Risk Management
Risk Management Strategy
Risk management objectives are clear and ADCB has developed a well established strategy to deliver them, through robust risk management processes and practices. Risks are proactively managed within the Bank, while the framework is flexible to incorporate new businesses the Bank undertakes. The framework is comprehensive and has been communicated from the Board of Directors down to the individual business lines.

Risk management activities broadly take place simultaneously at the following different hierarchy levels.

a) Strategic level: encompasses risk management functions performed by senior management and Board of Directors such as:
  • definition and identification of material risks;
  • ascertaining the Bank’s risk appetite and ensuring business plans are consistent with it;
  • formulating strategy and policies for managing risks;
  • independent review and challenge structures;
  • establishing adequate systems and controls to ensure that overall risk remains within acceptable levels and the rewards compensate for the risk taken.

b) Management (Macro) Level: encompasses risk management within a business area or across business lines. Generally the risk management activities performed by middle management or units devoted to risk reviews fall into this category.
c) Transaction (Micro) Level: involves ‘on-the-line’ risk management where risks are actually created. This is the risk management activity performed by individuals who take risk on the Bank’s behalf such as front office and loan origination functions. The risk management in those areas is confined to following operational procedures and guidelines set by management.

The Risk Management function starts at the highest level with the Board and Board-level committees, with the following committees contributing to risk management:
– Board Risk & Credit Committee (BRCC)
– Board Audit & Compliance Committee (BACC)

The following Executive Management-level committees also actively manage risk:
– Assets and Liabilities Management Committee
– Management Risk & Credit Committee
– Management Recoveries Committee

The Bank also has a Chief Risk Officer function, which oversees the Credit risk, Market risk, Operational risk, Compliance risk, and the Remedial risk functions.