Risk analysis

Risk management

In the conditions of the growing business the Bank attaches the extreme importance to risk management, inherent in bank activity.

The main objectives of risk management are: identification, classification of risks of Bank, definition and use of effective tools of an assessment and risk management, establishment of limits on the admissible level of risks, monitoring and taking measures to decrease and control of the risks connected with the operations performed by Bank.

In Bank the monitoring system, monitoring and risk management based on requirements of authorized bodies of the Republic of Kazakhstan, recommendations of Basel committee on bank supervision and the auditor companies operates.

Today the SB of JSC «Sberbank» participates in processes of integration of JSC «Sberbank of Russia» Group within risk management, projects in the field of a risk management are actively implemented.

The bank defines for itself essential the following types of risk: credit, market, risk of liquidity and operational risk.

Credit risk

Management of credit risk is defined by requirements of authorized bodies, policy of Bank on risk management, and also the internal normative documents regulating credit risks. Independent approach to an assessment and the analysis of the credit risks connected with the loan operations performed by Bank is the cornerstone of management of credit risks. For decrease in credit risks the Bank in the activity applies the following main methods and techniques:

• Joint decision-making at establishment/change of financing terms of borrowers;

• Restriction of credit risk by establishment of limits;

• The analysis of dynamics and quality of a credit portfolio, elaboration of actions for decrease in risks of a credit portfolio;

• Monitoring of observance of prudential standards and threshold values.

Market risk - risk of emergence of expenses (losses) connected with adverse changes of market parameters (an exchange rate, a remuneration rate, cost of financial instruments). Within market risk the Bank allocates currency, percentage and price risks.

The purpose of management of market risk is optimization of a ratio risk/profitability, minimization of losses at realization of adverse events and decrease in size of a deviation of the actual financial result from expected.

The currency risk represents risk of the currency losses connected with a change in the exchange rate of one foreign currency in relation to another when carrying out the external economic, credit and other currency transactions.

The bank is subject to currency risk which arises in connection with existence of open positions on foreign currencies and adverse changes of market rates. Within system of limits and restrictions. The bank sets limits of a total open currency position, limits of an open position in separate foreign currencies, limits of the maximum losses (stop-loss) on arbitration operations and a limit of losses of currency risk. These limits are reconsidered at least once a year.

For management of currency risk the Bank carries out process of identification, limitation of risk, and also its subsequent monitoring. As a result of conservative policy of Bank on management of an open currency position, the level of currency risk is estimated as low.

Percentage risk - risk (opportunity) of emergence of financial losses (losses) because of adverse changes of interest rates. The percentage risk can be caused by discrepancy of terms of claiming (repayment) of requirements and obligations, and also unequal extent of change of interest rates for requirements and obligations.

Because of susceptibility Bank to percentage risk, first of all as a result of investment of funds in the credits to clients and in securities on the fixed interest rates, in the sums and for terms, different from the sums and terms of deposits, and also other borrowed funds with the fixed interest rates, the Bank operates percentage risks by means of improvement of procedures of the analysis, forecasting and planning of interest rates. For reporting date the level of percentage risk in Bank remains at a low level.

Price risk - the risk of emergence of expenses (losses) owing to change of cost of a portfolio of financial instruments arising in case of change of conditions in the financial markets.

For control of level of price risk the Bank carries out monitoring such risk – metrics as VaR, DV01, carries out stress testing. VaR allows to estimate the maximum volume of the expected financial losses for a certain period of time with the set level of confidential probability. Stress testing can be defined as an assessment of potential impact on a financial condition of a number of the set changes in risk factors which correspond to exclusive, but probable events. DV01 determines the average size of the change of cost happening owing to change of profitability on 1 basic point.

Operational risk

Control of operational risk is exercised according to requirements of National Bank of the Republic of Kazakhstan, recommendations of Basel committee on bank supervision and is defined according to requirements of internal normative documents of Bank for management of operational risks.

Management of operational risks is directed on the prevention and/or decrease in the risks connected with possibility of losses as a result of shortcomings of the organization of activity, the used technologies, functioning of information systems, inadequate actions or errors of the personnel, inadequate construction business – processes, and also as a result of influence of external events.

In a control system of operational risk, in connection with susceptibility to operational risk of any activity, in Bank all structural divisions, branches and employees of Bank are involved. Control of operational risk is exercised them indissolubly from execution of the main functions.

For effective management of operational risk and calculation of size of operational risk the Bank uses the following elements of management of operational risk: collecting internal data on incidents of operational risk, collecting external data on incidents of operational risk, a self-assessment on operational risks, monitoring of key indicators of risk and indicators of control, the scenario analysis and mapping of risks. For ensuring complete and comprehensive management of operational risks elements of management of operational risks are used in a complex and is interconnected.

For regular monitoring of operational risk the Bank uses system of reports for the management of Bank and joint bodies involved in processes of management of risks.

For January 1, 2015 the level of operational risk (a share of expenses on a covering of losses of the realized operational risk in expenses of Bank) made 0,1%. Thus, the level of operational risk is estimated as accepted and is in limits of the set limit.

Today in Bank the system of limits allowing to provide the acceptable level of concentration of risks on a credit portfolio in a section of branches of economy works. For January 1, 2015 the greatest share of a loan portfolio is the share of such branches as branches Trade – 25,8% and Construction and operations with real estate – 12,3%. (See the appendix 4).

