Key Functional Structure Within Group Risk Management




The main management function primarily involved in the management of risk in the Bank is Group Risk Management, which provides the main support to the Risk Management Committee and is responsible for the development and maintenance of sound risk management policies and procedures for the Bank and its main subsidiaries. In order to maintain its independence, Group Risk management reports directly to the RMC and is made up of five (5) functions as follows:-


Credit Risk


The main objective of Credit Risk is to assist the Bank in managing its credit risk. In achieving this key objective, Credit Risk screens all financing proposals for any lapse in credit risk, identifies risk issues associated with the financing proposals and rates the underlying client, business or transaction in accordance with the Bank’s credit risk guidelines and procedures. In addition, Credit Risk is also responsible to analyze the loan portfolio and to provide advice on the Bank’s risk exposure by industry rating and returns. The Function is also responsible to monitor the exposure against its established limits and ultimately lead to maintaining quality loan portfolio.


Operational Risk


The primary role is to assess, identify and manage the operational risk inherent in all material products, activities, processes and systems. The Function is to develop operational risk management strategies, policies and framework as well as to communicate and report the best practices in order to effectively manage the operational risks in the Bank. Included in the Operational Risk function is Business Continuity Management Coordination, whose main objective is to plan, coordinate, develop, implement and maintain the Business Continuity Plan (BCP) programme for the Bank.


Market Risk


The main objective of Market Risk is to monitor interest rate, forex risk, liquidity risk and capital adequacy of the Bank. In addition, the Function also acts as the middle office for monitoring the investment risk such as in bonds and equities. In line with the industry best practice, the Function is also responsible to assist the Bank in optimizing the risk reward through managing Assets & Liabilities that will enhance the maintenance of healthy and stable financial position of the Bank.




The main objective of Technical is to assist operational functions in solving technical issues related to the projects financed by the Bank and to monitor the status of assets financed by the Bank through periodic inspections. Technical also takes up an active role in protecting the Bank’s interest through the provision of technical advisory in ensuring technical viability of the projects being financed and the ability to be implemented and operated as planned, as well as ensure that the projects are financed adequately and the approved loans are disbursed especially for payment claims that are based on project implementation progress.




Compliance function, which is now under Group Legal, is responsible to check and vet through all Letters of Offer and pertinent documents for the disbursement before submitting to the Bank’s Approving Authority for signing and approval.


The major areas of risks to which the Bank is exposed to can be summarised as follows:-


Credit Risk


The potential loss of revenue and principal in the form of specific provision arising from the failure of a counterparties or the borrowers to honour debts or settlement through its lending.


Market Risk


Risk of loss due to adverse movement in the mark-to-market value of the company’s assets and liabilities.


Liquidity Risk


The risk relates to the ability to maintain sufficient liquid assets to meet financial commitments and obligations at a reasonable cost and time.


Operational Risk


The risk that deficiencies in information system or internal controls will result in unexpected loss. The risk is associated with human error, system failure and inadequate controls and procedures.


Interest Rate


Exposure to loss arising from unfavorable movement in interest rate, resulting in mismatch between income and expenses between interest bearing asset and liabilities especially involve the gap in long term against short term financing.


Product Risk


Possibility of product incurring financial or opportunity loss attributed to poor reception by customer, competitiveness of products term and conditions, competencies of promoting and/or timing of entrance of the products.


Forex Risk


Probability of loss occurring from an adverse movement in foreign exchange rates.


Strategic Risk

The current and prospective impact on earnings or capital arising from adverse business decisions, improper implementation of decisions or lack of responsiveness to industry changes. This risk is a function of the compatibility of an organisation’s strategic goals, the business strategies developed to achieve those goals, the resources deployed against these goals, and the quality of implementation.