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Risk overview
Risks Business risks Strategic risk is a risk that the business and competitive environment, the impact of regulation on bank activities, inadequate implementation of the strategy, changes in customer expectations or inadequate implementation of new technologies can cause losses or significantly reduce revenues. Reputation risk is the risk to the bank’s income, own funds or liquidity, which is a loss to the reputation of the bank.
Capital risk Capital risk is the risk that Inbank’s capital adequacy or quality is below the optimum level
Consolidated annual report 2017
Main hedging activities
Risk factors
Situation
• The Management Board focuses on ensuring that business development and planning conform to risk appetite. • Strategic risk and reputation risk are analyzed as part of strategic planning. • Strategic risk strategy is to control and mitigate the risk, which
involves a strategy based on thorough planning process, as well as sufficient and timely response to the changes. • The Bank’s strategy to manage reputation risk is to avoid significant risks and situations that could have a negative impact on reputation and thereby lead to loss of revenue or loss of confidence. • The basis for the management of the reputation risk is the principle that reputation is an important asset, its development starts with customer service and public opinion is important for the Bank.
• The risk appetite approved by the Management Board ensures
that we have enough capital to respond to legal and internal demands. • Capital policies define minimum standards for capital management. • The Group’s capital must at any time exceed the total risk and comply with legal requirements and ICAAP/SREP minimum requirements. • ICAAP and capital management work continuously. • Capital adequacy management is an integral part of strategic decision and business decision making and risk management. • The Bank continuously assesses the individual risk profile and the corresponding capital requirement for all risk categories that are identified by the Bank. • Stress and scenario tests assess capital adequacy across a range of serious, cross-market stress scenarios and events.
Capital ratios
2017
2016
CET 1
12.75%
13.90%
Total capital ratio
19.86%
24.49%
Leverage ratio
11.45%
10.40%
Our total capital and leverage ratios are stable and conservative. We will continue to hold a highquality capital base, which exceeds the regulatory rates.