Operational risk

The capital requirements for operational risk are calculated using the standardized approach (CRR Article 317-320). They represented about 12% of the total amount of capital requirements (without the regulatory floor) as at 31 December 2016. (Art. 446)

Losses stemming from operational risk events

The below table presents operational risk events registered in the operational risk database in 2016. In the table are not included operational risk events related to credit risk, which are treated as credit risk events for the purpose of calculating credit requirements.

Operational risk events (the amount of losses), divided by events categories and kind of loss (in PLN million)


Event category Net
Internal fraud 10.2*) 26.0
External fraud 0.1 0.7
Execution, delivery and process management 0.2 1.8
Damage to physical assets 0.0 0.4
TOTAL 10.5 28.9

*) it includes PLN 7.7 m during the recovery process


Operational risk management system requires identification of a causes of an events and implementation of decisions or actions to reduce frequency and financial impact of events. It is completed using change of processes, strengthening of internal controls, adjustments of documentation and procedures and dedicated trainings.

In terms of the risk of internal fraud, internal procedures, used by the Bank, have been thoroughly analysed in terms of resistance to this type of risk. The result of this analysis was to strengthen and establish additional points of internal control across all lines of defence in the processes of carrying out transactions and the execution orders of the Customers.

In 2016 Bank Millennium Group reported no material operational risk events. i.e. those for which gross loss exceeds 10% of capital requirements for operational risk.

Internal procedures
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