Risk Management

Approach and governance

Risk philosophy
Yoma Bank’s risk philosophy is based on its commitment to be the “Responsible Bank” in Myanmar. Yoma Bank commits to accepting risk in supporting the development of the economy, in assisting foreign business to invest in the country, in helping local entrepreneurs to build businesses and in expanding banking access for farmers and urban consumers.

Risk Governance
Our Board of Directors is ultimately responsible for ensuring that the Bank's activities are: 
  • aligned with the Bank's long-term objectives.
  • governed by an effective risk and control framework which enables all material risks to be identified, assessed and managed.
  • carried out within the defined risk appetite of the Bank. 
Through its two Committees, the Board ensures that the risk management framework and internal controls are effective:  
  • the Risk Oversight Committee approves risk appetite, risk management policies and oversees their implementation. It delegates responsibility to three sub-committees led by our Management Team: the Executive Credit Committee, the Asset-Liability Committee and the Product Committee.
  • the Audit Committee monitors internal controls across the Bank and reviews their effectiveness through the Internal Audit. 
The Chief Executive Officer (CEO) and the Chief Risk Officer (CRO) are both responsible for ensuring implementation of the risk policies and procedures approved by the Board and Risk Management Oversight Committee across the Bank. 

Executive Credit Committee (ECC)
The ECC’s mandate is to provide oversight of the Bank’s credit activities on behalf of the Board. The ECC is responsible for ensuring that suitable credit risk policies, underwriting standards, risk measurement and approval limits are developed and applied. 

The ECC monitors compliance with credit policies and the portfolio risk profile to ensure that it is consistent with the defined risk appetite. It will review and approve requests for credit as per Credit Risk Delegation of Authority. Lower level credit approving authorities have been delegated to joint authority of heads of business, credit or risk or to the Junior Credit Committee (JCC) or to the deputy heads/head of Credit Risk Department as defined in the Delegation of Authority. 

To ensure that the quality of the loan portfolio is sound and within the approved credit risk profile, the ECC will periodically review credit risk monitoring reports. In addition, the ECC will also ensure compliance with Central Bank of Myanmar (CBM) regulations, relevant laws and any other legal obligations or agreements that Yoma Bank has. The ECC’s functions shall also include: a review of the credit strategy, recommending changes where necessary, and a review of credit products and programs prior to submission to the Risk Oversight Committee.

Asset-Liability Committee (ALCO)
The ALCO’s mandate is to ensure the implementation of the Asset-Liability Management (ALM) policy and oversight of the risks prescribed within it. ALM covers the following key functions and risks: capital adequacy, liquidity, interest rate risk, foreign exchange, and other market risks. 

The ALCO has a key strategic role in managing the structure of the Bank’s balance sheet, determining pricing for all banking products, and ensuring that capital and liquidity are adequate to support the projected business growth plans and are in compliance with relevant regulations and standards, including all other related legal obligations and covenants that the Bank has.


Product Committee
The Product Committee’s mandate is to ensure new products and services are developed in accordance with product policy, risk appetite and in response to market demands.  The Committee also reviews product performance and considers necessary modifications to existing products including sunset clauses/actions.

Operational Risk Management 
Under Yoma Bank’s Operational Risk Management, as shown in the following diagram, the Risk Management team together with the business and branch support units identify the respective risks, facilitate risk and control assessments.



Three Lines of Defence Model

First Line of Defence
Risk Management
Second Line of Defence
Risk Oversight
Third Line of Defence
Independent Assurance
- Takes and manage risk exposure in accordance with the risk appetite, mandate and limits set by the Board - Ensures key risks are escalated to Board and provides oversight to ensure First Line business executed in line with the bank’s risk appetite - Provides the Board with an independent opinion about the effectiveness of Risk Management and Internal Controls 
- Identifies and escalates significant emerging issues related to risk- Develops the Risk Management Framework  (policies, systems, processes, tools)- Confirms the level of compliance with regulations, and other limits and requirements as defined in the Bank’s policies