2010 ANNUAL REPORT
Bank Pembangunan Malaysia Berhad [16562-K]
40
Bank Pembangunan Malaysia Berhad (the Bank) is
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The Bank has been guided by its risk management ! " ! #
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management policies and procedures. + ! "
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the Bank and to ensure that risk management process is in place
,!#$ and recommend actions on all & 7?# operational risk and compliance risk and to assess the adequacy
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" ! # regulatory requirements and best practices. In doing %
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" ! # !#$ its independence.
RISK MANAGEMENT PROCESS
C as described below:-
#$% Analyse risks surrounding the activities
% monitor the effectiveness of risk management controls
RISK ASSESSMENT &' Quantify and assess risk impact
% Put system in place and recommend measures to mitigate risk
MANAGEMENT OF CREDIT RISK $ !
7 # risk encompasses establishing internal controls with a check-and-balance structure within the credit process ' & judgmental errors that could potentially impact the
# & loan assets throughout the credit process in order to sustain credit quality.
41 2010 ANNUAL REPORT
' C
" ! # &
Bank Pembangunan Malaysia Berhad [16562-K]
$ competencies as well as to keep current with the latest
2010 ANNUAL REPORT
# #( Credit Origination
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Credit Monitoring
$ between credit sourcing and credit processing.
Independent credit risk
$ !
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links the authority limits to credit amount.
Independent checking $
on non-compliance to credit disbursement conditions.
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rating to assess
$ V projects to determine
Proper selection and $
Bank Pembangunan Malaysia Berhad [16562-K]
42
$ $ % guidelines.
# arrears. In-depth post-mortem credit. H to ensure that credit
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? 9 F & throughout the credit period to detect any deterioration 7 $
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" ! # that all inherent risks could be managed. All product !#$ F
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management process. F 7
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43 2010 ANNUAL REPORT
F 7 XC HC ! / :H!/; C 7 C
Y & in place.
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Bank Pembangunan Malaysia Berhad [16562-K]
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2010 ANNUAL REPORT
$ .
Bank Pembangunan Malaysia Berhad [16562-K]
44
+ F $ ! # H $ 9 H " 9 8 #
(BNM) including guidelines as prescribed under the * X
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F ? to manage concentration risk. Limits are continuously
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F Y projects. The rating model is subject to enhancement lending requirements. F ! ,!#$ !#$ ,!#$ & & C
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\ 7 $ G "7, implemented. #$/ Y JQSQ ' the enhanced credit rating model in January 2011. This G
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MANAGEMENT OF MARKET RISK
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The risk to earnings or capital arising , At Risk (EAR) while under the economic f
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exchange options.
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& & time.
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& controls are in place to support business growth.
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C C C liquidity risk and asset-liability management and stress testing. # + F G G
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conditions.
45 2010 ANNUAL REPORT
Interest rate risk :
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Bank Pembangunan Malaysia Berhad [16562-K]
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2010 ANNUAL REPORT
Bank Pembangunan Malaysia Berhad [16562-K]
46
F
8 7 8 # 7 8 # ,!#$ / X* X* F ! ' V
,!#$ 7 ,!#$ & !#$ F 7 maintain the Net Interest Margin within the tolerance / Based on the simulations conducted on the interest rate ,!#$
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# ! will propose mitigations to adhere to internal limits. F , # 7 :#7 ; #7
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& ? & able to liquidate assets in a timely manner. The primary & + Represents the risk that the Bank will not be
G G reasonable cost.
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9 V H counterparties.
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/ G & crunch is met by money market borrowings and F ? & &
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established to monitor liquidity and concentration risk # !
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& are also assessed to monitor liquidity. Any requirements & and monitored.
1) 0 $ . 8# ? & X & the liquidity risk limit exposure such as New Liquidity X :8?X; # 7 Triggers (MAT) and stress testing. ? &
& 7 & & & to liquidity strategy. A general approach on liquidity &
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47 2010 ANNUAL REPORT
X +
F ! would be able to meet its short-term obligations and
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Bank Pembangunan Malaysia Berhad [16562-K]
MANAGEMENT OF LIQUIDITY RISK
2010 ANNUAL REPORT
MANAGEMENT OF OPERATIONAL RISK
Bank Pembangunan Malaysia Berhad [16562-K]
48
9 ! G making: F ? :}; ? , 9 ! are collated and reported. The collected cases are
' ,!#$ !#$ F 3 ! :3! ; and measure operational control weaknesses. Risk Limits were established to monitor actual risk taking
G such occurrences are reported to Management 3!
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~ ! # 3! monthly and some are reported on quarterly and yearly basis. F * S JQSQ9 ! ! $ /G7 :!$/7; 3 ! :3! ;
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F 9 ! : ; C G mitigations on the existing IT systems were also carried " F $ # $ H : $H; * ! H :*!H; to comply with the requirements set by Bank Negara Malaysia (BNM). The testing programmes were carried and to resume its business operations.
CREDIT AND REGULATORY COMPLIANCE $
credit compliance is to check and ensure that all Letters 9
7 7 & $
to loan disbursement conditions prior to submission to the 7 7 $
i.e. the regulatory requirements which the Bank must comply. These include statutory reporting requirements
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measures. $
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