Nedbank Group’s approach to risk embraces risk management as a core competency that allows us to optimise risk-taking, is objective and transparent, and ensures that the business prices for risk appropriately, linking risk to return.
For this reason one of Nedbank Group’s Deep Green aspirations is to be ‘worldclass at managing risk’. This focus is supported by a number of industry policies and regulations, including regulation 38 of the Banks Act, King II and Basel II.
The board acknowledges its responsibility for the entire process of risk management and for evaluating the effectiveness of this process. Management is accountable to the board for designing, implementing and monitoring the process of risk management and integrating it with the day-to-day activities of the group. The Group Risk Committee is responsible for assisting the board in reviewing the risk management process and any significant risks facing the group.
ENTERPRISE-WIDE RISK MANAGEMENT FRAMEWORKThe group ERMF comprises three lines of defence, namely:
- focused and informed involvement by the board and Nedbank Group EXCO, and accountability and responsibility of business management – all supported by appropriate internal control, risk management and governance structures;
- independent risk monitoring at group level by the various group risk and group finance functions; and
- independent assurance provided by internal and external audit.
GROUP ASSET, LIABILITY AND EXECUTIVE RISK COMMITTEE (GROUP ALCO)Group ALCO primarily oversees the management of liquidity risk, interest rate risk and foreign exchange rate risk in the group. It proposes the policies for the management of these risks to the board’s Group Risk Committee for review and ratification. Group ALCO meets at least once a month to review and approve the proposals on the strategies and policies for the management of these risks.
Risk management focus areas in 2007