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[Active risk management]

The bank adopts a global, proactive and cautious approach to managing business risks using internal control and oversight systems that conform to leading international standards. Its objective is to optimize the risk/return ratio, all in support of its aim to offer the best customer service quality and gain a stronger foothold as one of the soundest entities on the Spanish market. 

Risk identification, measurement and assessment is constantly taken into account in the decision-making processes at CaixaBank. These risks include:

  • Credit risk, with procedures for approval, monitoring, measurement and valuation of risk, composed of:

    – A system of powers for approving transactions to ensure effective delegation of risks (rating, scoring).

    – Pricing tools to achieve appropriate coverage of the risk premium (RAR). 

    – Use of advanced internal rating and scoring models (89.38% of total exposure).

    –  Prevention and early management of NPLs.

  • On-balance sheet risk includes balance sheet interest rate risk inherent in all banking activity. This latter risk is controlled for two reasons: to reduce the sensitivity of net interest income to interest rate fluctuations and to preserve the economic value of the balance sheet.

    Any potential loss in value of the bank's financial assets as a result of adverse fluctuations in market rates or prices is also measured and controlled on a day-to-day basis. 

  • Liquidity risk, maintaining diversified sources of finance, low reliance on wholesale markets and major stability through customer deposits.

  • Operational risk, mitigated by employing an expert workforce and using procedures, systems and controls in place. This risk, which is inherent to banking business, is managed where possible, and occasionally protected through insurance.

  • Reputational risk, controlled by monitoring potential risks, developing preventive measures and assessing the effectiveness thereof. Stakeholder opinions and expectations are also regularly analyzed.

CaixaBank also uses a risk control model offering three lines of defense, which is managed and overseen by areas that are separate from those managing risks. The aim is to have the necessary controls in place to manage risks, establish second-tier controls and obtain independent expert opinions on the areas reviewed.

 

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[Active risk management]

The bank adopts a global, proactive and cautious approach to managing business risks using internal control and oversight systems that conform to leading international standards. Its objective is to optimize the risk/return ratio, all in support of its aim to offer the best customer service quality and gain a stronger foothold as one of the soundest entities on the Spanish market. 

Risk identification, measurement and assessment is constantly taken into account in the decision-making processes at CaixaBank. These risks include:

  • Credit risk, with procedures for approval, monitoring, measurement and valuation of risk, composed of:

    – A system of powers for approving transactions to ensure effective delegation of risks (rating, scoring).

    – Pricing tools to achieve appropriate coverage of the risk premium (RAR). 

    – Use of advanced internal rating and scoring models (89.38% of total exposure).

    –  Prevention and early management of NPLs.

  • On-balance sheet risk includes balance sheet interest rate risk inherent in all banking activity. This latter risk is controlled for two reasons: to reduce the sensitivity of net interest income to interest rate fluctuations and to preserve the economic value of the balance sheet.

    Any potential loss in value of the bank's financial assets as a result of adverse fluctuations in market rates or prices is also measured and controlled on a day-to-day basis. 

  • Liquidity risk, maintaining diversified sources of finance, low reliance on wholesale markets and major stability through customer deposits.

  • Operational risk, mitigated by employing an expert workforce and using procedures, systems and controls in place. This risk, which is inherent to banking business, is managed where possible, and occasionally protected through insurance.

  • Reputational risk, controlled by monitoring potential risks, developing preventive measures and assessing the effectiveness thereof. Stakeholder opinions and expectations are also regularly analyzed.

CaixaBank also uses a risk control model offering three lines of defense, which is managed and overseen by areas that are separate from those managing risks. The aim is to have the necessary controls in place to manage risks, establish second-tier controls and obtain independent expert opinions on the areas reviewed.