Page 77 - EXIM-Bank_Annual-Report-2022

A VISION COMMITMENT EMPOWERING ENSURING ENHANCINg FINANCIAL
74 EXIM BANK MALAYSIA ANNUAL REPORT 2022 TO SERVE TO LEAD GROWTH SUSTAINABILITY gOVERNANCE STATEMENTS 75

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 Bank has implemented an effective risk management framework which identifies, assess and manages risk that could impact
our business objectives. Our risk framework is designed to enable proactive identification of potential risk primarily the enterprise
risk categories, risk governance and the development of strategies to mitigate them through 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.

Our risk management framework is integrated into our business processes and culture, and it is reviewed and updated regularly
as reflected through the regular review of other risk related frameworks, policies, procedures and manuals to support risk related
decision-making; and to ensure that the Bank is able to swiftly response to any internal as well as external changes which will
have an impact on the Bank’s operating environment.
Our risk management framework involves the following steps:

a. Establishment and review of the risk appetite approved by the Board.
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 a. The Bank shall clearly define the roles and responsibilities of parties involved in the
entire risk management processes.
Clear responsibilities on risk b. The Board has the ultimate responsibility for identifying the Bank’s risks and ensuring
management
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 oversee managing the Bank’s day-to-day risk management.

Principle 2 The Bank shall integrate risk management into its existing strategic management and
operational process, as risk management is an important component of robust decision
Risk management shall
be incorporated into all making.
decision-making processes

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