Risk management

RISK MANAGEMENT

RISK MANAGEMENT CONCEPT

Launching an effective internal control and integrated risk management system is one of the bank priorities that would foster growing confidence among depositors and investors. In 2005, the Finance and Credit Bank continued improvement of its existing risk management system on the basis of the approved Concept. The major goals as per the Concept are:

• determining risk tolerance of the Bank
• differentiation of functions and responsibilities of the Supervisory Board and the Board of the Bank, profile committees and units in the process of risk management
• establishing a unified methodology of identification and assessment (measurement) of risks pertinent to the Bank active operations as well as taking actions to optimize them
• creation of effective system of support and management decision making based on risks pertinent to business processes
• ensuring compliance of the banking operations to the established policies, procedures and regulations
• compliance with the National Bank's of Ukraine requirements concerning ratios and other limitations as may be applicable
• effective interaction of all bank units at all organizational levels in the process of risk management
• ensuring the bank's viability in crisis situations
• optimization of the expected profit and loss

Upon organizational restructuring assisted by the consultants from TACIS Project for Reforming the Banking Sector of Ukraine, in 2005 the risk management Department was formed at the Finance and Credit Bank, which is independent from business units.

Risk management process of the Bank is continuous and covers all structural levels from the management one (Risk Committee at the Supervisory Board, the Board) to the level where risks are directly accepted or emerge.

The Board interacts with the Supervisory Board in the risk management issues based on common principles of corporate management. The interaction concerns two components: reporting and making recommendations.

The Board, the Credit Committee and the Committee for Assets and Liabilities Management are superior collegial, operating and executive bodies of the Bank responsible for organization and implementation of the Bank risk management process.

Internal Audit Service is an operating control body responsible for corporate control system operation, drawing conclusions whether the system is adequate and effective. The Internal Audit Service assesses also whether the risk management systems adequately meet the Bank needs.