TMBThanachart Bank Public Company Limited and its Subsidiaries (Formerly TMB Bank Public Company Limited and its Subsidiaries) Notes to the financial statements For the year ended 31 December 2021 36 6 Risk management Risk management approach Risk management is an integral part of the Bank and its subsidiaries’ business activities and strategic planning with the objective to optimize risks and returns and create sustainable shareholder value whilst remaining in compliance with regulatory requirements. The Bank and its subsidiaries have established a solid risk governance framework which serves as the foundation for consistent and effective risk management. The risk governance framework mainly consists of a clear risk governance structure, risk appetite, risk management policies, consistent risk management processes and an embedded risk culture. All of this translates into a straight-forward risk management strategy in which: - Products and portfolios are structured, underwritten, priced, approved and managed appropriately and within established risk appetites; - Compliance with internal and external regulations and guidelines is monitored continuously; - Our risk profile and risk appetite are transparent and consistent; - Delegated authorities are consistent with the Bank’s overall strategy and risk appetite; - Communication to internal and external stakeholders on risk management and value creation is transparent. 6.1 Credit risk Credit risk is the risk of potential loss as a result of borrowers and/or counterparties failing to meet their financial and contractual obligations in accordance with agreed terms. It arises primarily from granting loans and undertaking contingent liabilities, and also from certain off-balance sheet items products such as derivatives. The objective of credit risk management is to optimize the Bank’s risk-adjusted return by balancing the risk /return and by building a sustainable competitive advantage by integrating risk management into business activities and strategic planning. The Bank has established frameworks which set out Credit Risk Appetite, Credit Risk Policies and Guidelines and processes covering the measurement and management of credit risk. Credit Risk Appetite Statement (Credit RAS) Credit RAS is a formally documented statement of the maximum level of credit risk that the Bank and its subsidiaries are willing to accept in pursuit of its business objectives. The Bank and its subsidiaries develop and review its Credit RAS at Bank-wide level, BU level and Portfolio level, covering all relevant credit risk metrics to monitor the quality of credit portfolio and control obligor concentration. 280 TMBThanachart Bank Public Company Limited
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