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Annual Report of Euram Bank 2019

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For this reason, the Risk Management function carries out a risk inventory process in the form <strong>of</strong> a<br />

self-assessment with the individual corporate and administrative divisions each year. The loss<br />

scenarios developed in the course <strong>of</strong> this process are summarized in the risk pr<strong>of</strong>ile <strong>of</strong> <strong>Euram</strong> <strong>Bank</strong>,<br />

based on which measures and priorities are defined to reduce risk. <strong>Euram</strong> <strong>Bank</strong> has implemented<br />

a loss database, which is kept by Risk Management. All business and organizational divisions are<br />

instructed to report any mistakes that have occurred (regardless <strong>of</strong> the amount <strong>of</strong> money involved) to<br />

the Risk Management function, thus enabling their analysis in a first step and to derive arrangements<br />

to prevent new mistakes from occurring in the next step.<br />

Other risks<br />

General business risk:<br />

Basically, <strong>Euram</strong> <strong>Bank</strong> is in a position to achieve a positive result on the basis <strong>of</strong> the existing<br />

business model. In the course <strong>of</strong> preparing the annual accounts, a risk strategy is defined for the<br />

new fiscal year which also serves as a basis for the allocation <strong>of</strong> economic capital. Based on the<br />

preliminary balance sheet figures <strong>of</strong> the annual accounts and on the risk strategy adopted by the<br />

Joint Managing Board, a financial forecast will be prepared for the new fiscal year. A Pr<strong>of</strong>it Center<br />

account is prepared monthly. The result is compared with the target values, which were calculated<br />

according to the same criteria, on a monthly basis. Strategic risks, business and yield risks are<br />

consolidated with the credit, market and interest rate risks and supplemented by operational risks.<br />

The result will be discussed and analysed promptly by the joint Managing Board. This process<br />

ensures that general business risks are identified immediately.<br />

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