The reputation risk is defined as the risk related to a possibility of negative variations from the planned results of the Group due to the deterioration of the Group’s image.
The objective of managing the reputation risk is to protect the Group’s image and limit the probability of the occurrence and level of reputation-related losses.
Reputation risk ratios are calculated based on annual assessment of negative image-related events identified in a given calendar year for particular types of image-related events. Main tools used to determine the Group’s reputation risk level are:
- a catalogue of image-related events categories containing a list of image-related categories with appropriate weights assigned,
- a register of image-related events containing a list of negative image-related events that occurred grouped by image-related events categories.
Monitoring of image-related events is performed on an ongoing basis and includes:
- monitoring the external and internal communication channels of the Group with the environment in terms of identifying the negative impact of image-related events,
- gathering and analyzing information related to the occurrence or a possibility of occurrence of image related events;
- recording data on the identified negative impact of image-related events.
The reports on the level of reputation risk are prepared in the Bank on an annual basis. The reports are addressed to the organisational units of the Banking Risk Division.
Management of reputation risk in the Group mainly comprises preventive activities aimed at reducing or minimising the scale and the scope of reputation events, as well as selection of effective tools for protective measures aimed at eliminating, mitigating or minimising the unfavourable effect of unfavourable events on the Group’s image.