
predominantly comprises exposures to KLIBOR and USD LIBOR. These fair value hedges are designated using interest rate swaps,
for changes attributable to the respective current benchmark interest rates, which are MYR KLIBOR, Secured Overnight Financing
Rate (“SOFR”) and Singapore Overnight Rate Average (“SORA”).
As part of the reforms noted above:
- In 2021, BNM introduced the Malaysia Overnight Rate (“MYOR”) as the new alternative reference rate, which will
run in parallel with the existing KLIBOR, providing the market with the flexibility to choose either MYOR or KLIBOR
as the reference rate for pricing of financial instruments. On 1 January 2023, BNM had discontinued the publication
of the 2- and 12-month KLIBOR tenors, which are the least referenced rates in the market for financial contracts.
The remaining one-, three- and six-month KLIBOR tenors, which continue to reflect an active underlying market,
continued to be published. The Financial Markets Committee (“FMC”) will engage the International Swaps and
Derivatives Association (“ISDA”) to ensure continuity of KLIBOR derivative contracts in the event of a temporary or
permanent discontinuation of KLIBOR publication.
- The UK Financial Conduct Authority (“FCA”) has decided not to compel the panel banks to participate in the USD
LIBOR submission process after 31 December 2021 (for GBP, EUR, JPY, CHF LIBOR and USD LIBOR 1-week and 2-month
tenors) and after 30 June 2023 (the remaining US dollar settings).
- The Association of Banks in Singapore and the Singapore Foreign Exchange Market Committee have discontinued the
6-month SIBOR on 31 March 2022, while the 1-month and 3-month SIBOR will be discontinued after December 2024.
The SOFR is expected to replace the USD LIBOR, and regulatory authorities and private sector working groups, had published
recommendations to use USD SOFR compounded in arrears or USD Term SOFR, as alternatives to replace USD LIBOR for different
financial products.
The Group Asset and Liability Committee oversees the Group’s and the Bank’s IBOR transition plan. The transition plan considers
changes to systems, processes, risk management and valuation models, as well as managing tax and accounting implications.
The Group and the Bank continue to monitor market developments in relation to the transition and their impact on the Group’s
and the Bank’s financial assets and liabilities to ensure that there are no unexpected consequences or disruptions from the
transition.
366 • FINANCIALS

56 IBOR REFORM (CONTINUED)
The Group and the Bank hold the following financial instruments which are referenced to the current benchmark interest rates
and have yet to transition to an alternative interest rate benchmark:
The Group The Bank

Notional Amount Notional Amount
Assets Liabilities Assets Liabilities
2023 RM'000 RM’000 RM'000 RM’000
(a) Derivative assets/liabilities
(i) Interest rate swaps

- KLIBOR 58,825,948 62,576,051 58,683,091 62,544,601
(ii) Cross currency swaps

- USD LIBOR 1,590,860 2,346,479 1,590,860 2,346,479
(iii) Option
- KLIBOR 4,297,008 821,860 3,859,768 821,860
(b) Deposits from customers
(i) Structured deposits

- KLIBOR - 3,857,080 - 3,413,390
(c) Loans, advances and financing
- KLIBOR 330,773 - 330,773 -

- USD LIBOR 968,899 - 525,881 -
1,299,672 - 856,654 -

56 IBOR REFORM (CONTINUED)
The Group and the Bank hold the following financial instruments which are referenced to the current benchmark interest rates
and have yet to transition to an alternative interest rate benchmark: (continued)
The Group The Bank

Notional Amount Notional Amount
Assets Liabilities Assets Liabilities
2022 RM'000 RM’000 RM'000 RM’000
(a) Derivative assets/liabilities
(i) Interest rate swaps

- USD LIBOR 66,083 198,248 66,083 198,248
- KLIBOR 40,262,092 45,944,731 40,065,663 45,944,731
40,328,175 46,142,979 40,131,746 46,142,979
(ii) Cross currency swaps

- USD LIBOR 1,959,061 3,050,298 1,916,393 3,050,298
(iii) Option
- KLIBOR 2,458,510 100,000 2,358,510 100,000
(b) Deposits from customers
(i) Structured deposits

- KLIBOR - 2,418,510 - 2,318,510
(c) Loans, advances and financing
- KLIBOR 457,376 - 457,376 -

- USD LIBOR 1,258,226 - 924,213 -
1,715,602 - 1,381,589 -
(d) Bonds
- USD LIBOR 88,110 - 88,110 -
368 • FINANCIALS

57 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING ACCOUNTING POLICIES
The Group and the Bank make estimates and assumptions concerning the future. The resulting accounting estimates will, by
definition, rarely equal the related actual results. To enhance the information content of the estimates, certain key variables
that are anticipated to have material impact to the Group’s and the Bank’s results and financial position are tested for sensitivity
to changes in the underlying parameters. The estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amount of assets and liabilities within the next financial year are outlined below:
(a) Allowance for ECL
The measurement of the ECL for financial assets measured at amortised cost and FVOCI is an area that requires the use of
complex models and significant assumptions about future economic conditions and credit behaviour.
MFRS 9 introduces the use of macroeconomic factors which include, but is not limited to, unemployment, interest rates,
gross domestic product, private consumption, inflation and commercial property prices, and requires an evaluation of both
the current and forecast direction of the economic cycle. Incorporating forward looking information increases the level of
judgement as to how changes in these macroeconomic factors will affect ECL. The methodology and assumptions including
any forecasts of future economic conditions are reviewed regularly.
A number of significant judgements are also required in applying the accounting requirements for measuring ECL, such as:
(i) Determining criteria for significant increase in credit risk;
(ii) Choosing appropriate models and assumptions for the measurement of ECL;
(iii) Establishing the number and relative weightings of forward-looking scenarios for each type of product/market and
the associated ECL; and
(iv) Establishing groups of similar financial assets for the purposes of measuring ECL.
The sensitivity effect on the macroeconomic factor is further disclosed in Note 48(d)(viii) to the financial statements.
While the methodologies and assumptions applied in the base ECL calculations remained unchanged, the Group and the
Bank have applied overlays to determine a sufficient overall level of ECL for the financial year ended 30 June 2023 amidst
the on-going geopolitical conflicts, inflationary pressures from supply disruptions and elevated energy prices, and global
monetary tightening coupled with the reopening of China’s border/slower global growth that may have the impact to our
economy.
The details of overlays and adjustments for expected credit losses are disclosed in Note 48(d)(ix) to the financial statements.
58 GENERAL INFORMATION
The Bank is a public limited liability company that is incorporated and domiciled in Malaysia. The registered office is at Level 30,
Menara Hong Leong, No.6, Jalan Damanlela, Bukit Damansara, 50490 Kuala Lumpur, Wilayah Persekutuan, Malaysia.
The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the Directors on
19 September 2023.
Statement by Directors
pursuant to Section 251(2) of the Companies Act 2016
We, Tan Kong Khoon and Lau Souk Huan, two of the Directors of Hong Leong Bank Berhad, do hereby state that, in the opinion of the
Directors, the financial statements set out on pages 170 to 368 are drawn up so as to give a true and fair view of the financial position
of the Group and the Bank as at 30 June 2023 and the financial performance and the cash flows of the Group and the Bank for the
financial year then ended on that date, in accordance with Malaysian Financial Reporting Standards, International Financial Reporting
Standards and the requirements of the Companies Act 2016 in Malaysia.
On behalf of the Board,
Tan Kong Khoon
Lau Souk Huan
Kuala Lumpur
19 September 2023
Statutory Declaration
pursuant to Section 251(1) of the Companies Act 2016
I, Malkiat Singh @ Malkit Singh Maan A/L Delbara Singh, the officer primarily responsible for the financial management of Hong
Leong Bank Berhad, do solemnly and sincerely declare that the financial statements set out on pages 170 to 368 are, to the best of my
knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the
provisions of the Statutory Declarations Act 1960.
Subscribed and solemnly declared by )

the abovenamed Malkiat Singh @ )
Malkit Singh Maan A/L Delbara Singh at )
Kuala Lumpur in Wilayah Persekutuan on )
19 September 2023 ) Malkiat Singh @ Malkit Singh Maan A/L Delbara Singh
MIA No. CA9305
Before me,
Mohamad Zuliswandi bin Mohamed

Commissioner of Oaths
370 • FINANCIALS
Independent Auditors’ Report

to the members of Hong Leong Bank Berhad
Report on the Audit of the Financial Statements
Our opinion
In our opinion, the financial statements of Hong Leong Bank Berhad (“the Bank”) and its subsidiaries (“the Group”) give a true and
fair view of the financial position of the Group and of the Bank as at 30 June 2023, and of their financial performance and their cash
flows for the financial year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting
Standards and the requirements of the Companies Act 2016 in Malaysia.
What we have audited
We have audited the financial statements of the Group and of the Bank, which comprise the statements of financial position as at
30 June 2023 of the Group and of the Bank, and the statements of income, statements of comprehensive income, statements of
changes in equity and statements of cash flows of the Group and of the Bank for the financial year then ended, and notes to the
financial statements, including a summary of significant accounting policies, as set out on pages 170 to 368.
Basis for opinion
We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our
responsibilities under those standards are further described in the “Auditors’ responsibilities for the audit of the financial statements”
section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence and other ethical responsibilities
We are independent of the Group and of the Bank in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of
the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Board for Accountants’ International Code of
Ethics for Professional Accountants (including International Independence Standards) (“IESBA Code”), and we have fulfilled our other
ethical responsibilities in accordance with the By-Laws and the IESBA Code.
Our audit approach
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements
of the Group and of the Bank. In particular, we considered where the Directors made subjective judgements; for example, in respect of
significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in
all of our audits, we also addressed the risk of management override of internal controls, including among other matters, consideration
of whether there was evidence of bias that represented a risk of material misstatement due to fraud.
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the financial statements
as a whole, taking into account the structure of the Group and of the Bank, the accounting processes and controls, and the industry in
which the Group and the Bank operate.

Report on the Audit of the Financial Statements (continued)
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the Group and of the Bank for the current financial year. These matters were addressed in the context of our audit of the
financial statements of the Group and of the Bank as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
Key audit matters How our audit addressed the key audit matters
Impairment of loans, advances and financing We understood and tested the design and operating effectiveness of the controls
for the Group and the Bank relating to:
Refer to Note 2N of the summary of significant • Identification of loans, advances and financing that displayed objective
accounting policies and Notes 8, 37 and 57 to evidence of impairment or loans, advances and financing that have
the financial statements. experienced significant increase in credit risk or objective evidence of
impairment and the calculation of the impairment loss;
We focused on this area due to the significant
size of the carrying value of loans, advances • Governance over the impairment processes, including model development,
and financing. model approval and model validation, model monitoring and overlay;
The expected credit loss (“ECL”) impairment • Data used to determine the allowances for credit losses including the
model under MFRS 9 “Financial Instruments” completeness and accuracy of the key inputs and assumptions used in the
requires the use of complex models and respective ECL models; and
significant assumptions about future economic
conditions and credit behaviour. • Calculation, review and approval of the ECL computation.
This is also an area of focus as it involves Individual assessment

making significant judgement in applying the
accounting requirements for measuring ECL, Where the loans, advances and financing are individually assessed, we performed
which include the following: the following procedures:
• Building and selecting the appropriate • Examined a sample of loans, advances and financing with focus on loans,
collective assessment models used to advances and financing identified by the Group and the Bank as having lower
calculate ECL. The models are inherently credit quality, rescheduled and restructured, borrowers in high risk industries
complex and judgement is applied in and borrowers affected by recent adverse market developments and formed
determining the appropriate construct of our own judgement as to whether there was a significant increase in credit
model; risk or objective evidence of impairment; and
• Identification of loans, advances and • Where objective evidence of impairment was identified and impairment
financing that have experienced a loss was individually calculated, we assessed the adequacy of impairment
significant increase in credit risk; and allowance by examining both the quantum and timing of future cash
flows used by the Group and the Bank in the impairment loss calculation,
• Assumptions used in the ECL models, challenging the assumptions and comparing estimates to external evidence
which are expected future cash flows, where available. We also reperformed the calculations of discounted cash
forward-looking macroeconomic factors, flows.
probability weighted multiple scenarios
and ECL overlay adjustments made,
given the economic uncertainty that may
impact the ECL.
372 • FINANCIALS

Key audit matters (continued)
Key audit matters How our audit addressed the key audit matters
Collective assessment
To determine the appropriateness of the MFRS 9 collective assessment ECL models

implemented by the Group and the Bank, we have:
• Assessed the methodologies and significant modelling assumptions inherent

within the ECL models applied against the requirements of MFRS 9, including
the basis used by the Group and the Bank to determine the key assumptions
used in respective ECL models;
• Assessed and considered the reasonableness of forward-looking forecasts

assumptions;
• Assessed the reasonableness and tested the calculation of model overlay

adjustments to the ECL;
• Checked the accuracy of data inputs used in ECL models and checked the
calculation of ECL amount on a sampling basis; and
• Involved our financial risk modelling experts and IT specialists in areas such as
reviewing the appropriateness of the ECL models and data reliability.
Based on the procedures performed, we did not find any material exceptions to the
Group’s and the Bank’s assessment on impairment of loans, advances and financing
as at 30 June 2023.
Information other than the financial statements and auditors’ report thereon
The Directors of the Bank are responsible for the other information. The other information comprises the Directors’ Report and Annual
Report, but does not include the financial statements of the Group and of the Bank and our auditors’ report thereon.
Our opinion on the financial statements of the Group and of the Bank does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial statements of the Group and of the Bank, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial statements of the Group and of
the Bank or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required
to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors for the financial statements
The Directors of the Bank are responsible for the preparation of the financial statements of the Group and of the Bank that give a
true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the
requirements of the Companies Act 2016 in Malaysia. The Directors are also responsible for such internal control as the Directors
determine is necessary to enable the preparation of financial statements of the Group and of the Bank that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements of the Group and of the Bank, the Directors are responsible for assessing the Group’s and the
Bank’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless the Directors either intend to liquidate the Group or the Bank or to cease operations, or have no realistic
alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements of the Group and of the Bank as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on
auditing in Malaysia and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we exercise
professional judgement and maintain professional scepticism throughout the audit. We also:
(a) Identify and assess the risks of material misstatement of the financial statements of the Group and of the Bank, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher
than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
(b) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s and the Bank’s internal
control.
(c) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures
made by the Directors.
(d) Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s or
on the Bank’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditors’ report to the related disclosures in the financial statements of the Group and of the Bank or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date
of our auditors’ report. However, future events or conditions may cause the Group or the Bank to cease to continue as a going
concern.
374 • FINANCIALS

Auditors’ responsibilities for the audit of the financial statements (continued)
(e) Evaluate the overall presentation, structure and content of the financial statements of the Group and of the Bank, including the
disclosures, and whether the financial statements of the Group and of the Bank represent the underlying transactions and events
in a manner that achieves fair presentation.
(f) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the
Group to express an opinion on the financial statements of the Group. We are responsible for the direction, supervision and
performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and significant audit
findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding independence,
and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and
where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with the Directors, we determine those matters that were of most significance in the audit of the
financial statements of the Group and of the Bank for the current financial year and are therefore the key audit matters. We describe
these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
In accordance with the requirements of the Companies Act 2016 in Malaysia, we report that the subsidiaries of which we have not
acted as auditors, are disclosed in Note 13 to the financial statements.
Other Matters
This report is made solely to the members of the Bank, as a body, in accordance with Section 266 of the Companies Act 2016 in
Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.
PRICEWATERHOUSECOOPERS PLT LEE TZE WOON KELVIN

LLP0014401-LCA & AF 1146 03482/01/2024 J
Chartered Accountants Chartered Accountant
Kuala Lumpur
19 September 2023
Basel II Pillar 3 Disclosures

1. INTRODUCTION
The risk profile and risk management practices of Hong Leong Bank Berhad and its banking subsidiaries (collectively known as
“the Bank”) are disclosed in this document. These disclosures are in accordance with the requirements outlined in the Guidelines
on Risk-Weighted Capital Adequacy Framework (Basel II) (“RWCAF”) - Disclosure Requirements (Pillar 3) and Capital Adequacy
Framework for Islamic Bank (“CAFIB”) - Disclosure requirements (Pillar 3) issued by BNM.
The capital adequacy ratios of the Bank are computed in accordance with BNM’s Capital Adequacy Framework (Capital
Components) and Capital Adequacy Framework for Islamic Banks (Capital Components), which set out the approach for computing
the regulatory capital adequacy ratios, the minimum levels of the ratios at which banking institutions are required to operate
as well as requirements on Capital Conservation Buffer (“CCB”) and Counter-Cyclical Capital Buffer (“CCyB”). The Bank is also
required to maintain CCB of up to 2.5% of total risk-weighted assets (“RWA”). The CCyB, which could range from 0% up to 2.5%,
is currently assessed at 0% in Malaysia. The minimum capital adequacy including CCB for Common Equity Tier I (“CET I”) capital
ratio, Tier I capital ratio and Total capital ratio for year 2019 onwards are 7.0%, 8.5% and 10.5% respectively.
On 19 April 2023, BNM increased the allocation under the BNM’s Fund for SMEs by RM1.3 billion through selected facilities
namely the High Tech and Green Facility (HTG), Automation and Digitalisation Facility (ADF) and Agrofood Facility (AF) to further
support the micro, small and medium enterprises (SMEs). The Bank will continue to provide support to SMEs involved in strategic
sectors or critical technology segments through the HTG facility, incentivise the automation of processes and digitalisation of
operations through the ADF facility, and provide financing to increase agrofood production through the AF facility.
The Bank has adopted the Standardised Approach for the computation of Credit Risk and Market Risk, and the Basic Indicator
Approach for Operational Risk computation in deriving the RWA.
The following information concerning the Bank’s risk exposures, risk management practices and capital adequacy is disclosed as
accompanying information to the annual report and does not form part of the audited financial statements.
2. SCOPE OF APPLICATION
The capital adequacy ratios of the Bank consist of capital base and RWA derived from the consolidated balances of the Bank and
its banking subsidiaries, namely Hong Leong Islamic Bank Berhad (“HLISB”), Hong Leong Bank Vietnam Limited and Hong Leong
Bank (Cambodia) PLC.
The Bank’s capital requirements are generally based on the principles of consolidation adopted in the preparation of its financial
statements, as disclosed in Note 2A to the financial statements, except where deductions from eligible capital are required
under BNM’s Capital Adequacy Framework (Capital Components) and Capital Adequacy Framework for Islamic Banks (Capital
Components) or where separation requirements (set by BNM) are met by entities.
During the course of the year, the Bank did not experience any restrictions or other major impediments on transfer of funds or
regulatory capital within the Bank.
376 • FINANCIALS

3. CAPITAL STRUCTURE AND ADEQUACY
The Bank monitors its capital adequacy position to ensure compliance with the requirements of BNM and allows for prompt
actions to be taken to address projected capital deficiency. The capital position is reviewed on a monthly basis and takes into
account the levels and trends of material risks. The sufficiency of capital is assessed against various risks on the balance sheet
as well as future capital requirements based on the Bank’s business plans.
The Bank has also formalised an overall capital management and planning policy, which seeks to ensure that it is in line with
Basel III Capital Standards.
The following table sets forth details on the capital resources, capital adequacy ratios and risk-weighted assets for the Bank as
at 30 June 2023. BNM’s Capital Adequacy Framework (Capital Components) and Capital Adequacy Framework for Islamic Banks
(Capital Components) set out the minimum capital adequacy ratios for the banking institutions and the methodologies for
calculating these ratios. As at 30 June 2023, the Bank’s CET I, Tier I capital ratio and Total capital ratio were higher than BNM’s
minimum requirements.
BNM’s Capital Adequacy Framework (Capital Components) and Capital Adequacy Framework for Islamic Banks (Capital
Components) set out the constituents of the total eligible capital for the Bank. For the main features of these capital instruments,
please refer to Note 26 and Note 27 to the financial statements.
Basel III
(a) The capital adequacy ratios of the Group and the Bank are as follows:
The Group The Bank

30 June 2023 30 June 2022 30 June 2023 30 June 2022



3. CAPITAL STRUCTURE AND ADEQUACY (CONTINUED)
Basel III (continued)
(b) The components of CET I, Tier I and Tier II capital under the revised Capital Components Framework are as follows:
The Group The Bank

RM’000 RM’000 RM’000 RM’000
CET I capital
Share capital 7,739,063 7,739,063 7,739,063 7,739,063
Retained profits 25,017,703 22,727,982 15,727,832 15,120,482
Other reserves 947,836 592,754 2,905 (283,282)
Less: Treasury shares (708,766) (713,690) (708,766) (713,690)
Less: Deferred tax assets (410,436) (528,771) (317,985) (403,666)
Less: Other intangible assets (362,435) (304,749) (326,216) (269,645)
Less: Goodwill (1,831,312) (1,831,312) (1,771,547) (1,771,547)
Less: Investment in subsidiary companies/associated
companies (8,712,976) (6,455,474) (3,938,210) (2,794,291)
Total CET I capital 21,678,677 21,225,803 16,407,076 16,623,424
Additional Tier I capital

Multi-currency Additional Tier-1 capital securities 1,698,491 1,698,839 1,698,491 1,698,839
Additional Tier I capital before regulatory adjustments 1,698,491 1,698,839 1,698,491 1,698,839
Less: Investments in Additional Tier 1 perpetual
subordinated sukuk wakalah - - (400,000) (400,000)
Additional Tier I capital after regulatory adjustments 1,698,491 1,698,839 1,298,491 1,298,839
Total Tier I capital 23,377,168 22,924,642 17,705,567 17,922,263
Tier II capital
Stage 1 and Stage 2 expected credit loss allowances
and regulatory reserves # 1,832,523 1,738,471 1,399,403 1,350,820
Subordinated bonds 1,499,089 1,499,970 1,499,089 1,499,970
Less: Investment in Tier 2 Subordinated Sukuk
Murabahah - - (400,000) (400,000)
Total Tier II capital 3,331,612 3,238,441 2,498,492 2,450,790
Total Capital 26,708,780 26,163,083 20,204,059 20,373,053
# Includes the qualifying regulatory reserves for non-impaired loans of the Group and the Bank of RM990,816,000
(2022: RM643,141,000) and RM825,318,000 (2022: RM536,432,000) respectively.
378 • FINANCIALS

(c) The breakdown of RWA by each major risk category is as follows:
The Group The Bank

RM’000 RM’000 RM’000 RM’000
Credit risk * 146,601,855 139,077,644 111,952,229 108,065,582

Market risk 6,124,089 3,917,894 6,120,834 3,934,497
Operational risk 10,143,761 9,327,630 8,131,845 7,485,705
Total RWA 162,869,705 152,323,168 126,204,908 119,485,784
* In accordance with BNM Investment Account Policy, the credit RWA of HLISB funded by Investment Account of
RM1,588,912,000 (2022: RM1,899,820,000) is excluded from the calculation of capital adequacy ratio of the Group.
(d) The capital adequacy ratios of the banking subsidiary company of the Group are as follows:
Hong Leong Islamic Bank Berhad

30 June 2023 30 June 2022



(e) The breakdown of RWA by exposure is as follows:
Minimum
Gross Net Risk capital
exposures exposures weighted requirements
before CRM after CRM assets at 8%
30 June 2023
Exposure Class
Credit Risk
On-Balance Sheet Exposures
Sovereigns/Central Banks 59,748,413 59,748,413 - -
Public Sector Entities 25,848 25,848 5,170 414
Banks, Development Financial Institutions (“DFIs”) and
Multilateral Development Bank (“MDBs”) 11,375,031 11,375,031 3,666,329 293,306
Insurance Cos, Securities Firms (“SF”) and
Fund Managers (“FM”) 643,986 615,986 615,986 49,279
Corporates 58,341,208 55,931,802 49,626,908 3,970,153
Regulatory Retail 53,792,198 53,430,691 40,340,954 3,227,276
Residential Mortgages 69,768,087 69,737,838 31,979,976 2,558,398
Higher Risk Assets 16,660 16,660 24,990 1,999
Other Assets 6,064,948 6,064,948 3,257,175 260,574
Defaulted Exposures 645,007 620,212 667,381 53,390
Total On-Balance Sheet Exposures 260,421,386 257,567,429 130,184,869 10,414,789
Off-Balance Sheet Exposures

Over-the-counter (“OTC”) Derivatives 4,193,781 4,193,781 2,180,837 174,467
Credit Derivatives 71,411 71,411 17,317 1,385
Off-Balance Sheet Exposures Other Than
OTC Derivatives or Credit Derivatives 16,927,260 16,675,422 14,193,197 1,135,456
Total Off-Balance Sheet Exposures 21,207,570^ 20,955,732 16,416,986 1,313,359
Total On and Off-Balance Sheet Exposures 281,628,956 278,523,161 146,601,855 11,728,148
Long Short
Market Risk Position Position
Interest Rate Risk 142,997,388 139,141,596 5,331,875 426,550

Foreign Currency Risk 337,822 625,067 705,852 56,468
Equity Risk 14,303 - 61,376 4,910
Option Risk - - 24,986 1,999
Total 143,349,513 139,766,663 6,124,089 489,927
Operational Risk 10,143,761 811,501
Total RWA and Capital Requirements 162,869,705 13,029,576

Note:
CRM - credit risk mitigation
^ The gross exposures before CRM of Off-Balance Sheet exposures refer to the credit equivalent of Off-Balance
Sheet items on page 410.
380 • FINANCIALS

(e) The breakdown of RWA by exposure is as follows: (continued)
Minimum
30 June 2022
Exposure Class
Credit Risk
Public Sector Entities 73,157 73,157 14,631 1,171
Banks, DFIs and MDBs 11,007,818 11,007,818 3,164,386 253,151
Insurance Cos, SF and FM 555,839 555,751 555,751 44,460
Corporates 50,328,255 47,937,295 44,153,757 3,532,301
Other Assets 8,006,453 8,006,453 5,857,939 468,635

OTC Derivatives 3,288,070 3,288,070 1,795,810 143,665
Credit Derivatives 46,916 46,916 9,384 751
OTC Derivatives or Credit Derivatives 16,274,365 16,023,952 13,400,965 1,072,077
Long Short

Option Risk - - 15,878 1,270
Total 99,757,056 97,089,730 3,917,894 313,431
Note:

Minimum
30 June 2023
Exposure Class
Credit Risk
Public Sector Entities 25,848 25,848 5,170 414
Corporates 44,567,163 42,643,691 38,089,653 3,047,172
Other Assets 5,665,880 5,665,880 3,206,600 256,528

OTC Derivatives 3,887,086 3,887,086 2,060,262 164,821
Credit Derivatives 71,411 71,411 17,317 1,385
OTC Derivatives or Credit Derivatives 13,103,967 12,871,416 10,937,743 875,019
Long Short

Equity Risk 14,303 - 61,376 4,910
Option Risk - - 24,986 1,999
Total 141,950,059 139,206,860 6,120,834 489,666
Note:
382 • FINANCIALS

Minimum
30 June 2022
Exposure Class
Credit Risk
Public Sector Entities 73,157 73,157 14,631 1,171
Corporates 38,625,466 36,547,316 34,139,739 2,731,179
Other Assets 7,131,626 7,131,626 5,262,359 420,989

OTC Derivatives 3,101,893 3,101,893 1,722,632 137,811
Credit Derivatives 46,916 46,916 9,384 751
OTC Derivatives or Credit Derivatives 12,780,033 12,548,489 10,495,206 839,617
Total Off-Balance Sheet Exposures 15,939,597^ 15,707,760 12,243,212 979,458
Long Short

Option Risk - - 15,878 1,270
Total 99,154,486 96,930,684 3,934,497 314,759
Note:

4. RISK MANAGEMENT
The Bank has implemented a risk management framework with the objective to ensure the overall financial soundness and
stability of the Bank’s business operations. The risk management framework outlines the overall governance structure, aspiration,
values and risk management strategies which aligns the Bank’s risk profile, capital strategies and return objectives. Appropriate
methodologies and measurements have been developed to manage uncertainties such that deviations from intended strategic
objectives are closely monitored and kept within tolerable levels.
As part of the risk management framework, the Bank has formulated and implemented an Internal Capital Adequacy Assessment
Process (“ICAAP”) and a capital management and planning policy to ensure that it maintains the appropriate level of capital, the
appropriate quality and structure of capital and the appropriate risk profile to support its strategic objectives. This also includes
determining the Bank’s minimum capital threshold and target capital levels.
From a governance perspective, the Board has the overall responsibility to define the Bank’s risk appetite and ensure that a
robust risk management and compliance culture prevails. The Board is assisted by the Board Risk Management Committee
(“BRMC”) in approving the risk management framework as well as the attendant capital management and planning policy, risk
appetite statements, risk management strategies, and risk policies.
Dedicated management level committees are established to oversee the development and the effectiveness of risk management
policies, to review risk exposures and portfolio composition as well as to ensure appropriate infrastructures, resources and
systems are put in place for effective risk management activities.
Operationally, the Bank operates multiple lines of defences to effect a robust control framework. The business units being the
first line of defence are responsible for identifying, mitigating and managing risks within their lines of business. The Group Risk
Management (“GRM”) function being one of the components of the second line of defence, is responsible for setting the risk
management framework and developing tools and methodologies for the identification, measurement, monitoring, control and
mitigation of risks. In addition, GRM undertakes validation to ensure that the business and operating units are in compliance
to the Bank’s risk appetite thresholds and to the regulatory requirements. Coverage of the GRM function includes Market Risk,
Interest Rate Risk in the Banking Book, Liquidity Risk, Credit Risk, Technology Risk, Operational Risk, ICAAP and Stress Testing,
Environment, Social and Governance (“ESG”) Risk and Islamic Banking Risk.
The Group Internal Audit function, being the third line of defence, is responsible to provide independent assurance on the
effective functioning of the risk management framework for the Bank.
The risk management process for each key risk area of the Bank and the various risk exposures are described in the following
sections of the Pillar 3 disclosures.
(A) Credit risk
Credit risk arises as a result of customers or counterparties not being able to or willing to fulfil their financial and contractual
obligations as and when they fall due. These obligations arise from lending, trade finance and other activities undertaken
by the Bank.
The Bank has established a Board Policy on Credit Risk Governance to ensure that exposure to credit risk is kept within the
Bank’s financial capacity to withstand potential future losses. Lending activities are guided by the internal credit policies
and guidelines which are reviewed and concurred by the Management Credit Committee (“MCC”), endorsed by the Credit
Supervisory Committee (“CSC”) and the BRMC, and approved by the Board. These policies are subject to review and
enhancements, at least on an annual basis.
384 • FINANCIALS

4. RISK MANAGEMENT (CONTINUED)
(A) Credit risk (continued)
Credit portfolio strategies and significant exposures are reviewed by both the BRMC and the Board. These portfolio
strategies are designed to achieve a desired portfolio risk tolerance level and sector distribution.
The Bank’s credit approving process encompasses pre-approval evaluation, approval and post-approval evaluation.
While the business units are responsible for credit origination, the credit approving function rests mainly with the Credit
Evaluation Departments, the MCC and the CSC. The Board delegates the approving and discretionary authority to the MCC,
CSC and the various personnel of the Bank based on job function and designation.
The Bank’s Independent Credit Review function conducts independent post approval reviews on sampling basis to ensure
that the quality of credit appraisals, approval standards and operational robustness are in accordance with the credit
standards, lending policies and the directives established and approved by the Bank’s Management as well as where
appropriate, a countervailing perspective on credit risk management issues including the overall credit quality.
For any new products/product variation, credit risk assessment also forms part of the new product/product variation sign-
off process to ensure that the new product complies with the appropriate policies and guidelines, prior to the introduction
of the product.
The Bank’s exposure to credit risk is mainly from its retail customers, small and medium enterprise (“SME”), commercial
and corporate customers. The credit assessment for retail customers is managed on a portfolio basis and the risk scoring
models and lending templates are designed to assess the credit worthiness and the likelihood of the obligors to repay
their debts.
The SME, commercial and corporate customers are individually assessed and assigned with a credit rating, which is based
on the assessment of relevant factors such as the customer’s financial position, industry outlook, types of facilities and
collaterals offered.
Under the Basel II Standardised Approach, the Bank makes use of credit ratings assigned by credit rating agencies in
its calculation of credit risk weighted assets. This is applicable for exposures to sovereigns, central banks, public sector
entities, banking institutions, corporates as well as certain other specific portfolios.
The approved External Credit Assessment Institutions (“ECAI”) ratings and the prescribed risk weights on the above stated
asset classes are used in the computation of regulatory capital. An exposure would be deemed to have an external rating
if the issuer or the issue has a rating provided by an ECAI. In cases where an exposure does not have an issuer or issue
rating, the exposure shall be deemed unrated and shall be accorded a risk weight appropriate for unrated exposures in
their respective exposure category.
The ECAI used by the Bank are Fitch Ratings, Moody’s Investors Service, Standard & Poor’s, Malaysia Rating Corporation
Berhad (“MARC”) and Rating Agency Malaysia (“RAM”). ECAI ratings are mapped to a common credit quality grade as
prescribed by BNM.
In addition, the Bank also conducts periodic stress testing of its credit portfolios to ascertain the credit risk impact to capital
under the relevant stress scenarios. In addition, the Bank’s credit risk assessments are progressively enhanced to consider
the effects of climate-related risks, as well as its impact on the ability and willingness of customers to honour their credit
obligations.

Gross credit exposure
(i) The table below sets out the breakdown of gross credit exposures by geographical distribution as follows:
Other
Malaysia countries Total
The Group RM’000 RM’000 RM’000
30 June 2023
Financial assets at fair value through profit or loss* 3,738,439 172,348 3,910,787
Financial investments at fair value through other comprehensive
income* 28,388,139 5,400,881 33,789,020
Financial investments at amortised cost 29,698,005 1,496,060 31,194,065
Loans, advances and financing 165,977,730 13,925,117 179,902,847
Derivative financial instruments 2,017,300 151,124 2,168,424
Total On-Balance Sheet Exposures 229,819,613 21,145,530 250,965,143
Off-Balance Sheet Exposures^

OTC Derivatives 3,915,368 278,413 4,193,781
Credit Derivatives 71,411 - 71,411
Off-Balance Sheet Exposures Other Than OTC Derivatives
or Credit Derivatives 16,650,908 291,470 16,942,378
Total Off-Balance Sheet Exposures 20,637,687 569,883 21,207,570
Total On and Off-Balance Sheet Exposures 250,457,300 21,715,413 272,172,713
30 June 2022

Financial assets at fair value through profit or loss* 1,065,670 1,876,878 2,942,548
income* 23,773,424 2,339,493 26,112,917
Financial investments at amortised cost 31,377,076 981,338 32,358,414

OTC Derivatives 3,178,204 109,866 3,288,070

Note:
(1)
For this table, the Group and the Bank have allocated the loans, advances and financing to geographical
areas based on the country where the loans, advances and financing were provided.
* Excludes equity securities.
^ Off-Balance Sheet exposures refer to the credit equivalent of Off-Balance Sheet items on page 410 and page 411.
386 • FINANCIALS

Gross credit exposure (continued)
(i) The table below sets out the breakdown of gross credit exposures by geographical distribution as follows: (continued)
Other
Malaysia countries Total
The Bank RM’000 RM’000 RM’000
30 June 2023
Financial assets at fair value through profit or loss* 2,978,291 172,348 3,150,639
income* 24,616,776 5,394,774 30,011,550
Financial investments at amortised cost 20,769,220 1,432,344 22,201,564

OTC Derivatives 3,608,851 278,235 3,887,086
30 June 2022

Financial assets at fair value through profit or loss* 657,940 1,876,878 2,534,818
income* 20,001,154 2,331,981 22,333,135
Financial investments at amortised cost 22,225,115 919,430 23,144,545

OTC Derivatives 2,995,832 106,061 3,101,893

Note:
(1)
For this table, the Group and the Bank have allocated the loans, advances and financing to geographical
areas based on the country where the loans, advances and financing were provided.
7
387

(ii) The table below sets out the breakdown of gross credit exposures by sector as follows:
Financial Off-balance Total

Financial investments Total sheet exposures Total on and
assets at fair value Financial on-balance other than OTC off-balance off-balance
at fair value through other investments Loans, Derivative sheet credit OTC and derivatives sheet sheet
through comprehensive at amortised advances and financial risk credit or credit credit risk credit risk
profit or loss* income* cost financing instruments exposures derivatives derivatives exposures exposures
The Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
30 June 2023
Agriculture - 41,232 - 2,787,470 - 2,828,702 - 381,487 381,487 3,210,189
Mining and quarrying - - - 115,556 - 115,556 - 27,051 27,051 142,607
Manufacturing 14,136 - - 15,342,174 - 15,356,310 - 3,564,036 3,564,036 18,920,346
Electricity, gas and water 70,431 2,289,844 5,024 738,051 - 3,103,350 - 111,619 111,619 3,214,969
Construction 10,098 349,270 158,951 6,358,806 - 6,877,125 - 1,607,936 1,607,936 8,485,061
Wholesale and retail - 33,156 - 16,176,215 - 16,209,371 - 2,727,458 2,727,458 18,936,829
communications 9,868 181,083 - 5,706,490 - 5,897,441 - 341,582 341,582 6,239,023
Finance, insurance, real
estate and business
services 164,994 13,058,003 2,035,363 16,528,907 2,168,424 33,955,691 4,265,192 1,179,350 5,444,542 39,400,233
Government and
government agencies 3,641,260 17,836,432 28,994,727 - - 50,472,419 - 79,686 79,686 50,552,105
Education, health and
others - - - 1,538,040 - 1,538,040 - 124,984 124,984 1,663,024
Household - - - 114,541,027 - 114,541,027 - 6,796,724 6,796,724 121,337,751
Others - - - 70,111 - 70,111 - 465 465 70,576
Total On and Off-Balance
Sheet Exposures 3,910,787 33,789,020 31,194,065 179,902,847 2,168,424 250,965,143 4,265,192 16,942,378 21,207,570 272,172,713

388 • FINANCIALS

(ii) The table below sets out the breakdown of gross credit exposures by sector as follows: (continued)

The Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
30 June 2022
Agriculture 24,365 41,252 - 3,161,634 - 3,227,251 - 360,796 360,796 3,588,047
Manufacturing - - - 14,120,195 - 14,120,195 - 2,925,571 2,925,571 17,045,766
Construction 10,195 287,553 160,904 4,954,202 - 5,412,854 - 1,161,094 1,161,094 6,573,948
communications - 118,864 - 5,271,899 - 5,390,763 - 431,186 431,186 5,821,949
estate and business
services 172,153 9,044,626 1,122,291 14,112,171 1,863,300 26,314,541 3,334,986 1,103,589 4,438,575 30,753,116
Government and
others - - - 1,714,066 - 1,714,066 - 202,042 202,042 1,916,108
Household - - - 106,595,675 - 106,595,675 - 7,279,506 7,279,506 113,875,181
Others - - - 44,804 - 44,804 - 15,048 15,048 59,852
Sheet Exposures 2,942,548 26,112,917 32,358,414 166,487,621 1,863,300 229,764,800 3,334,986 16,288,963 19,623,949 249,388,749

9
389


The Bank RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
30 June 2023
Agriculture - 41,232 - 1,345,007 - 1,386,239 - 298,955 298,955 1,685,194
Manufacturing 14,136 - - 11,302,215 - 11,316,351 - 2,882,578 2,882,578 14,198,929
Construction 10,098 349,270 158,951 4,974,419 - 5,492,738 - 911,013 911,013 6,403,751
communications 9,868 181,083 - 5,178,405 - 5,369,356 - 272,299 272,299 5,641,655
estate and business
services 163,712 12,807,144 1,244,885 12,766,941 2,071,669 29,054,351 3,958,497 814,727 4,773,224 33,827,575
Government and
others - - - 720,459 - 720,459 - 58,932 58,932 779,391
Household - - - 86,261,100 - 86,261,100 - 5,562,354 5,562,354 91,823,454
Others - - - 61,859 - 61,859 - - - 61,859
Sheet Exposures 3,150,639 30,011,550 22,201,564 135,092,761 2,071,669 192,528,183 3,958,497 13,113,193 17,071,690 209,599,873

390 • FINANCIALS


The Bank RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
30 June 2022
Agriculture 24,365 41,252 - 1,693,048 - 1,758,665 - 253,524 253,524 2,012,189
Manufacturing - - - 10,655,006 - 10,655,006 - 2,310,970 2,310,970 12,965,976
Construction 10,195 287,553 160,904 3,911,381 - 4,370,033 - 862,380 862,380 5,232,413
communications - 118,864 - 4,761,090 - 4,879,954 - 351,075 351,075 5,231,029
estate and business
services 163,056 8,765,571 873,690 10,801,366 1,776,371 22,380,054 3,148,809 825,919 3,974,728 26,354,782
Government and
others - - - 891,452 - 891,452 - 98,809 98,809 990,261
Household - - - 81,566,321 - 81,566,321 - 5,934,981 5,934,981 87,501,302
Others - - - 34,284 - 34,284 - 443 443 34,727
Sheet Exposures 2,534,818 22,333,135 23,144,545 126,745,536 1,776,371 176,534,405 3,148,809 12,790,788 15,939,597 192,474,002


(iii) The table below sets out the breakdown of gross credit exposures by residual contractual maturity as follows:
Less than 1-5 Over 5

1 year years years Total
30 June 2023
Financial assets at fair value through profit or loss* 2,090,705 480,689 1,339,393 3,910,787
comprehensive income* 5,340,047 27,530,664 918,309 33,789,020
Financial investments at amortised cost 1,784,522 28,365,414 1,044,129 31,194,065
Derivative financial instruments 1,140,489 819,048 208,887 2,168,424

OTC Derivatives 3,334,379 662,959 196,443 4,193,781
Credit Derivatives 10,119 - 61,292 71,411
Off-Balance Sheet Exposures Other Than OTC
Derivatives or Credit Derivatives 8,460,089 8,482,289 - 16,942,378
Total Off-Balance Sheet Exposures 11,804,587 9,145,248 257,735 21,207,570
30 June 2022

Financial assets at fair value through profit or loss* 2,319,944 455,783 166,821 2,942,548
comprehensive income* 2,572,169 18,834,057 4,706,691 26,112,917
Derivative financial instruments 896,363 673,666 293,271 1,863,300

OTC Derivatives 2,459,820 388,512 439,738 3,288,070
Credit Derivatives - - 46,916 46,916

392 • FINANCIALS

(iii) The table below sets out the breakdown of gross credit exposures by residual contractual maturity as follows: (continued)
Less than 1-5 Over 5

1 year years years Total
30 June 2023
Financial assets at fair value through profit or loss* 1,495,673 377,894 1,277,072 3,150,639
comprehensive income* 5,233,315 23,859,926 918,309 30,011,550
Derivative financial instruments 1,039,539 825,996 206,134 2,071,669

OTC Derivatives 3,111,363 590,896 184,827 3,887,086
Credit Derivatives 10,119 - 61,292 71,411
30 June 2022

Financial assets at fair value through profit or loss* 1,912,215 455,782 166,821 2,534,818
comprehensive income* 2,526,533 16,544,469 3,262,133 22,333,135
Derivative financial instruments 813,570 672,718 290,083 1,776,371

OTC Derivatives 2,309,499 384,307 408,087 3,101,893
Credit Derivatives - - 46,916 46,916

393

(i) The table below sets out the breakdown by sector the amount of past due loans, advances and financing, credit impaired loans, advances and financing, expected credit losses (Stage 1, 2
and 3), expected credit losses charges/(write back) and write-offs for Stage 3 during the period as follows:
Charges/
Lifetime (write back) Write-offs
expected Lifetime lifetime lifetime
Credit 12-month credit losses- expected expected credit expected credit
Past due loans, impaired loans, expected not credit credit losses- losses-credit losses-credit
advances and advances and credit losses impaired credit impaired impaired impaired
financing financing (Stage 1) (Stage 2) (Stage 3) (Stage 3) (Stage 3)
30 June 2023
Agriculture 5,478 3,518 9,424 1,638 336 383 48
Mining and quarrying 2,344 3,029 601 115 1,187 1,294 58
Manufacturing 78,477 144,477 53,877 13,751 68,638 62,364 23,486
Electricity, gas and water 9,113 1,146 6,292 339 736 194 29
Construction 97,116 90,551 35,099 14,219 47,469 28,054 2,336
Wholesale and retail 173,434 152,397 89,717 27,696 67,695 24,777 9,615
Transport, storage and communications 11,471 8,465 11,936 1,362 3,408 3,029 1,775
Finance, insurance, real estate and business services 113,341 83,591 82,707 19,984 18,312 (2,524) 6,910
Education, health and others 11,476 11,942 6,008 2,091 3,639 1,105 446
Household 5,320,185 542,768 669,950 300,560 199,724 275,638 261,442
Others - - 654 - - - -
5,822,435 1,041,884 966,265 381,755 411,144 394,314 306,145
394 • FINANCIALS

Loans, advances and financing (continued)
and 3), expected credit losses (write back)/charges and write-offs for Stage 3 during the period as follows:
(Write back)/
Lifetime charges Write-offs
30 June 2022
Agriculture 3,112 3,394 11,149 1,093 79 (284) 55
Mining and quarrying 754 168 531 1,043 20 182,816 183,951
Manufacturing 47,259 55,892 55,162 37,821 30,648 4,844 50
Electricity, gas and water 1,163 1,171 9,850 1,424 595 (49) -
Construction 95,163 60,730 31,013 16,948 23,820 8,408 1,257
Transport, storage and communications 13,607 5,830 12,007 1,831 2,350 3,055 141
Finance, insurance, real estate and business services 56,610 113,038 73,195 20,396 28,929 9,439 278
Education, health and others 13,038 12,379 5,538 6,631 3,371 1,016 52
Household 4,173,270 428,609 693,592 301,126 190,291 282,356 238,916
Others 70 - 218 167 - - -
4,484,342 819,750 976,919 423,876 335,647 529,808 425,838
5
395

and 3), expected credit losses charges/(write back) and write-offs for Stage 3 during the period as follows:
Charges/
Lifetime (write back) Write-offs
The Bank RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
30 June 2023
Agriculture 3,969 3,518 5,378 870 336 383 48
Mining and quarrying 914 3,029 453 32 1,187 1,242 6
Manufacturing 47,547 44,194 37,839 10,468 24,992 19,010 23,486
Electricity, gas and water 9,113 - 2,974 339 - - -
Construction 72,923 81,924 27,800 11,115 44,402 27,489 2,336
Transport, storage and communications 10,105 8,177 9,703 1,136 3,387 2,998 1,764
Finance, insurance, real estate and business services 103,452 74,410 54,480 17,726 14,653 (3,728) 6,900
Education, health and others 10,400 9,213 3,166 700 3,024 863 446
Household 3,453,566 351,707 511,536 199,331 118,832 172,441 183,228
Others - - 31 - - - -
3,866,347 676,600 712,146 265,808 260,295 238,353 227,681
396 • FINANCIALS

and 3), expected credit losses (write back)/charges and write-offs for Stage 3 during the period as follows:
(Write back)/
Lifetime charges Write-offs
The Bank RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
30 June 2022
Agriculture 3,073 3,394 5,261 784 79 (284) 55
Mining and quarrying 754 168 400 939 20 (72) -
Manufacturing 23,641 53,258 40,408 22,043 30,064 4,602 50
Electricity, gas and water 1,161 - 3,228 389 - (82) -
Construction 71,665 54,361 23,672 11,898 21,049 8,392 1,257
Transport, storage and communications 11,344 5,828 9,670 1,708 2,348 1,144 141
Finance, insurance, real estate and business services 44,761 104,163 48,190 19,158 26,032 8,745 278
Education, health and others 10,608 11,026 3,541 759 2,931 531 52
Household 2,935,563 310,604 555,590 208,954 133,016 204,118 175,365
Others 70 - 54 33 - - -
3,162,196 647,646 745,735 296,203 259,157 255,198 178,336

(ii) The table below sets out the breakdown by geographical areas the amount of past due loans, advances and
financing, impaired loans, advances and financing, expected credit losses (Stage 1, 2 and 3) as follows:
Lifetime Lifetime
expected expected
Past due Impaired 12-month credit losses- credit
loans, loans, expected not credit losses-credit
advances and advances and credit losses impaired impaired
financing financing (Stage 1) (Stage 2) (Stage 3)
RM’000 RM’000 RM’000 RM’000 RM’000
The Group
30 June 2023
Malaysia 5,749,913 982,267 948,736 378,040 392,335
Other countries 72,522 59,617 17,529 3,715 18,809
5,822,435 1,041,884 966,265 381,755 411,144
The Bank
30 June 2023
Malaysia 3,841,194 675,119 705,598 265,773 259,597

Other countries 25,153 1,481 6,548 35 698
3,866,347 676,600 712,146 265,808 260,295
The Group
30 June 2022
Malaysia 4,395,535 805,638 955,661 419,958 332,877
Other countries 88,807 14,112 21,258 3,918 2,770
4,484,342 819,750 976,919 423,876 335,647
The Bank
30 June 2022
Malaysia 3,135,741 646,805 733,871 295,998 258,792
Other countries 26,455 841 11,864 205 365
3,162,196 647,646 745,735 296,203 259,157
Note:
(1)
A financial asset is defined as “past due” when the counterparty has failed to make a principal or interest
payment when contractually due.
(2)
For description of approaches adopted by the Group and the Bank for the determination of expected credit
losses impairment, refer to Note 2N to the financial statements.
398 • FINANCIALS

(iii) The table below sets out the movements in expected credit losses for loans, advances and financing during the financial
year as follows:

At 30 June 2023
At 1 July 976,919 423,876 335,647 1,736,442
financial asset 366 1,078 203 1,647
Other movements - - (12,057) (12,057)
At 30 June 966,265 381,755 411,144 1,759,164

year as follows: (continued)

At 30 June 2023
At 1 July 745,735 296,203 259,157 1,301,095
financial asset 366 1,103 (76) 1,393
At 30 June 712,146 265,808 260,295 1,238,249
400 • FINANCIALS


At 30 June 2022
At 1 July 1,074,984 459,674 234,509 1,769,167
Exchange difference 996 374 903 2,273
At 30 June 976,919 423,876 335,647 1,736,442


At 30 June 2022
At 1 July 818,437 326,761 186,098 1,331,296
Exchange difference 476 52 12 540
At 30 June 745,735 296,203 259,157 1,301,095
402 • FINANCIALS

Credit risk exposures by risk weight
The breakdown of credit risk exposures by risk weight is as follows:
The Group
30 June 2023 Exposures after Netting and Credit Risk Mitigation
Total
Exposures
Sovereigns/ Public Banks, Insurance Higher after Netting Total Risk
Central Sector DFIs Cos, SF Regulatory Residential Risk Other & Credit Risk Weighted
Banks Entities and MDBs and FM Corporates Retail Mortgages Assets Assets Mitigation Assets
Risk Weight RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
0% 59,926,844 - - - - - - - 1,566,391 61,493,235 -

20% - 610,585 7,447,706 190 6,298,000 - - - 1,580,128 15,936,609 3,171,171
35% - - - - - - 45,378,832 - - 45,378,832 15,882,591
50% - - 6,304,502 - 620,036 27,802 16,154,909 - - 23,107,249 11,524,797
75% - - - - - 60,375,610 28,500 - - 60,404,110 45,303,083
100% - - - 1,108,190 56,935,840 2,514,731 8,483,936 - 2,948,431 71,991,128 71,991,128
150% - - - - 70,690 124,628 - 16,680 - 211,998 317,997
Total 59,926,844 610,585 13,752,208 1,108,380 63,924,566 63,042,771 70,046,177 16,680 6,094,950 278,523,161 148,190,767
Risk Weighted Assets

by Exposure - 122,117 4,596,813 1,108,228 58,611,493 47,997,282 32,465,357 25,020 3,264,457 148,190,767
Average Risk Weight 0% 20.00% 33.43% 99.99% 91.69% 76.13% 46.35% 150.00% 53.56% 53.21%
Deduction from
Capital Base - - - - - - - - - -
3
403

Credit risk exposures by risk weight (continued)
The breakdown of credit risk exposures by risk weight is as follows: (continued)
The Group
Total
Exposures
0% 53,049,498 - - - - - - - 1,370,428 54,419,926 -

20% - 411,661 8,387,245 - 3,187,152 - - - 991,238 12,977,296 2,590,235
35% - - - - - - 43,276,151 - - 43,276,151 15,146,653
50% - - 4,492,863 - 482,378 22,825 16,072,070 - - 21,070,136 10,528,807
75% - - - - - 57,946,697 53,736 - - 58,000,433 43,500,325
100% - - - 984,004 50,956,317 2,551,650 8,583,331 - 5,674,789 68,750,091 68,750,091
150% - - - - 93,825 121,499 - 92,245 - 307,569 461,354
Total 53,049,498 411,661 12,880,108 984,004 54,719,672 60,642,671 67,985,288 92,245 8,036,455 258,801,602 140,977,465

by Exposure - 82,332 3,912,395 984,004 51,975,674 46,205,334 31,806,321 138,368 5,873,037 140,977,465
Deduction from
Capital Base - - - - - - - - - -
404 • FINANCIALS

The Bank
Total
Exposures
0% 45,382,848 - - - - - - - 1,237,583 46,620,431 -

20% - 456,646 8,084,307 190 5,382,536 - - - 1,537,124 15,460,803 3,092,161
35% - - - - - - 36,905,594 - - 36,905,594 12,916,958
50% - - 5,833,129 - 607,310 18,997 11,742,866 - - 18,202,302 9,101,151
75% - - - - - 44,473,923 24,981 - - 44,498,904 33,374,178
100% - - - 1,005,135 42,791,003 486,743 6,008,880 - 2,901,175 53,192,936 53,192,934
150% - - - - 69,125 97,426 - 16,680 - 183,231 274,847
Total 45,382,848 456,646 13,917,436 1,005,325 48,849,974 45,077,089 54,682,321 16,680 5,675,882 215,064,201 111,952,229

by Exposure - 91,329 4,533,426 1,005,173 44,274,852 33,997,822 24,816,007 25,020 3,208,600 111,952,229
Deduction from
Capital Base - - - - - - - - - -
5
405

The Bank
Total
Exposures
0% 38,982,184 - - - - - - - 1,124,960 40,107,144 -

20% - 333,909 10,481,908 - 2,796,496 - - - 940,385 14,552,698 2,910,540
35% - - - - - - 35,599,468 - - 35,599,468 12,459,814
50% - - 4,035,438 - 480,207 19,724 11,847,620 - - 16,382,989 8,191,495
75% - - - - - 44,105,338 43,931 - - 44,149,269 33,111,949
100% - - - 977,854 38,624,875 443,030 5,847,119 - 5,076,282 50,969,160 50,969,160
150% - - - - 87,744 101,767 - 92,238 - 281,749 422,624
Total 38,982,184 333,909 14,517,346 977,854 41,989,322 44,669,859 53,338,138 92,238 7,141,627 202,042,477 108,065,582

by Exposure - 66,782 4,114,101 977,854 39,555,892 33,684,546 24,263,691 138,357 5,264,359 108,065,582
Deduction from
Capital Base - - - - - - - - - -
406 • FINANCIALS

The following tables summarise the rated exposures according to ratings by External Credit Assessment Institutions
(“ECAIs”) as follows:
(i) Ratings of Public Sector Entities, Insurance Cos, SF and FM and Corporates by approved ECAIs
Moody’s Aaa to Aa3 A1 to A3 Baa1 to Ba3 B1 to C Unrated

S&P AAA to AA- A+ to A- BBB+ to BB- B+ to D Unrated
Fitch AAA to AA- A+ to A- BBB+ to BB- B+ to D Unrated
RAM AAA to AA3 A1 to A3 BBB1 to BB3 B to D Unrated
MARC AAA to AA- A+ to A- BBB+ to BB- B+ to D Unrated
30 June 2023
Exposure Class
On and Off-Balance
Sheet Exposures
Public Sector Entities 25,848 - - - 584,737
Insurance Cos, SF
and FM 190 - 137,653 - 970,537
Corporates 6,233,788 603,649 366,425 - 56,720,704
6,259,826 603,649 504,078 - 58,275,978
30 June 2022
Exposure Class
On and Off-Balance
Sheet Exposures
Public Sector Entities - 73,157 - - 338,504
Insurance Cos, SF
and FM - - 156,504 - 827,500
Corporates 3,084,043 366,596 414,562 - 50,854,471
3,084,043 439,753 571,066 - 52,020,475

The following tables summarise the rated exposures according to ratings by ECAIs as follows: (continued)
(i) Ratings of Public Sector Entities, Insurance Cos, SF and FM and Corporates by approved ECAIs (continued)
Moody’s Aaa to Aa3 A1 to A3 Baa1 to Ba3 B1 to C Unrated

S&P AAA to AA- A+ to A- BBB+ to BB- B+ to D Unrated
Fitch AAA to AA- A+ to A- BBB+ to BB- B+ to D Unrated
RAM AAA to AA3 A1 to A3 BBB1 to BB3 B to D Unrated
MARC AAA to AA- A+ to A- BBB+ to BB- B+ to D Unrated
30 June 2023
Exposure Class
On and Off-Balance
Sheet Exposures
Public Sector Entities 25,848 - - - 430,798
Insurance Cos, SF
and FM 190 - 137,653 - 867,482
Corporates 5,318,324 601,949 346,425 - 42,583,276
5,344,362 601,949 484,078 - 43,881,556
30 June 2022
Exposure Class
On and Off-Balance
Sheet Exposures
Public Sector Entities - 73,157 - - 260,752
Insurance Cos, SF
and FM - - 156,504 - 821,350
Corporates 2,693,387 364,896 314,054 - 38,616,985
2,693,387 438,053 470,558 - 39,699,087
408 • FINANCIALS

(ii) Ratings of Sovereigns/Central Banks and Banking Institutions by approved ECAIs
Moody’s Aaa to Aa3 A1 to A3 Baa1 to Baa3 Ba1 to B3 Caa1 to C Unrated

S&P AAA to AA- A+ to A- BBB+ to BBB- BB+ to B- CCC+ to D Unrated
Fitch AAA to AA- A+ to A- BBB+ to BBB- BB+ to B- CCC+ to D Unrated
RAM AAA to AA3 A1 to A3 BBB1 to BBB3 BB1 to B3 C1 to D Unrated
MARC AAA to AA- A+ to A- BBB+ to BBB- BB+ to B- C+ to D Unrated
The Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
30 June 2023
Exposure Class
On and Off-Balance
Sheet Exposures
Sovereigns/Central
Banks 4,536,414 50,016 134,549 278,799 - 54,927,066
Banks, DFIs and MDBs 3,273,899 5,001,693 2,124,530 43,120 - 3,308,966
7,810,313 5,051,709 2,259,079 321,919 - 58,236,032
30 June 2022
Exposure Class
On and Off-Balance
Sheet Exposures
Sovereigns/Central
Banks 516,635 1,582,213 123,614 248,512 - 50,578,524
Banks, DFIs and MDBs 1,951,956 2,106,317 2,187,383 520,991 - 6,113,461
2,468,591 3,688,530 2,310,997 769,503 - 56,691,985

(ii) Ratings of Sovereigns/Central Banks and Banking Institutions by approved ECAIs (continued)
Moody’s Aaa to Aa3 A1 to A3 Baa1 to Baa3 Ba1 to B3 Caa1 to C Unrated

S&P AAA to AA- A+ to A- BBB+ to BBB- BB+ to B- CCC+ to D Unrated
Fitch AAA to AA- A+ to A- BBB+ to BBB- BB+ to B- CCC+ to D Unrated
RAM AAA to AA3 A1 to A3 BBB1 to BBB3 BB1 to B3 C1 to D Unrated
MARC AAA to AA- A+ to A- BBB+ to BBB- BB+ to B- C+ to D Unrated
The Bank RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
30 June 2023
Exposure Class
On and Off-Balance
Sheet Exposures
Sovereigns/Central
Banks 4,536,414 50,016 - - - 40,796,418
Banks, DFIs and MDBs 4,601,078 4,927,590 1,900,238 - - 2,488,530
9,137,492 4,977,606 1,900,238 - - 43,284,948
30 June 2022
Exposure Class
On and Off-Balance
Sheet Exposures
Sovereigns/Central
Banks 516,635 1,582,213 - - - 36,883,336
Banks, DFIs and MDBs 5,037,233 2,010,442 1,934,534 - - 5,535,137
5,553,868 3,592,655 1,934,534 - - 42,418,473
410 • FINANCIALS

Credit risk mitigation
The Bank grants credit facilities on the basis of the borrower’s credit standing, repayment and debt servicing ability. Where
possible, collateral is taken to mitigate and reduce any credit risk for the particular credit facility extended. The value of
the collateral is monitored periodically and where applicable, a revised valuation may be requested from the borrower.
The types of collateral accepted include cash, marketable securities, properties, machineries, equipments, inventories and
receivables. In certain cases, corporate guarantees are obtained where the credit worthiness of the corporate borrower is
insufficient for the amount sought. There are policies and processes in place to monitor collateral concentration. For Credit
Risk Management (“CRM”) purposes, only collateral or guarantees that are legally enforceable are taken into account. The
credit exposures are computed on a net basis only when there is a legally enforceable netting arrangements for loans and
deposits. The Bank uses the Comprehensive Approach for computation of the adjusted exposures.
The following table summarises the breakdown of CRM by exposure as follows:
Exposures Exposures
covered by covered by
Exposures guarantees/ eligible
before credit financial
CRM derivatives collateral
30 June 2023
Exposure Class

Sovereigns/Central Banks 59,748,413 - -
Public Sector Entities 25,848 - -
Banks, DFIs and MDBs 11,375,031 - -
Insurance Cos, SF and FM 643,986 - 28,000
Corporates 58,341,208 - 2,409,406
Regulatory Retail 53,792,198 - 361,507
Residential Mortgages 69,768,087 - 30,249
Higher Risk Assets 16,660 - -
Other Assets 6,064,948 - -
Defaulted Exposures 645,007 - 24,795
Total On-Balance Sheet Exposures 260,421,386 - 2,853,957

OTC Derivatives 4,193,781 - -
Credit Derivatives 71,411 - -
Off-Balance Sheet Exposures Other Than OTC Derivatives or Credit
Derivatives 16,927,260 - 251,838
Defaulted Exposures 15,118 - -
Total Off-Balance Sheet Exposures 21,207,570 - 251,838
Total On and Off-Balance Sheet Exposures 281,628,956 - 3,105,795


Credit risk mitigation (continued)
The following table summarises the breakdown of CRM by exposure as follows: (continued)
Exposures Exposures
30 June 2022
Exposure Class

Insurance Cos, SF and FM 555,839 - 88
Corporates 50,328,255 - 2,390,960

Derivatives 16,274,365 - 250,413
Defaulted Exposures 14,598 - 292

412 • FINANCIALS

Exposures Exposures
30 June 2023
Exposure Class

Insurance Cos, SF and FM 568,272 - 28,000
Corporates 44,567,163 - 1,923,472

Derivatives 13,103,967 - 232,551
Defaulted Exposures 9,226 - -


Exposures Exposures
30 June 2022
Exposure Class

Insurance Cos, SF and FM 555,649 - 88
Corporates 38,625,466 - 2,078,150

Derivatives 12,780,033 - 231,544

414 • FINANCIALS

Counterparty credit risk
Counterparty credit risk is the risk of trading counterparties’ failure to honour its obligations to the Bank. To control
over-exposure of counterparty credit risk, credit limits are established for each trading counterparty. The credit limits
are determined individually based on its credit strength and profile, which also takes into consideration the Bank’s risk
appetite and trading strategies.
Appropriate methodologies have been implemented to measure counterparty credit risk against credit limits of each trading
counterparty. These measurement methodologies implemented are in line with BNM’s Capital Adequacy Framework on
the treatment of counterparty credit risk.
The Bank also engages in netting and margining agreements with major trading counterparties to mitigate counterparty
credit risks. Under these agreements, the counterparty credit exposures are mitigated with collaterals whenever the
exposures exceed the margin threshold.
Nature of commitments and contingencies
Direct credit substitutes comprise guarantees undertaken by the Bank to support the financial obligations of their customers
to third parties.
Non credit related contingent items represent financial products such as Performance Guarantee whose crystallisations are
dependent on specific events other than default payment by the customers.
Short term self liquidating trade-related contingencies relate to bills of exchange which have been accepted by the Bank
and represent liabilities in the event of default by the acceptors and the drawers of the bills.
Assets sold with recourse and commitments with certain drawdown represents assets sold by the Bank with recourse in
the event of defects in the assets, and investment or purchase commitments entered into by the Bank, where drawdown
is certain to occur.
Obligations under underwriting agreements arise from underwriting agreements relating to the issuance of equity and
debts securities, where the Bank is obliged to subscribe or purchase the securities in the event the securities are not taken
up when issued.
Irrevocable commitments to extend credit include all obligations on the part of the Bank to provide funding facilities or the
undrawn portion of an approved credit facilities to customers.
Forward foreign exchange contracts are agreements to buy or sell fixed amounts of currencies at agreed rates of exchange
on a specified future date.
Interest rate swaps involve the exchange of interest obligations with a counterparty for a specified period without the
exchange of the underlying principal.

Counterparty credit risk (continued)
The Off-Balance Sheet exposures and their related counterparty credit risk of the Group and the Bank are as follows:
Positive Fair
Value of Credit Risk
Principal Derivative Equivalent Weighted
Amount Contracts Amount* Assets*
30 June 2023
Commitments and Contingent Liabilities
Direct credit substitutes 224,515 - 224,515 217,515
Transaction related contingent items 2,594,402 - 1,297,201 1,262,523
Short term self liquidating trade related contingencies 1,063,924 - 212,785 210,780

- More than one year 17,073,556 - 8,535,976 6,672,055
- Less than one year 26,457,159 - 5,291,432 4,818,762
Unutilised credit card lines 6,902,344 - 1,380,469 1,037,197

54,315,900 - 16,942,378 14,218,832
Derivative Financial Contracts

Foreign exchange related contracts:
- Less than one year 63,906,468 1,060,098 3,240,963 1,330,633
- One year to five years 7,321,941 160,566 212,330 212,330
- Over five years 737,005 36,840 47,174 47,175
Interest/profit rate related contracts:

- Less than one year 45,361,203 65,822 1,904 1,610
- Over five years 4,399,525 85,919 149,269 143,484
Equity related contracts:

- Less than one year 487,429 6,950 34,963 20,191
- One year to five years 668,393 57,044 89,674 45,323
Credit related contracts:

- Over five years 1,225,853 86,128 61,292 12,258
Commodity related contracts

205,854,734 2,168,424 4,265,192 2,198,154

260,170,634 2,168,424 21,207,570 16,416,986
* The credit equivalent amount and risk-weighted assets are arrived at using the credit conversion factors and risk-
weights as defined in BNM’s revised RWCAF and CAFIB.
416 • FINANCIALS

The Off-Balance Sheet exposures and their related counterparty credit risk of the Group and the Bank are as follows: (continued)
Positive Fair
30 June 2022
Transaction related contingent items 2,024,547 - 1,012,274 968,976
Short term self liquidating trade related contingencies 853,412 - 170,682 168,415


51,557,893 - 16,288,963 13,423,038

- Less than one year 55,995,785 847,790 2,392,914 1,040,612
- Over five years 396,495 21,252 - -

- Less than one year 34,692,744 44,604 3,130 626
- Over five years 4,395,228 138,990 321,999 312,959

- Over five years 270,542 90,686 117,740 58,869

- Over five years 938,327 39,156 46,916 9,384

156,559,078 1,863,300 3,334,986 1,805,194
208,116,971 1,863,300 19,623,949 15,228,232

Positive Fair
30 June 2023
Transaction related contingent items 1,819,394 - 909,697 879,749


43,277,374 - 13,113,193 10,954,490

- Less than one year 60,747,086 959,148 3,021,126 1,273,381
- Over five years 737,005 36,840 47,174 47,175

- Less than one year 45,361,203 65,822 1,904 1,610
- Over five years 4,291,746 83,166 137,653 137,653


- Over five years 1,225,853 86,128 61,292 12,258

203,008,285 2,071,669 3,958,497 2,077,579

246,285,659 2,071,669 17,071,690 13,032,069
418 • FINANCIALS

Positive Fair
30 June 2022
Transaction related contingent items 1,444,276 - 722,138 682,487


41,860,441 - 12,790,788 10,511,196

- Less than one year 51,999,925 764,997 2,244,001 992,074
- Over five years 396,495 21,253 - -

- Less than one year 34,692,744 44,604 3,130 626
- Over five years 4,208,323 138,988 290,348 290,348

- Over five years 270,542 90,686 117,740 58,870

- Over five years 938,327 39,156 46,916 9,384

152,609,457 1,776,371 3,148,809 1,732,016
194,469,898 1,776,371 15,939,597 12,243,212

(B) Market risk
Market risk is the risk of loss in financial instruments or the balance sheet due to adverse movements in market factors
such as interest rates, foreign exchange rates, equities, spreads, volatilities and/or correlations.
The Bank adopts a systematic approach in managing such risks by types of instruments and nature of exposure. Market
risk is primarily controlled via a series of cut-loss limits and potential loss limits, i.e. Value at Risk (“VaR”). The amount of
market risk that the Bank is prepared to take for each financial year is based on the budget, business direction, its risk-
taking strategies, the impact on earnings and capital utilisation. These factors are used as a basis for setting market risk
limits for the Bank.
Market risk limits, the monitoring and escalation processes, delegation of authority, model validation and valuation
methodologies are built into the Bank’s market risk policies, which are reviewed and concurred by the Group Assets and
Liabilities Management Committee (“Group ALCO”), endorsed by the BRMC and approved by the Board.
The main market risk limits are stop loss limits, VaR limits, counterparty limits, sensitivity limits, position/instrument limits
and holding period limits.
VaR is defined as the maximum loss at a specific confidence level over a specified period of time under normal market
conditions. The Bank computes the Historical Simulation VaR on a daily basis based on the recent 250-days of market
observations at a 99.0% confidence level.
Over the course of the financial year, the VaR of the Bank’s trading book is as follows:
Financial Year Ending 30 June 2023 VaR (RM mil)
Minimum (5.4)
Maximum (13.3)
Average (8.3)
The Bank performs backtesting on VaR on a hypothetical and actual basis and the results are tabled to the Group ALCO.
In addition, stress tests are conducted regularly on the trading book. In performing stress-testing, the Bank uses the
following:
(1) Scenario analysis, which is a combination of expected movements on risk factors.
(2) Historical crisis event, which is based on actual movements that occurred in the relevant risk factors. The main risk
factors that are stressed are the KL Financial Bursa Composite Index, interest rates movements (for MYR, USD and
other major currencies), ratings migration and Foreign Exchange spot and volatilities.
In managing interest rate risk in the banking book, the Bank measures Earnings at Risk (“EAR”) and economic value or
Capital at Risk (“CAR”).
420 • FINANCIALS

(C) Market Conduct Risk
Market Conduct risk is the risk that arises from either an individual or group of individual dealers of the Bank, who through
non-compliant behaviour and/or behaviour that lack integrity or honesty, subjects the Bank to adverse consequences in
terms of monetary losses, reputational damage and regulatory fines.
Independent market conduct risk monitoring and surveillance is carried out to detect attempts on market misconduct
by Global Markets. Management oversight on market conduct is effected through the Risk and Compliance Governance
Committee (“RCGC”). A robust and comprehensive market conduct surveillance policy has been established by the Bank to
ensure all activities in Global Markets are in conformity with market best practices and compliance requirements, which is
reviewed and concurred by the RCGC, endorsed by the BRMC and approved by the Board.
(D) Liquidity risk
Liquidity risk is the risk of financial loss arising from the inability to fund increases in assets and/or meet financial
obligations as they fall due. Financial obligations arise from withdrawal of deposits, funding of loans committed and
repayment of borrowed funds. It is the Bank’s policy to ensure there is adequate liquidity across all business units to
sustain ongoing operations, as well as sufficient liquidity to fund asset growth and strategic opportunities.
Besides adhering to the Regulatory Liquidity Requirements, the Bank has put in place a robust and comprehensive liquidity
risk management framework consisting of risk appetite, policies, triggers and controls which are reviewed and concurred
by the Group ALCO, endorsed by the BRMC and approved by the Board. The key elements of the framework cover proactive
monitoring and management of cashflow, maintenance of high quality liquid assets, diversification of funding sources and
maintaining a liquidity compliance buffer to meet any unexpected cash outflow.
The Bank has in place a liquidity contingency funding plan and stress test programs to minimise the liquidity risk that may
arise due to unforeseen adverse changes in the marketplace. The contingency funding plan sets out the crisis escalation
process, various strategies to be employed to preserve liquidity and includes an orderly communication channel during
liquidity crisis scenarios. Liquidity stress tests are conducted regularly to ensure there are adequate liquidity contingency
fund to meet any shortfalls during liquidity crisis scenarios.
(E) Operational risk
Operational Risk is the risk of loss resulting from inadequate or failed internal processes, people and systems or from
external events which also include outsourcing and business continuity risks.
Management oversight on Operational Risk Management (“ORM”) matters are effected through the RCGC whilst Board
oversight is effected through the BRMC.
The Bank’s ORM strategy is based on a framework of continuous improvements, good governance structure, policies and
procedures as well as the employment of risk mitigation strategies. The objective is to create a strong risk and internal
control culture by ensuring awareness of the significance of operational risk, its methodology of identification, analysis,
assessment, control and monitoring.
The Bank adopts ORM tools such as loss event reporting, risk and control self assessment and key risk indicators to manage
operational risks and are used to assess risk by taking into consideration key business conditions, strategies and internal
controls. The ultimate aim is to enhance economic performance, achievement of corporate goals and the aspirations of
stakeholders.

(E) Operational risk (continued)
These tools are based on international best practices for the management of operational risks and are explained in more
detail below:
(i) Risk and Control Self Assessment (“RCSA”) is an assessment process on severity of potential risk and control
effectiveness.
(ii) Key Risk Indicators (“KRI”) is a set of measures to allow the Bank to monitor and facilitate early detection of
operational risks.
(iii) Loss Event Reporting (“LER”) is a process for collecting and reporting operational risk events. These are further used
for analysis of operational risks for the purpose of developing mitigating controls.
The operational risk mitigation strategies that are implemented include:
(i) Policies and Standard Operating Procedures that define the roles and responsibilities of personnel and their respective
operating limits.
(ii) Insurance against operational losses as a form of risk mitigation especially for risks which are deemed as high
severity.
(iii) System of controls, established to provide reasonable assurance of effective and efficient operation.
(iv) Business Continuity Management to facilitate the continuance of business activities in the event of disaster or crisis
situations by means of ensuring appropriate redundancy of systems are available.
(v) Outsourcing Management to ensure proper due diligence review is performed prior to engaging outsource service
providers and continuous tracking of existing outsource service providers’ performance, code of conduct, compliance,
and business viability.
(F) Financial hedges to mitigate interest rate risks
The following actions describe the accounting treatment for financial hedges that may be entered into to mitigate the
interest rate risk exposures of the Bank.
(i) Financial instruments designated as fair value through profit and loss
The Bank uses derivative hedge instruments, such as interest rate swaps to undertake economic hedges on part of
their existing fixed rate loans to reduce the exposure on interest rate risk as part of its risk management strategy.
(ii) Fair value hedges
The Bank uses interest rate swap as the hedge instruments to hedge the interest rate risk of fixed rate loans
exposure. The interest rate swap contracts used for the hedging are contracted with other financial institutions.
422 • FINANCIALS

(F) Financial hedges to mitigate interest rate risks (continued)
The following actions describe the accounting treatment for financial hedges that may be entered into to mitigate the interest
rate risk exposures of the Bank. (continued)
(iii) Cash flow hedges
The Bank uses interest rate swaps as hedge instruments to hedge the variability of future cash flows on fixed deposits.
Further information relating to the cash flow hedges are disclosed in Note 10(a) to the financial statements.
(iv) The accounting policies on derivative financial instruments and hedge accounting are disclosed in Note 2K to the
5. EQUITY EXPOSURES IN BANKING BOOK
The Bank’s banking book’s equity investments consist of equity holdings in organisations which are set up for specific socio-
economic reasons and equity holdings and equity instruments received as a result of loan/financing restructuring or loan/
financing conversion.
The Bank’s banking book’s equity investments are classified and measured in accordance with MFRS 9 and are categorised as
financial investments at fair value through other comprehensive income. Refer to Note 2D to the financial statements for the
accounting policies of the Bank.
Details of the Bank’s financial investments at fair value through other comprehensive income are set out in Note 6 to the
The following table summarises the Group’s and the Bank’s equity exposures in the banking book:
The Group The Bank

Exposures Exposures
subject to subject to
risk- Risk risk- Risk
weighting weights weighting weights
RM’000 % RM’000 %
30 June 2023
Unquoted equity securities 97,650 150% 97,650 150%
30 June 2022
Unquoted equity securities 83,386 150% 83,386 150%
There are no unrealised gains/(losses) for equity securities that have not been reflected in the statements of income of the
Group and the Bank but have been recognised under other comprehensive income of the Group and the Bank for the financial
year ended 30 June 2023.

6. INTEREST RATE RISK/RATE OF RETURN RISK IN THE BANKING BOOK (“IRRBB”/”RORRBB”)
The Bank evaluates the impact of IRRBB/RORRBB via the earnings and the underlying economic value perspectives.
The earnings perspective focuses on the short-term effect of IRRBB/RORRBB via reduction in earnings arising from changes in
interest rate/rate of returns. Components affecting the earnings perspective include the timing of repricing, yield curve risk and
option positions.
The economic value perspective focuses on the long-term impact of IRRBB/RORRBB. This perspective evaluates changes in the
Bank’s economic value by present valuing the Bank’s future cash flows. The future cash flow projections are used to estimate
economic exposures and provides a pro forma estimate of the future income generated by the Bank’s current position. In
general, measuring the present value of instruments will be able to provide an overview of the Bank’s economic value of equity
(“EVE”) over a longer time period.
Impact on positions 100 basis points parallel shift

Increase/(Decline) Increase/(Decline)
in Earnings in Economic Value
30 June 2023
100 bps upward
Ringgit Malaysia (59,634) (153,979)
100 bps downward

Ringgit Malaysia (109,525) 136,614
30 June 2022
100 bps upward
Ringgit Malaysia 3,851 137,938
100 bps downward

424 • FINANCIALS

6. INTEREST RATE RISK/RATE OF RETURN RISK IN THE BANKING BOOK (“IRRBB”/”RORRBB”) (CONTINUED)
Impact on positions 100 basis points parallel shift

Increase/(Decline) Increase/(Decline)
in Earnings in Economic Value
30 June 2023
100 bps upward
Ringgit Malaysia (16,343) 123,966
100 bps downward

30 June 2022
100 bps upward
Ringgit Malaysia 39,645 342,908
100 bps downward

7. SHARIAH GOVERNANCE DISCLOSURE
On 20 September 2019, Bank Negara Malaysia has issued the policy document on Shariah Governance (“SGPD”) for Islamic
financial institutions to supersede the Shariah Governance Framework. The policy document aims to further strengthen the
effectiveness of Shariah governance implementation and reinforce a closer integration of Shariah considerations in the business
and risk strategies of the Islamic financial institutions. This policy document takes effect from 1 April 2020, with the exception
of Section 12.5 (which specifies that a member of the Shariah Committee shall not serve the same Islamic Financial Institution
for more than nine years), which takes effect from 1 April 2023.
HLISB has enhanced its own Board Policy on Shariah Governance to ensure the structure and management of Shariah Governance
matters in the Bank is of the highest standard and in line with SGPD and Islamic Financial Services Act 2013.
The Board Policy on Shariah Governance governs and guides HLISB on the on-going development and enhancement of its
Shariah governance functions and infrastructure which includes interaction, effective communication and reporting. It forms the
basic foundation upon which Shariah governance policies are to be developed, Shariah governance structure is to be operated
in, and Shariah governance initiatives are to be carried out.
Notice of
Annual General Meeting
NOTICE IS HEREBY GIVEN that the Eighty-Second Annual General Meeting (“AGM”) of Hong Leong Bank Berhad
(“Bank”) will be held at Wau Bulan 2, Level 2, Sofitel Kuala Lumpur Damansara, No. 6, Jalan Damanlela, Bukit
Damansara, 50490 Kuala Lumpur on Monday, 30 October 2023 at 2.30 p.m. in order:
1. To lay before the meeting the audited financial statements together with the reports of the Directors and
Auditors thereon for the financial year ended 30 June 2023.
2. To approve the payment of Director Fees of RM1,568,614 for the financial year ended 30 June 2023 to
be divided amongst the Directors in such manner as the Directors may determine and Directors’ Other
Benefits of up to an amount of RM250,000 from the 82nd AGM to the 83rd AGM of the Bank. (Resolution 1)
3. To re-elect the following Directors pursuant to the Bank’s Constitution:
(a) YBhg Tan Sri Quek Leng Chan (Resolution 2)
(b) YBhg Datuk Manharlal A/L Ratilal (Resolution 3)
4. To re-appoint PricewaterhouseCoopers PLT as Auditors of the Bank and to authorise the Directors to fix
their remuneration. (Resolution 4)
SPECIAL BUSINESS
As special business, to consider and, if thought fit, pass the following motions as resolutions:
5. Ordinary Resolution
- Authority to Directors to Allot Shares
- Waiver of Pre-Emptive Rights over New Ordinary Shares (“Shares”) or Other Convertible
Securities in the Bank under Section 85(1) of the Companies Act 2016 (“Act”) read together
with Clause 50 of the Constitution of the Bank
“THAT subject to the Act, the Main Market Listing Requirements of Bursa Malaysia Securities Berhad
(“Bursa Securities”) [“MMLR”], the Bank’s Constitution and approval of the relevant governmental
regulatory authorities, if required, the Directors be and are hereby empowered pursuant to Sections 75
and 76 of the Act to issue and allot new Shares in the Bank, grant rights to subscribe for Shares in the
Bank, convert any security into Shares in the Bank, or allot Shares under an agreement or option or offer
at any time and from time to time, and upon such terms and conditions and for such purposes as the
Directors may, in their absolute discretion, deem fit, to any persons who are not caught by Paragraph
6.04(c) of the MMLR, provided that the aggregate number of Shares issued and allotted, to be subscribed
under any rights granted, to be issued from conversion of any security, or to be issued and allotted under
an agreement or option or offer, pursuant to this resolution does not exceed 10% of the total number of
issued Shares (excluding treasury shares) of the Bank for the time being and that the Directors be and are
also empowered to obtain approval for the listing of and quotation for the additional Shares so allotted
on Bursa Securities and that such authority shall continue in force until the conclusion of the next Annual
General Meeting of the Bank;
AND THAT in connection with the above, pursuant to Section 85(1) of the Act read together with Clause
50 of the Constitution of the Bank, the shareholders of the Bank do hereby waive their pre-emptive rights
over all new Shares, options over or grants of new Shares or any other convertible securities in the Bank
and/or any new Shares to be issued pursuant to such options, grants or other convertible securities, such
new Shares when issued, to rank pari passu with the existing Shares in the Bank.” (Resolution 5)
426 • ADDITIONAL INFORMATION
Notice of Annual General Meeting
6. Ordinary Resolution
- Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a
Revenue or Trading Nature with Hong Leong Company (Malaysia) Berhad (“HLCM”), GuoLine
Capital Assets Limited (“GCA”) and Persons Connected with them
“THAT approval be and is hereby given for the Bank and/or its subsidiaries to enter into any of the transactions
falling within the types of recurrent related party transactions of a revenue or trading nature as disclosed in
Section 2.3 (A) and (B) of the Bank’s Circular to Shareholders dated 29 September 2023 (“the Circular”) with
HLCM, GCA and persons connected with them (“Hong Leong Group”), as set out in Appendix II of the Circular
provided that such transactions are undertaken in the ordinary course of business, on arm’s length basis and
on commercial terms which are not more favourable to the Hong Leong Group than those generally available
to and/or from the public and are not, in the Bank’s opinion, detrimental to the minority shareholders;
AND THAT such approval shall continue to be in force until:
(a) the conclusion of the next Annual General Meeting (“AGM”) of the Bank at which time it will lapse,
unless by a resolution passed at the meeting, the authority is renewed; or
(b) the expiration of the period within which the next AGM of the Bank after that date is required to be
held pursuant to Section 340(2) of the Companies Act 2016 (but shall not extend to such extension
as may be allowed pursuant to Section 340(4) of the Companies Act 2016); or
(c) revoked or varied by resolution passed by the shareholders in general meeting,
whichever is the earlier;
AND THAT the Directors of the Bank be and are hereby authorised to complete and to do all such acts and
things (including executing all such documents as may be required) as they may consider expedient or
necessary to give effect to the transactions contemplated and/or authorised by this ordinary resolution.” (Resolution 6)
7. To consider any other business of which due notice shall have been given.
By Order of the Board
JACK LEE TIONG JIE

(MAICSA 7060133)
(SSM PC No. 202008001704)
Group Company Secretary
Kuala Lumpur
29 September 2023
NOTES:
1. For the purpose of determining members’ eligibility to attend this meeting, only members whose names
appear in the Record of Depositors as at 20 October 2023 shall be entitled to attend this meeting or appoint
proxy(ies) to attend and vote on their behalf.
2. Save for a member who is an exempt authorised nominee, a member entitled to attend and vote at the
meeting is entitled to appoint not more than two (2) proxies to attend, participate, speak and vote in his stead.
A proxy may but need not be a member of the Bank. A member who is an authorised nominee may appoint not
more than two (2) proxies in respect of each securities account it holds. A member who is an exempt authorised
nominee for multiple beneficial owners in one securities account (“Omnibus Account”) may appoint any number
of proxies in respect of the Omnibus Account.
3. Where two (2) or more proxies are appointed, the proportion of shareholdings to be represented by each proxy must be specified in the
instrument appointing the proxies, failing which the appointments shall be invalid.
4. The Form of Proxy must be deposited at the Registered Office of the Bank at Level 30, Menara Hong Leong, No. 6, Jalan Damanlela,
Bukit Damansara, 50490 Kuala Lumpur or lodged electronically via email at [email protected], not less than forty-eight
(48) hours before the time appointed for holding of the meeting or adjourned meeting.
5. Pursuant to Paragraph 8.29A(1) of the Main Market Listing Requirements of Bursa Securities, all the resolutions set out in this Notice will
be put to a vote by way of a poll.
EXPLANATORY NOTES
1. Resolution 1 on Director Fees and Other Benefits
• Director Fees of RM1,568,614 are inclusive of Board Committee Fees of RM500,889 and Meeting Allowances of RM180,000.
• Directors’ Other Benefits refer to Directors’ & Officers’ Liability Insurance coverage based on premium paid/payable and Directors’
training benefits of up to RM250,000.
2. Resolutions 2 and 3 on Re-election of Directors
The Board, on the recommendation of the Nomination Committee of the Bank (“NC”), supports the re-election of the retiring Directors.
The NC has reviewed the results of the Board Annual Assessment conducted for the financial year ended 30 June 2023 and noted that
YBhg Tan Sri Quek Leng Chan has effectively discharged his duties and responsibilities. The NC has also conducted assessment on the
fitness and propriety of YBhg Tan Sri Quek Leng Chan and YBhg Datuk Manharlal A/L Ratilal including the review of their Fit and Proper
Declaration and result of their background checks, and was satisfied that they met the Fit and Proper criteria as set out in the Fit and
Proper Policy of the Bank. In addition, the NC has assessed the declaration made by YBhg Datuk Manharlal A/L Ratilal confirming that
he fulfilled the Independent Director criteria as set out in the relevant regulatory requirements, and found it to be in order.
The retiring Directors had abstained from deliberations and decisions on their re-election at the NC and Board meetings, as applicable.
The details and profiles of the retiring Directors are set out in the Board of Directors’ Profile section of the Bank’s 2023 Annual Report.
3. Resolution 5 on Authority to Directors to Allot Shares and Waiver of Pre-emptive Rights
The proposed Ordinary Resolution, if passed, will renew the general mandate given to the Directors of the Bank to allot ordinary shares
(“Shares”) of the Bank from time to time and expand the mandate to grant rights to subscribe for Shares in the Bank, convert any
security into Shares in the Bank, or allot Shares under an agreement or option or offer, provided that the aggregate number of Shares
issued and allotted, to be subscribed under any rights granted, to be issued from conversion of any security, or to be issued and allotted
under an agreement or option or offer, pursuant to this resolution does not exceed 10% of the total number of issued Shares (excluding
treasury shares) of the Bank for the time being (“Renewed General Mandate”). In computing the aforesaid 10% limit, Shares issued or
agreed to be issued or subscribed pursuant to the approval of shareholders in a general meeting where precise terms and conditions
are approved shall not be counted. The Renewed General Mandate, unless revoked or varied at a general meeting, will expire at the
conclusion of the next AGM of the Bank.
As at the date of this Notice, no new Shares in the Bank were issued and allotted pursuant to the general mandate given to the Directors
at the last AGM held on 27 October 2022 and which will lapse at the conclusion of the 82nd AGM. The Renewed General Mandate will
enable the Directors to take swift action in case of, inter alia, a need for corporate exercises or in the event business opportunities or
other circumstances arise or for compliance with regulatory requirements which involve the issuance and allotment of new Shares, grant
of rights to subscribe for Shares, conversion of any security into Shares, or allotment of Shares under an agreement or option or offer,
and to avoid delay and cost in convening general meetings to approve the same.
Pursuant to Section 85(1) of the Companies Act 2016 (“Act”) read together with Clause 50 of the Constitution of the Bank, shareholders
have pre-emptive rights to be offered any new Shares in the Bank which rank equally to the existing issued Shares or other convertible
securities.
Section 85(1) of the Act provides as follows:
“85. Pre-emptive rights to new shares
(1) Subject to the constitution, where a company issues shares which rank equally to existing shares as to voting or distribution
rights, those shares shall first be offered to the holders of existing shares in a manner which would, if the offer were
accepted, maintain the relative voting and distribution rights of those shareholders.”
Clause 50 of the Constitution of the Bank provides as follows:
“50. Subject to any direction to the contrary that may be given by the Company in general meeting, all new shares or other convertible
securities, shall, before issue, be offered to such persons as at the date of the offer are entitled to receive notices from the
Company of general meetings in proportion as nearly as the circumstances admit, to the amount of the existing shares or
securities to which they are entitled...
Subject to the provisions of this Constitution, the Directors may recognise a renunciation of any share by the allottee thereof in
favour of some other person.”
In order for the Board to issue any new Shares or other convertible securities free of pre-emptive rights, such pre-emptive rights
must be waived. The proposed Ordinary Resolution, if passed, will exclude your pre-emptive right over all new Shares, options
over or grant of new Shares or any other convertible securities in the Bank and/or any new Shares to be issued pursuant to such
options, grants or other convertible securities under the Authority to Directors to Allot Shares.
4. Resolution 6 on Recurrent Related Party Transactions of a Revenue or Trading Nature
The proposed Ordinary Resolution, if passed, will empower the Bank and its subsidiaries (“HLB Group”) to enter into recurrent related
party transactions of a revenue or trading nature which are necessary for HLB Group’s day-to-day operations, subject to the transactions
being in the ordinary course of business and on terms which are not more favourable to the Hong Leong Group than those generally
available to the public and are not, in the Bank’s opinion, detrimental to the minority shareholders of the Bank (“Proposed Shareholders’
Mandate”).
Detailed information on the Proposed Shareholders’ Mandate is set out in the Circular to Shareholders dated 29 September 2023 which
is available on the Bank’s corporate website (https://www.hlb.com.my/agm2023).
Statement Accompanying Notice of Annual General Meeting

(Pursuant to Paragraph 8.27(2) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad)
• Details of individuals who are standing for election as Director
No individual is seeking election as a Director at the forthcoming Eighty-Second Annual General Meeting of the Bank.
• Statement relating to general mandate for issue of securities in accordance with Paragraph 6.03(3) of the Main Market
Listing Requirements of Bursa Malaysia Securities Berhad
Details of the general mandate to issue securities in the Bank pursuant to Sections 75 and 76 of the Companies Act 2016 are set
out in Explanatory Note 3 of the Notice of Eighty-Second Annual General Meeting.
Other
Information
1. MATERIAL CONTRACTS
There are no material contracts (not being contracts entered into in the ordinary course of business) which had been entered into
by the Bank and its subsidiaries involving the interest of Directors, chief executives and major shareholders, either still subsisting
at the end of the financial year or entered into since the end of the previous financial year pursuant to Item 21, Part A, Appendix
9C of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad.
2. ANALYSIS OF SHAREHOLDINGS AS AT 30 AUGUST 2023
Total number of issued shares : 2,167,718,284

Adjusted total number of issued shares : 2,086,616,584
(after deducting treasury shares pursuant to
Section 127 of the Companies Act 2016)
Class of shares : Ordinary shares
Voting rights : 1 vote for each share held
Distribution Schedule of Shareholders as at 30 August 2023
Size of Holdings No. of Shareholders % No. of Shares* %
Less than 100 424 3.56 9,311 0.00

100 – 1,000 3,571 29.98 1,999,810 0.09
1,001 – 10,000 6,236 52.35 21,224,132 1.02
10,001 – 100,000 1,248 10.48 37,649,339 1.80
100,001 – less than 5% of issued shares 431 3.62 478,007,040 22.91
5% and above of issued shares 2 0.01 1,547,726,952 74.18
11,912 100.00 2,086,616,584 100.00
* Excluding 81,101,700 shares bought back and retained by the Bank as treasury shares
List of Thirty Largest Shareholders as at 30 August 2023
Name of Shareholders No. of Shares %
1. Hong Leong Financial Group Berhad 1,340,137,681 64.23

2. Citigroup Nominees (Tempatan) Sdn Bhd 207,589,271 9.95
- Employees Provident Fund Board
3. MTrustee Berhad 37,470,641 1.80
- Exempt AN for Hong Leong Bank Berhad (ESOS)
4. Kumpulan Wang Persaraan (Diperbadankan) 27,477,129 1.32
5. AmanahRaya Trustees Berhad 20,000,000 0.96
- Amanah Saham Bumiputera
- Amanah Saham Malaysia
7. Cartaban Nominees (Asing) Sdn Bhd 17,766,188 0.85
- Exempt AN for State Street Bank & Trust Company (West Clt OD67)
8. CIMSEC Nominees (Tempatan) Sdn Bhd 14,254,300 0.68
- CIMB for Rakaman Anggun Sdn Bhd (PB)
9. Permodalan Nasional Berhad 14,177,400 0.68
- Amanah Saham Bumiputera 2
Other Information
2. ANALYSIS OF SHAREHOLDINGS AS AT 30 AUGUST 2023 (CONTINUED)
List of Thirty Largest Shareholders as at 30 August 2023 (continued)
Name of Shareholders No. of Shares %

- Great Eastern Life Assurance (Malaysia) Berhad (Par 1)
- Exempt AN for AIA Bhd
13. HSBC Nominees (Asing) Sdn Bhd 8,939,472 0.43
- JPMCB NA for Vanguard Emerging Markets Stock Index Fund
- JPMCB NA for Vanguard Total International Stock Index Fund
15. Pertubuhan Keselamatan Sosial 8,299,300 0.40
16. Cartaban Nominees (Tempatan) Sdn Bhd 8,012,580 0.38
- PAMB for Prulink Equity Fund
17. HLIB Nominees (Tempatan) Sdn Bhd 6,485,863 0.31
- Chew Brothers Development Corporation Sdn Bhd
18. Pertubuhan Keselamatan Sosial 6,300,000 0.30
19. Citigroup Nominees (Asing) Sdn Bhd 5,630,000 0.27
- Exempt AN for Citibank New York (Norges Bank 19)
20. HLB Nominees (Asing) Sdn Bhd 5,510,000 0.26
- Kwek Leng Hai (Custodian)
- CB Spore GW for Government of Singapore (GIC C)
- Employees Provident Fund Board (AHAM AM)
- BNYM SA/NV for People’s Bank of China (SICL Asia EM)
24. Cartaban Nominees (Tempatan) Sdn Bhd 4,349,200 0.21
- Prudential Assurance Malaysia Berhad for Prulink Strategic Fund
- JPMCB NA for Blackrock Institutional Trust Company, N.A. Investment Funds for
Employee Benefit Trusts
- JPMCB NA for Vanguard Fiduciary Trust Company Institutional Total
International Stock Market Index Trust II
- Exempt AN for Citibank New York (Norges Bank 14)
- Great Eastern Life Assurance (Malaysia) Berhad (Par 3)
- BBH (LUX) SCA for Fidelity Funds Asean
- State Street London Fund U8T8 for Pinebridge Asia Ex Japan Small Cap Equity
Fund (Pinebridge GL F)
1,825,563,909 87.49
Other Information
2. ANALYSIS OF SHAREHOLDINGS AS AT 30 AUGUST 2023 (CONTINUED)
Substantial Shareholders
According to the Register of Substantial Shareholders, the substantial shareholders of the Bank as at 30 August 2023 are as follows:
Direct Indirect
Name of Shareholders No. of Shares % No. of Shares %
Hong Leong Financial Group Berhad 1,340,137,681 64.23 3,057,504 0.15(a)

Hong Leong Company (Malaysia) Berhad - - 1,343,195,185 64.37(b)
HL Holdings Sdn Bhd - - 1,343,195,185 64.37(c)
Tan Sri Quek Leng Chan - - 1,346,027,209 64.51(d)
Hong Realty (Private) Limited - - 1,345,971,529 64.50(d)
Hong Leong Investment Holdings Pte Ltd - - 1,345,971,529 64.50(d)
Kwek Holdings Pte Ltd - - 1,345,971,529 64.50(d)
Kwek Leng Beng - - 1,345,971,529 64.50(d)
Davos Investment Holdings Private Limited - - 1,345,971,529 64.50(d)
Kwek Leng Kee 282,344 0.01 1,345,971,529 64.50(d)
GuoLine Overseas Limited - - 1,343,195,185 64.37(b)
Guoco Group Limited - - 1,343,195,185 64.37(b)
GuoLine Capital Assets Limited - - 1,345,971,529 64.50(e)
Employees Provident Fund Board 219, 659,021 10.53 - -
Notes:
(a)
Held through subsidiary
(b)
Held through Hong Leong Financial Group Berhad (“HLFG”)
(c)
Held through Hong Leong Company (Malaysia) Berhad (“HLCM”)
(d)
Held through HLCM and company(ies) in which the substantial shareholder has interests
(e)
Held through a subsidiary and HLFG
3. DIRECTORS’ INTERESTS AS AT 30 AUGUST 2023
Subsequent to the financial year end, there is no change, as at 30 August 2023, to the Directors’ interests in the ordinary
shares, preference shares and/or options over ordinary shares or convertible bonds of the Bank and/or its related corporations
(other than wholly-owned subsidiaries), appearing in the Directors’ Report on pages 163 and 164 as recorded in the Register of
Directors’ Shareholdings kept by the Bank under Section 59 of the Companies Act 2016 except for the change set out below:
Indirect Interest No. of Shares %
YBhg Tan Sri Quek Leng Chan in:

Hong Leong Industries Berhad 242,876,970 76.02%
82,000 0.03%
Note:
* No. of ordinary shares/ordinary shares to be received arising from vesting of share grant
Other Information
HLBB LIST OF PROPERTIES HELD AS AT 30 JUNE 2023
Description Net book

of property Gross Area Age value Date of
Location Tenure held (Sq-ft) (Years) (RM’000) Acquisition
1 No. 1, Light Street, Freehold Branch 20,594 89 7,403 30/12/1986
Georgetown, premises
10200 Pulau Pinang
2 No. 15-G-1, 15-1-1 & 15-2-1, Freehold Branch 9,968 24 1,962 26/06/1997
Medan Kampung Relau, premises
Bayan Point,
11900 Pulau Pinang
3 No. 42, Jalan Pending, Leasehold - Branch 4,425 41 1,177 27/12/1983
93450 Kuching, Sarawak (31/12/2779) - premises
757/859 years
4 No. 133, 135 & 137, Freehold Branch 4,871 31 2,745 28/12/1992
Jalan Kampong Nyabor, premises
96000 Sibu, Sarawak
5 Jungle land at Leasehold - Jungle land 1,217,938 n/a 1 31/12/1938
Sungai Limut Rajang, (31/12/2026) -
Sarawak Occupation 4/99 years
Ticket 612 of 1931
6 No. 25 & 27, Jalan Tun Ismail, Freehold Branch 1,600 32 1,028 29/06/1996
25000 Kuantan, premises
Pahang Darul Makmur
7 No. 69, 70 & 71, Freehold Branch 6,000 Pre-war 1,350 27/12/1994
Jalan Dato’ Bandar Tunggal, premises
70000 Seremban,
Negeri Sembilan Darul Khusus
8 No. 26, Lorong Rahim Kajai 14, Freehold Branch 3,750 37 469 30/12/1986
Taman Tun Dr Ismail, premises
60000 Kuala Lumpur
9 No. 120-122, Jalan Mersing, Leasehold Branch 3,355 57 462 31/05/1990
86000 Kluang, premises
Johor Darul Takzim
10 No. 100, Jalan Gurney, Freehold Branch 5,107 37 1,890 25/06/1992
72100 Bahau premises
11 No. 12, 14 & 16, Freehold Branch 4,174 32 3,328 25/06/1992
Jalan Wong Ah Fook, premises
80000 Johor Bahru,
Johor Darul Takzim
12 No. 63 & 65, Jalan SS 23/15, Freehold Vacant 4,760 28 3,024 28/04/1997
47400 Petaling Jaya,
Selangor Darul Ehsan
13 No. 24, Medan Taming 2, Freehold Branch 3,037 27 895 28/04/1997
Taman Taming Jaya, premises
43300 Balakong,
Other Information

14 No. 1, Jalan Takal 15/21, Leasehold - Branch 2,625 36 1,022 26/06/1997
Seksyen 15, 40000 Shah Alam, (29/6/2086) - premises
Selangor Darul Ehsan 64/99 years
15 Lots 3594 & 3595, Leasehold - Branch 3,199 29 172 26/06/1997
Jalan Baru Pak Sabah, (8/4/2082) - premises
23000 Dungun, 60/84 years
Terengganu Darul Iman
16 Lot 3073 & 3074, Leasehold - Branch 2,582 26 830 26/06/1997
Jalan Abang Galau, (12/2/2056) - premises
97000 Bintulu, Sarawak 34/60 years
17 Lot 34, Putra Industrial Park, Freehold Warehouse 96,219 27 2,506 26/01/1995
47000 Sungai Buloh,
18 No. 1540, Leasehold - Vacant 10,619 48 12 30/06/1977
Jalan Sultan Badlishah, (19/7/2030) -
05000 Alor Setar, 8/60 years
Kedah Darul Aman
19 No. 9A & 9B, Freehold Branch 9,320 30 688 01/01/1994
Jalan Kampong Baru, premises
08000 Sungai Petani,
Kedah Darul Aman
20 No. 45, Jalan Burma, Freehold Vacant 14,277 45 1,658 24/11/1978
10500 Pulau Pinang
21 No. 55-57, Jalan Yang Kalsom, Freehold Vacant 11,720 44 862 01/10/1984
30250 Ipoh,
Perak Darul Ridzuan
22 No. 27, Jalan Dewangsa, Leasehold - Branch 4,694 28 216 24/11/1995
31000 Batu Gajah, (26/2/2078) - premises
Perak Darul Ridzuan 56/79 years
23 No. 75, Jalan Sultan Idris Shah, Freehold Branch 1,900 26 567 15/06/1998
30000 Ipoh, Perak Darul Ridzuan premises
24 No. 80 & 82, Leasehold - Branch 9,062 33 749 01/06/1994
Jalan Othman 1/14, (15/6/2089) - premises
46000 Petaling Jaya, 67/90 years
25 No. 19, Jalan 54, Desa Jaya, Leasehold - Branch 5,859 41 296 29/11/1985
52100 Kepong, (8/3/2081) - premises
Selangor Darul Ehsan 59/99 years
26 Lot 111, Jalan Mega Mendung, Leasehold - Vacant 4,978 43 347 31/07/1988
Kompleks Bandar, (11/10/2076) -
Off Jalan Klang Lama, 54/99 years
58200 Kuala Lumpur
27 No. 161, Jalan Imbi, Freehold Vacant 2,454 27 2,660 14/02/1996
55100 Kuala Lumpur
Other Information

28 No. 8A-D, Jalan Station, Freehold Vacant 12,854 30 284 22/10/1977
80000 Johor Bahru,
Johor Darul Takzim
29 No. 109, Main Road, Freehold Branch 2,740 35 197 01/09/1988
83700 Yong Peng, premises
Johor Darul Takzim
30 No. 1, Bentong Heights, Freehold Branch 5,432 55 27 30/06/1977
28700 Bentong, premises
Pahang Darul Makmur
31 No. 36, Main Road Tanah Rata, Leasehold - Branch 1,728 83 66 30/08/1982
39000 Cameron Highland, (24/11/2039) - premises
Pahang Darul Makmur 17/99 years
32 W-1-0, W-2-0 & W-1-1, Freehold Branch 4,545 24 1,008 18/12/1999
Subang Square Business Centre, premises
Jalan SS15/4G, 47500 Subang Jaya,
33 No. 2828-G-02 & 2828-1-02, Freehold Vacant 12,173 24 1,917 18/12/1999
Jalan Bagan Luar,
12000 Butterworth,
Pulau Pinang
34 Plot No. 20, Jalan Bidor Raya, Freehold Branch 3,243 24 433 23/11/1999
35500 Bidor, premises
Perak Darul Ridzuan
35 No. 1, Persiaran Greentown 2, Leasehold - Branch 7,870 23 1,286 23/11/1999
Greentown Business Centre, (21/11/2094) - premises
30450 Ipoh, 72/99 years
Perak Darul Ridzuan
36 Lots 39 & 40, Leasehold - Branch 5,988 24 997 31/05/1991
Kompleks Munshi Abdullah, (24/2/2084) - premises
75100 Melaka 62/99 years
37 No. 1 & 2 Jalan Raya, Freehold Branch 5,840 22 332 20/09/2000
09800 Serdang, premises
Kedah Darul Aman
38 No. 133 & 135, Jalan Gopeng, Freehold Branch 4,700 22 307 13/12/2000
31900 Kampar, premises
Perak Darul Ridzuan
39 No. 65-67, Jalan Tun HS Lee, Freehold HLB’s CSR 2,223 27 4,617 14/10/1996
50000 Kuala Lumpur Community
Center
40 No. 64, Jalan Tun Mustapha, Leasehold - Branch 1,370 32 353 30/05/1991
87007 Labuan (28/12/2881) - premises
859/999 years
55100 Kuala Lumpur
55100 Kuala Lumpur
Other Information

43 No. 114 & 116, Jalan Cerdas, Leasehold - Branch 12,200 17 3,235 07/06/2006
Taman Connaught, (16/10/2078) - premises
56000 Kuala Lumpur 56/99 years
44 Lot A08-A09, Freehold Branch 9,800 17 2,463 06/07/2006
Jalan SS 6/5A Dataran Glomac, premises
Pusat Bandar Kelana Jaya,
47301 Petaling Jaya
45 No. 2, Jalan Puteri 2/4, Freehold Branch 11,850 16 4,854 28/06/2007
Bandar Puteri, Puchong, premises
47100 Selangor Darul Ehsan
46 Tower A, PJ City Development, Leasehold - Branch 194,489 15 66,671 21/07/2008
46100 Petaling Jaya, Selangor (14/08/2094) - premises
72/99 years
47 OUG, No. 2, Lorong 2/137C, Leasehold - Branch 17,300 13 4,304 01/04/2011
Off Jalan Kelang Lama, (year 2088) - premises
48 KEP, Lot No. 77C & 77D, Leasehold - Branch 30,613 13 7,636 01/05/2011
Lot No. 58529 Jalan Kepong, (7/01/2101) - premises
49 No. 122, Kapit By-Pass, Leasehold - Branch 1,200 30 162 30/04/1985
96807 Kapit, (29/4/2045) - premises
Sarawak 23/60 years
50 No. 12A, Block B, Level 2, Leasehold - 1 unit 1,792 36 82 24/05/1983
Fraser’s Hill, Condominium, (23/05/2082) - apartment
49000 Bukit Fraser’s, 60/99 years (Vacant)
Pahang Darul Makmur
51 No. 9, Jalan Cheng Lock, 50000 Freehold Vacant 2,199 50 247 18/09/1972
Kuala Lumpur,
Wilayah Persekutuan
52 No. 3, Jalan Bandar Satu, Freehold Branch 4,687 28 1,582 03/04/1997
Pusat Bandar Puchong, premises
47100 Puchong,
53 No. 32 & 34, Jalan 21/19, Freehold Vacant 3,080 60 2,062 19/08/1997
Sea Park, 46300 Petaling Jaya,
54 No. 26 & 27, Jalan Kenari 1, Freehold Branch 3,600 27 1,264 22/01/1999
Bandar Puchong Jaya, premises
47100 Puchong,
55 No. 2, Jalan PJU 5/8, Leasehold - Branch 12,892 19 3,076 12/02/2005
Dataran Sunway, Kota Damansara, (23/11/2100) - premises
47810 Petaling Jaya, 78/99 years
Other Information

56 No. J09-6 and J02-06, Leasehold - 2 units 2,088 27 153 21/04/1994
Paradise Lagoon Holiday, (7/6/2087) - apartment
Apartment, 65/99 years
Batu 3 1/2 Jalan Pantai,
70100 Port Dickson,
57 No. S-3, Kompleks Negeri, Leasehold - Vacant 1,680 39 206 29/06/1981
Jalan Dr. Krishnan, (30/01/2078) -
70000 Seremban, 56/99 years
58 No. 105 & 107, Leasehold - Vacant 3,132 27 411 17/04/1998
Jalan Melaka Raya 24, (20/3/2094) -
Taman Melaka Raya, 72/99 years
75000 Melaka
59 No. 67 & 69, Jalan Merdeka, Leasehold - Branch 3,080 28 579 15/08/1999
75000 Taman Merdeka Raya, (7/7/2093) - premises
Melaka 71/99 years
60 No. 35, 37 & 39, Jalan Johor Satu, Freehold Branch 13,965 20 1,763 12/02/2003
Taman Desa Cemerlang, premises
81800 Ulu Tiram,
Johor Darul Takzim
61 No. 21, Jalan Permas 10/1, Freehold Branch 2,624 26 862 05/04/1999
Bandar Baru Permas Jaya, premises
81750 Masai,
Johor Darul Takzim
62 No. B-278 & B-280, Jalan Beserah, Freehold Branch 3,208 22 1,250 04/08/1999
25300 Kuantan, premises
Pahang Darul Makmur
63 No. 31, 33, 35 & 37, Freehold Branch 15,844 20 1,076 10/07/2003
Jalan Usahaniaga 1, premises
Taman Niagajaya,
14000 Bukit Mertajam,
Seberang Perai Tengah,
Penang
64 Lot 171, Jalan Council, Leasehold - Branch 1,740 27 108 21/06/1990
95000 Bandar Sri Aman, (20/06/2050) - premises
Sarawak 28/60 years
65 Lot No. 2013, Jalan Pisang Barat, Leasehold - Storage 1,390 30 - 23/09/1992
93150 Kuching, (31/12/2038) -
Sarawak 16/99 years
66 No: 3/G14, 3/G15 & 3/G16, Leasehold - Branch 4,141 28 1,407 04/02/1997
Block 3, Lorong Api-Api 2, (31/12/2086) - premises
Api-Api Centre, 64/99 years
88000 Kota Kinabalu, Sabah
67 No. 177, Limbok Hill, Freehold Single-storey 6,730 50 9 16/08/1972
70000 Seremban, detached
Negeri Sembilan Darul Khusus house
Other Information

