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FirstRand Banking Group’s Risk Management Framework
The FirstRand Banking Group has established a comprehensive risk management framework to mitigate various types of risks associated with trading positions, market risks, and operational risks. This framework is designed to ensure the accuracy and completeness of accounting records and the timely preparation of reliable financial information.
Risk Management Overview
The group’s risk management approach can be summarized as follows:
- Trading Limits: Day-to-day operations are managed by the Group Treasurer, with approved limits set by the board.
- Counterparty Risk: Managed in the dealing room with treasury, where dealers operate within assigned limits based on their knowledge, expertise, and experience.
- Underwriting Risk: Reinsured for mortality and morbidity risks above a set retention limit, with strict underwriting criteria and HIV testing for cover above certain limits.
Operational Risks
The group has implemented various measures to manage operational risks, including:
Market Risk Management
- Managed through the dealing room’s operationals systems
- Segregation of duties
- Security measures to prevent unauthorized access
Internal Audit
- Performs an independent appraisal activity with full cooperation from the board and management
- Examines business risks and internal control systems
Internal Control
The group has established a robust internal control system, which includes:
Segregation of Duties
- Implemented to safeguard assets
- Prevent error and fraud
- Ensure accurate accounting records
Written Policies and Procedures
- Established to maintain accountability of assets
- Ensure the integrity of financial statements
Conclusion
Overall, the FirstRand Banking Group’s risk management framework appears to be robust, with a focus on segregation of duties, written policies, and procedures to ensure the accuracy and completeness of accounting records and the timely preparation of reliable financial information.