Risk management system

In terms of risk management system

• Application of a bank risk limit system in accordance with the indicators of tolerance to risks, determined by the Supervisory Board of the Bank;
• formation by the Bank of the optimal Organizational Risk Management Structure;
• ensuring the elimination of the conflict of interest and the conditions for its occurrence in the risk management process;
• Ensuring the risk management system by qualified specialists, the necessary information systems and software and technical means;
• revealing risks in all types of activities, products and bank transactions, as well as in payment systems in order to ensure its effective, reliable and safe operation;
• providing the presence of a methodological base for each of the risks, its improvement, taking into account the risk-profile of the bank and the application in work;
• determination of the relationship between individual risks;
• Creating a risk tracking system at the stage of negative trend based on key risk indicators, as well as a system of rapid and adequate response aimed at preventing or reducing the possible negative impact of risks to the results of the Bank's work;
• obtaining sufficient compensation for the received risk;
• ensuring regular informing of the bank's risks at all levels of the organizational structure of the risk management system;
• Ensuring the effectiveness of the Bank's risk management system.

The Bank distinguishes the following risks inherent in its activities : liquidity risk, credit risk, strategic risk, interest rate risk of the banking portfolio, market risks (interest rate risk of the trading portfolio, currency risk, stock risk, commodity risk), operational risk, risk of loss of business reputation, country risk, concentration risk.

The Bank is constantly improving the risk management system, taking into account the periodic assessment of its effectiveness.

The organizational structure of the bank's risk management system is formed on the principle of functioning of the bank's three lines of protection against risks and includes:

• Bank’s Supervisory Board;
• Audit Committee, Personnel Appointment and Remuneration Committee, Risk Committee and Strategy Committee under the Bank's Supervisory Board, headed by independent directors from the Bank's Supervisory Board;
• Bank’s Management Board;
• Financial committee, Asset and Liability management committee, Project and Process committee, Distressed debts committee, Credit committee, Credit committee of the Central Client Office, standing meetings, Regional directorates and Banking service centers’ credit committees, Underwriting Department;
• Internal Audit Department, Internal Control Department;
• The official responsible for risk management in the bank;
• The official responsible for internal control in the bank;
• Risk Center;
• Other structural units responsible for organizing risk management work;
• Structural divisions responsible for the risks generated in the course of their activities;
• Central Client Office, Banking Operations Support Center, Regional directorates responsible for the risks generated in the course of their activities.

The main tools for improving the Bank's risk management system are:

Risk Management of the Bank holding company.

At the bank level, the internal risk control system of a banking holding company includes:

• collegial management bodies of the bank (general meeting of shareholders of the bank, supervisory board of the bank, board of the bank);
• Risk Committee of the Bank's Supervisory Board;
• risk committee, committee for managing assets and liabilities of the bank, credit committees, permanent meetings - as part of making decisions on the implementation of banking operations with bank clients, including with members of the bank holding company;
• chairman of the board of the bank, deputy chairmen of the board of the bank, executive directors of the bank;
• representatives of the bank on the supervisory boards of participants in the banking holding company - open joint-stock companies;
• structural divisions of the central office of the bank, including the Risk Center, Center for Implementation of Investment Projects, Internal Audit Department, Financial Department; Cyber Security Department, Financial Monitoring Directorate;
• regional directorates providing banking services to members of the banking holding company.

At the level of participants of a bank holding company, the system of internal control over risks of a bank holding company includes:

• collegial governing bodies of open joint-stock companies - general meeting of shareholders, supervisory board;
• committees of a participant in a banking holding company, created, if necessary, in order to resolve individual risk management issues;
• structural unit for risk management, allocated in the organizational structure of the participant of the banking holding company (if any);
• audit commission of participants of the bank holding company;
• managers of participants in a banking holding company.

The goals of organizing a system of internal control over the risks of a bank holding company on a consolidated basis are:

• efficiency and effectiveness of the financial and other economic activities of the bank, taking into account the results of the activities of the participants of the banking holding company;
• efficiency of risk management, assets and liabilities;
• efficiency of transactions between participants of the bank holding company;
• prevention of transactions aimed at distorting the bank's performance indicators;
• reliability, completeness, objectivity and timeliness of compilation and presentation of information on activities;
• compliance by the banking holding organizations and their employees with the requirements of regulatory legal acts and local legal acts;
• excluding the involvement of bank holding organizations in financial transactions of an illegal nature, including the prevention and suppression of actions related to the laundering of proceeds from crime, the financing of terrorist activities and the financing of the proliferation of weapons of mass destruction.

Risk management of a banking holding company is carried out by solving the following priority tasks:

• implementation of measures aimed at ensuring that each employee of the banking holding company understands the ongoing risk management policy;
• developing the necessary skills for each employee to perform risk management functions within the framework of their assigned job responsibilities;
• improving the decision-making process and strategic planning by understanding the potential opportunities and threats in the activities of banking holding organizations;
• creating a system for monitoring risks at the stage of the emergence of a negative trend, in order to prevent (the magnitude of) risk, the consequences of the implementation of which are critically significant for the organizations of the banking holding company;
• formation of an internal risk control system corresponding to the scale and nature of the activities carried out by organizations of the banking holding company.

The risk management system in a bank holding company is organized on a consolidated basis in order to ensure the possibility of obtaining comparable information on the level of risks of bank holding organizations, including conducting an aggregated assessment of the level of risks of a bank holding company.

The official responsible for risk management at JSC Belagroprombank is the First Deputy Chairman of the Management Board of JSC Belagroprombank JSC - Pavel Evgenievich Vasilevsky (since July 29, 2016, appointed by the Bank's Order with the consent of the Bank's Supervisory Board).

For the period of temporary absence of the official responsible for risk management in JSC "Belagroprombank" (vacation, temporary disability, business trip), as well as if there is a vacancy in the position held by the official responsible for risk management in JSC "Belagroprombank", the functions of the official responsible for risk management in the Bank are performed by the person replacing him - Mitrofanova Tatiana Vyacheslavovna.