BR FINAL COVER (O).pdfBR FINAL 2COVER 6/1/18 (O).pdf 1:35 2 PM 6/1/18 1:35 PM FORFOR THE THE BENEFITBENEFIT OF OFALL ALL ANNUAL REPORTANNUAL 2017 REPORT 2017 C C M M Y Y CM CM MY MY CY CY CMY CMY K K ANNUAL REPORT 2017 ANNUAL REPORT 2017 FOR THE BENEFIT OF ALL Since our inception, Bank Rakyat has always maintained our position as a dynamic, modern, progressive and caring Islamic cooperative bank that ensures the well-being and prosperity of our members, customers and community at large. The theme for 2017, “For The Benefit of All”, communicates our relentless commitment to be “Your Choice Bank” as we strive to deliver innovative products and exceptional services while continuously improving our offerings and financial solutions. The front cover visual features a “water droplet” element originating from the Bank’s inherent strengths as depicted by the brand, resulting in ripples resonating far and wide. Enriching all segments of life that we subtly touch. Our effort today impacts everyone everywhere across the nation. The purity of water illustrates our clear intentions and provision of sustenance guided by sound Islamic principles. The flexibility and fluidity of flow highlights our unwavering commitment to redefine ourselves towards achieving sustainability. The element intrinsically defines our values as we continue to progress into tomorrow and enrich life for all. PG.38 PG.80 BoarD OF WHAt’s MANAGEMENT Directors DISCUSSION AND MAIN PG.28 CHAIRMAN’S Statement AND ANALYSIS committees INSIDE PG.132 CORPorate GOVERNANCE PG.164 FINANCIAL Statements 161 Notice of Annual General Meeting 174 Statutory Declaration Additional Information & Directory 175 Directors’ Report 328 Corporate Office & Branches ADDITIONAL Information & DirectorY 178 Statements of Financial Position PG.328 Financial Statements 334 Ar-Rahnu X’Change 180 Statements of Profit or Loss and 164 Report of the Auditor General Other Comprehensive Income 335 Subsidiaries on The Financial Statements of 336 Service Agents Bank Kerjasama Rakyat Malaysia 182 Statements of Changes In Equity Berhad 186 Statements of Cash Flows 340 Rakyat Xcess and Ar-Rahnu X’Change 168 Statement by Directors 190 Notes To The Financial Statements 341 Rakyat Xcess 169 Annual Report of Shariah Committee of Bank Rakyat 2017 About Us 13 Our Members Our Leadership Team 16 Key Milestones 4 Overview 80 Board of Directors 20 Our Presence 5 The Brand 82 Board of Directors Profile 22 2017 Accolades 7 2017 Highlights 92 Shariah Committee 24 Us in the Media 94 Shariah Committee Profile Bank Rakyat: A Snapshot 98 Management Committee From The Top 8 Five-Year Performance 100 Management Committee Profile (Non- Financial) 28 Chairman’s Statement 9 Five-Year Performance (Financial) 38 Management Discussion and 108 Analysis Sustainability Report 10 Quarterly Performance 68 Corporate Information 10 Assets 70 Our Vision, Our Mission, Corporate Governance 11 Liabilities and Equity Our Values 132 Board of Directors and Main 11 Segmental Analysis of Bank 72 Our Business Pillars Committees Earnings 74 Our Group Corporate Structure 147 Audit and Examination 12 Banking Operation Performance Committee Report 75 Bank Rakyat and the 12 Dividend Government 152 Risk Management Committee 76 Organisation Chart 156 Shariah Committee Terms of Reference OVERVIEW THE We are the biggest Islamic cooperative bank in the country and the second largest Islamic financial institution in BRAND terms of Shariah assets. Our journey began as a pioneer cooperative bank in 1954 with the mandate to raise the social and economic status of rural communities, provide opportunities for self-improvement and to build a better future for their families as well as their communities for the stability and prosperity of our nation. Biggest Islamic Cooperative Bank This mandate we have proudly surpassed. NO.1 GIFA Market Best Annual Report in We became known as Bank Kerjasama Rakyat Malaysia (Bank Rakyat) in 1973 and extended our membership to Leadership Award Bahasa Malaysia individuals. Governed by our by-laws and the Bank Kerjasama Rakyat (Malaysia) Berhad Act 1978, we are allowed (Pawnbroking Services) NACRA to provide financing to non-members as well. We now not only serve our members but also individuals, businesses, GIFA 2017 2017 corporations, SMEs, and a whole range of others. The Best Bank Capital Best Ladies Card Sukuk Awards Program (Islamic) The Asset Malaysia Mastercard PRINCIPAL ActiVities Performance LEGACY 2017 2017 Commendable performance over 60 years. As at year ending 2017, we have achieved the following : Our ongoing legacy has been one of 5008 staff unyielding courage, formidable spirit and Second Largest Islamic commendable achievements. Our principal activities are those of a Customers 7.49 million Financial