KENANGA ANNUAL REPORT 2019

177 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2019 9. LOANS, ADVANCES AND FINANCING (CONT’D.) 9.2 Impairment allowance for loans, advances and financing are as follows: (a) Term loans and subordinated term loan The tables below show the credit quality and the maximum exposure to credit risk based on the Group’s and the Bank’s internal credit rating system and year-end stage classification. The amounts presented are gross of ECL allowances. Details of the Group’s and the Bank’s internal grading system are explained in Note 50(a). Group 2019 Internal rating grade Stage 1 RM’000 Stage 2 RM’000 Stage 3 RM’000 Total RM’000 Performing: Strong 3,840 - - 3,840 Satisfactory 426,008 36,347 - 462,355 Substandard 192,681 6,447 - 199,128 Total 622,529 42,794 - 665,323 Group 2018 Internal rating grade Stage 1 RM’000 Stage 2 RM’000 Stage 3 RM’000 Total RM’000 Performing: Strong 3,840 - - 3,840 Satisfactory 433,965 - - 433,965 Substandard 110,060 6,417 - 116,477 Total 547,865 6,417 - 554,282 Bank 2019 Internal rating grade Stage 1 RM’000 Stage 2 RM’000 Stage 3 RM’000 Total RM’000 Performing: Strong 3,840 - - 3,840 Satisfactory 498,506 36,347 - 534,853 Substandard 192,681 6,447 - 199,128 Total 695,027 42,794 - 737,821