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Risk Management
PROBANK constantly ensures its full compliance with the regulatory guidelines as defined each time by the supervising authority, i.e. the Bank of Greece. These regulations and directions call for a thorough exhaustive monitoring and risk management. Therefore as a result, Risk Management department monitors and effectively manages risks through the implementation of updated systems and optimum international practices.
The Risk Management Unit collaborates with all other departments of the Bank and its Subsidiaries, so as to gather all necessary information that will be required in order to evaluate all types of risks on an individual and consolidated basis, identify, analyze and measure them to facilitate taking relevant measures.
Credit Risk
The prospect of a contracted party not being able to respond to its contractual obligations, is defined as Credit Risk. Especially in cases of loans, this risk applies in case of default by debtors when they fail to meet their obligations regarding their debt. The monitoring regarding the undertaken credit risks is applied across operations of the Bank and the Group, by defining a strategy for business growth and setting limits in terms of mortgages, business and consumer lending counter parties, business sectors, individual economy sectors and customer Groups. The evaluation of the contracting party’s credit ability is founded on qualitative, quantitative and personality features, as well as the use of Credit Rating and Scoring systems.
Market Risk
Market Risk represents the possibility of losses produced as a result of adverse market conditions such as debts, securities, currencies and products on which the Bank or the Group has invested. In order to handle and minimize market risks, the Bank implements modern analysis methods, evaluation methodologies, including simulation scenarios and sensitivity analysis.
Operational Risk
Operational Risk is defined as a risk of possible losses caused by facts or situations, such as “inadequacy, failure of internal procedures, human error, system break down, other external factors”. In order to handle such risks, the Bank, as well as the Group, take specific measures giving special emphasis on issues related to the protection and safety of Human Resources, Clientele, Operations, Systems (Software, Equipment, Data), Fixed Assets and Premises. PROBANK Group is constantly taking measures so as to develop and improve the effectiveness of the systems and methods it employs.
Liquidity Risk
The Bank’s potential inability to fulfill transactional obligation, is defined as liquidity risk. In order for PROBANK to maintain adequate liquidity, to meet its existing and future obligations, it has established a methodology of monitoring and systematic liquidity management. Among others, the analysis of Liquidity Maturity and Cash Flows Evaluation deriving from all Assets and Liabilities, classified in time periods of commencement and remaining duration, constitute the central axis for handling situations of potential inadequate liquidity.
Additionally, the Bank conducts stress tests on a regular basis, contributing accordingly to the formation of a management policy for situations of limited liquidity.
