FUIB has an effective risk management system in place that meets the requirements of NBU Regulation No. 64 dated 11 June 2018 "On the Organisation of the Risk Management System in Ukrainian Banks and Banking Groups". The risk management system is a part of the overall corporate governance system of the bank and is aimed at ensuring the stable development of the bank within the framework of the bank's development strategy in all business areas.

To implement all the requirements of the NBU, FUIB developed the following internal regulatory documents:

1. Declaration of risk appetite. The document defines:

- the aggregate level of risk appetite and types of risks that the bank intends to take and hold to achieve its business goals;

- maximum level of risk acceptable for the bank based on the amount of available resources (capital and liquidity needs);

- quantitative and qualitative indicators by types of material risks;

- individual level of risk appetite for each type of material risk;

- types of risks that the bank should avoid.

2. Risk Management Policy and Risk Management Strategy. The documents regulate the organisation of a clear process for effective risk management by setting boundaries and limit parameters for each type of risk, the purpose of which is to carry out a systematic process of identifying, measuring, monitoring, controlling, reporting and mitigating all types of risks at all organisational levels of the bank.

Risk management policy

RMS policy

To ensure the stability and security of the bank's business, along with the risk management system, the bank has implemented an internal control system (ICS), which is regulated by the internal regulatory document "Policy on Organisation of the Internal Control System".

Policy on the Internal Control System

Policy of the JIC

The document fully complies with the requirements of the NBU Regulation No. 88 dated 2 July 2019 "On Organisation of the Internal Control System in Ukrainian Banks and Banking Groups".

The ICS is based on a three-line defence model:

• The first line of defence includes business and support units of the bank.
• The second line of defence is the risk management and compliance departments.
• The third line is the Internal Audit Department, which assesses the effectiveness of the risk management system of the first and second lines of defence and evaluates the effectiveness of the internal control system.

3 lines of protection provide:

• Identification of risks. The Bank's structural units that carry out banking operations and support 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 carrying out operations.
• Risk management. The Risk Management and Compliance Departments develop risk management mechanisms, and 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.
• Internal audit. It conducts an independent assessment of the effectiveness of the risk management system, corporate governance and internal control system, identifies violations and makes proposals for improving the risk management system.

To control and timely respond to any events that may affect the sustainable development of the bank, monthly, quarterly and annual reports are provided for, which are reviewed by the Management Board and the Supervisory Board of the bank. To regulate social issues, FUIB has developed and implemented the following regulatory documents:

• Code of Corporate Ethics
• Anticorruption program
• Corporate Governance Code
• Regulations on the settlement of conflicts of interest
• Порядок організації роботи лінії довіри СКМ
• Rules for financial monitoring
• Procedure for giving and receiving gifts and invitations
• The procedure for staff training
• Procedure for forming the staffing table

​The Bank regularly conducts staff training and testing to monitor risk management and compliance knowledge.​

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

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. Regarding 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. Emergency evacuation plans for valuables and personnel were developed to prevent the loss of property and assets and 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 to property that could not be removed due to significant danger and buildings that were damaged/destroyed as a result of shelling.