KENANGA ANNUAL REPORT 2018

NOTES TO THE FINANCIAL STATEMENTS 31 December 2018 201 ANNUAL REPORT 2018 26. BORROWINGS Group Bank 2018 2017 2018 2017 Note RM’000 RM’000 RM’000 RM’000 Short-term borrowings Secured: Revolving bank loan (a) 52,800 64,000 52,800 64,000 Unsecured: Revolving bank loans (b) 41,500 21,000 - - Subordinated notes (c) 25,000 5,000 25,000 5,000 119,300 90,000 77,800 69,000 (a) The revolving bank loans amounting to RM52.8 million (2017: RM64 million) bears interest of 0.5% (2017: 0.5%) per annum above cost of funds. The loan is secured by a first party legal charge over Kenanga Tower, the corporate office building of Kenanga Investment Bank Berhad. The tenure for the loan is 7 years. (b) The revolving bank loan bears interest of 1.50% to 2.00% over cost of fund (2017: 1.50% to 2.50% over cost of fund) plus cost of maintaining statutory reserve and liquidity requirements and is payable on maturity of the loans. The maximum tenure for the loans is 3 months (2017: 3 months). (c) On 27 March 2017, the Bank established a RM250 million Tier 2 Subordinated Note Programme in nominal value which has a tenure of up to thirty (30) years. The outstanding subordinated notes under this programme as at 31 December 2018 are as follows: Issue date Tranches RM’000 Rate (p.a.) Tenure 20 April 2017 1 5,000 6.25% 10 years (non-callable 5 years) 29 January 2018 2 10,000 6.60% 18 September 2018 3 10,000 6.40%