The objective of CDB's risk management policy is to minimise the
financial risks to which the Bank is exposed. Although it is not the
Bank's primary goal to maximise profitability, its policies are designed
to create stable conditions for the business operations of the Bank
and contribute to a steady growth and preservation of capital and
reserves. The key risks actively ma-naged by the Bank include the
following:
As mentioned earlier, the Bank has implemented a credit management
system that separates the function of evaluation from that of administration
with respect to its lending activity and its loan portfolio management,
for both local currency and foreign currency businesses. The ultimate
credit decision-making power generally rests with the Credit Committee
of the Bank. Credit evaluation, credit servicing and credit administration
is segregated in the lending process. In order to ensure that the
loan proceeds are used for their intended purpose, the Bank generally
disburses loans according to a schedule to coincide with actual project
expenditures as they are incurred.
The Bank has also worked closely with international advisors and
consul-tants to identify methods to improve its credit risk management
techniques. The integration of these recommendations in the daily
operations of the Bank has led to positive changes in the organizational
structure, credit management procedures, performance evaluation,
and client risk rating systems, among other areas, in the Bank in
1999.
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