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ANNUAL REPORT 2021 75

Linked to the Bank’s strategic objectives, capital and business plans
Establishes the amount of risk the Bank is prepared to accept in pursuit of its strategic objectives and business
plan, considering the interest of its stakeholders within the boundaries of its capital adequacy and regulatory
requirements
Key Elements Determines material risks and the maximum tolerance level of risks the Bank is willing to operate based on its
of Risk risk appetite, risk capacity and risk profile
Appetite
Includes quantitative measures that are translated into risk limits applicable to business lines which in turn will
provide direction to measure risk profile against risk appetite and risk capacity

Includes qualitative statements for risk that cannot be measured e.g., reputational risk, as a guide for proper
management of such risks

As part of risk strategy, the risk appetite must be aligned to the Bank’s strategy or the strategic plan and must be considered in the
budget setting and decision-making process for the projection of business growth.

The Bank’s Risk Appetite Policy (the Policy) address the following:

a. Overall approach including policies, processes, controls, and systems through which the risk appetite is established,
communicated, and monitored.
b. The governance in overseeing the implementation and monitoring of the risk appetite in EXIM Bank.
c. Address the Risk Appetite Statement (RAS) and risk appetite metrics coverage
d. The roles and responsibilities of those overseeing the establishment, approval, implementation and monitoring of the risk
appetite framework.

The risk appetite metrics as the expansion of the broad RAS are to comprehensively manage the Bank’s operating dimensions and
the key enterprise risk categories as identified in the Risk Management Framework.

The articulation of the risk appetite metrics for the Bank’s key primary enterprise risk category are as follows:

Primary Enterprise Risk Category Risk Metrics Dimension
1. General • Overall risks
• Asset Quality
2. Credit risk • Concentration Risk
• Insurance Business Exposures
3. Operational risk • Loss event
4. Shariah Non-compliance risk • Shariah Non-Compliance (SNC) Income

• Capital/ALM/Liquidity Risk
5. Asset Liability, Liquidity and Market risk
• Earnings/Profitability
6. Information and cyber security risk • System vulnerabilities
7. Compliance risk • Regulatory & Compliance

The Board’s risk appetite must be assessed on a regular basis to ensure that it remains aligned with the Bank’s strategic objectives,
business performance, any new emerging risks, and external environment changes.