The Bank's overall risk management framework is governed by the Risk Appetite Framework and the relevant documents, and it is continuously updated in accordance with the evolution of the Group's strategy.
As for credit risk management, besides the well-established first line of defence controls and the periodic monitoring conducted by the Risk Management Function, the Bank is implementing the counterparty rating system. The internally developed model focuses on Italian businesses and consists of:
- a “financial statement” module, to assess the company's operating/financial soundness;
- a “central credit register” module, presenting the evolution of counterparty risk vis-à-vis the banking industry;
- two “internal performance” modules, monitoring signs of deterioration in the relationship between the counterparty and the Bank consistently with the business model of providing working capital financing, based on whether the counterparty is a seller or a debtor;
- a qualitative questionnaire intended to obtain “soft” information that the above modules cannot provide.
As for the non-performing loans of the DRL business area, the Bank reviewed the model for measuring said loans, aligning it even more with debt collection processes and the changes in the portfolio's composition occurred in recent years. In addition, it further bolstered the monitoring of the underlying portfolio and the relevant collection performance.
Concerning tax receivables, Banca IFIS improveded the methodology for determining the estimated collection date, which bases its assumptions on the analysis of historical data series.
As for operational risks, the Bank consolidated the Loss Data Collection process - which extends to its network and even the Polish subsidiary - as well as periodic Risk Self Assessments. It also continued assessing IT risks in accordance with the method adopted by the Bank.
Concerning liquidity risks, the Bank conducted systematic monitoring in order to ensure a sound and prudent management, pursuant to the relevant regulations.
The Function strengthened its staff by adding new and dynamic professionals, and continues to do so consistently with the Group's strategic development goals.