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trigger levels and thresholds for the indicators were deter-
mined based on regulatory requirements (CBN), the Bank’s The Group gives the Risk Management Group a critical
Risk Appetite, as well as global best practices. These indica- depth and dimension in its risk management activities as it
tors have different monitoring frequencies and a threshold relates to data management and integration. The Group is
breach will trigger a series of actions as specified in the plan. responsible for enhancing all core risk analytics and report-
ing functions that previously resided in the respective risk
In line with best practice, we have identified a wide range areas within our Enterprise-wide Risk Management (ERM),
of recovery options that will mitigate different types of while the Bank’s pre-defined governance structures in re-
stress scenarios and steer the Bank back to a business as spect of the above-mentioned functions are retained by
usual condition. The Bank’s Internal Capital Adequacy As- the respective risk groups.
sessment Process (ICAAP) and Internal Liquidity Adequa-
cy Assessment Process (ILAAP) are the bedrock on which The Group remains the key driver in ensuring that Access
the scenario planning and stress testing are formed. These Bank fully implements Basel II/III to the most advanced
scenarios cover both idiosyncratic and market-wide events, levels in alignment with the Central Bank of Nigeria (CBN)
which could lead to severe capital and liquidity impacts as prudential guidelines. The team is also responsible for the
well as impacts on our performance and balance sheet. For Internal Capital Adequacy Assessment Process (ICAAP),
each recovery option, the impact on capital and liquidity is stress testing, Liquidity Risk measurement and other risk
quantified. The timing to realization of benefits, franchise measurement activities. The Group aligns its reporting with
impact as well as likely effectiveness is evaluated. The im- the Bank’s predefined governance structure such as Board
plementation plan and timeline are delineated, risks and Risk Management Committee, Board Credit and Finance
regulatory considerations are also assessed. Committee and Enterprise-wide Risk Management Com-
mittee.
The Board of Directors (“Board”) owns and is responsible
for the Recovery Plan. The Chief Risk Officer is charged with The functional set up of the Risk Analytics and Reporting
the responsibility of maintaining the Recovery and Resolu- group is as follows:
tion Plan and making submission to the regulatory author- • Data management and integration
ities. • Integrated Risk Analytics
• Integrated Risk Reporting
RESOLUTION PLANNING
DATA MANAGEMENT AND INTEGRATION
Globally, regulators of financial institutions are seeking to
mitigate the risk of market-wide disruption from bank fail- This unit is responsible for the development and mainte-
ure as occurred in the previous financial crisis. To facilitate nance of the enterprise risk data architecture with a road-
this, regulators require information from banks to enable a map geared to promoting data integrity, data quality and
resolution strategy to be put in place. No definitive descrip- ensuring integration with risk analytics and reporting.
tion of resolvability exists, but regulators wish to ensure that
impact of failure is minimised, access to deposits are main- The Group has a data governance structure which enforces
tained, payment services continue and the risk of a fire sale risk data governance and discipline across the Bank as well
of assets, which may cause financial instability is minimised. as data quality measurement metrics to reduce the Bank’s
risk exposure due to data quality issues.
The Central Bank of Nigeria (CBN) Minimum Contents for
Recovery Plans and Requirements for Resolution Planning An efficient structure has been put in place to ensure au-
outlines minimum information which should be included in to-reconciliation of data across risk and finance silos to
a resolution pack which would assist the resolution author- improve timeliness and consistency of risk reporting. The
ities in carrying out their statutory responsibilities. These Group is in the process of developing a data structure mod-
information have been provided in line with the regulatory el which will support the risk analytics and reporting activi-
guidance. ties, thus driving improvements.
RISK ANALYTICS AND REPORTING INTEGRATED RISK ANALYTICS

The Bank’s Risk Analytics and Reporting Group continues to The Group guides the analytical input into the implemen-
champion the development and entrenchment of integrat- tation of various risk software and their on-going imple-
ed data architecture to enhance risk analytics and reporting mentation in credit risk, market risk, operational risk and
within the Bank’s enterprise-wide risk management (ERM) other risk areas. The Group drives the development as
space. The Group has aligned its governance and functions well as implementation of the internal and regulatory risk
to that of leading global financial institutions and also con- measurement methodologies and models for the core risk
sidered all contents as seen in most jurisdictions where risk elements; examples of the model are Rating models, Scor-
management is best practised. ing models, Probability of Default (PD), Loss Given Default

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Annual Report & Accounts 2017