KENANGA ANNUAL REPORT 2018

NOTES TO THE FINANCIAL STATEMENTS 31 December 2018 170 KENANGA INVESTMENT BANK BERHAD 9. DERIVATIVE FINANCIAL ASSETS Group and Bank 2018 2017 RM’000 RM’000 At fair value Dual currency investment - Options 115 118 Equity related contracts - Options 69,585 64,820 Equity related contracts - Swap 2,292 2,455 71,992 67,393 Contract/Notional amount Dual currency investment - Options 13,636 18,114 Equity related contracts - Options 100,319 111,305 Equity related contracts - Swap 14,771 75,772 128,726 205,191 The contractual or underlying notional amounts of derivative financial assets held at fair value through profit or loss reflect the value of transactions outstanding as at reporting date, and do not represent amounts at risk. 10. LOANS, ADVANCES AND FINANCING Group Bank 2018 2017 2018 2017 RM’000 RM’000 RM’000 RM’000 At amortised cost Term loans 554,282 588,800 577,312 614,478 Share margin financing 1,419,617 1,557,649 1,419,617 1,557,649 Other lending and factoring receivables 62,735 51,985 - - Advances to group employees 60 - 60 - Subordinated term loan* - - 10,278 10,261 Gross loans, advances and financing 2,036,694 2,198,434 2,007,267 2,182,388 Less: Allowance for ECL/impairment losses - Stage 1 - 12-month ECL (898) - (1,402) - - Stage 2 - Lifetime ECL not credit impaired (8,847) - (8,847) - - Stage 3 - Lifetime ECL credit impaired (22,034) - (21,253) - - Collective impairment - (669) - (867) - Individual impairment - (2,264) - (1,441) Net loans, advances and financing 2,004,915 2,195,501 1,975,765 2,180,080 * Subordinated term loan to a subsidiary The subordinated loan granted to a subsidiary company, Kenanga Futures Sdn Bhd, is unsecured with effective interest rate of 6.06% per annum (2017: 5.7%) and is repayable by November 2021.