RISK MANAGEMENT SYSTEM

In Sekerbank, Risk Management System means a decision making and executing structure, which is constituted with the aim of maintaining a system for identifying, measuring, monitoring and controlling of risks to which the Bank may be exposed, through the establishment of strategies and policies as well as risk limits and applications in order to control and if necessary, to alter risks versus earnings structure within the Bank’s cash flows including both the level and the quality of its activities.

The Structure and The Scope of Risk Management System
The structure of Risk Management System consists of all the decision-making, executing and as a consequence, monitoring, controlling and auditing bodies of the Bank; its scope, thus, covers
• The Board of Directors
• Senior Management
• Internal Systems
• Committees established by the Board of Directors within Risk Management System
• Committees established by Senior Management within Risk Management System

RISK MANAGEMENT SYSTEM STRATEGIES AND OBJECTIVES

Risk Management System in the Bank is considered as a whole and is structured in all organisational and management processes as well as Information Technologies systems and risk awareness is enhanced.

Risk Management System should be built-in into all activities of the Bank and it is the responsibility of all the Bank’s personnel to enhance Risk Management System.

Risk Management System also covers the Bank’s investments and associates, as well as its subsidiaries, on a consolidated basis.

The objectives to be achieved through Risk Management System are as stated:
1. Protection of the Bank’s solid financial condition,
2. Establishment of the principles of corporate governance and transparency,
3. Enhancement of Risk Management System, by means of:
3.1. Adoption of risk-based approaches rather than traditional ones,
- Across business units,
- In structuring of portfolios,
- In setting of authorisations,
- In pricing.
3.2. Enhancement of Performance Management System,
4. Determination of the Bank’s risk appetite in line with the Bank’s business strategies and activities,
5. Determination of the Bank’s level of own funds in line with its risk appetite.

The Purposes of Risk Management System

The purposes of Risk Management System are as stated herein:
1. Enhancement of enterprise risk management culture throughout the Bank, by means of establishment of sound strategies, objectives and policies,
2. Establishment and sound management of risk limits and applications,
3. Enhancement of asset structure,
4. Provision of accurate fulfillment of obligations,
5. Determination of the Bank’s risk appetite by means of setting the risk limits at acceptable levels, in line with the Bank’s strategies and activities,
6. Determination of the Bank’s level of own funds in line with its risk appetite.

The Basic Principles of Risk Management System

The basic principles of Risk Management System are imposed by the Board of Directors.

These are as stated herein:
1. The activities within the Bank’s Risk Management System are regulated and supervised in a sound manner.
2. Risk Management strategies, policies, risk limits and applications are established in line with the Bank’s business strategies and activities as well as the requirements within a changing environment.
3. In order to prevent errors and irregularities, fraud, conflicts of interest, manipulation of information and abuse of resources, segregation of authourities is formulated for these.
4. Authorities and responsibilities of all the units, committees and personnel are defined precisely and in written form.
5. Information Technologies systems of the Bank are structured in line with the Bank’s business strategies and activities as well as the qualifications and the complexity of products to be newly introduced.
6. Information Technologies systems of the Bank are structured so that measuring, monitoring, controlling and reporting of risks to which the Bank may be exposed, due to its strategies and activities are executed in an effective and timely manner.
7. Within the scope of the organisational structure of the Bank and in accordance with principles related to security of information, vertical and horizontal flows of information are established.
8. All the managers and related personnel are informed precisely, concerning the Bank’s strategies and objectives, policies, risk limits and applications.

The Tools of Risk Management System
1. Establishment of Risk Limits,
2. Segregation of duties and decision-making system,
3. Establishment of sound communication channels
(including financial and managerial reporting lines),
4. Establishment of sound internal controls,
5. Structuring of Emergency and Business Continuity Planning.