Sector Risk

Sector Risk

Sector risk means uncertainty related to unfavorable economic situation that may arise in some economic sectors and result in overall drop in the lending portfolio quality.
The Bank monitors and controls credit investments by economic sectors on the monthly basis.

Credit Risk Relating to Interbank Transactions

The Finance and Credit Bank is active in the interbank resource market. The Bank accepts unsecured credit risks (unsecured credits, SWAP transaction with first delivery of cash by the Bank, etc.) in interbank operations.

In order to limit the credit risks mentioned, the Risk Management Department submits its proposals to the Credit Committee to set limitations for counteragent banks based on integrated assessment of their financial condition and non-financial factors which can affect a counteragent bank in general. The limits for interbank transactions are revised on the monthly basis. Once information is received concerning deterioration or potential deterioration of a counteragent bank condition, the Risk Management Department promptly suspends validity of the credit limit and communicates the fact to the Bank management.