Corporate governance

Effective corporate governance is the key condition for performing successful bank functions. It is a significant area which determines stable development and protection of shareholders, customers and other stakeholders’ rights in increasing the efficiency of the financial organization.

The activities of the Bank are associated with various risks. Therefore, there exists a need to have a full-blown approach to Corporate Governance and to Internal Control. In order to establish a clear system of Internal Control the Bank makes careful and regular assessments of the characteristics and the levels of the risks.

A full-blown Corporate Governance structure exists at the Bank, which includes the superior management body – general meeting of the shareholders, the Supervisory Board of the bank with independent members, the Executive Board of the Bank and Revision Committee , 5 committees under the Executive Board of the Bank and 3 Committees under the Supervisory Board of the Bank, the composition of which includes the members of the Supervisory Board.

Committees of the Supervisory Board of the Bank:

• Committee on Strategic Planning, Development and Corporate Governance;
• Audit Management Committee;
• Risk Management Committee;
• Appointment and Remuneration Committee.

Committees of the Executive Board of the Bank:

• Assets/liabilities and Financial Risk Management Committee;
• Credit Committees of two levels;
• Committee for setting tariffs for banking products;
• Committee on Information Technology and Innovations.

All of the structural bodies of the management are aimed at minimizing and preventing risks, which are the integral parts of banking business.

The management system of assets, liabilities and financial risks performs main functions to maintain the sustainability of the Bank and profitability of bank operations at necessary levels. The main objectives of the Committee are as follows:

• To assist the Executive Board of the Bank in performing its regulatory and supervisory functions in control areas over the analysis system improvement, consolidation and the financial risk management;
• To determine the main areas of the financial development of the Bank by taking into account the maintenance of optimal liquidity, high profitability, minimization of financial losses and coordination the activities of the various units of the Bank in order to ensure effective liquidity management;
• To select optimal and balanced assets and liabilities structure;
• To manage the flow of funds in balance.

Two Credit Committees operating at the Bank are intended to maintain the maximum elimination level of credit risk. The objectives of the committees are as follows:

• To review, approve and ensure the conformity of policies and procedures for the assets-related operations of the Bank;
• To set the limits of the credit risk in order to manage the diversification and the level of the credit risk;
• To establish control over the proper performance of all assets-related operations;
• To analyze the credit portfolio; to ensure control over its quality, the level of its profitability, diversification, appropriate reserve creation; to develop and take appropriate measures to mitigate risks.