Annual Report 2018

Risk Management

Risk is broadly defined as the possibility that an uncertain event or outcome results in adverse variations of profitability or in losses. Risks might also negatively impact the strength of the Group’s balance sheet, its market capitalisation or its brand and reputation. In the process of performing its function as a financial intermediary, the Group exposes itself to various categories of risk, such as credit risk, asset and liability management risk (including market and liquidity risk), operational risk and other risks.

Within its risk appetite and tolerances and in accordance with its strategic objectives, the Group takes and manages risks and controls and monitors them prudently. The Group actively, comprehensively and systematically manages risk and promotes a strong risk and control culture across all business areas. The established risk management process comprises four core elements:

  • Identification of risks across all business activities;
  • Assessment and measurement of risks, including stress testing;
  • Limitation and mitigation of risks; and
  • Effective controls, monitoring and reporting.