Annual Report 2010 - ProCredit Bank

More documents

Recommendations

Info

22 Annual Report 2010 Risk Management In 2010, banking operations were still very strongly influenced by the financial crisis. At the same time, however, this situation has created opportunities for a bank that has consistently taken a rigorous approach to risk management. We believe that this has been one of the key factors behind ProCredit Bank’s success in retaining the trust of our customers. While ultimate responsibility for risk management lies with the General Manager and the Board of Administration, it is the Risk Division which develops and implements mechanisms to identify, assess, and mitigate the bank’s exposure to risk. The two departments which make up the Risk Division are the Risk Management Department, which includes the Information Security Unit, and the Risk Control Department. Credit risk at the individual exposures level is managed separately by the Credit Risk Division, while the risk of money laundering and related illegal activities is addressed by the Compliance Department. These departments report to the various committees which are responsible for decisionmaking in connection with risk. The Risk Management Committee works with its subcommittees to manage and control risk: the Credit Risk Management Subcommittee closely monitors loan portfolio quality; the Assets and Liabilities Subcommittee manages liquidity, market and counterparty risks; and the Operational Risk Management Subcommittee manages operational and reputational risk. AML is the responsibility of the AML&CFT Subcommittee. The risk management policies in effect at ProCredit Bank Romania are based on the principles and standards applicable to all ProCredit institutions, which in turn are based on the German Federal Financial Supervisory Authority’s policy document “Minimum Requirements for Risk Management” as well as on the requirements of the National Bank of Romania. ProCredit Bank Romania reports its risk position to the relevant units responsible for risk management at the ProCredit Holding level at monthly intervals. Risk management policies throughout the ProCredit group are based on the concept of “risk-bearing capacity”, i.e. the principle that each bank’s aggregated risk exposures must not exceed its capacity to bear risk, and that the resources available to cover risk are sufficient to absorb any losses that may arise and protect creditors’ investments. Statistical models and other procedures are used to quantify the risks incurred, and thresholds and limits are set for each risk category and for the aggregate exposure. Throughout 2010 the level of risk remained within the limit in nearly every category. One exception was interest rate risk, which remains at a significant level. The bank is continuing its efforts to reduce this risk. ProCredit Bank’s culture of internal and external transparency is equally crucial to our risk management efforts. Thanks to our clearly defined procedures and our encouragement of open communication, our well-trained staff are in a strong
position to detect risks and take the steps necessary to mitigate them. Credit Risk Management Given that lending to small businesses is ProCredit Bank’s main asset-side operation, it is not surprising that classical credit risk, i.e. the risk that borrowers will be unable to repay, accounts for the largest share of risk in this category. ProCredit Bank Romania has implemented in its local policies the principles established through the ProCredit Group Credit Risk Management Policy and the Group Collateral Valuation Policy, which together reflect the experience gained in more than two decades of successful lending operations in developing and transition economies. Credit decision-making authority at the bank is clearly defined; all decisions to issue a loan, or change its terms, are taken by a credit committee, and all credit risk assessments are carefully documented. Above all, the bank seeks to build and maintain long-term relationships with its customers, thus ensuring that it is fully aware of their financial situation, and great care is taken to avoid over-indebting them. Credit risk is also mitigated by the fact that our portfolio is highly diversified. The businesses Risk Management 23
Page 1 and 2: Annual Report 2010
Page 3 and 4: Contents 3 Mission Statement 4 Lett
Page 5 and 6: Letter from the Board of Administra
Page 7 and 8: Commerzbank is Germany’s leading
Page 9 and 10: The Bank and its Shareholders 9
Page 11 and 12: entrepreneurs to better manage thei
Page 13 and 14: Political and Economic Environment
Page 15 and 16: maintain relationships with potenti
Page 17 and 18: Business Loan Portfolio - Breakdown
Page 19 and 20: Domestic Money Transfers Volume (in
Page 21: Management Business Review 21
Page 25 and 26: sometimes engages in transactions w
Page 27 and 28: NRA process does management give it
Page 29 and 30: where they could make the greatest
Page 31 and 32: outside Romania at the internationa
Page 33 and 34: These six values represent the back
Page 35 and 36: The ProCredit Group: Responsible Ne
Page 37 and 38: The ProCredit Group: Responsible Ne
Page 39 and 40: Switzerland Germany Italy Czech Rep
Page 41 and 42: Name ProCredit Bank Albania ProCred
Page 43 and 44: Rodica and Ciprian Lazar, Producers
Page 45 and 46: Mr. Valeriu Dacius Masalar, 35, sta
Page 47 and 48: Financial Statements 47
Page 49 and 50: Statement of Financial Position As
Page 51 and 52: Statement of Cash Flows For the yea
Page 53 and 54: assets and liabilities denominated
Page 55 and 56: In assessing collective impairment
Page 57 and 58: Given the nature of the Bank’s op
Page 59 and 60: higher than EUR 30,000. These loans
Page 61 and 62: The following table shows the inter
Page 63 and 64: maintain a balance between continui
Page 65 and 66: Compliance with Bank standards is s
Page 67 and 68: 6. Financial assets and liabilities
Page 69 and 70: Deferred taxes The deferred tax ass
Page 71 and 72: Operating leases Non-cancellable op
Page 73 and 74:
26. Reserves In EUR 31 Dec 2010 31
Page 75 and 76:
Financial Statements 75
Page 77 and 78:
Baia Mare Branch 9 Unirii Blvd. Bai
Page 79:
Contact Addresses 79
show all

Annual Report 2010 - ProCredit Bank

Create successful ePaper yourself

Delete template?

Save as template?