Sustainability Report 2021

54 Introduction Customers Social Governance Appendix Environment Sustainability Report 2021 Risk management is a fundamental part of the Bank‘s business activities and strategic planning with the objective to optimize risks and returns and create sustainable shareholder value while remaining in compliance with regulatory requirements. The Bank has 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 riskmanagement processes, and embedded risk culture. All of this translates intoastraightforward riskmanagement strategy in which: • Products and portfolios are structured, underwritten, priced, approved, and managed appropriately 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 compatible with the Bank’s overall strategy and risk appetite. • Communication to internal and external stakeholders on risk management and value creation is transparent. Overarching Risk Governance The Bank maintains a risk governance structure that is intended to strengthen risk management by ensuring that risk-taking authorities are properly cascaded down from the Board to the appropriate committees and functional levels. Risk issues and changes in regulatory and business environments are managed in an efficient and effective manner. To maintain the independence of the Compliance function, Compliance has a dual reporting line to both the Audit Committee and Chief Risk Officer. Risk Management Chief Executive Officer Non-Financial Risk Committee Asset and Liability Management Committee Portfolio Management Committee Financial Markets Control Committee Legal Risk Committee * Also report directly to Audit Committee Board of Directors Credit Committee Risk Oversight Committee Chief Risk Officer IFRS9 ECL Committee IT Non-Financial Risk Committee Risk Policy Committee Credit Underwriting Committee Credit Restructuring Committee 1 Sub-Credit Underwriting Committee Credit Restructuring Committee 2 Risk Policy and Credit Risk Intelligence Credit Restructuring Underwriting Commercial Credit Risk Management Retail Credit Risk Management Market Risk Management Automotive Credit Risk Management Compliance* Corporate Operational Risk Management Legal The Bank’s Risk Governance Structure