|How risk is managed
|Legal and Compliance Risk
|Compliance and Legal Risk covers the risk of failure to act in accordance with laws, regulations, industry standards and codes (including all banking regulations and AML/CFT requirements)
|Through its Audit Committee, the Board of Directors is ultimately responsible for ensuring the compliance of the Bank with all relevant regulations and laws. As part of our Management Team, our Compliance Officer ensures that all the functions and employees of the Bank operates according to our standards and policies.
|Human Capital Risk
|Human Capital Risk is the risk that our people capability falls short of our strategic and operational requirements. This risk can be driven by poor culture, losing key personnel, having insufficient succession planning for business continuity, having inadequate investment in developing staff, having in inadequate performance management processes and weak employee engagement or value proposition.
|Board of Directors is responsible for fostering our values and enabling a positive corporate culture through the implementation of our Code of Conduct. Our HR division is responsible for enhancing our working environment, enhancing our employer branding and offering our employees fulfilling jobs and career opportunities.
|Credit Risk is the risk of financial loss resulting from a borrower or counterparty failing to fulfill its credit obligations or decrease in portfolio credit quality resulting in a loss in value.
|Board of Directors approves major policies and limits that govern monitoring of the credit risk. The Bank structures the levels of credit risk it undertakes by placing limits on the amount of risk acceptable in relation to one borrower, or group of borrowers and industry segments.
|Market Risk is the risk of financial loss resulting from the Bank’s treasury and balance sheet management activities due to changes in market rates (interest rate, FX Rate, etc.)
|Board of Directors approves Enterprise Risk Management Policy and limits that governs monitoring of market risk. Market Risk Team monitor the market risks using Board Approved NOP limits and Value-at-Risk (VaR) limits.
|Technology and Project Risk
|Technology and Project risk is the risk resulting from inadequate or failed information technology assets (including compromise of confidentiality, integrity, and availability). This risk also includes capability to manage key project and change management required to deliver our strategic objectives.
|The Bank invests in developing its IT assets and enhancing its customer experience.
|Liquidity and Funding Risk
|Liquidity and Funding Risk is the risk that Yoma Bank is unable to meet its payment obligations as they fall due, including repaying depositors or other maturing debt or that the Bank has insufficient capacity to fund increases in assets.
|Board of Directors approves asset-liability management (ALM) policies. Liquidity limits are set to address liquidity shocks, whether affecting most financial institutions or Yoma Bank uniquely, are fully covered, and a Contingent Funding Plan is developed. Liquidity levels are being strictly monitored for adherence to the Board’s specified minimums (as defined in the ALM policy) or the requirements prescribed by the CBM.
|Operational Risk covers many types of risk, including but not limited to, strategic risk, compliance, legal, technology, vendor, business continuity, reputation, financial crime, conduct, miss-selling, responsible lending, fraud and process failures.
|Balancing the cost and risk within the constraints of the risk appetite of the Bank and consistent with the prudent management required of a large financial organization
|Reputation Risk is the risk arising from negative perceptions from stakeholders that can adversely affect Yoma Bank’s ability to maintain existing, or establish new, business relationships and continue to access sources of funding.
|Yoma Bank’s Board of Directors periodically approves and reviews our Code of Conduct. During their onboarding, all the new recruits are trained to understand our Code of Conduct and their duties. Regarding the projects we finance, our Compliance Officer ensures that Yoma Bank operates according to its Anti-Money Laundering and Counter Financing of Terrorism Policy.
|Capital Risk is the risk that Yoma Bank failing to maintain the level of capital required by regulators or other key stakeholders (shareholders, investors, depositors, etc.) to support the Bank’s operations and risk appetite.
|Board of Directors is responsible to govern the Capital Adequacy of the Bank. Assets and Liability Committee monitors the growth of its assets and liabilities to ensure that capital adequacy levels can be sustained and provide sufficient buffer over minimum regulatory requirements. The risk team is also responsible to perform the annual stress testing of financial plan to confirm the sufficient capital adequacy to the potential downside risk.
|Social and environmental risk
|Business customers of the Bank have to assume their corporate responsibility. They might be liable for adverse impacts on people and/or the environment.
|Yoma Bank has set an Environmental & Social Policy to assess the underlying risks of its customers’ projects. The risks analysed cover various dimensions such as environmental, social, and governance-related risks. The Bank will not invest in or support various sectors as defined in section 2 of its policy.