Risk Management Principles
The management of risks is based on the Bank’s general risk policy, and the more detailed policies on credit risk, market risk, operational risk, country risk, interest rate risk, liquidity and refinancing risk, directive on anti-money laundering, as well as the broader range of policies and procedures in place. The aim is to ensure that all significant risks associated with the Bank’s activities are identified, assessed and controlled, properly and on time, for the benefit of both clients and shareholders. The Bank therefore places great importance on the strength of its human resources, IT systems, infrastructure and internal risk culture, to ensure a sound and efficient risk management process.
The different types of risks are allocated specific limits and respect of such limits is monitored on a regular basis. The valuation of own account positions is carried out daily. Responsibilities for investments and risk control are clearly segregated within the Bank.
A comprehensive management information system (MIS) and specific regular reporting of the financial situation and performance, regulatory changes, and overall risk and compliance issues, allows the Executive Management Committee and the Board of Directors to be regularly informed on the Bank’s wealth and financial situation, its liquidity, its results and all types of risks.
In terms of organisational structure, the Bank has three levels of risk management/risk controlling responsibilities:
- Overall guidance and supervision, performed by the Board of Directors, which is responsible for determining the general risk policy and risk management strategy (risk vision, risk appetite and risk control standards)
- Management and operational supervision by the Executive Management Committee (formulation and implementation of risk management strategies). The Bank also has a Risk Committee and Asset & Liability Committee ('ALCO') which meet monthly, and a KYC & Compliance Committee and Credit Approval Committee which meet several times a month
- Risk control, primarily by the independent Risk Management department (comprising the Credit and Risk control units) , as well as the Compliance department
In addition to the risk management, a surveillance system is in place composed of organisation measures, the internal control system and various external and internal audits. The rigorous internal control system is fully documented and based on the industry best practice methodologies.