1

What is the profit distribution rate for 2019?

The profit distribution after zakat for the financial year 2019 is 3.05%, which is a significant increase from 1.25% for the financial year 2018.

2

What is the total profit distribution to depositors for 2019?

Distribution of Profit after zakat to depositors for the financial year 2019 is RM2.1 billion, which is RM1.2 billion higher than the RM0.9 billion hibah amount for financial year 2018. The distribution for 2019 will benefit almost 9 million depositors.

Distribution of profits to depositors is based on TH current financial ability and performance and is subject to compliance to Tabung Haji Act 1995 requirements.

3

Do depositors still have to pay zakat for their savings in TH?

The distribution of profits to the depositor is after taking into account zakat payments. TH is paying the zakat on behalf of the depositors and thus TH depositors will no longer have to pay zakat on the savings and profit distribution received in accordance with the decision made in the 17th National Fatwa Committee on Islamic Religious Affairs Malaysia on May 3, 1979.

4

How is the profit distribution for 2019 calculated?

The method of calculating profit distribution for 2019 is to take into account the lowest average monthly savings balance throughout 2019 and multiply by a fixed rate of 3.05% for 2019. The detailed calculation is as follows:

Lowest Monthly Savings Balance Average x 3.05% = (Lowest monthly savings balance from January – December 2019 / No. of Months) x 3.05%)

5

Who is eligible to receive distribution of profits?

All depositors who maintain an active savings account as of December 31, 2019.

6

Who is not eligible to receive distribution of profits?

• Depositor with inactive account in the current year due to dormant status;
• Depositor with closed account in the current year; and
• Depositor with an account opened in December (not a full month).

Depositor accounts that have not had any transactions for more than seven (7) years will be classified as Inactive Accounts, in accordance with the Rules and the Hajj Act (1995).

The terms and conditions under the Wakalah contract (Wakalah Agreements) stipulate that the account is closed after all savings are removed from the account and depositors are only entitled to the amount credited to the account at the time the account is closed.

7

How is the profit distribution paid to the depositors?

The profit distribution will be credited directly into the active depositor account.

For saving accounts that are closed in 2020 (before March 16, 2020), depositors or their heirs will need to visit any nearby TH branch offices.

8

When can the 2019 profit distribution be checked by depositors?

Distribution of Profit may be checked beginning March 16, 2020.

The latest savings balance can be checked at:

• TH branch counters, Bank Islam and Bank Rakyat
• www.thijari.com.my website
• Internet portals of TH's strategic partner banks, namely Bank Islam, Bank Rakyat and Maybank
• ATMs of TH's strategic partner banks, namely Bank Islam, Bank Rakyat, Maybank and CIMB.

9

How can depositors make saving withdrawals from TH?

Depositors can withdraw their TH savings at TH branch counters, Bank Islam and Bank Rakyat Malaysia. Non-cash withdrawals exceeding RM10,000 can only be made at TH Headquarters and at TH branches via telegraphic transfer.

10

What is the difference between Hibah declared in previous years and profit distribution declared in 2019?

Hibah is an unconditional gift, while profit distribution refers to the distribution of part or the whole sum of the profits that can be distributed to the fund owner.

The savings in TH are now under the Wakalah savings contract, replacing the previously used Wadiah Yad Dhamanah savings contract. Under this new contract, TH is the representative to manage the depositors' fund for the purpose of investment and pilgrimage management activities whereby the profits from the depositor's savings investment will be distributed to the depositors after taking into account the pilgrimage, zakat and management costs.

However, under the previous Wadiah Yad Dhamanah savings contract, TH as trustee has no obligation but may at its discretion grant the Hibah (gifts) to its depositors.

11

Is the Hajj Hibah given for 2019 same to the year before 2018?

No. In accordance with the requirements of equality under the Wakalah contract, the distribution of profit is given to all depositors regardless of whether they have performed the pilgrimage or not. Therefore no special Hajj Hibah is given.

12

What is the advantage for depositors when they make savings in TH besides saving towards pilgrimage (especially for pilgrims who have performed the pilgrimage) compared to other funds / institutions?

TH distribution of profits is defined as an excess of investment profit taking into account the expenses and assistance of pilgrimage costs, zakat payments and management costs. As such, TH depositors not only benefit from the return on their savings, but also contribute to helping Malaysian pilgrims perform the fifth pillars of Islam and the welfare of the asnafs.

In addition:

• The deposit is 100% guaranteed by the Government of Malaysia.
• Savings and investments are Shariah-compliant.
• Distribution of profits are exempted from tax.

13

Why is the profit distribution in 2019 higher than the 2018 Hibah?

This improved profit distribution is supported by improved financial performance and positioning and is driven by sustainable investment strategies and prudent cost management measures.

For the financial year 2019, TH managed to generate investment revenue of RM3.3 billion. Overall, TH-generated investment income was more stable with fixed income investment generating 58% or RM1.9 billion while real estate, equity and money market instruments contributed RM0.5 billion (15%), RM0.5 billion (15%) and RM0.4 billion (12%) respectively. With prudent cost management, TH has managed to register a profit after zakat for the 2019 financial year amounting to RM1.9 billion, an increase of 19% or RM0.3 billion compared to RM1.6 billion for the previous financial year.

In addition, TH's stronger financial position with total assets exceeding RM2.9 billion from total liabilities (prior to the distribution of profits to depositors) will enable higher profit distribution for the financial year 2019.

14

How does TH's 2019 profit distribution rate compare to other funds / institutions?

Investment strategies, risk levels and liquidity levels will affect the rate of return on funds managed by investment institutions. Investment institutions with different visions and missions will have different investment strategies, levels of risk and liquidity.

An account opened by a depositor in TH is a savings account and has similar savings account features offered by other Islamic banking institutions, such as unlimited frequency and amount for savings or withdrawal transactions. Depositors are not subject to restrictions, charges or subject to fluctuations in unit prices when making savings or withdrawals. The type of investment and the level of risk involved also vary.

Therefore, it is reasonable to compare TH's profit distribution to the rate offered by other Islamic banking deposits. Sources from Bank Negara Malaysia statistics show that TH's 3.05% year-on-year dividend yield is between the average 12-month Islamic Banking Deposit rate at 0.74% per annum and the 12-month Islamic Banking Investment Account at 3.65% a year before zakat. In addition, Islamic Bank deposits are also secured by the Perbadanan Insurans Deposit Malaysia (PIDM) with a maximum protection of RM250,000 per depositor at each member bank.

15

Will the profit distribution rate change according to TH profit in the coming years?

Distribution of profits to depositors is based on TH’s current year financial performance and ability and is subject to compliance to the Tabung Haji Act 1995.