Company No: 50841 W
Commerce Asset-Holding Berhad
(Incorporated
in Malaysia)
1. Basis of the Preparation of the Financial Statements
The quarterly accounts of the Commerce Asset-Holding Berhad (“CAHB”) Group have been
prepared in accordance with the accounting policies and methods of computations consistent with
those adopted in the recent annual financial statements. There have been no changes to these policies.
2. Exceptional items
There were no exceptional items during the financial period ended 30 September 2001.
3. Extraordinary items
There were no extraordinary items during the financial period ended 30 September 2001.
4. Taxation
There were no material transfers in respect of deferred taxation and there were no material
adjustments for under or over provision in respect of prior years during the period ended 30
September 2001
5. Pre-acquisition profits
There were no pre-acquisition profits or losses during the financial period ended 30 September 2001.
6. Gain/(loss) on sale of investments and/or properties
There were no material gain or loss on disposal of investments or properties other than in the ordinary
course of business.
7. Particulars of purchase and sale of quoted securities
As at
30/09/01
RM’000
Total purchases
Total disposals
Total profit/(loss) on disposal
2,309
As at
30/09/01
RM’000
184,940*
Total investment at cost
Total investment at carrying value/book value
(after provisioning for diminution in value)
Total investment at market value
113,687
121,282
* Excluding shares buy-back
The above disclosure is in respect of the CAHB at company level.
9
Company No: 50841 W
Commerce Asset-Holding Berhad
(Incorporated
in Malaysia)
8. The effect of changes in the Group’s composition
The Group’s unaudited accounts for the nine-months period ended 30 September 2001 were prepared
after accounting for the 30% equity in Bank Muamalat Malaysia Berhad (“BMMB”) commencing
from 1 April 2000. This is in accordance with the supplementary agreement to Share Acquisition
Agreement (“SAA”) entered into between the Company and Khazanah Nasional Berhad on 13
December 2000.
Commencing from 1 January 2001, the results of Commerce Trust Berhad were accounted directly
under CAHB Group level, as a result of the 70% stake acquired from a subsidiary company,
Commerce International Merchant Bankers Berhad (“CIMB”). This is in accordance with the Sale
and Purchase Agreement (“S&P”) entered into between the Company and CIMB on 1 November
2000.
Commencing from 1 January 2001 also, the acquisition of Bumiputra-Commerce Discount House
Berhad (“BCDH”) by CIMB from Bumiputra-Commerce Bank Berhad (“BCB”) via S&P entered into
on 1 November 2000 was deemed completed. Thus the results of BCDH (now known as CIMB
Discount House Berhad) was consolidated under CIMB Group level as of 1 January 2001.
9. Status of Corporate proposals
There have been no other corporate proposals other than that which has already been announced to
the KLSE.
10. Seasonal or cyclical factors
The business operations of the Group have not been affected by any material seasonal or cyclical
factors.
11. Issuance and repayment of debt and equity securities
Save and except as detailed below, there were no new issuance and repayment of debt securities,
share buy-backs, share cancellations, or shares held as treasury shares during the financial period
ended 30 September 2001:a) Issuance of 433,000 shares arising from exercise of Employee Share Option Scheme (ESOS)
between 9 August 2001 to 27 September 2001.
The weighted average number of issued and fully paid-up shares with voting rights as at the
financial period ended after deducting treasury shares purchased was 1,175,332,970 shares.
Treasury shares have no rights to voting, dividends and participation in other distribution.
b) The Company has on 22 May 2001 issued RM 500 million Redeemable Unsecured Bonds
(“bonds”) divided into RM 250 million with coupon rate of 7.85% p.a. and RM 250 million
with coupon rate of 8.35% p.a. The maturity date of the bonds is on 22 May 2006 and 22
May 2008 respectively. The bonds are constituted by a trust deed dated 4 May 2001.
c) BCB has on 28 May 2001 issued RM 667 million Irredeemable Convertible Unsecured Loan
Stocks with detachable coupons rate of 7.5% p.a. with a tenor of 10 years to maturity. An
amount of RM 600 million from the total proceeds was utilised to retire the full amount of the
10
Company No: 50841 W
Commerce Asset-Holding Berhad
(Incorporated
in Malaysia)
EPF negotiable subordinated certificates of deposits through the call option by EPF on 30
May 2001. The remaining RM 67 million is for working capital.
