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Sustainability Statement (Continued)
Risk Management Governance Structure
GROUP BOARD OF DIRECTORS
CEO
Group risk management
Committee
- Establish risk appetite and tolerance for credit,
market and operational risk
- Assign management responsibilities
- Review risk portfolios against agreed risk appetite
and tolerance
Country Board of
Directors
GROUP AUDIT COMMITTEE
- Ensure a adequacy, compliance and effectiveness
of policy throughout the Group
- Monitor the financial performance of the
Group, and accuracy of public reporting
Group Risk Management
Committee (ALCO, GORCCO)
Director Risk
Country Managing
Director
Subsidiary Risk Management
Committee (ALCO, GORCCO)
Director Audit
GROUP Internal Audit
Group - Risk Business Units
Lending Risk
Operational Risk
Market & Liquidity Risk
Information Risk
Compliance Risk
Subsidiary - Risk Business Units
Uganda
Tanzania
South Sudan
Rwanda
Burundi
Enterprise–wide stress testing
As part of its core risk-management practices, the Bank
conducts enterprise-wide stress tests on a periodic
basis to better understand earnings, capital and liquidity
sensitivities to certain economic scenarios, including
economic conditions that may be more severe than
anticipated. These enterprise-wide stress tests provide
an understanding of the potential impact to the Bank’s
risk profile, capital and liquidity.
The stress tests generate and consider pertinent and
plausible scenarios that have the potential to adversely
affect the business.
KCB’s stress-testing framework is designed to:
• Contribute to the setting and monitoring of risk
appetite;
• Identify key risks to the Bank’s strategy, financial
position and reputation;
• Examine the nature and dynamics of the risk profile
and assess the impact of stress situations on the
Group’s profitability and business plans;
• Ensure effective governance, processes and systems
are in place to co-ordinate and integrate stress testing;
• Inform senior management; and
• Ensure adherence to regulatory requirements.
Basel II/III Framework
The Group’s capital management objective is to maintain
a strong capital position consistent with the expectations
of various stakeholders, i.e. customers, investors and
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K C B 2 0 1 3 A n n u a l R e p o r t a n d F i n a n c i a l S t a t e m e n t s