Corporate Governance
General information about risk management in AccessBank
Risk management is an integral part of the Bank's activities. The Bank ensures the creation of a risk management system adequate to the risk profile within the framework of the strategic vision.
Risk management is also carried out with the following objectives:
- Detect, measure and determine the level of perceived risk;
- Risk/reward ratio optimization in all areas of banking;
- Maintaining risks at a level that does not threaten the financial stability of the Bank, as well as the interests of its creditors and depositors;
- Monitoring compliance with legal acts, constituent and internal documents of the Bank by all employees of the Bank;
- Minimizing risks in the event of unfavorable circumstances for the Bank.
The complete risk assessment process is comprehensively reflected in the bank's risk map.
When evaluating borrowers for business loans, the financial performance of the borrowers, credit history, collateral, the purpose of the loan, the borrower's business experience, market factors affecting the borrower, and external factors are taken into account. Evaluation of borrowers for consumer loans is based on internal banking rules and a scoring system.
Risk management system in a bank
I line of defense. This block includes structural divisions that serve the bank's clients, develop products and services, as well as branches and departments of the bank. The main task of the first line of defense is risk management, covering all stages from risk identification to optimization, including resource allocation and prioritization decisions.
II line of defense. This block includes structural units that perform the functions of risk management, legal and compliance management in the bank. The main task of the second line of defense is to define the framework, principles, limits of risk management, conduct risk assessment, monitor and report on the results.
III line of defense. This block consists of an independent internal audit unit and external auditors empowered to evaluate the first and second lines of defense. The Internal Audit Department conducts a risk-based and general audit of the effectiveness and improvement of procedures and mechanisms, as well as their proper implementation.
Bank risk management policy
AccessBank's risk management policy is designed to identify, analyze and prevent risks arising during the activities of the bank.
The current policy of the Bank has been developed on the basis of the proposals of the Basel Committee on Banking Supervision, the legislation of the Republic of Azerbaijan, including risk management standards, rules and other regulations of the Central Bank of the Republic of Azerbaijan, as well as the Charter of the Bank and internal procedures.
Priority areas and control measures to reduce risks in the bank are:
- Risk propensity is determined in accordance with the bank's risk mitigation policy;
- In order to reduce banking risks, certain limits are set, which are mainly implemented in relation to credit risk, liquidity risk and market risk. The purpose of the limits is to prevent risks in advance and ensure the efficiency of the bank's activities. Risk control is carried out within the limits of risks established by the Supervisory Board of the Bank;
- Risk management in the bank is controlled in accordance with the internal rules of each department and the decisions of the Risk Management Committee. Daily risk control is carried out by internal departments of the Bank. Internal departments are supported by the Bank's Risk Management Department;
- With all of the above, audits in this area during the year are carried out by the Internal Audit Department;
- The Risk Management Department reviews loan offers from branches to the head office, and also conducts their control checks; regular monitoring of loans issued by branches is carried out, and if necessary, credit committees on delinquencies are held in the branches and a report on the results of work is prepared;
- Through the early warning system, management is informed about the risks that have arisen as a result of approaching the established limits;
- If during the monitoring a violation of the established limit levels is detected, the necessary measures are taken by the Bank, so the risks in this area are under control;
- Analysis is carried out for each risk and the results are presented to the Board of Management and the Supervisory Board of the Bank;
- Reserves for assets and liabilities are created in accordance with the norms established by the Central Bank.
Andrea Hagmann has been appointed member of the Supervisory Board of AccessBank in December 2019 by the General Assembly of Shareholders.
Ms. Hagmann has extensive experience in financial services for more than twenty five years. She currently serves as Member of the Board of Directors and the Investment Committee of the European Fund for Southeast Europe (since 2019), Member of the Board of Directors of SANAD Fund (Middle East and North Africa) for Micro and SMEs (since 2017) and Member of the Board of Directors of Microfinance Enhancement Facility (since 2009). Her previous business experience and voluntary activities included also service as a Member of the Executive Board of the Development Bank of Austria, (2008-2017), Member of the Supervisory Board of Raiffeisenbank, Wolkersdorf (since 2019), Member of the Supervisory Board of Hilfswerk International (Austria’s leading non profit organization) (since 2018), as well as various senior positions at Oesterreichische Kontrollbank AG, Austrian´s export credit agency (1991 – 2007).
Ms. Hagmann holds a Master’s degree in commercial science from Vienna University of Economics and Business Administration.
E-mail: [email protected]
Tel: 151
Ms. Tomash has 25 years of experience in financial services, mostly in development-oriented financial institutions. She works as a consultant in strategy development, operational excellence, internal audit and corporate governance. Olga currently serves as an independent Supervisory Board member of PrivatBank, Ukraine.
She has been appointed the Chairperson of the Audit Committee of AccesBank in December 2019. Olga holds a diploma in Accounting and Audit in Banks from Kyiv State University of Economics and Trade. She is a Fellow member of ACCA (Association of Certified Chartered Accountants) since 2004.
- Setting minimum requirements for every stage of the risk management process;
- Determining the limits calculated by the risk management unit for various risks and submitting those for approval to the Supervisory Board;
- Assessing internal risks management function of the Bank;
- Revision of the rules for various operations and business directions, different rules and methodologies used in the risk management area, as well as risk management policy;
- Making certain proposals to the Supervisory Board on the issues specified in paragraphs 3 and 4 above in accordance with the legislation of the Republic of Azerbaijan;
- Assessing activities of the Bank’s Risk Management Department;
- Providing guidance on risk management including, but not limited to, guidelines for the application of risk management methods, scenarios and models to the Bank's Risk Management Department;
- Requiring from the Risk Management Department and other relevant bodies of the Bank to regularly submit reports, proposals and information in accordance with the relevant norms, rules and standards set by the Financial Market Supervisory Authority of the Republic of Azerbaijan, the Central Bank of the Republic of Azerbaijan;
- Reviewing the Emergency Action Plan prepared by the Bank's Risk Management Department;
- Determining the frequency and subject matter of surveys used to identify various risks;
- Identifying ratios and factors used as early warning tools for risk monitoring in Banks;
- Jointly with the Bank’s Remuneration Committee at least once a year assessing the efficiency of the remuneration system, including (but not limited to) the Bank's Remuneration Committee's remuneration policy, internal remuneration procedures, special remuneration mechanisms and their implementation;
- Coordinating the Bank's other internal committees on activities relating to the risk management;
- Providing recommendations to the Management Board on toughening the risk management mechanism and reporting to the Supervisory Board on the Management Board's compliance with the recommendations;
- Implementing other duties and tasks on risk management in accordance with the legislation of the Republic of Azerbaijan.