12. Deposits and placements of financial institutions and debt securities
Group
As at
30/09/01
RM’000
Deposits from customers:
Demand deposits
Saving deposits
Fixed deposits
Negotiable instruments of deposits
Others
Fixed deposits and negotiable instruments of deposits
One year or less (short term)
More than one year (medium/long term)
Deposits and placements of banks and
other financial institutions
One year or less (short term)
More than one year (medium/long term)
Bonds and notes*
Secured
One year or less (short term)
More than one year (medium/long term)
As at
31/12/00
RM’000
9,606,639
3,442,711
29,719,674
1,057,350
1,062,989
44,889,363
9,577,086
3,298,177
30,895,987
1,027,350
1,322,684
46,121,284
25,255,877
5,521,147
30,777,024
31,101,853
821,484
31,923,337
10,624,308
763,000
11,387,308
7,610,808
230,700
7,841,508
2,964
1,108,032
1,110,996
610,996
610,996
144,679
349
-
600,000
600,000
*
Including in bonds and notes is USD denominated bonds
equivalent to USD 160,780,000.
Irredeemable Unsecured Loans Stocks
Unsecured
One year or less (short term)
More than one year (medium/long term)
Subordinated term loans
Secured
One year or less (short term)
More than one year (medium/long term)
11
Company No: 50841 W
Commerce Asset-Holding Berhad
(Incorporated
in Malaysia)
13. Commitments and contingencies
In the normal course of business, the Group makes various commitments and incurs certain
contingent liabilities with legal recourse to its customers. No material losses are anticipated as a result
of these transactions.
Risk Weighted exposures of the Group as at
As at
30/09/01
Principal
Credit
Amount
Equivalent*
RM’000
RM’000
Direct credit substitutes
Transaction-related contingent items
Short-term self-liquidating tradeRelated contingencies
Hire purchase sold directly and
Indirectly to Cagamas Berhad
Housing loans sold directly and
Indirectly to Cagamas with recourse
Obligations under underwriting
Agreement
Irrevocable commitments to extend
credit:-maturity not exceeding one year
-maturity exceeding one year
Credit derivatives
Foreign exchange related contracts
Interest rate related contracts
Equity related contracts
Miscellaneous
As at
31/12/00
Principal
Credit
Amount
Equivalent*
RM’000
RM’000
2,776,555
2,998,093
2,776,555
1,499,046
3,183,794
2,224,837
3,183,794
1,112,419
854,968
170,994
1,888,940
377,787
-
-
-
-
-
-
-
-
648,313
324,157
433,897
216,949
16,777,736
3,181,785
30,400
7,202,616
30,218,593
371,835
65,060,894
1,590,893
30,400
159,139
197,785
6,748,969
12,819,024
3,537,504
30,400
4,883,147
12,172,129
370,000
2,421,333
43,965,005
1,768,752
30,400
115,842
85,572
6,891,515
* The credit equivalent amount is arrived at using the credit conversion factors as specified by Bank Negara Malaysia
12
Company No: 50841 W
Commerce Asset-Holding Berhad
(Incorporated
in Malaysia)
14. Off-Balance sheet risk
Value of contracts classified by remaining period to maturity/next repricing date (whichever
earlier)
Group
Items
Principal
Amount
1 mth or
less
>1-3
mths
>3-6 mths
RM’000
RM’000
RM’000
RM’000
>6-12
mths
>1-5
yrs
>5 yrs
RM’000
RM’000
Margin
requirement
RM’000
RM’000
Foreign exchange
Related contracts
-forward
-swaps
-options
2,784,802
2,609,534
1,808,280
1,284,763
818,393
1,808,280
527,782
591,111
-
563,547
764,790
-
363,352
225,528
-
45,358
209,712
-
-
-
Interest rate related
Contracts
-forwards
-futures
-swaps
24,545,338
5,673,255
1,230,395
2,588,825
1,518,825
2,697,625
379,132
3,931,450
276,000
11,352,638
2,062,000
3,974,800
206,903
12,488
-
Total
37,421,209
5,141,831
5,226,543
4,405,094
4,796,330
13,669,708
4,181,703
12,488
Foreign exchange, interest rate and equity and commodity related contracts are subject to market risk
and credit risk.
Market risk
Market risk is the potential change in value caused by movement in market rates or prices. The
contractual amounts stated above provide only a measure of involvement in these types of
transactions and do not represent the amount subject to market risk. Exposure to market risk may be
reduced through offsetting on and off-balance sheet positions. As at end of the financial quarter, the
amount of contracts which were not hedged and, hence, exposed to the market risk was
RM2,217,113,000 (31/12/2000: RM1,249,477,000)
Credit risk
Credit risk arises from the possibility that a counter-party may be unable to meet the terms of a
contract in which the Group has a gain position. As at end of the financial quarter, the amounts of
credit risk, measured in the term of the cost to replace the profitable contracts, was RM
362,556,000(31/12/2000:RM194,226,000). This amount will increase or decrease over the life of the
contracts, mainly as a function of maturity dates and market rates or prices.
