The strategic risk is defined as a risk related to the possibility of negative financial consequences caused by erroneous decisions, decisions made on the basis of an inappropriate assessment or failure to make correct decisions relating to the direction of the Bank’s strategic development.
Managing the strategic risk is aimed at maintaining, on an acceptable level, the negative financial consequences resulting from bad decisions, decisions made on the basis of an incorrect assessment or failing to make appropriate decisions on the direction of the strategic development of the Bank.
In measuring the strategic risk, the Bank takes into account an impact of selected types of factors, distinguished in the activity and in the environment, which comprise in particular:
- external factors,
- factors related to the growth and development of the banking operations,
- factors related to the management of human resources,
- factors related to investment activities,
- factors related to the organisational culture.
The monitoring of the strategic risk level is performed in the Bank at least on an annual basis at minimum.
Strategic risk reporting is conducted annually in the Bank. The reports on strategic risk are prepared mainly for the Bank’s Management Board and for managing directors of the Bank’s Head Office.
The management of strategic risk in the Bank is mainly applied in the form of actions undertaken if an elevated level of strategic risk occurs.