Risk Management

The Banca IFIS Group has been rapidly developing its risk management activities.

The Risk Control Function is part of the Parent Company’s Risk Management Function, directly reporting to the CEO. The Chief Risk Officer has direct access to the Board of Directors and the Board of Statutory Auditors, and he or she communicates with them with no restrictions or intermediation. The Risk Management Function is separate from the Internal Audit, Compliance and Anti-Money Laundering Departments from an organisational standpoint. Moreover, it is not involved in risk assumption processes.

The mission of the Parent Company’s Risk Management Function is to:

  • guarantee a holistic and integrated vision of the risks to which the Group and the Companies that are part of it are exposed;
  • identify, measure, assess and monitor risks that are relevant to the Group;
  • monitor risk governance and management processes in accordance with the strategies and policies defined by Corporate Bodies;
  • support prompt and coordinated collection of relevant information for the purpose of quantifying and managing risks, and the adoption of any appropriate and timely corrective measures addressing any identified issues and priorities;
  • facilitate the endorsement of supervisory regulations and directives.

 

The Parent Company’s Risk Management Function carries out its activities to the benefit of Banca IFIS, and within the management and coordination framework, its scope of competence also includes all companies belonging to the Group.
In recent years, the Risk Management Function of the Parent Company Banca IFIS has increased in size and completed the organisational structure with reference to the risk governance and management framework, also through the creation of a model validation function.

2016 was characterized by intense activity for the Risk Management Function, in terms of both ordinary operations – aimed at ensuring implementation of standard control activities – and extraordinary operations linked to specific projects, such as the acquisition of the former Ge-Capital Interbanca Group, finalised on 30 November 2016, and the change in the corporate core banking service provider.
As for trade receivables, monitoring of credit and concentration risks continued. The Risk Management Function was mainly committed to consolidating reporting documents, introducing a set of Early Warning indicators aimed at identifying potential anomalies and starting to redevelop the main risk models.

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

As for the operational and reputational risks, the Risk Management Function was constantly committed to promoting a culture based on proactive operational risk management, therefore encouraging increased awareness about the related Loss Data Collection process. Specifically, the Group’s governance is structured to actively involve all the Group’s organisational units, also through training activities. IT risks are also periodically assessed, through a proprietary method that is defined jointly with the other relevant corporate functions.
As for liquidity and interest rate risks, some changes were introduced to the risk control system already implemented by the Bank, with the aim to bolster it even further. In addition, as Basel 3 indicators became effective, the Bank implemented the method for calculating the LCR and NSFR liquidity ratios.
In 2017, the Risk Management Function will be strongly committed to integration activities within the new Group’s scope, with reference to both Interbanca and the Lease area.

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