IBANK 7.4.5 Calculation of PIDC, SC and FC

(1) In a formula in this rule, a bar above a term means that the term is to be calculated as the average of the relevant quantity over the current accounting year and the 2 previous accounting years of the firm concerned.
(2) The factors PIDC, SC and FC are calculated in accordance with the following formulas:

Guidance—meaning of business indicator terms
P&L or balance-sheet items Description Typical sub-items
Profit, ijarah rental and dividend component
Profit income Profit income from all financings, financial assets and other profit income (includes profit income from ijarah contracts)
• Profit income from all financings, assets available for sale, assets held to maturity, trading assets, ijarah rentals
• Profit income from Shari’a-compliant hedge accounting
• Other profit income, not included in the categories above
• Profits from leased assets
Profit payment to fund providers Profit payments on all financial liabilities and other return payments (includes rentals payable on ijarah losses, depreciation and impairment of ijarah assets)
• expenses or returns payable on funds received from investment account holders, current account deposits, debt securities issued, ijarah contracts
Profit- earning assets (balance sheet item) Total gross outstanding financings, sukuk, other profit-bearing financial assets (including sovereign sukuk), and Ijarah assets measured at the end of each financial year
Dividend income Dividend income from investments in stocks and funds not consolidated in the firm’s financial statements, including dividend income from non-consolidated subsidiaries, associates and joint ventures
Services component
Fee and commission income Income received from providing advice and services. Includes income received by the firm as an outsourcer of financial services Fee and commission income from:
• securities (issuance, origination, reception, transmission, execution of orders on behalf of customers)
• clearing and settlement; asset management; custody; fiduciary transactions; payment services; structured finance; servicing of securitisations; loan commitments and guarantees given
Fee and commission expenses Expenses paid for receiving advice and services. Includes outsourcing fees paid by the firm for the supply of financial services, but not outsourcing fees paid for the supply of non-financial services (for example, logistical, IT, human resources) Fee and commission expenses from:
• clearing and settlement; custody; servicing of securitisations; financing commitments and guarantees received; and foreign transactions
Other operating income Income from ordinary banking operations not included in other BI items but of similar nature (income from operating ijarah transactions should be excluded)
• rental income from investment properties
• gains from non-current assets and disposal groups classified as held for sale not qualifying as discontinued operations (IFRS 5.37)
Other operating expenses Expenses and losses from ordinary banking operations not included in other BI items but of similar nature and from operational loss events (expenses from operating leases should be excluded)
• losses from non-current assets and disposal groups classified as held for sale not qualifying as discontinued operations (IFRS 5.37)
• losses incurred as a consequence of operational loss events (for example fines, penalties, settlements, replacement cost of damaged assets), which have not been provisioned/reserved for in previous years
• expenses related to establishing provisions/ reserves for operational loss events
Financial component
Net profit (loss) on the trading book
• net profit/loss on trading assets and trading liabilities (sukuk securities, equity securities, financings, other assets and liabilities)
• net profit/loss from hedge accounting
• net profit/loss from exchange differences
Net profit (loss) on the banking book
• net profit/loss on financial assets and liabilities measured at fair value through profit and loss
• realised gains/losses on financial assets and liabilities not measured at fair value through profit and loss (financing exposures, assets available for sale, assets held to maturity, financial liabilities measured at amortised cost)
• net profit/loss from hedge accounting
• net profit/loss from exchange differences
Derived from QFCRA RM/2020-3 (as from 1st January 2021)