Risk Management

Banca IFIS evolves rapidly also in the area of Risk Management function.
The Bank consolidated some initiatives launched in the second half of 2013 concerning the introduction of new technological tools in use at the Risk Management function, which allows to manage and analyse the available databases in an easier and more integrated manner.

As for credit risk, concerning the trade receivables segment, a new internal rating model for assessing counterparty risk related to Italian businesses was developed.
The model consists in:

  • a “financial statement” module, to assess the company’s operating/financial soundness;
  • a “central credit register” module, presenting the evolution of counterparty risk concerning the banking industry;
  • two “internal performance” modules, monitoring signs of deterioration in the relationship between the counterparty and the Bank consistently with the business model of providing working capital financing, based on whether the counterparty is a seller or a debtor;
  • a qualitative questionnaire intended to obtain “soft” information that the above modules cannot provide.

This model is currently being rolled out on the Bank’s proprietary IT platform and will be implemented in operational processes during 2015.

As for non-performing loans managed by the DRL business area as well as tax receivables, the Bank enhanced the monitoring and the control process concerning the portfolio’s collection recovery risk, thanks to technological solutions allowing to easily manage large data sets and through a new specific reporting process. It also assesses from time to time the performance of the credit assessment model.

As for operational risks, the Bank defined the relevant management and governance framework: although it calculates capital requirements using the basic indicator approach, it also implements a robust Loss Data Collection process – including throughout its network and at the Polish subsidiary – and periodically conducts Risk Self Assessments.

As for liquidity and interest rate risks, for which the Bank already has a monitoring policy in place, some changes were introduced to the risk control system to bolster it even further. Furthermore, as Basel 3 indicators became effective, the Bank implemented the method for calculating the LCR and NSFR liquidity ratios.

The Bank’s management defined – with relevant business functions involved – the method of information security risk, which was first applied to high-priority IT services.

In addition, 2014 saw the Risk Management Function involved in a broad set of activities aimed at ensuring regulatory compliance: among other things, they concerned the definition of a Risk Appetite Framework and the implementation of procedures for identifying and assessing Significant Transactions, as well as a comprehensive review of risk governance and management policies.

The Bank continued the path strengthening of the Function by adding new and dynamic professionalism recruited on the market and consistently strengthening it in line with the Group’s strategic development goals.

The information for the public regarding Pillar III is available in this section.