Amani Financing Berhad (AFB) has been in operation since 10 years ago. The data shows results of the analysis of defaults experienced by AFB in a fixed monthly installment of a Murabaha contract portfolio in year 2020 to 2022. The expected and unexpected loss in AFB can be estimated by calculating the probability of default (PD) and the loss given default (LGD).

Period for measuring the defaults	Numbers of financing contracts (B)	Numbers of defaulted financing (A)
2020	10,000	160
2021	30,000	100
2022	60,000	80

%PD=(A/B)x100

LGD =(1-RR)xFinancing exposure

REQUIRED:

A) Given the financial data of Murabaha financing for each year, calculate PD at the end of 2022 by taking the historical data average. Explain the performance behavior of AFB based on your result and conclude the conditions related to risk level based on the number of financing and default.

B) Given the recovery rate (RR) of 70%, explain what is the loss given default (LGD) on the exposure amount of RM100 million by end of 2022

C) Besides the above, suggest other THREE (3) financial risk indicators to assess the level of banks credit risk from annual report. Provide example each. (Tips: Example may include i.e., how to calculate, information, figures etc.)