Investor Relations

Risk Committee - Terms of Reference

Risk Committee - Terms of Reference

I. MANDATE

I. MANDATEThe Risk Committee is a Board level committee which provides oversight of the risk management of the Bank. Its mandate is to establish the Bank’s overall risk appetite and risk management framework, and to oversee senior management’s implementation of the Bank’s risk policies. It shall ensure that best practices in risk management are used by the Bank wherever appropriate.

The Risk Committee is authorized by the Board of Directors of the Bank (“the Board”) to obtain external expert advice on risk related matters at the Bank’s expense if it considers it necessary.

II. FUNCTIONS

II. FUNCTIONS

1.	The Risk Committee shall annually review and endorse the Bank’s risk appetite statement and risk management strategies as formulated by the management of the Bank (the “Management”) for full Board’s approval.
2.	The Risk Committee shall review and assess the adequacy of the Bank’s risk management framework and polices in identifying, measuring, monitoring and controlling risks and the extent to which these are operation effectively.
3.	The Risk Committee shall oversee to ensure that an effective anti-corruption policy, including anti-money laundering issues, is established, maintained, consistently followed and regularly reviewed. The Risk Committee, including the INEDs as independent third parties, shall actively assist in monitoring the effective implementation of the anti-corruption policy and controls and in reporting promptly to the Board any discrepancies or irregularities detected.
4.	The Risk Committee shall oversee the establishment and maintenance by senior management of appropriate infrastructure, resource and systems for risk management, particularly in relation to the compliance with relevant legal and regulatory requirements and adherence to the approved risk appetite and related policies, and the adoption of best practices wherever feasible.
5.	The Risk Committee shall review and endorse all matters relating to capital management, including the results of the Bank’s Internal Capital Adequacy Assessment Process (“ICAAP”) for full Board’s approval.
6.	The Risk Committee shall ensure that the staff responsible for implementing risk management systems and controls are sufficiently independent of the risk taking units in the Bank.
7.	The Risk Committee shall review and approve the risk management policies of the Bank other than (i) policies relating to capital management which shall be reviewed and approved in accordance with the provisions of Clause II.4, and (ii) credit risk management policies which shall be reviewed and approved by the Executive Credit Committee (“ECC”). The Risk Committee shall seek approval from the full Board if the Risk Committee considers such risk management policies or any amendments thereto to be material.
8.	The Risk Committee shall review and approve various major risk limits of the Bank other than (i) limits relating to capital management which shall be reviewed and approved in accordance with the provisions of Clause II.4 and (ii) credit risk limits which shall be reviewed and approved by ECC.
9.	The Risk Committee shall review periodic reports provided by the risk management function on the state of the Bank’s risk culture, risk exposure and risk management activities.
10.	The Risk Committee shall review periodic reports provided by the compliance function.
11.	The Risk Committee shall oversee and challenge the result of stress testing and scenario analysis as formulated by the management.
12.	The Risk Committee shall examine, without prejudice to the tasks of ECC, whether the Bank’s credit risk management policies align with the Bank’s risk culture and risk appetite.
13.	The Risk Committee shall examine, without prejudice to the tasks of the Nomination and Remuneration Committee, whether incentive programs created by the remuneration system are aligned with the Bank’s risk culture and risk appetite, and whether remuneration awards mechanism appropriately reflect risk-taking and risk outcomes.
14.	The Risk Committee shall conduct annual assessment on the performance of the risk management functions of the Bank by reviewing the self assessment report prepared and submitted by the Management.
15.	The Risk Committee shall ensure the appropriateness of the key risk management staff of the Bank and that they possess adequate qualification for the positions appointed to by reviewing the risk management resources report prepared and submitted by the Management.
16.	Chairman of the Risk Committee shall verbally or in writing report to the Board of important matters declined and/or approved in the Committee in the next Board Meeting.
17.	The Risk Committee should approve the Environment, Social and Governance (“ESG”) Strategy & ESG Plan on annual basis and receive a semi-annual ESG progress report prepared by the Management.

III. MEETING FREQUENCY AND MINUTES

III. MEETING FREQUENCY AND MINUTESMeetings shall be held at least four times a year and more frequently when deemed necessary.

The Company Secretary will serve as the secretary of the Committee and shall be responsible to produce and distribute such papers for, and minutes of, the Committee’s meetings as appropriate.

IV. MEMBERSHIP AND QUORUM

IV. MEMBERSHIP AND QUORUMThe Board shall appoint designated members of the Board as members of the Risk Committee. Majority of the members of the Risk Committee should be Independent Non-Executive Directors.

The Risk Committee should be chaired by an Independent Non-Executive Director. The Chairman should not be the same person as the Chair of the Board or of any other Board committee.

Each appointed Risk Committee Member shall hold office until the earlier of (i) such time as the Board determines to terminate his/her appointment, or (ii) the Committee Member ceasing to be a member of the Board of Directors of the Bank.

Committee meetings must have a quorum of not less than two Committee Members.

The Committee may invite any director or employee of the Bank to attend any of its meetings as it may from time to time consider desirable to assist it with the attainment of its objectives.

V. GOVERNANCE

V. GOVERNANCE A. Approval of Resolutions

Resolutions shall be determined by a majority of votes of the members present at a meeting. In the case of equal votes, the Chairman of the meeting shall have an additional or casting vote (Article 106 of the Articles of Association).

A resolution in writing signed by a majority of the members of the Risk Committee shall be valid and have the same effect as a resolution passed at a meeting of the Committee (Article 114 of the Articles of Association).

B. Frequency of Review

The Committee shall review at least annually its Terms of Reference and recommend to the Board any necessary changes.

VI. REPORTING

VI. REPORTINGThe Committee shall report to the full Board on important matters discussed. The report shall include important matters discussed and/or approved, events which require the attention of the full Board and matters endorsed for full Board’s approval, and any other matters deemed appropriate by the Committee’s Chairman.

28 May 2024