ICICI Bank 2013 Annual Report Download - page 47

Annual Report 2012-2013 45
Going forward, we will continue to focus on expanding our rural and semi-urban outreach and providing a
comprehensive range of products and services customised to the needs of different customer segments
in these markets.
Treasury
Our treasury operations are structured into three verticals: proprietary trading group, customer related
markets business and the asset-liability management group.
Our proprietary trading business saw an increase in trading activity and profits during fiscal 2013. The
Bank also continued to focus on opportunities in corporate bond markets and was ranked second in
overall league table rankings for debt private placement according to Prime database. During the year, the
Bank won the Finance Asia Country Award under “Best Bond House – India” category.
In its customer related business, the Bank provides foreign exchange and derivative solutions to clients
and continues to be a major player in this segment. These products and services are aimed at managing
customers’ foreign exchange and risk hedging needs through forwards, swaps, options and bullion
services. The Bank hedges market risks related to these products with banking counterparties.
The balance sheet management function continued to actively manage the Bank’s liquidity and the
government securities portfolio held for compliance with Statutory Liquidity Ratio (SLR) norms to optimise
the yield on this portfolio, while maintaining an appropriate portfolio duration given the volatile interest
rate environment.
RISK MANAGEMENT
Risk is an integral part of the banking business and we aim at delivering superior shareholder value by
achieving an appropriate trade-off between risk and returns. Key risks include credit, market, liquidity,
operational, legal, compliance and reputation risks. Our risk management strategy is based on a clear
understanding of various risks, disciplined risk assessment and measurement procedures and continuous
monitoring.
The Board of Directors has oversight on all the risks assumed by the Bank. Specific Committees of the
Board have been constituted to facilitate focused oversight of various risks. Policies approved from time
to time by the Board of Directors or Committees of the Board form the governing framework for each
type of risk. The business activities are undertaken within this policy framework. Independent groups and
sub-groups have been constituted across the Bank to facilitate independent evaluation, monitoring and
reporting of various risks. These groups function independently of the business groups.
Our Risk Committee approves, every year, a detailed calendar of reviews. The calendar of reviews includes
reviews of risk management policies in relation to various risks, risk profile of the Bank, its overseas
banking subsidiaries and key non-banking subsidiaries, assessment of capital adequacy based on the risk
profile of the balance sheet, status with respect to implementation of advanced approaches under the
Basel framework and review of regulatory compliance issues. Our Credit Committee also approves every
year a detailed calendar of reviews covering the Bank’s exposure to particular industries and outlook for
those industries, analysis of non-performing loans, overdues, incremental sanctions and specific review
of each portfolio. A summary of the reviews carried out by the Credit Committee and Risk Committee
is reported to the Board of Directors. Our Asset Liability Management Committee is responsible for
managing the balance sheet within the risk parameters laid down by the Board and Risk Committee and
reviewing our asset-liability position.
We have dedicated groups, namely the Risk Management Group, Compliance Group, Corporate Legal
Group, Internal Audit Group and Financial Crime Prevention and Reputation Risk Management Group,
with a mandate to identify, assess and monitor the Bank’s principal risks in accordance with well-defined
policies and procedures. These groups are independent of all business operations and coordinate with
representatives of the business units to implement ICICI Bank’s risk management methodologies. The
Internal Audit Group and Compliance Group are responsible to the Audit Committee of the Board.