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Bank’s policy on management of risk
JSCB "EXIMBANK-Gruppo Veneto Banca" performs its activity within the framework of the consolidated control system of risk management based on the use of the general principles accepted in international banking practice.

The consolidated control system of risk management on active operations of JSCB "EXIMBANK-Gruppo Veneto Banca" is based on five basic elements of the system.

The first element is the method of estimation of credit risk. The credit risk represents the risk of default by the contractor of the Bank the obligations to the Bank when due and in full. The Bank uses a number of techniques for the complex estimation of the financial condition of the borrowers, including: financial entities, large enterprises, enterprises of average and small business, individuals.

The second element is the procedure of decision-making on carrying out of the bearing risks assets operations. The bank has established a multistage procedure of joint decision-making with the purpose of avoiding the subjective mistakes on estimation of risk and use of official power on carrying out the risky operations.

The third element of the system is establishing limits on the risk bearing operations. The limit represents a money equivalent of the risk, i.e. potential loss, which can be of consequence in carrying out the given operation. The basic limits established by the Bank is a limit of risk on specific operations, a limit of risk on a set of various operations with a specific contractor, a limit of power, a limit of investments in various sorts of assets, a limit of branch concentration of investments and so forth. The establishment of limits is considered as a preventive measure and a barrier to increasing the risks of bank activities.

The fourth element of the system is monitoring the observance of the established limits. With a view of permanent monitoring of the established limits, the following commissions operate in the bank: Assets and Liabilities Management Committee, the Commission on Revision and approval of shares of participation in the capital of managing subjects, and the Commission on management and control on investments into long-term material assets. Also monitoring of obeying the established limits is carried out by the Internal Audit Department, Board, the Revision Committee and Council of Bank within the framework of their competence.

The fifth element of the system is creation of sufficient reserves for covering possible losses of the transactions of the Bank. Creation of reserves represents a safety factor, which allows compensating possible future losses of the Bank from transactions bearing risks without a negative influence on the financial condition of the Bank.

 
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