Description of the significant risks

In the social area Bank Millennium manages various types of risk, while the Bank’s main focus is on the risk relating to the safety of clients’ funds. It is a vector of other risks, including among others reputation risk, considered from the point of view of the Bank and the Bank Millennium Group, but also from the standpoint of the whole banking sector. Other than that, the Bank identifies the risk arising from its cooperation with customers and contractors. 

In terms of the risk of client relations, the Bank considers the legal aspects of the contracts, risk of incorrect design of products and services and the risk of selecting the optimum product to suit the client’s needs and capacity. By monitoring new regulations and opinions of the UOKiK (Office of Competition and Consumer Protection) and other authorities, it is focused on delivering the best products and services to its clients, as the Bank’s top positions in various rankings amply attest. 

In terms of the risk of incorrect employment and work safety practices, the Bank minimizes the risk of high employee turnover by embracing the pertinent policies (including HR, compensation and diversity) and offering high working standards.   

The risk related to the issue of failing to respect human rights and combat corruption refers to the possibility of human rights violations and cases of corruption occurring in the organization. This entails risk of criminal, administrative and financial liability and loss of reputation. The Bank’s Group prevents this risk by observing the “Diversity Policy” and obligating its employees and business partners to adhere to the Bank Millennium Group’s Code of Ethics in which these issues are regulated and by offering the ability to report violations anonymously in these areas.  

The risk pertaining to the natural environmental impact chiefly involves the negative impact of the Group on the natural environment, both through its own operating activity and also through projects financed by the Bank. The Group mitigates this risk by submitting to legal regulations, monitoring its own environmental impact and implementing environmentally-friendly actions and observing the “Environmental Policy of the Bank Millennium Group” and the project financing rules. 

Another key risk of the Bank is the risk of financial loss resulting from a failure of its clients to pay liabilities. With a large volume of loss loans, the Bank may lose its financial liquidity. In the same instance, the client’s consequences and risk include loss of creditworthiness (negative entries in registers such as BIK), upsetting of the financial balance of a household and launch of legal proceedings by the Bank to enforce repayment of the liability. 

A detailed description of the management of the foregoing risks has been set forth in the various sections of the report pertaining to relations with clients, employees, business partners and communities and to respecting human rights, preventing corruption and managing the natural environmental impact.