Annual Report
2017

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Introduction

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Effective risk management is a prerequisite for efficient and safe development of the bank and the group. mBank Group manages all relevant risks inherent in the implementation of its operating strategy, based on regulatory requirements and best market practice.
The ever-changing environment of the group, both technological and regulatory, require broader and more comprehensive knowledge and continuous improvement of the risk management process. This is why mBank Group has been applying and developing innovative methods and tools to identify, measure and control risk.
Professional risk management in the group relies on competent employees continuously upgrading their knowledge and skills. The group supports the development of its employees and fosters the culture of cooperation and knowledge-sharing.

Cezary Stypułkowski
President of the Management Board of mBank

Responsible development of mBank Group would be impossible if it was not for the multidimensional process of risk control and management, which has been constantly enhanced and streamlined. At the same time, we direct careful attention to implementing the adopted strategy, which is based on three pillars: client-centricity, competitive advantage in mobile solutions and systematic effectiveness improvement.

  • Establishment of the Investment Banking Committee. The Committee is responsible, in particular, for the control and management of risks (including market, credit, reputational and operational) of the Brokerage House transactions and making decisions regarding the execution of these transactions.
  • The IFRS 9 implementation project was continued. The IFRS 9 standard has been in force since January 2018. The mBank Group completed key project work including the implementation of all critical databases and calculators to the extent necessary for the application of the new standard from January 1, 2018. The project will be continued in 2018 in the scope of other changes and adaptations in IT systems.
  • Risk appetite was defined for the subsequent planning horizon with special attention paid to 2018. Conclusions from analyses and discussions on potential impact on the Group of several issues identified during the managerial dialogue with particular emphasis on the package of non-financial risks, were taken into account while formulating risk appetite.
  • The Limit Book was updated and limits for 2018 were set. Limits for new LAB measures (which replaced previously used ANL measures) were introduced within liquidity limits.
  • Review and update of the Risk Management Strategy of the mBank Group and the other strategies for managing particular risks (credit risk in the corporate and the retail areas, market risk, liquidity risk, operational risk and reputational risk).
  • Implementation of the Concentration Risk Management Strategy of mBank Group. The strategy, defining the framework for managing concentration risk using the existing system of limits and stress tests, was approved by the Management Board and the Supervisory Board of the bank.
  • The internal capital adequacy assessment process (ICAAP) and the internal liquidity adequacy assessment process (ILAAP) were reviewed. The results of the reviews were presented to the Management Board and the Supervisory Board of mBank.
  • Periodic risk inventory process was carried out resulting in the update of the Risk Catalogue of mBank Group. The process was carried out in accordance with the modified rules (as a result of ICAAP review). The key change consisted in inclusion in the Catalogue of all risks identified in the Group’s operations (previously the Catalogue included the list of material risks).
  • Programme of continuous increase of work efficiency based on the Lean Management rules was continued. Further processes in the risk management area are reviewed and streamlined using the lean philosophy and tools. The purpose of the programme is to allow the growing number of tasks accompanying business growth and increasing number of regulatory requirements without the need to significantly increase resources and to reallocate resources from the streamlined operating areas to the areas where resources need to be increased due to the realized projects or growing scope of tasks.
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