Finance and risk management

The Group Chief Financial Officer represents the LLB Group’s Group Executive Board. He is in charge of:

  • Risk management: it is based on risk policy and encompasses the systematic identification, assessment, reporting, management and monitoring of credit risks, market risks, liquidity and operational risks as well as asset and liability management (ALM).
  • Overall bank management: it ensures transparency at all management levels in order that costs, income and risks can be managed in line with corporate strategy and in an efficient and timely manner. This includes medium-term planning, budgeting and the Group Management Information System (MIS).
  • Financial management: it encompasses the establishment of accounts in accordance with local laws and International Financial Reporting Standards (IFRS), reporting as well as the treasury.
  • Credit management: it exercises efficient and effective credit processes as well as timely credit decisions according to valid directives and instructions in a risk-oriented and profit-oriented manner.

Comprehensive risk management

Part of the banking business is to accept risks. It is essential for the protection of the LLB Group’s financial power and reputation that we prudently deal with risks within the scope of our strategic priorities. The LLB Group manages risks according to strategic targets (see chapter “Risk management”). It applies an adequate organizational and methodological framework for risk assessment and risk management. We ensure that we can always provide adequate liquidity and capital to cover all essential risks with the “Internal Capital Adequacy Assessment Process” (ICAAP).

Risk management is part of our business planning process. Both the Board of Management and the Board of Directors are strongly involved in it. Our risk culture entails that all members of Management are consciously aware of and sensitive to risk factors and risks. The handling of risk scenarios is anchored in our departments for financial control and risk control. A holistic and forward-looking perspective sustainably contributes to creating value for the whole enterprise.

Internal control system (ICS)

The LLB Group applies standards that are customary in the banking industry for the internal control system (ICS), a sub-system of corporate risk management. In 2014, we continued to expand our ICS. It contributes to increasing risk transparency within the company as an integral part of our Group-wide risk management by linking the relevant business processes with the concomitant risks and by monitoring them through effective control processes.

Independent credit management

Within the LLB Group, credit competences are assigned in relation to the current expertise of key employees and their experience according to different levels and credit types. The authority to grant credit has been given to Group Credit Management and the Credit Committees, with the exception of standard business transactions. This ensures that credit decisions are made independently of market pressures and market objectives. In this way, we are able to avoid conflicts of interest and objectively and independently assess risk in individual cases.

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