96 / 316
AfrAsia Bank Limited and its Group Entities
Annual Report 2015
page 94
The Board of Directors is responsible for setting the Bank’s tolerance for country risk. It has delegated authority for the day-to-day
management of the country risk policy to MCC.
This policy will also ensure effective oversight by the Board of Directors and Senior Management in ensuring that country risk is managed
satisfactorily.
LOANS AND PLACEMENTS AS OF 30 JUNE 2015
COUNTRY EXPOSURE: LOANS AND PLACEMENTS
The Bank regularly compares its internal risk ratings with the ratings of the major international rating agencies. Country risk limits are
reviewed regularly, in conjunction with the review of country risk ratings. Country risk limits are set by the Board Risk Committee.
RISK ASSESSMENT
Assessment of country risk involves the determination of the nature of risks associated with individual country exposure and the evaluation
of country conditions. In this connection, the Bank conducts a thorough evaluation of risks associated with its cross-border operation and
which have the potential to adversely affect its risk profile.
The aim is to identify the risk of a shock, such as an economic crisis or a sudden change in the political environment that would affect those
conducting business within a country.
The Bank utilizes two types of approach:
a bottom-up approach analysis of the country risk pertaining to each cross-border credit files, placements, financial products (among others)
a top-down approach:
• analysis of the concentration/diversification of country risk in the Bank’s portfolio
• analysis of the global or regional economic and political movements and their adverse impacts on the country risk profiles
15,000,000
10,000,000
5,000,000
0
Mauritius
UK
South Africa
India
Nigeria
Others
Kenya
Zambia
Uganda
Mozambique
Angola
Rest of Europe
Zimbabwe
Singapore
Republic of China
USA
Maldives
Madagascar
Botswana
UAE
RISK MANAGEMENT REPORT (CONTINUED)