Page 72 - EXIM_AR2021

70 ENHANCING EXIM BANK MALAYSIA
GOVERNANCE

STATEMENT OF
RISK MANAGEMENT

RISK MANAGEMENT FRAMEWORK OVERVIEW

The Bank’s risk management strategy has evolved over the years to support the Bank’s risk related decision-making while balancing
the appropriate level of risk taken to the desired level of rewards.

The strategy of the Bank’s risk management is governed by the Risk Management Framework that covers the primary enterprise risk
categories, risk governance, broad risk approaches and specific risk management tools.

The Bank has a dedicated risk management function to manage risks through the process of identifying, measuring, monitoring
and controlling the primary enterprise risk categories as well as timely reporting and update of action plans on the risk findings.
These are governed by a structured risk governance mechanism consisting of strong Board and Management oversight roles and
responsibilities.

This helps in building and integrating the Bank’s risk strategy within the organisation’s strategic management and operational
processes. This is further reflected through the establishment and regular review of other risk related frameworks, policies,
procedures and manuals to support risk related decision-making.
The risk management strategies and approaches of the Bank are continuously revised to ensure they are responsive to any internal
as well as external changes in the Bank’s operating environment.
This may be achieved through the following:

a. Establishment and review of the Board’s approved risk appetite
b. Formulation of risk limits covering all relevant and material risks.
c. Establishment of effective risk assessment, monitoring, mitigation and reporting processes.
d. Development of risk methodology and models supported by a robust model validation process.
The risk management function is regularly assessed to provide assurance on the Bank’s compliance to the applicable laws,
regulations, internal policies, procedures and limits.

RISK MANAGEMENT STRATEGIES

The following principles underpin the Bank’s risk management strategies:

Principle Details
Principle 1 Clear responsibilities on a. The Bank shall clearly define the roles and responsibilities of parties
risk management involved in the entire risk management processes.
b. The Board has the ultimate responsibility for identifying the Bank’s risks
and ensuring that they are effectively managed. The Board Risk Committee
is tasked to assist the Board in carrying out this responsibility.
c. The Senior Management will be in charge of managing the Bank’s
day-to-day risk management.
Principle 2 Risk management shall The Bank shall integrate risk management into its existing strategic
be incorporated into management and operational process, as risk management is an important
all decision-making component of robust decision making.
processes

Principle 3 Comprehensive All material risks to which the Bank is exposed to must be thoroughly
assessment of risks on analysed based on the consistent application of the following processes: risk
all activities identification, risk measurement, and risk evaluation.