Sustainability - bicbanco

26 Annual and Sustainability Report 2011
Because of the turbulent international scenario in
2011, credit operations lost strength in the domestic
market. Based on this, BICBANCO sought to raise its
portfolio diversification levels and supported a policy,
which has already been used in previous years, of
granting credit pending a guarantee on receivables
and financial investments.
The Credit and Credit Risk Policies are applied to all
business that involves risks and their mission is to ensure
the integrity of assets and appropriate levels of
risk, to enhance administration of credit risk, to assure
uniformity in decisions, and to raise the Bank’s
quality standards and results. These policies establish
guidelines on which control strategies are based at
every level and they assemble, among other things:
1. Analysis of credit distribution by economic seg-
ment, respecting the limits of concentration in
various activities;
2. Levels established for individual or group borrower
risks;
3. Credit assessment by scope, according to the determined
flow of approval, which includes formalization
and liberation of operations;
The Bank raised its portfolio
diversification levels and
sustained a policy of granting
credit pending a guarantee on
receivables and financial investments.
4. Risk x return criteria in approving credit for setting
operation fees;
5. Value at Risk (VaR) and VaR stress limits in credit
portfolios;
6. Adaptation of term gaps and matching of inflation
indicators and rates in assigning operations;
7. VaR and VaR stress limits for treasury operations
as well as for other asset and liability operations.
It is bank practice to subject all new products, actions
or services involving any kind of risk to various committees
for assessment prior to their implementation
in order to evaluate controls needed for their mitigation
or acceptance. The goal is to gain a multi-disciplinary
analysis and guarantee management according
to the complexity of products, exposure to risk
and the risk/return relationship.
Because of this position, the Business Policy prevents
the negotiation of untested products or products that
present an elevated liquidity risk. Therefore, new
products and services are not subject to significant
exposure. Traditionally, credit operations are carried
out through a mutual contract for greater security and
without options that modify the essential features of
the product.
CREDIT RISK
MANAGEMENT STRUCTURE
Included in the credit risk management structure are:
the corporate governance board, the credit board, the
office of the superintendent of asset recovery, and
the executive officer responsible for managing the
Bank’s credit risk before Brazilian Central Bank.