KB prezent. angl - Komerční banka

Risk Management
Risk management at Komerční banka is based on an integrated concept which takes into account the advanced risk
management standards of the Société Générale Group and the statutory and regulatory norms laid down by the Czech
National Bank and other regulatory bodies. In its procedures, the Bank takes into consideration the world development in all
types of risk, i.e. credit risk, market and liquidity risk, and operational and regulatory risk.
Credit Risk Management
The Bank, in co-operation with Société Générale, has started, in the scope of the internal Basel II project, preparing for the
implementation of the New Basel Capital Accord rules on capital adequacy management. The main goal of the project is to
implement advanced methods for the calculation of the Capital Adequacy Ratio, based on the internal system used for credit
risk assessments of clients. The regular monitoring and reporting of operational risks has already been introduced.
Procedures for measuring the risk parameters of the loan portfolio are being improved to meet the Basel II standards.
The Bank performs regular calculations of the unexpected credit risk.
In 2003, the Bank made active use of the inter-bank credit register of individuals, set up and run by the main banks on the
Czech market. During the year, its use was broadened to include other products, increasing the ability of the Bank to identify
problematic clients as early as the assessment process of the applications. The Bank also provided the Czech National Bank
with data for the credit register of legal entities. In 2003, the Bank started using the register in the credit process and since
then has become increasingly reliant on this instrument.
During the year, considerable attention was paid to the development of advanced information systems designed for the daily
monitoring of limits and the Bank’s exposure to clients and economically connected groups.
Loan evaluation and monitoring
During the year, the Credit Risk Assessment units cooperated closely with business units to reduce the administrative burden
of credit process and apply procedures allowing for further improvement of credit process performance and flexibility. Most
attention was paid to the process of simplifying the credit file format and monitoring procedure. An example of this is the
expansion of the process of assessing the solvency of individuals and small entrepreneurs by evaluating the client’s transaction
history. The improved quality of client solvency evaluation is reflected in the acceleration and improved quality of the approval
procedure, but the Bank is also able to assess the level of the credit risk posed by individual clients better.
The development of the 4M system and Credit Risk Machine also continued; the 4M system is a reporting instrument for risk
assessment and the Credit Risk Machine monitors commitments dedicated to the largest KB exposures. KB also continued
using the DCCIT electronic tool for credit file circulation, building up expertise in specialised teams, and improving internal
monitoring. As a result of these activities, credit assessment delays were reduced, the quality of the KB loan portfolio
improved, and the productivity of the approval process increased.