Financial and
ESG report 2020

Method of risk management

[GRI 102-11, 103-1, 103-2 103-3]
Bank Millennium manages various types of risk. The Bank’s main focus is on the risk relating to the safety of clients’ funds.

It is a combination of other types of risks, including, but not limited to, different types of financial or operational risks, which include also social, environmental risks, poor employment or human rights practices.

Every year the Bank evaluates the significance of the types of risk identified, it drafts the relevant management procedures and it sets up capital buffers if justified. Due to the nature of the Bank’s business, the risk of its direct environmental impact has been assessed as negligible. However, in order to fully understand the broad spectrum of interrelationships between the Bank’s operations and environmental risks, the Bank has chosen to incorporate various environmental aspects into the assessment of other risks directly related to the Bank’s operations, as separate risk factors. Currently, the environmental aspect is considered for the annual materiality assessment of the individual risks in the context of credit risk, market risk related to financial instrument prices, operational risk and reputation risk. The risk management process in the Bank and the Bank’s Group is uniform to a high degree and it may be treated as a common system applicable to the overall Group.  

M2020-170 M2020-170

[GRI 102-30]

The operational risk management structure defines individual management levels and the scopes of their duties and responsibilities. The owners of business and supporting processes play a crucial role in the Group’s daily activity. Process owners are best fit to identify and curtail the threats that occur as the first line of defense based on their profound process knowledge. The second line of defense is the level of specialized entities that deal with the organization of management processes and the control of an acceptable level of risk, with special emphasis on the following areas: compliance, countering abuse, employee issues, safety and ensuring business continuity, insurance and subcontracting. The third line of defense is the independent internal audit unit. 

The Bank’s Management Board designs and introduces a risk management system and monitors its operation. The Bank’s Supervisory Board oversees the implemented system and assesses its adequacy and effectiveness at least once a year. 

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