ING Direct 2013 Annual Report Download - page 264

Risk management continued ING Bank
Within ING Bank, the ultimate authority to set the risk appetite and approve or decline credit proposals resides with the MBB. The MBB
has further delegated authorities, based on amounts and tenors to lower levels of the organisation. Transactions are approved via a dual
signatory approval system that requires an individual sign off from both front office and credit risk management. For larger and higher risk
credits a committee structure exists whereby the credit risk chair takes the final decision with support of the respective committee
members, thereby ensuring accountability. Retail business units have delegated authority to decide within policies and mandates approved
by CRM and any decisions outside those policies or above the delegated mandate require a specific credit risk approval.
Risk governance per business activity
There is a split between commercial banking and retail banking. In practice, CRM consists of the following units; Commercial Banking CRM
(CB), Global Credit Restructuring (GCR), Credit Capitals and Retail Risk Management CRM (CC&RRM), Information Management Services
(IMS) and Strategy and Business Management (S&BM).
Chief Risk Officer
Credit Risk
Management Bank
Commercial Banking
CRM
Global Credit
Restructuring
Information
Management Services
Strategy & Business
Management
Commercial Banking &
Corporate Line
Retail Banking Benelux
& International
Credit Capitals &
Retail CRM
Credit risks of commercial and retail banking are monitored by Commercial Banking CRM, Global Credit Restructuring and Retail Banking.
These units are guided, instructed and supported by Credit Capitals, Information Management Services and Strategy & Business
Management. Each head of the five units reports directly to the CCRM General Manager. As shown in the organisation chart, the CRM
General Manager reports directly to CRO.
The CRM role encompasses the following activities:
• Measures, monitors and manages the credit risks in the Bank’s portfolio
• Challenges and approves new transactions or any changes to previously approved terms and conditions applicable to clients
• Manages the levels of provisioning and risk costs, and advice on impairments
• Provides consistent policies and systems and tools to manage the credit lifecycle of all credit risk taking activities.
A range of committees are in place at CRM level both at transactional and policy level. The Global Credit Committee for Transaction
Approval (GCC(TA)) is the highest approval authority level within ING Bank (with the exception of MBB and ING Bank Supervisory Board),
and is mandated to discuss and approve transactions entailing taking of credit risks. Next to that is the Global Credit Risk Committee
Policy. GCC(P) is the highest level ING Bank body (with the exception of MBB), which is authorised to discuss and approve policies,
methodologies and procedures related to credit risks within ING Bank. The Credit Risk Committee (CRC) is the next highest level ING
Bank body, authorised to discuss and approve policies, methodologies and procedures related to Credit Risk within ING Bank. The
Models Development Committee (MDC) serves as a technical advisor to CRC and is a planning body for future model development. The
Credit Portfolio Committee is a committee advising Bank ALCO and GCC(P) on ING Credit Risk Appetite. CPC can also advise the MBB,
GCC(P) or the Line of Business (LoB) to update the appetite for risk and/or to take specific actions on ING’s own assets. The ING Bank
Provisioning Committee (IPC) is the sole Approval Authority that can approve Loan Loss Provisions (LLP) amounts for all ING Bank
entities. The Group Impairment Committee (GIM) decides on the quarterly impairments. The IPC and GIM are executed in connection
with the Finance department.
Commercial Banking
Commercial Banking manages the credit risk of the commercial banking activity i.e. the corporates, sovereigns and counterparties. There is
a functional reporting line from the regional CB risk departments to CB CRM. There is a hierarchical reporting line from the risk
departments Corporate & Structured Finance, Real Estate Finance, Counterparty & Investment and Real Estate & Other to CB CRM. Several
reports are made regularly for monitoring and managing purposes. These reports are intensively discussed with the (regional) risk
managers. RWA developments are monitored on portfolio level and per individual client during the month.
Commercial Banking has specific delegated mandates. The approval process for Issuer and Corporate Credit Risk is based on mandates for
approval signatories, except for the GCC. Each mandate is further broken down into categories, each representing a different Delegated
Authority in amounts. For Counterparties the approval authorities and committees consists of GCC, Counterparty Credit Committee
(CPCC) and mandates on (sub) regional or (local) unit level.
262 ING Group Annual Report 2013