Related accounting policies
The accounting policies applied for recognising the financial instruments concerned are the same as
those applied for the financial year ended 31 December 2000.
13
Company No: 50841 W
Commerce Asset-Holding Berhad
(Incorporated
in Malaysia)
15. Material Litigations
At the date of this report there were no pending material litigation which would have materially
affected the Group’s financial position.
16. Segmental reporting revenue, profit and assets
Third Quarter Ended
30/09/01
Turnover
Profit
Before tax
RM’000
RM’000
Commercial banking
Offshore banking
Finance, factoring
And leasing operations
Merchant banking
Stock and sharebroking
Discount house
Insurance
Unit trust management
Investment holding &
others
Consolidation
Adjustments
Total
480,861
11,204
42,605
6,565
1,457,193
45,703
263,608
27,441
59,367,501
2,874,633
85,065
70,691
9,647
7,904
735
2,865
14,080
48,983
1,435
6,648
193
1,626
205,301
248,869
23,722
44,362
1,120
8,003
64,006
152,304
4,963
40,903
(280)
3,914
4,079,985
7,311,238
335,528
3,119,593
462,337
51,726
32,950
701,922
30,294
152,429
51,187
2,085,460
39,323
596,182
2,463,722
80,066,263
(13,242)
688,680
(2,618)
149,811
(31,859)
2,053,601
(18,968)
577,214
(5,013,273)
75,052,990
Third Quarter Ended
30/09/00
Turnover
Profit
Before tax
RM’000
RM’000
Commercial banking
Offshore banking
Finance, factoring
And leasing operations
Merchant banking
Stock and sharebroking
Discount house
Insurance
Unit trust management
Investment holding &
others
Consolidation
Adjustments
Total
Nine-months period ended
30/09/01
Turnover
Profit
Total
Before tax
Assets
RM’000
RM’000
RM’000
Nine-months period ended
30/09/00
Turnover
Profit
Total
Before tax
Assets
RM’000
RM’000
RM’000
543,646
23,344
140,417
17,933
1,433,994
46,925
400,266
23,581
59,887,602
3,006,072
71,419
63,380
13,555
14,058
(3,665)
2,401
44,593
44,089
5,614
12,587
(2,692)
736
135,009
129,557
78,060
48,561
(2,367)
9,828
61,677
93,085
54,512
45,236
(3,288)
5,018
3,385,020
4,798,766
446,948
2,875,051
351,996
53,822
72,756
800,894
11,044
274,321
160,006
2,039,573
59,054
739,141
1,193,820
75,999,097
(10,717)
790,177
(7,922)
266,399
(24,948)
2,014,625
(25,126)
714,015
(4,509,629)
71,489,468
14
Company No: 50841 W
Commerce Asset-Holding Berhad
(Incorporated
in Malaysia)
Segmental reporting on loans, advances and financing analysed by their economic purposes.
Group
As at
30/09/01
RM’000
Agriculture
Mining and quarrying
Manufacturing
Electricity, gas and water
Construction
Real estate
Purchase of landed property
(of which:Residential
Non-residential)
General commerce
Transport, storage and communication
Finance, insurance and business service
Purchase of securities
Consumption credit
Purchase of transport vehicles
Others
As at
31/12/00
RM’000
1,400,706
444,304
7,740,174
959,030
3,688,390
1,286,015
1,131,158
541,785
7,173,646
1,264,597
3,234,719
1,080,570
8,328,072
2,455,360
3,331,759
2,225,402
3,651,530
1,905,421
1,394,189
2,483,263
2,742,645
44,036,260
7,875,743
2,173,802
2,825,034
2,168,116
2,770,016
2,307,895
1,836,545
1,907,774
2,337,178
40,628,578
17. Non-Performing loans
Group
As at
30/09/01
RM’000
Balance as at 1 January
Non performing during the period / year
Performing during the period / year
Amount sold to Danaharta Urus
Recoveries
Amount written off
Exchange fluctuation
Balance as at 30 September / 31 December
As at
31/12/00
RM’000
3,052,030
3,838,274
(1,353,645)
(226,186)
(622,185)
(18,383)
13,377
4,683,282
3,792,820
4,496,391
(2,563,060)
(1,043,626)
(1,186,468)
(444,027)
3,052,030
1,192,088
567,328
2,923,866
4,683,282
611,054
543,862
1,897,114
3,052,030
42,220,782
2,867,804
39,453,837
1,877,289
6.8%
*4.8%
Classification of non-performing loans
Sub-standard
Doubtful
Bad debts
Total Gross non-performing loans
Total loans and advances (net of SP and IIS)
Net non-performing loans
Ratio of net non-performing loans to total loans
( less SP and IIS)
*The net NPL figure include NPLs arising out of BBMB loans and is
subject to the Put Option as detailed in the agreement with Danaharta
Urus Sdn Bhd(Danaharta). The Put Option expired on 31 July 2001.
