Page 86 - EXIM-Bank_Annual-Report-2022

A VISION COMMITMENT EMPOWERING ENSURING ENHANCINg FINANCIAL
84 EXIM BANK MALAYSIA ANNUAL REPORT 2022 TO SERVE TO LEAD GROWTH SUSTAINABILITY gOVERNANCE STATEMENTS 85

STATEMENT OF RISK MANAGEMENT

MILESTONE AND ACHIEVEMENTS IN 2022

In line with the Bank’s Corporate Strategic Plan, the Bank is strengthening sound risk management practices and promoting
good governance.

In 2022, the Risk Management Division achieved the following major milestones and implemented the following initiatives:

1. Review of Approving Authorities and Authority Limits
The Approving Authorities and Authority Limits (AA) is a compilation of authorised approving authorities, signatories and
their respective limits approving financial and non-financial transactions as well as expenditures or activities within the Bank.
The review considers the latest organisational structure of the Bank which prioritises operational efficiency of the Bank’s AA
and activities, as well as the associated risk factors and control measures including the recommending party and approval
authority. Additionally, the review addresses best governance practices to ensure compliance with regulatory requirements.

2. Review of Risk Appetite Metrics
The Risk Appetite Policy (The Policy) governs the Bank’s approach to establishing, communicating and monitoring risk
appetite through policies, controls and mechanisms. The Policy also outlines the governance structure for overseeing the
implementation and monitoring of the Bank’s risk appetite.

The Bank’s risk appetite addresses major types of risk taking into account both the willingness and capacity to take on risk
while considering the long-term financial capacity and ability to meeting obligations to stakeholders.

To comprehensively manage the Bank’s operating dimensions and the enterprise risk categories identified in the Risk
Management Framework, the Bank is further streamlining its risk appetite metrics in accordance with the Bank’s Corporate
Strategic Plan year 2023. This will allow for more granular monitoring and reporting of the risk appetite metrics.
3. Review of the Risk Management Framework

The Risk Management Framework (the Framework) is an overarching risk management document for the Bank based on its
mandated role as a government-owned Development Financial Institution (DFI) to promote reverse investment and export
of strategic sectors such as capital goods, infrastructure projects, shipping, value added manufactured products and to
facilitate the entry of Malaysian companies to new markets, particularly to the non-traditional markets.

The review is to include the Environmental, Social and Governance (ESG) Risk and its definition.

4. Review of the Bank’s credit related documentations
The Bank has reviewed and enhanced its credit risk policy and procedures for effective implementation across the organisation.

The Credit Risk Policy (the Policy) is the governing Policy of the Bank’s credit management.
The Credit Processes and Procedures (the Procedures) is a procedural document for the implementation of the Credit Risk
Policy. The Procedures review was to provide clarity on end-to-end credit processes for both conventional and also the
Islamic processes and terminologies.

The review and enhancement to the Procedures was approved at the Management Audit, Risk & Compliance Committee
meeting and subsequently endorsed by the Shariah Committee.

The identification of Connected Party and Politically Exposed Persons (PEP) has been clearly defined and this has been
reflected in the review of Bank’s Approving Authority and Authority Limits for the New & Review application.