In accordance with its risk management strategy, the bank oversees the risk management systems for the other entities of the group. It also supports their development and takes into account the operational risk profiles of the individual entities in order to monitor and report risk at the group level. The bank's Management Board is responsible for ensuring that the risk management system functions effectively. It regularly monitors whether the system adequately reflects the size and the risk profile of the group and its external environment. An assessment of risk materiality is conducted at least once a year. The following risks are considered material at the bank: credit risk, risk of the household mortgage loans in foreign currencies, forex risk, interest rate risk, liquidity risk, operational risk, business risk, modelling risk and risk of macroeconomic changes.

Due to the cross-cutting dimension of socio-environmental risks, which are not separate risks but which form part of the classic risk categories, the Bank’s Group did not set them apart as a separate category. The Bank has conducted an analysis of its risk management process and has incorporated ESG risks in the risk management strategy of the Bank and the Bank’s Group. The ESG risk is understood as the risk of negative financial implications which are the result of the impact of ESG factors on customers and counterparties or balance sheet items. 

The purpose of ESG risk management is to support sustainable development and building the long-term value of the Bank through integrated management of the impact of ESG factors. The ESG risk management takes into account the perspective of double materiality: the impact of ESG factors on the activities, financial result and development of the Bank as well as the impact of the Bank’s activities on society and the environment. The Bank manages the ESG risk as part of managing other types of risk. The ESG risk is not a separate type of risk but a cross-cutting one which affects the individual risk types. The ESG risk management is supported by all committees that function at the Bank within the scope of their activities and competences related to the ESG risk. 

Security of customers and their funds
Product compliance
Sustainable development
Social environment
Human rights
Supply chain