15
Company No: 50841 W
Commerce Asset-Holding Berhad
(Incorporated
in Malaysia)
Loan Loss Provision
Movements in the provision for bad and doubtful debts and interest-in-suspense accounts are as
follows:
Group
As at
30/09/01
RM’000
As at
31/12/00
RM’000
General provision
Balance as at 1 January
Net provision/(write back) made during the period / year
Amount transferred to specific provision
Amount written back to income statement
Amount transferred to provision for diminution in value
of investment securities
Exchange fluctuation
Balance as at 30 September / 31 December
(as % of total loans less SP and IIS)
653,234
73,364
(28,000)
601,713
72,254
(20,857)
-
(16,529)
279
682,348
124
653,234
1.6%
1.7%
870,286
519,588
(64,208)
(14,320)
(6,772)
1,304,574
1,012,297
453,725
(220,640)
20,857
(51,742)
(343,586)
(625)
870,286
304,455
354,554
(24,361)
(104,162)
358,098
559,143
(221,262)
(153,597)
(4,240)
(4,112)
3,387
(14,617)
510,904
(92,919)
(145,008)
304,455
Specific provision (SP)
Balance as at 1 January
Provision made during the period / year
Amount sold to Danaharta Urus
Amount transferred from general provision
Amount written back in respect of recoveries
Amount written off
Exchange fluctuation
Other adjustment
Balance as at 30 September / 31 December
Interest-in-suspense (IIS)
Balance as at 1 January
Interest suspended during the period / year
Amount sold to Danaharta Urus
Amount written back in respect of recoveries
Amount written back in respect of non-performing
loans reclassified as performing
Amount written back to income statement
Amount written off
Exchange fluctuation
Other adjustment
Balance as at 30 September / 31 December
18. Comparison with preceding quarter’s result
For the third quarter ended 30 September 2001, the Commerce Group had recorded a Profit
Before Taxation and Zakat (“PBT”) of RM 149.8 million, a decrease of 22.2% compared to the
16
Company No: 50841 W
Commerce Asset-Holding Berhad
(Incorporated
in Malaysia)
RM 192.7 million registered in the second quarter of 2001. The quarter-to-quarter decrease was
mainly due to the increase of loan loss provision by 48.6% arising from the slowdown in
economy in the third quarter.
19. Group performance review
For the nine-month period ended 30 September 2001, the Group PBT of RM 577.2 million
recorded was 19.2% lower as compared to RM 714.0 million made during the corresponding
period last year. The lower Group PBT was largely due to the increase in level of provision by
RM 246.7 million.
The main contributor to the Commerce Group’s PBT was Bumiputra-Commerce Bank Berhad
(BCB) Group which registered RM 355.7 million, thus contributing 61.6%. BCB Group’s profits
was also 30.0% lower compared to RM 508.1 million made in corresponding period last year.
The Commerce International Merchant Bankers Berhad (CIMB) Group contributed 33.4% to
Commerce Group profits with a higher PBT of RM 193.0 million (30/9/00: RM 143.7 million).
20. Prospects for the current financial year
The prospects for the remainder of 2001 remain challenging. In a difficult operating environment,
the emphasis will be on managing the asset quality position.
With the completion of two important post merger initiatives during the year, namely the
integration into a single operating platform and the voluntary separation scheme, BCB can direct
its efforts towards enhancing its competitive position. This will include broadening their reach
into previously untapped areas in retail banking. The investment banking group, CIMB continues
to lead in its core competencies and barring unforeseen circumstances, will record another year of
earnings growth.
We anticipate that on a Group basis, the financial results of the second half will not be able to
match the financial results of the first half of 2001. The impact will primarily be from the
potential increase in the level of provisioning and additional one-off exceptional costs of
approximately RM 100.0 million attributable to the voluntary separation scheme.
21. Dividend
No interim dividends have been recommended.
17