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FUIB has an effective risk management system (RMS) that meets the requirements of the National Bank of Ukraine and is part of the bank’s overall corporate governance system. The RMS is aimed at ensuring the stable development of FUIB in accordance with the business strategy. 

To implement all the requirements of the National Bank of Ukraine, the following internal regulatory documents were developed by FUIB:

1. Declaration of risk exposure: defines the list of material risks, the aggregate maximum level of risk appetite permissible for the bank, quantitative and qualitative indicators for all types of material risks, the individual level of risk appetite for each type of material risk, and the types of risks that the bank should avoid.   

2. The Risk Management Policy and the Risk Management Strategy regulate the organization of a clear process for effective risk management by setting limits and thresholds for each type of risk, which aims to implement a systematic process of identifying, measuring, monitoring, controlling, reporting and mitigating all types of risks at all organizational levels of the bank. 

To ensure the stability and security of the bank’s business, the internal control system (ICS) has been implemented along with the RMS, which is regulated by the internal regulatory document “Policy on the Organisation of the Internal Control System” and meets the requirements of the NBU. The ICS is based on the model of three levels of control

The first level includes business and support units of the bank that ensure risk identification: the bank’s structural units that carry out banking operations and provide support for them are involved in the process of identifying, assessing and monitoring risks, comply with the requirements of internal regulatory documents on risk management, and take into account the level of risk in the course of operations. 

The second level includes risk management and compliance units that ensure risk management: the Risk Management and Compliance Departments develop risk management mechanisms, methodology, assess and monitor the level of risks, prepare risk reports, perform aggregate risk assessment, and evaluate the ratio of risk to the established risk appetite. 

The third level includes the Internal Audit Department, which independently assesses the effectiveness of the risk management system of the units of the first and second levels and evaluates the effectiveness of the internal control system.

To monitor and respond in a timely manner to any events that may affect the bank’s sustainable development, monthly, quarterly and annual risk reports are prepared and reviewed by the bank’s Management Board and Supervisory Board.

FUIB has developed and implemented the following regulatory documents to manage compliance risks and resolve social issues

  • Code of Corporate Ethics, 
  • Anti-Corruption Programme,  
  • Corporate Governance Code, 
  • Regulations on the Settlement of Conflicts of Interest,  
  • Procedure for Organising the Work of the SCM Hotline, 
  • Financial Monitoring Rules, 
  • Procedure for Giving and Receiving Gifts and Invitations, 
  • Staff Training Procedure, 
  • Procedure for Staffing. 

The bank also regularly conducts staff training and testing to control knowledge of risk management and compliance.  

In the Declaration of Risk Exposure, the bank declares that it takes into account the impact of climate risks on corporate customers’ credit risks in terms of loss of collateral, borrower default, lack of insurance of collateral; operational risks of loss of property and/or suspension of the bank’s operations (direct impact of natural factors on business continuity is assessed) as a result of natural disasters.

Back in January 2022, FUIB developed and approved a clear response plan for all types of material risks in the event of a threat of hostilities. In terms of credit risks, algorithms for suspending customer lending and debt restructuring scenarios were developed in advance and implemented in March 2022 to reduce the credit burden on Ukrainian citizens and legal entities. To prevent the loss of property and assets, emergency evacuation plans for valuables and staff were developed, as well as to ensure the continuous operation of critical processes and systems. As a result, the bank’s losses were recorded only in the occupied territories and in the territories of hostilities in respect of property that could not be removed due to significant danger and in respect of buildings that were damaged/destroyed as a result of shelling.

General Policy of banking risks management in JSC “FUIB” 2023 - Ukrainian version