2012 Annual Report & Financial Statements - UBA Plc

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Notes to the consolidated and separate financial statements
continued …
The key functional areas and their responsibilities are highlighted below:
Credit Office
The Credit Office has responsibility for credit underwriting and makes recommendations to the appropriate authority level for approval of
assessed Corporate, Commercial, Public Sector and Retail Credits as spelt out in the Credit Empowerment/Approval Framework.
Credit Risk Management
The Credit Risk Management division acts as the custodian of Group credit policies and recommends reviews based on regulatory changes
and other developments in the operating environment. It develops and implements the Group credit risk management framework, as well as a
portfolio management strategy towards achieving a diversified, high quality asset mix to minimise delinquencies.
In addition, CRM ensures appropriate control measures are taken in the documentation and administration of approved loans.
Credit Monitoring
Credit monitoring runs as a separate group of risk management to improve oversight of loan performance. Its primary function is to continuously
monitor the Bank’s loan portfolio to ensure ongoing portfolio performance and achievement of portfolio quality targets. Credit Monitoring
ensures all loans are booked in line with the Bank’s policy and highlights income leakages. They also identify exceptions which may prevent
the loan from being paid in a timely manner. Observed Credit exceptions are escalated for possible resolution, sanction implementation and
management attention. The Group takes proactive steps to ensure follow up on accounts showing signs of delinquency.
Market Risk
This is the risk that the value of our portfolio, either an investment portfolio or a trading portfolio, will decrease due to the change in value of
the market risk factors and affect the Group’s income or the value of its holdings of financial instruments. The main objective of market risk
management is not only to manage, measure and control market risk exposures but also to ensure that the Group carries out its affairs within
acceptable parameters and in line with the market risk appetite.
Market risk achieves the above stated objective, through a mix of quantitative and statistical controls which covers the underlisted activities:
– Market data collection and statistical analysis
– VaR limit determination based on market volatility
– VaR/Stop loss limit utilisation monitoring
– Position monitoring
– New trading products risk assessment
– P&L attribution analysis
– Pricing model validation and sign off
– Trading portfolio stress testing
– Regulatory limit monitoring
– Position data extraction and internal limit monitoring
– Contingency funding plan maintenance and testing
– Risk profile reporting to GALCO.
Annual Report 2012