68 No. 11, Jalan Emas 2, Freehold Vacant 5,804 30 - 25/05/1993
Taman Emas Cheras,
43200 Cheras, Selangor
69 No. 53 & 55, Jalan Sultan Ismail, Freehold Branch 9,600 26 17,384 01/06/2015
50250 Kuala Lumpur premises
70 No. 300, Jalan Jelutong, Freehold Branch 16,652 21 12,535 23/06/2015
11600 Pulau Pinang premises
71 Lot 1, Block 35, Leasehold - Branch 13,880 51 4,569 17/08/2015
Fajar Commercial Complex, (31/12/2895) - premises
Jalan Lembaga, 873/998 years
91000 Tawau, Sabah
72 Menara Hong Leong, Freehold Head Office/ 668,331 8 536,098 03/07/2015
No. 6, Jalan Damanlela, Branch
Bukit Damansara,
50490 Kuala Lumpur
73 01-01, 01-02, 01-03, 01-05, Leasehold - Branch 18,317 5 13,944 16/11/2018
Blok D, Komersil Southkey Mozek, (21/2/2100) -
Persiaran Southkey 1, 78/99 years
Kota Southkey,
80150, Johor Bahru
74 No. 8, Jalan 3/5-C, Leasehold - Branch 6,908 5 1,976 13/09/2018
Taman Setapak, Indah Jaya, (28/8/2086) -
Off Jalan Genting Klang, 64/99 years
53300 Kuala Lumpur
75 No. Hakmilik 1205, No. Lot 4057 Freehold Vacant 65,340 2 10,342 25/02/2021
Muikim 06 Daerah Seberang
Perai Tengah, Pulau Pinang
Other Information
BRANCHES AS AT 30 JUNE 2023
FEDERAL TERRITORY 15 No. 71 & 73, Jalan Radin Tengah, 29 No. 1-GM, Jalan Perdana 4/6,
KUALA LUMPUR Zone J 4, Bandar Baru Seri Petaling, Pandan Perdana,
57000 Kuala Lumpur 55300 Kuala Lumpur
1 Level 1, Wisma Hong Leong, 16 No. 7 & 9, Jalan 2/109F, 30 No. 19, Jalan 54, Desa Jaya,
18, Jalan Perak, Plaza Danau 2, Taman Danau Desa, 52100 Kepong, Kuala Lumpur
50450 Kuala Lumpur Off Jalan Klang Lama, 31 No. 23GM & 25GM,
2 No. 34, 36 & 38, Jalan Petaling, 58100 Kuala Lumpur Jalan Pandan Indah 4/8,
50000 Kuala Lumpur 17 A-G-10 & A-01-11, 55100 Kuala Lumpur
3 No. 2-0, Lorong 2/137C, Jalan 26/70A, Desa Sri Hartamas,
Off Jalan Klang Lama, 50480 Kuala Lumpur
58200 Kuala Lumpur 18 150, Jalan Tun Sambanthan,
SELANGOR DARUL EHSAN
4 No. 26, Lorong Rahim Kajai 14, 50470 Kuala Lumpur
Taman Tun Dr Ismail, 19 No. 53 & 55, Jalan Sultan Ismail, 32 No. 80 & 82, Jalan Othman (1/14),
60000 Kuala Lumpur 50250 Kuala Lumpur 46000 Petaling Jaya,
5 No. 77C & D, Lot 58529, Jalan Kepong, 20 166 & 168, Selangor Darul Ehsan
52100 Kuala Lumpur Jalan 2/3A Off KM 12, Jalan Ipoh, 33 No. 3, Jalan Takal 15/21, Seksyen 15,
6 No. 31 & 33, Jalan 1/116 B, 68100 Batu Caves, Kuala Lumpur 40000 Shah Alam,
Kuchai Entrepreneurs Park, 21 No. 15, 16 & 17, Jalan Midah Satu, Selangor Darul Ehsan
Off Jalan Kuchai Lama, Taman Midah, Cheras, 34 No. 59A, Jalan Welman,
58200 Kuala Lumpur 56000 Kuala Lumpur 48000 Rawang, Selangor Darul Ehsan
7 No. 37, Jalan Telawi 3, Bangsar Baru, 22 Ground Floor(Lot G3), Menara Raja Laut, 35 Wisma Meru, No. 1,
59100 Kuala Lumpur No. 288, Jalan Raja Laut, Lintang Pekan Baru, Off Jalan Meru,
8 No. 8 & 10, Jalan 3/50C, 50350 Kuala Lumpur 41050 Klang, Selangor Darul Ehsan
Taman Setapak Indah Jaya, 23 Ground & Mezzanine Floors, 36 No. 119 & 121,
Off Jalan Genting Klang, No. 2-21A & 2-21A1, Jalan Sultan Abdul Samad,
53300 Kuala Lumpur Jalan Desa 1/1, Desa Aman Puri, 42700 Banting, Selangor Darul Ehsan
9 No. 114 & 116, Jalan Cerdas, 52100 Kepong, Kuala Lumpur 37 No. 64, Jalan Stesen,
Taman Connaught, Cheras, 24 Unit E-1-2 Level 1 Block E, Pusat 45000 Kuala Selangor,
56000 Kuala Lumpur Komersial Southgate, No 2 Jalan Dua, Selangor Darul Ehsan
10 No. 468-B2(A), Blok B, Ground Floor, Off Jalan Chan Sow Lin, 38 W-1-0, W-2-0 & W-1-1,
Rivercity 3rd Mile Jalan Ipoh, 55200 Kuala Lumpur Subang Square Business Centre,
51200 Kuala Lumpur 25 Ground & 1st Floor, Unit 25-G & 25-1, Jalan SS15/4G,
11 180-0-7 & 180-0-8, Wisma Mahkota, Signature Office, Mid Valley City, 47500 Subang Jaya,
Taman Maluri, Cheras, Lingkaran Syed Putra, Selangor Darul Ehsan
55100 Kuala Lumpur 59200 Kuala Lumpur 39 No. 91,
12 No. 50, Jalan Merlimau, 26 Tingkat Bawah, No. 6 & 8, Blok 5, Lorong Memanda 1, Ampang Point,
Off Jalan Kenanga, Jalil Link, Jalan Jalil Jaya 6, Bukit Jalil, 68000 Ampang,
55200 Kuala Lumpur 57000 Kuala Lumpur Selangor Darul Ehsan
13 No. 2, Jalan Rampai Niaga 1, 27 No 63, Jalan Medan Putra 1, 40 No. 2, Jalan Kinrara,
Rampai Business Park, Medan Putra Business Centre, Menjalara, Taman Kinrara, Jalan Puchong,
Taman Sri Rampai, 52200 Kuala Lumpur 47100 Selangor Darul Ehsan
53300 Kuala Lumpur 28 Level 1 Menara Hong Leong, No. 6,
14 No. 44 & 46, Block A, Plaza Sinar, Jalan Damanlela, Bukit Damansara,
Jalan 8/38D, Taman Sri Sinar, 50490 Kuala Lumpur
Segambut, 51200 Kuala Lumpur
Other Information
41 No. 24, Medan Taming 2, 54 No. 68, Lorong Batu Nilam 4A, 67 No. 2G, 2-1 & 2A-G, Jalan Cheras
Taman Taming Jaya, Bandar Bukit Tinggi, Maju, Pusat Perniagaan Cheras Maju,
43300 Balakong, 41200 Klang, Selangor Darul Ehsan 43200 Balakong,
Selangor Darul Ehsan 55 No. 1 & 3, Jalan Seri Taming 1F, Selangor Darul Ehsan
42 No. 12 & 14, Jalan PJS 11/28A, Taman Seri Taming, Batu 9, 68 5, Jalan SL 1/4, Bandar Sungai Long,
Metro Bandar Sunway, Bandar Sunway, 43200 Cheras, Selangor Darul Ehsan 43000 Kajang, Selangor Darul Ehsan
46150 Petaling Jaya, 56 No. 7 & 9, 69 Ground Floor, 36, Jalan Sulaiman,
Selangor Darul Ehsan Jalan Bunga Tanjong 6A, 43000 Kajang, Selangor Darul Ehsan
43 No. 1 & 3, Jalan Sri Sarawak 17, Taman Putra, 70 No. 9 & 11, Jalan 52/2,
Taman Sri Andalas, 68000 Ampang, Selangor Darul Ehsan PJ New Town Centre,
41200 Klang, Selangor Darul Ehsan 57 No. 22 & 24, Jalan 14/14, 46200 Petaling Jaya,
44 No. 11 & 13, Jalan M/J 1, 46100 Petaling Jaya, Selangor Darul Ehsan
Taman Majlis Jaya, Jalan Sungai Selangor Darul Ehsan 71 90, Persiaran Raja Muda Musa,
Chua, 43000 Kajang, 58 Wisma Keringat 2, No. 17, Lorong 42000 Pelabuhan Klang,
Selangor Darul Ehsan Batu Caves 2, 68100 Batu Caves, Selangor Darul Ehsan
45 No. 174 & 174A, Jalan Besar, Selangor Darul Ehsan 72 3, Jalan Bandar Satu,
42800 Tanjung Sepat, Kuala Langat, 59 Ground Floor, Tower A PJ City Pusat Bandar Puchong,
Selangor Darul Ehsan Development 15A, 47100 Puchong, Selangor Darul Ehsan
46 No. 18 & 20, Jalan 20/16A, Jalan 219, Section 51A, 73 No. 26 & 27, Jalan Kenari 1,
Taman Paramount, 46100 Petaling Jaya, Bandar Puchong Jaya,
46300 Petaling Jaya, Selangor Darul Ehsan 47100 Puchong, Selangor Darul Ehsan
Selangor Darul Ehsan 60 No. E-01-07 & E-01-08, Jalan Puchong 74 No. 28 & 30, Jalan SS 2/67,
47 No. 15 & 16 Jalan Menteri Besar 2, Prima 5/3, Puchong Prima, 47300 Petaling Jaya,
New Sekinchan Business Centre, 47100 Puchong, Selangor Darul Ehsan Selangor Darul Ehsan
45400 Sekinchan, 61 No. 30, Jalan Public, 75 Lot 43 & 45, Jalan USJ 10/1G,
Selangor Darul Ehsan Sungai Buloh New Village, 47620 Subang Jaya,
48 No. 36, Jalan Dato Shahbudin 30, 47000 Sungai Buloh, Selangor Darul Ehsan
Taman Sentosa, Selangor Darul Ehsan
76 51 & 53, Jalan TSB 10A,
41200 Klang, Selangor Darul Ehsan 62 No. 64, Jalan BRP 1/2, Taman Industri Sungai Buloh,
49 No.39 & 41, Jalan SJ 17, Bukit Rahman Putra, 47000 Sungai Buloh,
Taman Selayang Jaya, 47000 Sungai Buloh, Selangor Darul Ehsan
68100 Batu Caves, Selangor Darul Ehsan
77 No. 2, Jalan PJU 5/8,
Selangor Darul Ehsan 63 No. 5 & 7 Jalan Besar Susur 1, Dataran Sunway, Kota Damansara,
50 No. 169, Jalan Teluk Pulai, 43300 Seri Kembangan, 47810 Petaling Jaya,
41100 Klang, Selangor Darul Ehsan Selangor Darul Ehsan Selangor Darul Ehsan
51 No. 1G-3G, Jalan Wawasan 2/10, 64 No. 7 & 9, Jalan Pasar Baru 2, 78 No. 5 & 7, Jalan Cempaka 1,
Bandar Baru Ampang, Seksyen 3, Bandar Semenyih, Taman Cempaka,
68000 Ampang, 43500 Semenyih, 48200 Serendah, Hulu Selangor,
Selangor Darul Ehsan Selangor Darul Ehsan Selangor Darul Ehsan
52 No 25-29G, Jalan SS 21/60, 65 No. 2, Jalan Puteri 2/4, 79 26-32, Jalan Kapar,
47400 Damansara Utama, Bandar Puteri, 47100 Puchong, 41400 Klang, Selangor Darul Ehsan
Petaling Jaya, Selangor Darul Ehsan Selangor Darul Ehsan
80 No. 19, Jalan Setia Prima R U 13/R,
53 No. G-16, 1-16 & 2-16 & G-17, 1-17 & 2-17, 66 No. 1, Jalan Temenggung 21/9, Setia Alam, Seksyen U13,
Jalan Prima SG1, Bandar Mahkota Cheras, 40170 Shah Alam,
Taman Prima Sri Gombak, 43200 Cheras, Selangor Darul Ehsan Selangor Darul Ehsan
68100 Batu Caves,
Other Information
81 No. 3-G, Jalan Anggerik Vanilla 92 No. F105 & F106, Jalan Kuantan,
N31/N, Kota Kemuning, 28000 Temerloh, PERLIS INDERA KAYANGAN
40460 Shah Alam, Pahang Darul Makmur
Selangor Darul Ehsan 103 No. 40 & 42, Jalan Bukit Lagi,
93 No. 36, Main Road, Tanah Rata,
01000, Kangar,
82 No. 1 & 3 39000 Cameron Highlands,
Perlis Indera Kayangan
Jalan PJU 1/43, Aman Suria, Pahang Darul Makmur
47301 Petaling Jaya, 94 No. 1, Bentong Heights,
Selangor Darul Ehsan 28700 Bentong,
KEDAH DARUL AMAN
83 Ground Floor, Lot G01, Pahang Darul Makmur
Giant Hypermarket Putra Heights, 95 No. B 278 & B 280, 104 Ground Floor & 1st Floor,
Persiaran Putra Perdana, Jalan Beserah, 25300 Kuantan, No. 212, Jalan Gangsa,
47560 Putra Heights, Pahang Darul Makmur Seberang Jalan Putra,
Selangor Darul Ehsan 05150 Alor Setar,
96 No. 113, Jalan Inderapura 1,
84 Ground Floor, No. 109 & 111, Bandar Inderapura, Kedah Darul Aman
Jalan Mahogani 5, Bandar Botanic, 27000 Jerantut, Pahang 105 Ground & 1st Floor, No. 64 & 65,
41200 Klang, Selangor Darul Ehsan Jalan Pengkalan, Taman Pekan Baru,
85 No. 4G & 6G, Jalan Equine 1B, 08000 Sungai Petani,
Taman Equine Boulevard, Kedah Darul Aman
43300 Seri Kembangan, TERENGGANU DARUL IMAN 106 No. 1 & 2, Jalan Raya,
Selangor Darul Ehsan 09800 Serdang,
97 Lot 3594 & 3595,
86 No. 8, Jalan UP 1/5, Kedah Darul Aman
Jalan Baru Pak Sabah,
Taman Ukay Perdana, 107 No. 62 & 63, Jalan Bayu Satu,
23000 Dungun,
68000 Ampang, 09000 Kulim, Kedah Darul Aman
98 Hong Leong Islamic Bank Berhad 108 No. 167 & 168,
87 No. 21, Jalan BS 10/6, Susuran Sultan Abdul Hamid 11,
No. 31, Jalan Sultan Ismail,
Seksyen 10, Bukit Serdang, Kompleks Perniagaan Sultan Abdul
20200 Kuala Terengganu,
43300 Seri Kembangan, Hamid Fasa 2,
Selangor Darul Ehsan 05050 Alor Setar,
99 No. 1107 - R,S & T, Jalan Pejabat,
88 No. 120, Jalan Puj 3/2, Kedah Darul Aman
20200 Kuala Terengganu,
Taman Puncak Jalil, 109 No. 9A & 9B, Jalan Kampung Baru,
Bandar Putra Permai, 08000 Sungai Petani,
43300 Seri Kembangan, 100 No. 5686 & 5694-B,
Kedah Darul Aman
Selangor Darul Ehsan Jalan Kubang Kurus,
24000 Kemaman, 110 18K & 18L, Jalan Raya,
Terengganu Darul Iman 08300 Gurun, Kedah Darul Aman
111 Ground & First Floor,
PAHANG DARUL MAKMUR 255, Jalan Legenda 10,
Legenda Heights,
89 No. 59 & 60, Jalan Temerloh, KELANTAN DARUL NAIM 08000 Sg Petani,
Locked Bag No. 9, Kedah Darul Aman
28409 Mentakab, 101 Hong Leong Islamic Bank Berhad
112 No. 93, Langkawi Mall,
Pahang Darul Makmur Ground & Mezanine Floor,
Jalan Kelibang,
No. 1121A & B, Jalan Padang Garong,
90 No. 25, Jalan Tun Ismail, 07000 Kuah, Langkawi,
Seksyen 12,
25000 Kuantan, Kedah Darul Aman
15000 Kota Bahru,
Pahang Darul Makmur 113 No 1520-2A, Pantai Halban,
Kelantan Darul Naim
91 No. 39-41, Jalan Tun Razak, Jalan Kepala Batas,
102 PT 320 & 321, Seksyen 25,
27600 Raub, Pahang Darul Makmur 06000 Jitra, Kedah Darul Aman
Jalan Sultan Yahya Petra,
15200 Kota Bahru,
Kelantan Darul Naim
Other Information
128 No. 31, 33, 35, Jalan Usahaniaga 1, 142 No. 11 & 12,
PULAU PINANG Taman Niagajaya, 14000 Bukit Kompleks Menara Condong,
Mertajam, Pulau Pinang Jalan Bandar,
114 No. 1, Light Street, Georgetown,
129 No. 3350 & 3351, Jalan Rozhan, 36000 Teluk Intan,
10200 Pulau Pinang
Taman Industri Alma Jaya, Perak Darul Ridzuan
115 No. 9 & 10, Jalan Todak 2,
14000 Bukit Mertajam, Pulau Pinang 143 No. 579 & 579A, Jalan Pasir Puteh,
Pusat Bandar, Seberang Jaya,
130 No. 1, Jalan Besar, Taman Tempua, 31650 Ipoh, Perak Darul Ridzuan
13700 Prai, Pulau Pinang
14000 Simpang Ampat, Pulau Pinang 144 No. 91 & 93,
116 Unit G-02, Mezzanine 2-02B,
131 No. 306-F, Jalan Dato Lau Pak Khuan, Ipoh Garden,
No. 405, Jalan Burmah,
Jalan Dato Ismail Hashim, Sungai Ara, 31400 Ipoh, Perak Darul Ridzuan
10350 Pulau Pinang
11900 Bayan Lepas, Pulau Pinang 145 86 & 88, Jalan Besar,
117 No. 15-G-1 (Bayan Point),
132 Ground & First Floor, 32400 Ayer Tawar, Perak
Medan Kampung Relau,
11900 Pulau Pinang No. 1, Medan Limau Emas, 146 PT 1167 & 1168, Jalan Chui Chak,
Pusat Perniagaan Limau Emas, 36700 Langkap, Perak Darul Ridzuan
118 1780 & 1781, Jalan Nibong Tebal,
Off Jalan Song Ban Keng, 147 Ground & First Floor, No.254 & 254A,
Taman Panchor Indah,
14000 Bukit Mertajam, Pulau Pinang Jalan Raja Dr. Nazrin Shah,
14300 Pulau Pinang
Gunung Rapat,
119 98-G-15, Prima Tanjung,
31350 Ipoh, Perak Darul Ridzuan
Jalan Fettes, Tanjung Tokong,
10470 Pulau Pinang PERAK DARUL RIDZUAN 148 No. 25 & 27,
Jalan Bunga Anggerik,
120 No. 1, Lebuh Kurau 1,
133 Lot-A-G-2 (Ground Floor), Taman Bunga Raya,
Taman Chai Leng,
No. 1, Persiaran Greentown 2, 35900 Tanjong Malim,
13700 Prai, Pulau Pinang
Greentown Business Centre, Perak Darul Ridzuan
121 No. 19, Jalan Bertam, 30450 Ipoh, Perak Darul Ridzuan
149 Ground & First Floor, No. 362,
13200 Kepala Batas,
134 N-20, Jalan Bidor Raya, Medan Bercham, Jalan Bercham,
Seberang Prai, Pulau Pinang
Off Jalan Persatuan, 31400 Ipoh, Perak Darul Ridzuan
122 No. 723-G-G, 723-H-G & 723-I-G, 35500 Bidor, Perak Darul Ridzuan
Jalan Sungai Dua,
135 No. 41, Jalan Taiping,
11700 Pulau Pinang
34200 Parit Buntar, NEGERI SEMBILAN
123 No. 6963 & 6964, Perak Darul Ridzuan DARUL KHUSUS
Jalan Ong Yi How,
136 No. 16 & 17,
Kawasan Perusahan Raja Uda, 150 No. 100, Jalan Gurney,
Taman Sitiawan Maju, Jalan Lumut,
13400 Butterworth, Pulau Pinang. 72100 Bahau,
32000 Sitiawan, Perak Darul Ridzuan
124 Lot G-17 & G-18, Negeri Sembilan Darul Khusus
137 Ground & First Floors,
Jalan Dato Keramat, 151 No. 69, 70 & 71,
No. 116 & 117, Jalan Besar,
Penang Times Square, Jalan Dato Bandar Tunggal,
31450 Menglembu, Ipoh,
10150 Georgetown, Pulau Pinang 70000 Seremban,
Perak Darul Ridzuan
125 No. 1823-G1, Negeri Sembilan Darul Khusus
138 No. 28, Medan Silibin,
Jalan Perusahaan Auto-City, 152 No. 112, Jalan Yam Tuan Raden,
30100 Ipoh, Perak Darul Ridzuan
North-South Highway Juru Interchange, 72000 Kuala Pilah,
13600 Prai, Pulau Pinang 139 No. 53, 55 & 57, Jalan Stesyen, Negeri Sembilan Darul Khusus
34000 Taiping, Perak Darul Ridzuan 153 Lot Pt 5729 & 5730,
126 No. 300 Jalan Jelutong,
11600 Pulau Pinang 140 No. 133 & 135 Jalan Gopeng, Jalan TS 2/1D, Taman Semarak,
31900 Kampar, Perak Darul Ridzuan 78100 Nilai,
127 Ground Floor, No. 16A & 16B,
141 No. 27, Jalan Dewangsa, Negeri Sembilan Darul Khusus
Lebuhraya Thean Teik,
31000 Batu Gajah, 154 Lot 3120 & 3121,
Bandar Baru Ayer Itam,
Perak Darul Ridzuan Jalan Besar, Lukut,
11500 Pulau Pinang
71010 Port Dickson,
Other Information
155 145-G, 145-1 & 146-G, Blok M, 179 No. 8-10, Jalan Nusaria 11/7,
Taipan Senawang,
JOHOR DARUL TAKZIM Taman Nusantara,
Senawang Commercial Park, 81550 Gelang Patah,
164 No. 12 - 16, Jalan Wong Ah Fook,
70450 Negeri Sembilan Darul Khusus Johor Darul Takzim
80000 Johor Bahru,
156 Ground, 1st & 2nd Floors, No. 7 & 8, Johor Darul Takzim 180 105-106, Jalan Besar,
Jalan S2 B15, Biz Avenue, Seremban 2, 81750 Masai, Johor Darul Takzim
165 No. 70, Jalan Segamat,
70300 Seremban, 181 30 & 31, Jalan Mawar 1, Taman Mawar,
85300 Labis, Johor Darul Takzim
Negeri Sembilan Darul Khusus 81700 Pasir Gudang,
166 Lot No. 24 & 25,
Johor Darul Takzim
Jalan Ahmad Ujan, Taman Kota Besar,
81900 Kota Tinggi, Johor Darul Takzim 182 1, 1A, 1B & 1C, Jalan Belimbing,
81400 Senai, Johor Darul Takzim
MELAKA 167 No. 120 - 122, Jalan Mersing,
86000 Kluang, Johor Darul Takzim 183 01-01, 01-02, 01-03, 01-05,
157 No. 345, Jalan Ong Kim Wee, Block D Komersil Southkey Mozek,
168 No. 173 & 175,
75300 Melaka Persiaran Southkey 1, Kota Southkey,
Jalan Sri Pelangi, Taman Pelangi,
158 No. 150 & 152, 80150 Johor Bahru,
80400 Johor Bahru, Johor Darul Takzim
Kompleks Munshi Abdullah, Johor Darul Takzim
169 No. 6 & 8, Jalan Nakhoda 12,
Jalan Munshi Abdullah, 184 No. 21, Jalan Permas 10/1,
Taman Ungku Tun Aminah,
75100 Melaka Bandar Baru Permas Jaya,
81300 Skudai, Johor Darul Takzim
159 Lot BB-371A & B, 81750 Masai, Johor Darul Takzim
170 No. 6 & 7, Jalan Anggerik 1,
Taman Melaka Baru, 185 No. 30 & 31, Jalan Delima,
Taman Kulai Utama,
Batu Berendam, Pusat Perdagangan Pontian,
81000 Kulai, Johor Darul Takzim
75350 Melaka 82000 Pontian, Johor Darul Takzim
171 No. LC 531, Jalan Payamas,
160 Lot 215 & 130, Jalan Besar, 186 No. 43A & 45, Jalan Genuang,
84900 Tangkak, Johor Darul Takzim
78300 Masjid Tanah, Melaka Kampung Abdullah,
172 No. 109, Main Road,
161 No. 1, 1-1 & 3, Jalan Malim Jaya 2/7A, 85000 Segamat, Johor Darul Takzim
83700 Yong Peng, Johor Darul Takzim
Taman Malim Permai, 187 No. 29 & 31,
173 No. 39 & 41, Jalan Kebudayaan 1,
75250 Melaka Jalan Molek 2/4, Taman Molek,
Taman Universiti,
162 No. 67 & 69, 81100 Johor Bahru,
Jalan Merdeka, Johor Darul Takzim
174 Ground & Mezzanine Floors,
Taman Melaka Raya, 188 No. 25 & 25A,
Penggaram Complex, No. 1,
75000 Melaka Jalan Kenanga 29/1, Indahpura,
Jalan Abdul Rahman,
163 No. 76 & 76-1, 81000 Johor Bahru,
Off Jalan Rahmat,
Jalan Inang 4 (Cheng), Johor Darul Takzim
83000 Batu Pahat, Johor Darul Takzim
Taman Paya Rumput Utama, 189 Ground & 1st Floor, No. 3,
175 No. 80, Jalan Dedap 13,
76300 Paya Rumput, Melaka Pusat Dagangan Bakri, Jalan Bakri,
Taman Johor Jaya,
84000 Muar, Johor Darul Takzim
81100 Johor Bahru, Johor Darul Takzim
190 Ground Floor, No. 121 & 123,
176 No. 2, Jalan Jati Satu,
Jalan Austin Heights 3,
Taman Nusa Bestari Jaya,
Taman Mount Austin,
81100 Johor Bahru,
177 No. 5, Jalan Camar 1/3, Johor Darul Takzim
Taman Perling,
191 Ground Floor,
81200 Johor Bahru,
No. 1, Jalan Setia Tropika 1/15,
Johor Darul Takzim
Taman Setia Tropika,
178 No. 35, 37 & 39, Jalan Johar 1, 81200 Johor Bahru,
Taman Desa Cemerlang, Johor Darul Takzim
81800 Ulu Tiram, Johor Darul Takzim
192 No. 345A, Jalan Ismail,
86800 Mersing, Johor Darul Takzim
Other Information
206 No. 133, 135 & 137, 221 No. 18C & 20,
SABAH Jalan Kampung Nyabor, Lorong Tun Razak 1,
96000 Sibu, Sarawak Jalan Masjid Lama,
193 Ground & 1st Floor,
207 No. 8-10, Lorong Maju, PO Box 279, 96100 Sarikei Sarawak
Lot No. 1, Block 35,
Fajar Commercial Complex, 96508 Bintangor, Sarawak 222 10, 12, 14, 16 & 18,
Jalan Lembaga, 208 Lot 13 & 14, Olive Garden, Mission Road, P.O. Box 656,
91013 Tawau, Sabah 7th Mile Bazaar, Jalan Pensrissen, 96007 Sibu, Sarawak
194 No. 5 & 6 (Ground Floor), 93250 Kuching, Sarawak 223 345-347, Ground Floor & 1st Floor,
Lorong Lintas Plaza 1, Lintas Plaza, 209 No. 175, Serian Bazaar, Central Park Commercial Centre,
88300 Kota Kinabalu, Sabah 94700 Serian, Sarawak Jalan Tun Ahmad Zaidi Adruce,
9 3200 Kuching, Sarawak
195 Lot 1, 2 & 3, Block 18, Mile 4, 210 Lot 124, Saratok Baazar, P.O Box 71,
North Road, Bandar Indah, 95407 Saratok, Sarawak 224 Lot 171, Jalan Council,
90000 Sandakan, Sabah 95000 Bandar Sri Aman, Sarawak
211 No. 10, Lot 734,
196 Ground Floor, Jalan Lee Kai Teng,
Wisma Sandaraya, Humprey Street, 95700 Betong, Sarawak
FEDERAL TERRITORY
90000 Sandakan, Sabah 212 No. 18, Chew Geok Lin Street, PUTRAJAYA
197 No. 19, Jalan Haji Saman, P.O Box 1461,
P.O. Box 11989, 96000 Sibu, Sarawak 225 Hong Leong Islamic Bank Berhad
88821 Kota Kinabalu, Sabah 213 No. 722, Jalan Masjid, P.O Box 19, Lot T00 - U01, No. 5,
198 No. 8, Jalan Pantai, 96400 Mukah, Sarawak Jalan P16, Precinct 16,
Locked Bag No. 124, 62150 Putrajaya,
214 Lot 122, Jalan Yong Moo Chai,
88999 Kota Kinabalu, Sabah Wilayah Persekutuan
P.O. Box 15,
199 Lot 4, 5 & 6, Block C, 96807 Kapit, Sarawak
Lorong KK Taipan 2, 215 Lot 11600-11602, Block 16,
Inanam New Township,
FEDERAL TERRITORY LABUAN
No. 127-129, R.H.Plaza,
88450 Kota Kinabalu, Sabah Jalan Lapangan Terbang, 226 No. 64, Jalan Tun Mustapha,
200 Lot 3-0-14 to 3-0-16, Block 3, 93550 Kuching, Sarawak 87007 Labuan
Lorong Api-Api 2, Api-Api Centre, 216 Lot 122-124,
88000 Kota Kinabalu, Sabah Jalan Song Thian Cheok, 93100
201 MDLD 4711 & 4712, Lot 3 & 4, Kuching, Sarawak BUREAU DE CHANGE
Jalan Kastam Lama, 217 Lot 1078-1079,
91100 Lahad Datu, Sabah Buangsiol Road, P.O. Box 69, 1 Bureau De Change Bukit Bintang,
202 No. 38, Block E, 98707 Limbang, Sarawak No. 53 & 55, Jalan Sultan Ismail,
Alamesra Plaza Permai, 50250 Kuala Lumpur
218 Ground & First Floor,
88400 Kota Kinabalu, Sabah Lot 715, Merbau Road, 2 Bureau De Change Kuantan,
98008 Miri, Sarawak No. 25, Jalan Tun Ismail,
25000 Kuantan,
219 No. 22-23,
SARAWAK Suria Permata Commercial Centre,
Pahang Darul Makmur
Jalan Lanang,
203 No. 35, Jalan Khoo Hun Yeang,
96000 Sibu, Sarawak
93000 Kuching, Sarawak
220 Lot 2499 & 2500,
204 No. 42, Jalan Pending,
Ground & 1st Floor,
93450 Kuching, Sarawak
Boulevard Commercial Centre,
205 Lot 3073 & 3074, Jalan Miri-Pujut, KM 3,
Jalan Abang Galau, 98000 Miri, Sarawak
97000 Bintulu, Sarawak
Other Information
Overseas Branches and Subsidiaries
6 Hong Leong Bank (Cambodia) PLC

