Risk management

Clean and strong balance sheet

• Strong focus on collateralised lending

• Loan portfolio matches deposits, long-term debt and equity

• Strategic focus to limit LtD ratio

• Limited market risk and trading portfolios

Diversification and focus within the portfolios

Our loan portfolios are fully aligned with our strategic choices and priorities:

• The loan portfolios are protected against concentration risks across sectors, customers and countries

• Developments in the field of concentrations are closely monitored and reported monthly 

• Targeted growth of Corporate Banking in the countries around us and in selected sectors worldwide

• Diversification through digital challengers

Sound capital and liquidity management

• Capital and liquidity indicators exceed current regulatory requirements

• Liquidity buffer managed based on regulatory compliance and internal views

• Costs for liquidity buffer charged to business to ensure proper pricing incentives

• Stress testing used to manage capital & liquidity

Sustainability and transparency

• Sustainable relationships with clients centre stage: long-term interests above short-term gains

• Sustainable business operations (sustainable products, risk management, ecological footprint and a vital organisation)

• Financial expertise used for the benefit of society

• Sustainable and transparent finance and investment services

Structured approach on risk intake and monitoring

• Credit risk mainly in the Netherlands and diversified across the economy

• Operational risk monitored and controlled by setting limits on potential losses

• Market risk low in comparison to size of the bank

• Business risk continuously monitored; create a culture of innovation in a constantly changing banking landscape

Risk profile

As part of our long-term strategy, we are committed to maintaining a moderate risk profile. The risk profile is managed based on an integrated risk management framework. In this framework, all types of risk, cross-risk types and overarching risks are identified to provide one integrated view on the risk profile for the bank as a whole and on the risk profile of each individual business line. This is a yearly process which involves the relevant stakeholders and is subject to the approval of the Managing Board.

Risk taxonomy

We classify risks into types of risk to which the bank is, or could be, exposed. This is referred to as our ‘risk taxonomy’. We review and update it once a year to ensure that all material risks are identified, defined and taken into account in the risk governance framework. The risk taxonomy creates a common risk vocabulary and provides a checklist for use in risk assessments. Working this way helps us to manage all material risks and to identify roles and responsibilities.

The main categories are credit, market, operational, liquidity and business risk. Other types of risk such as reputational risk (including sustainability risk) and model risk relate to several risk types in the risk taxonomy.

Risk appetite

The risk appetite determines the level and nature of risk that the bank is willing to take in order to pursue its strategy, taking all relevant risks and stakeholders into consideration. The risks covered in the risk taxonomy are included in the risk appetite.

Risk culture

The bank continuously promotes risk awareness as part of the bank-wide risk culture. The moderate risk profile is embedded in the risk culture by means of communication and training and is monitored in performance assessments.