Risk management
[GRI 102-11] Bank Millennium manages different types of risk. The overriding risk for the Bank is the risk related to the safety of its clients’ funds. It is the product of other risks, including, among others, financial and operational risks, as well as social, environmental, employment and human rights risks.
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 its activities, the risk of the Bank’s direct impact on the environment has been assessed as immaterial. However, in order to fully understand the wide range of interrelationships between the Bank’s activities 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 taken into account in the annual assessment of the materiality of individual risks in the context of credit risk, market risk, operational risk, including reputation risk. The risk management process in the Bank and the Bank Millennium Group is uniform to a high degree and it may be treated as a common system applicable to the overall Group.
[GRI 102-30] The risk management structure defines individual management levels and the scopes of duties and responsibilities. The owners of business and supporting processes play a crucial role in the Group’s daily activity. Owners are best fit to identify and curtail the threats that occur as the first line of defence based on their profound process knowledge. The second line of defence 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 defence 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.