SINGAPORE CAMBODIA
Boeung Snor Branch:
1 Main Office 1 Hong Leong Bank (Cambodia) PLC # SL08 and SL09 of Polaris Shop,
1 Wallich Street Head Office Branch: National road N01,
#29-01 Guoco Tower No. 28, Samdech Pan Avenue Boeung Chhouk Village,
Singapore 078881 (St. 214), Sangkat Boeung Raing, Sangkat Niroth,
Khan Daun Penh, Phnom Penh Khan Chbar Ampov,
Banking Hall Kingdom of Cambodia Phnom Penh, Cambodia
7 Wallich Street
#B1-25 & B1-26 Tel : +855 23 999 711 Tel : +855 23 999 711
Tanjong Pagar Center Fax : +855 23 998 494 7 Hong Leong Bank (Cambodia) PLC
Singapore 078884 2 Hong Leong Bank (Cambodia) PLC Sen Sok Branch:
Tuol Kork Branch: #65&67, St. 1003, Phum Bayab,
Tel : (65)-63498338 No. 150 G & 150 M, Sangkat Phnom Penh Thmey,
Fax : (65)-65339340 Street 289 Sangkat Boeung Kak 1, Khan Sensok,
Khan Toul Kork, Phnom Penh Phnom Penh, Cambodia
HONG KONG Tel : +855 23 999 711 Tel : +855 92 376 263

1 50/F
Olympic Branch Branch: LABUAN INTERNATIONAL
The Center
No 345, 347, and 349, Street 274, BUSINESS AND
99 Queen’s Road Central
Sangkat Veal Vong, Khan 7 Makara, FINANCIAL CENTRE
Central, Hong Kong
Phnom Penh
1 Hong Leong Bank Berhad
Tel : 852-22838838
Tel : +855 23 999 711 Labuan International Branch
Fax : 852-22853138
4 Hong Leong Bank (Cambodia) PLC (Licensed Labuan Bank No. 160118D):
Pet Lok Sang Branch: Level 6 (G), Main Office Tower,
Financial Park Labuan Complex,
VIETNAM No.23, Street 271,
Sangkat Toeuk Thla, Jalan Merdeka,
1 Hong Leong Bank Vietnam Limited Khan Sensok, Phnom Penh, 87000 Labuan F.T. Malaysia
Ground Floor, Centec Tower Cambodia
72-74 Nguyen Thi Minh Khai Street Tel : 6087-422253
District 3, Ho Chi Minh City Tel : +855 23 999 711 Fax : 6087-422263

Tel : 848-6299 8100 Mao Tse Toung Branch:
Fax : 852-6299 8101 No. 167CD, Mao Tse Toung Blvd
2 Hong Leong Bank Vietnam Limited (St. 245),
Pacific Place, GF, Unit 08-09, Sangkat Toul Svay Prey 1,
83B Ly Thuong Kiet Str, Khan Chamkamorn, Phnom Penh
Tran Hung Dao Ward,
Hoan Kiem District Tel: +855 23 999 711
Hanoi, Vietnam
Tel : 848-62998100
Fax : 848-62998101
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FORM OF PROXY Registration No. 193401000023 (97141-X)
I/We
NRIC/Passport/Company No.
of
being a member of HONG LEONG BANK BERHAD (the “Bank”), hereby appoint
NRIC/Passport No.
of
or failing him/her
NRIC/Passport No.
of
or failing him/her, the Chairman of the meeting as my/our proxy/proxies to vote for me/us on my/our behalf at the Eighty-Second Annual General
Meeting of the Bank to be held at Wau Bulan 2, Level 2, Sofitel Kuala Lumpur Damansara, No. 6, Jalan Damanlela, Bukit Damansara, 50490 Kuala Lumpur
on Monday, 30 October 2023 at 2.30 p.m. and at any adjournment thereof.
My/Our proxy/proxies is/are to vote as indicated below with an “X”:
RESOLUTIONS FOR AGAINST

1. To approve the payment of Director Fees and Directors’ Other Benefits
2. To re-elect YBhg Tan Sri Quek Leng Chan as a Director
3. To re-elect YBhg Datuk Manharlal A/L Ratilal as a Director
4. To re-appoint PricewaterhouseCoopers PLT as Auditors of the Bank and to authorise the Directors to fix their
remuneration
SPECIAL BUSINESS
5. To approve the ordinary resolution on Authority to Directors to Allot Shares and Waiver of Pre-emptive Rights
6. To approve the ordinary resolution on Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party
Transactions of a Revenue or Trading Nature with Hong Leong Company (Malaysia) Berhad, GuoLine Capital
Assets Limited and Persons Connected with them
Dated this day of 2023
Number of shares held Signature(s) of Member
_________________________________
CDS Account No.
Notes:-
1. For the purpose of determining members’ eligibility to attend this meeting, only members whose names appear in the Record of Depositors as at 20 October 2023
shall be entitled to attend this meeting or appoint proxy(ies) to attend and vote on their behalf.
2. If you wish to appoint other person(s) to be your proxy, insert the name(s) and address(es) of the person(s) desired in the space so provided.
3. If there is no indication as to how you wish your vote(s) to be cast, the proxy will vote or abstain from voting at his/her discretion.
4. A proxy may but need not be a member of the Bank.
5. Save for a member who is an exempt authorised nominee, a member shall not be entitled to appoint more than two (2) proxies to attend, participate, speak and vote
at the same meeting. Where a member of the Bank is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991, it may appoint
not more than two (2) proxies in respect of each securities account it holds with ordinary shares of the Bank standing to the credit of the said securities account. A
member who is an exempt authorised nominee for multiple beneficial owners in one securities account (“Omnibus Account”) may appoint any number of proxies in
respect of the Omnibus Account.
6. Where two (2) or more proxies are appointed, the proportion of shareholdings to be represented by each proxy must be specified in the instrument appointing the
proxies, failing which the appointments shall be invalid (please see note 9 below).
7. In the case where a member is a corporation, this Form of Proxy must be executed under its Common Seal or under the hand of its duly authorised attorney or officer.
8. All Forms of Proxy must be duly executed and deposited at the Registered Office of the Bank at Level 30, Menara Hong Leong, No. 6, Jalan Damanlela, Bukit
Damansara, 50490 Kuala Lumpur or lodged electronically via email at [email protected], not less than forty-eight (48) hours before the time appointed
for holding of the meeting or adjourned meeting.
9. In the event two (2) or more proxies are appointed, please fill in the ensuing section:
Name of Proxies % of shareholdings to be represented
10. Pursuant to Paragraph 8.29 A (1) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, all the resolutions set out in the notice will be put to
vote by way of a poll.
Fold this flap for sealing
Then fold here
AFFIX
STAMP
The Group Company Secretary

Registration No. 193401000023 (97141-X)
Level 30, Menara Hong Leong

No. 6, Jalan Damanlela
Bukit Damansara
50490 Kuala Lumpur
Malaysia
1st fold here

Hong Leong Bank Berhad
Registration No. 193401000023 (97141-X)
Level 19, Menara Hong Leong

No. 6, Jalan Damanlela, Bukit Damansara
50490 Kuala Lumpur
Tel : 03-2081 8888
Fax : 03-2081 7801
www.hlb.com.my
As part of Hong Leong Bank’s support for environmental sustainability,

this Annual Report is printed on Forest Stewardship Council (FSC) certified paper.

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Annual Report 2023

Corporate Financials Additional Information

08 Corporate Milestones Income 438 Network of Branches

18 Chairman’s Statement 173 Statements of Changes in Equity • Form of Proxy

24 Five Year Financial Highlights 177 Statements of Cash Flows

26 Group Managing Director/ 183 Notes to the Financial Statements

127 Board Risk Management

KEY BUSINESS PILLARS ARE:

HONG LEONG BANK BERHAD

Lembaga Hasil Dalam Negeri Malaysia

Anugerah Pembayar Cukai

Best SME Bank in Malaysia 2022 Best Performance for a Financial

Organised by Asian Banking & Finance Organised by SJPP

Best SME Bank in Malaysia 2022 Most Recommended Retail Bank by

Organised by The Asian Banker Organised by The Asian Banker

Awards & Accolades

HONG LEONG BANK BERHAD

Asset-Backed / Asset-Based / Covered Titanium+ Tier Certification for

Sustainability & CSR Awards Malaysia 2022

Mentioned 4 Times under “Highly Best Performer - Financial Institution 2022

Organised by The Asset Organised by The Edge

Asset Benchmark Research 2023 Global Good Governance Awards 2023

4th Best in Malaysian Ringgit Bonds - 3G Best Sustainability Disclosure &

Organised by The Asset Organised by Cambridge IFA

Asset Benchmark Research 2023 Global Good Governance Awards 2023

Best Trading Individual in Pan Asia 2023 3G Best Corporate Governance

Organised by The Asset Organised by Cambridge IFA

Malaysia (HQ) (Listed on Bursa Malaysia)

Hong Leong Bank Story

Personal Business & Global Islamic

Channels Core Values

- Digital at the Core

1905 1934 1989 1994

2013 2011 2009 2008

Intensified digitisation of HLB’s

2014 2016 • Introduced eFD via FPX

CUSTOMERS AND EMPLOYEES

CUSTOMERS AND EMPLOYEES

CORPORATE SOCIAL RESPONSIBILITY AND COMMUNITY INVESTMENT

Employees Covid-19 Vaccination Programme

Despite persistently challenging

Despite the softening growth prospects in the global

The sustained pace of domestic demand growth reflected

Looking ahead, the path to economic growth remains uncertain

In addition to our financial performance, HLB has continued TOTAL ASSETS

SUSTAINED VALUE CREATION

The Bank has continued to generate value

With this performance, earnings per

In Cambodia, Hong Leong Bank

To our exceptional employees, I am

On that note, I would like to

FY2019 FY2020 FY2021 FY2022 FY2023

Total Assets 207,369 221,278 237,129 254,331 279,850

Earnings per share (sen) 130 122 140 161 186

Gross Loans, Advances and Deposits from Customers Total Income

+8.0% YoY +7.3% YoY +1.6% YoY

Five Year Financial Highlights

FY2019 FY2020 FY2021 FY2022 FY2023

Total Assets 169,461 177,707 188,434 198,130 215,057