Please activate JavaScript!
Please install Adobe Flash Player, click here for download
ePaper created 2013-04-15, 17:20:51 | version 1.25.7
Management report – münchener Hypothekenbank eg l annual Report 201236 Risk report The ability to monitor and keep risks under control at all times is essential for the successful management of business develop- ment at MünchenerHyp. For this reason risk management plays a very important role in the overall management of the Bank. The business and risk strategy defines the parameters of the Bank’s business activities. MünchenerHyp’s entire Board of Management is responsible for this strategy, which is regu- larly reviewed regarding the attainment of goals and updated as necessary and then submitted to the Supervisory Board. As part of its supervisory duties, the Supervisory Board is advised about the Bank’s risk profile no less than on a quarterly basis and additionally as required. This takes place using the reports concerning the Bank’s risk-taking capabilities, lending risks, as well as the risk report prepared in accordance with the “Mini mum Requirements for Risk Management” (MaRisk). The basis of risk management consists of, on one hand, the ana lysis and presentation of existing risks, and, on the other, com- paring these risks with the risk cover potential (ability to bear risk). Appropriate monitoring processes are in place involving internal process-dependent supervision to ensure that this bal- ance is maintained. Our internal audit department, as a process- independent unit, has the monitoring function within the Bank. The analysis and presentation of existing risks primarily dis- tinguishes between counterparty, market price, credit spread, liquidity and operational risks. Additional risks such as place- ment risks, reputational risk, business risk etc., are viewed as parts of the abovementioned risks and are taken into consid- eration at the appropriate place in the individual calculations. Counterparty risk Counterparty risk (lending risk) is of major importance for MünchenerHyp. Counterparty risk refers to the danger that counterparties may delay their payment obligations to the Bank, only make partial payments or even default. The Credit Handbook presents the competencies and procedural requirements of entities involved in lending, as well as the Bank’s credit products. The business and risk strategy contains addi- tional explanations pertaining to sub-strategies regarding target customers and target markets, as well as definitions for meas- uring and controlling credit risks at the level of individual deals and the portfolio level. A procedure based on the credit value- at-risk (Credit-VaR) is used to determine lending limits. The individual contribution of every borrower (aggregate debtor or borrower unit as appropriate) – the Marginal Credit-VaR – to the Bank’s total credit risk is limited. Furthermore, limits are also set for each country to ensure adequate regional diversification. We always take care to ensure that the vast majority of our mortgage business activities consist of top tier mortgages with moderate mortgage lending value ratios. Currently, the break- down based on mortgage lending value is as follows: