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76 ENHANCING EXIM BANK MALAYSIA
GOVERNANCE
STATEMENT OF
RISK MANAGEMENT
STRESS TEST
To anticipate and respond swiftly to new or emerging risks, the Bank performs stress tests as part of the Bank’s risk management
process.
The stress test methodology is guided by the Stress Test Policy document issued by BNM and the Industry-Wide Bottom-Up Stress
Test and Sensitivity Analyses Exercise as well as supervisory guidance as elaborated in the BNM Composite Risk Rating (CRR) for
the Bank in 2019.
For the purpose of the stress test, the Risk Management Division (RMD) has established a Stress Test Working Group (STWG) and
conducted the stress test based on the approved methodologies and parameters.
Respective primary enterprise risks in the Bank are managed by the following key frameworks and approved policies:
• Risk Management Framework
• Technology Risk Management Framework
Key Frameworks
• Cyber Resilience Framework
• Framework on Management of Customer Information and Permitted Disclosure
• Risk Appetite Policy • Business Continuity Plan
• Credit Risk Policy • Shariah Risk Management Policy
Key Policies • Expected Credit Loss Policy • Asset Liability and Market Risk Policy
• Operational Risk Policy • Liquidity Risk Management Policy
• Fraud Management Policy • Compliance Policy
PRIMARY ENTERPRISE RISK CATEGORY DEFINITION & RISK MITIGATION
To enable robust and sustained growth, effective management of recognised major enterprise risk is critical.
The stress testing exercise must commensurate with the nature, size and complexity of the Bank’s business operations and risk
profile.
The stress test is a comprehensive exercise in term of scope and include on and off-balance sheet exposures, commitments,
guarantees and contingent liabilities.
PRIMARY ENTERPRISE RISK CATEGORY DEFINITION
Based on operating landscape in 2021, the Bank has identified the primary enterprise risk category & risk mitigation as follows:
No Primary Enterprise Risk Definition
1. Credit Risk The risk due to uncertainty on the customer or the customer’s counterparty ability to meet its
obligations or failure to perform according to the terms and conditions of the credit related
contract.
2. Shariah Shariah non-compliance risk is the risk that arises from the Bank’s failure to comply with the
Non-Compliance rulings of the Shariah Advisory Council of Bank Negara Malaysia (SAC), standards on Shariah
(SNC) Risk matters issued by the Bank Negara Malaysia pursuant to section 29(1) of the IFSA and section
33E(1) of the DFIA, or decisions or advice of the Shariah Committee for its Islamic finance
activities.
