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Risk Management Approach of the LLB Group
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The LLB Group, a banking institution, adopts a risk-conscious credit policy that helps it reliably fulfill its performance mandate. This approach takes into account various risks associated with lending and financial operations.
Key Elements of the Risk Management Approach
The LLB Group’s risk management approach includes:
- Differentiated evaluation of loan applications: Each loan application is evaluated based on individual circumstances.
- Conservative assessment of collateral values: The value of collateral is assessed conservatively to ensure that it covers potential losses.
- Individual calculation of affordability: Each borrower’s ability to repay the loan is calculated individually, taking into account their income and expenses.
- Compliance with standard equity requirements: Loans are approved only if they meet the required equity standards.
Compliance Risks
The compliance organization at the LLB Group focuses on three key areas:
Anti-Money Laundering (AML) and Combating Financing of Terrorism (CFT)
The company has implemented measures to prevent money laundering and financing of terrorism, including:
- Monitoring customer transactions for suspicious activity
- Verifying customer identity and address
- Reporting any suspicious activity to the relevant authorities
Tax Compliance
The LLB Group ensures compliance with tax laws and regulations by:
- Implementing a robust tax accounting system
- Ensuring accurate reporting of taxes to the relevant authorities
- Cooperating with tax audits and investigations
Regulatory Compliance
The company complies with all applicable regulatory requirements, including those related to banking, finance, and customer data protection.
The Three Lines of Defense Model
The compliance organization at the LLB Group uses the three lines of defense model to manage risk:
- First line: Day-to-day business operations are managed by employees who are responsible for implementing policies and procedures.
- Second line: Monitoring and control functions, including compliance, review and enforce policies and procedures.
- Third line: Internal audit ensures that controls are effective and provides an independent review of the company’s risk management processes.
Cyber Risks
The LLB Group takes cyber security seriously and has implemented robust measures to protect against cyber attacks, including:
- Robust IT systems
- Trained employees
- Directives on information security and data protection
Internal Control System (ICS)
The ICS at the LLB Group contributes to risk transparency by monitoring risks in business processes through effective control processes.
Business Continuity Management (BCM)
The BCM system at the LLB Group ensures that the company can continue to operate even in the event of a disruption or disaster, including:
- Identifying business-critical processes
- Establishing crisis teams
- Drawing up emergency plans
- Reporting regularly to senior management
Overall, the LLB Group’s risk management approach is designed to mitigate various risks, including compliance, cyber, and operational risks, while ensuring business continuity and protecting its reputation.