The bank has a comprehensive and integrated Risk and Capital Management Framework guiding the management of all risk exposures and ensuring that the bank has adequate capital to cover and mitigate these risks. This framework follows Bangko Sentral regulations to implement an active and effective Internal Capital Adequacy Assessment Process (ICAAP) and risk management processes within the bank.
The Board carries out its risk management function through its Risk Management Committee, which is tasked with nurturing a culture of risk management across the enterprise, proposing guidelines and regularly reviewing risk management structures, metrics, limits, and issues across the BPI Group, in order to meet and comply with regulatory and international standards on risk measurement and management. The committee also supports technology and training for key personnel in risk management.
Major identified risks in the bank's business are credit risk, market risk (interest rate risk and liquidity risk) and operational risk (people and process risks, information security, technology and physical security risks, model risk, compliance and regulatory risks, legal and tax risks, and reputation risk, amongst others).
The Risk Management Committee reviews the reports from the bank's various management committees and business units that are necessary to identify, monitor and assess the risk exposures and capital adequacy and their implications to the Bank.
It also reviews and recommends to the Board the approval of the bank's risk and capital management policies, and the appropriate capital structure for the bank in support of long-term strategic objectives, current business plans, and risk appetite.
The committee also reviews, approves and confirms proposals relating to risk limits, risk exposure allocation, capital allocation and other related risk management policies.
Several committees and units manage the bank's financial and non-financial risk exposures at the management level. The Chief Risk Officer leads the Risk Management Office, and supports the Risk Management Committee by recommending risk management policies and methodologies, closely coordinating and facilitating risk management best practices with the various business units. In the process, the CRO promotes an enterprise-wide risk management awareness, learning and appreciation.