Institution in terms of Shariah Assets cooperative that carries out banking Our vision, mission and values remain NO.2 activities based on Shariah principles Profit before Taxation and Zakat our team’s pulse and thrust forward, enabling us to have achieved many through accepting deposits and RM2.05 billion developmental milestones. providing financial services for retail Powered by almost and commercial needs. Total assets The numerous local, regional and RM105.45 billion international awards we have received Enriching members with a minimum of over the years prove we are not only a 1 million major player on the domestic Islamic individual and cooperative members as Total shareholders’ funds 10% dividend for banking scene but that we are also an shareholders with RM16.63 billion international leader in Islamic banking. 18 consecutive years RM3 billion in shareholders’ capital cataLYst to nation’S economic PROGress STRENGTH Meeting the banking In addition to our Islamic banking activities, as an entity under and financial needs of the control of the Ministry of Domestic Trade, Co-operatives and Consumerism and as the second largest contributor Over 7.49 million customers emanating from the cooperative sector, we play a major role with total shareholders’ funds of 7.49 million Malaysians in enabling the cooperative sector to be a significant driver of Malaysia’s economy. Comprehensive and innovative Islamic We are engraved distinctly in Malaysia’s banking history and RM16.63 billion banking solutions Our numerous initiatives for the benefit of cooperatives will endeavour to remain “Your Choice Bank” and their members foster their growth, supporting them to and a bank “For the Benefit of All”. Diversified service delivery channels develop and grow their businesses and performance. PG 4 Bank Kerjasama Rakyat Malaysia Berhad Annual Report 2017 Annual Report 2017 Bank Kerjasama Rakyat Malaysia Berhad PG 5 THE BRAND Our Shariah-compliant financial products: Personal Banking Business Banking Ar-Rahnu Takaful and Financing and Financing Trade Financing X’change (Islamic Financial Planning Pawn Broking) 2017HIGHLIGHTS Highest ranked cooperative in Malaysia NO.1 by Malaysian Cooperative Commission RM2.05 Billion RM16.63 Billion Profit before Taxation and Zakat Total Shareholders’ Funds Contributing for the past Producing 10 years RM186 million to the Cooperative NO.1 Over Development Fund A pioneer of Islamic RM2,798 Billion 2027Graduates with Pawn Broking Members’ Share Capital Yayasan Bank Rakyat’s RM330 million (Ar-Rahnu) Billion Scholarships (2007 – 2017) 7.49 Million RM105.45 contributed to the Cooperative Total Assets Education Fund Customers 874,380 Shareholders Ranked among the top cooperatives in the world by International Co-Operative Alliance 147 5008 Billion Benefiting needy communities Rewarding members and customers: Branches Employees RM83.24 through zakat contribution (2016-2017) Total Deposits 8 homes built 21 4 and renovated for the needy Rakyat Xcess Mobile Banks RM297,031.56 in petrol rebate for Credit Card-i, Debit Card-i, 28 van jenazah Siswa 1Malaysia Debit Card holders in 2017 (hearses) provided 250 113 Bank Rakyat Agents Ar- Rahnu X’Change RM40.67 Million Zakat Allocation 3 businesses Gained from capital and equipment Helping undergraduates ease pressure of living provided costs with Siswa 1Malaysia Debit Card 998 ATM/CDM/CICO Terminals PG 6 Bank Kerjasama Rakyat Malaysia Berhad Annual Report 2017 Annual Report 2017 Bank Kerjasama Rakyat Malaysia Berhad PG 7 FIVE Year Performance FIVE Year Performance (NON-FINANCIAL) (FINANCIAL) 147 147 148 147 144 7.49 6.26 6.01 6.00 5.36 113 110 95 90 76 7.02 6.66 6.43 6.07 6.11 2.05 1.74 2.01 2.19 2.14 1.91 1.63 1.82 1.98 1.92 Branches Customers X’Change Ar-Rahnu Income Operating and Zakat Taxation Before Profit and Zakat Taxation After Profit (RM Billion) (RM Billion) (RM Billion) ‘17 ‘16 ‘15 ‘14 ‘13 ‘17 ‘16 ‘15 ‘14 ‘13 ‘17 ‘16 ‘15 ‘14 ‘13 ‘17 ‘16 ‘15 ‘14 ‘13 ‘17 ‘16 ‘15 ‘14 ‘13 ‘17 ‘16 ‘15 ‘14 ‘13 998 960 960 895 827 5,008 5,036 5,135 4,640 4,695 83.24 77.90 70.98 68.52 65.30 69.19 67.81 68.14 60.48 57.30 ATM/CDM/CICO Employees and Savings Deposits and Advances Financing (RM Billion) (RM Billion) ‘17 ‘16 ‘15 ‘14 ‘13 ‘17 ‘16 ‘15 ‘14 ‘13 ‘17 ‘16 ‘15 ‘14 ‘13 ‘17 ‘16 ‘15 ‘14 ‘13 136,778 185,290 104,671 158,084 172,361 2,114,995 1,181,292 1,114,150 604,832 667,347 250 192 89 75 70 12.85 11.88 15.04 18.00 19.54 31.97 34.59 29.26 24.63 25.17 2.23 1.99 1.89 2.04 2.22 Gross Impaired Financing Ratio Ratio Financing Impaired Gross Registered i-Rakyat Customers i-Rakyat Registered Enquiries Centre Contact Agents Service Funds Shareholders’ on Average Return Income to Cost (%) (%) (%) ‘17 ‘16 ‘15 ‘14 ‘13 ‘17 ‘16 ‘15 ‘14 ‘13 ‘17 ‘16 ‘15 ‘14 ‘13 ‘17 ‘16 ‘15 ‘14 ‘13 ‘17 ‘16 ‘15 ‘14