Quality of a credit portfolio of Bank following the results of 2014 remains at the acceptable level. The indicator of a share of loans, with arrears over 90 days for January 1, 2015 made - 2,2%. This indicator is much lower than an average value on the banking market (an average value on BSL for 01.01.2015 – 31,1%).

 

2.4. Financing of corporate clients of SB of JSC «Sberbank»

In bank the special attention is paid to crediting of corporate clients (large, medium and small business). As today small and medium business is a support of economic development of the state, the solution of problems of employment of the population, filling of domestic market domestic goods and formation of the competitive environment in many respects depends on it. For 01.01.2015 the number of corporate clients of bank made about 28 thousand is more than in 2013 for 31%.

In 2014 the Bank financed real sector of national economy for the sum more than 680 billion tenge, having exceeded an indicator of 2013 for 43%. Within a state program «A road map of business 2020» 343 projects for the total amount of 147 billion tenge are approved.

Programs of financing within the state support of small and medium business.

The SB of JSC «Sberbank of Russia» is the active participant of state programs of FDB «Damu», «Road Map of Business 2020».

The Road Map of Business 2020 program is developed for implementation of the message of the President of the Republic of Kazakhstan N. A. Nazarbayev to the people of Kazakhstan «New decade – New economic recovery – New opportunities of Kazakhstan» and the Strategic development plan of Kazakhstan till 2020. The program is one of mechanisms of realization of the State program on the development of the Republic of Kazakhstan forced industrial innovatively for 2010 - 2014.

The Sberbank the first financed the project within a state program on development of monotowns for 2012-2020 on production of polyfoam, polistirolblok and raw materials for insulating installation and construction works.

- The SB of JSC «Sberbank» and JSC «Fund of Development of Business Damu» signed the Cooperation agreement within the new program for financing of regional priority projects of small and medium business «The Damu regions of III» for the sum of 5,5 billion tenge.

On August 4, 2014 the Bank financed projects of small and medium business for the sum of 6 billion tenge, having ahead of schedule finished an application of funds of the subjects of small and average business received from Fund of development of business «Damu» within the program of crediting in the sphere of manufacturing industry. These funds were allocated from National fund of the Republic of Kazakhstan in the sum of 100 billion tenge and are the first tranche from 1 trillion tenge intended for development of national economy.

Within this program the Bank financed 22 projects of small and medium business in manufacturing industry, including 9 projects of the food industry for the sum of 1,6 billion tenge. Businessmen could obtain a soft loan under 6% for up to 10 years, and also refinance the operating loans.

«We could master ahead of schedule allocated funds that businessmen as soon as possible felt effect from support of the state. This money is already directed on creation new and modernization of the operating productions in manufacturing industry. We are sure, this program will give a new impulse to development of SMB, will allow to fill domestic market with goods of a domestic production, to increase an export potential and to bring business in the country to qualitatively new level», - the Chairman of the board of Sberbank in Kazakhstan Alexander Kamalov noted.

The fund of development of business «Damu» placed in Sberbank of 6 billion tenge within the Program of support of SMB in manufacturing industry. It is part of hundred billion which were distributed among 13 Kazakhstan banks with a high credit rating and the developed system of financing of small and medium business. Credit conditions within this program are very favorable to SMB – only 6% per annum for 10 years. The Sberbank mastered the allocated funds of term much earlier, having financed more than 20 interesting projects in 10 various regions of the republic.

On February 26, 2014 the Fund of development of business «Damu» awarded SB of JSC «Sberbank» of a rank of the best bank in implementation of the Road Map of Business 2020 program following the results of 2013.

 

3. Practice in Department of Marketing and PR of SB of JSC «Sberbank»

Externship was taken place in SB of JSC «Sberbank» in department of marketing and PR. The department of marketing and PR is engaged in development of recommendations for the correct policy of the company in the field of sale taking into account resources which are available for the company, and also extents of development of market condition to which they directly contact.

Development of recommendations about the most effective use of personnel resources, namely divisions which have any relation directly to sales.

Identification and providing actual information on the market to divisions of the company. The report on studying of demand for the sold production or rendering service, competition level, on possible partners, on expansion of the range of goods, services and other can be such information.

During passing of work practice in this department, I studied internal rules of department and bank in general, was also acquainted with structure, tasks, functional duties of employees of department. I studied internal normative documents of bank which include: planning «expenses on advertising», the plan of market researches, results of the researches «grocery analysis» (recognition of SB of JSC «Sberbank» on the cities, satisfaction of clients with quality of service etc).

The main objectives of department of marketing and PR enter:

• Studying of competitors: the analysis of their price policy, functional mission, their work with suppliers, dealers, clients. Detection of competitive advantages to the company will be result of it.

• Studying of clients. Namely: segmentation of the available clients, more correct selection of service, necessary for each segment, or goods, bringing information on it to the end user. Also as department of marketing holding special events for studying of clients (questioning, polls), holding actions, seminars for attraction, both new clients, and partners enters. Also can quite be engaged in participation in joint activity in social and other projects. Results of these measures there will be an increase of loyalty of clients to your brand, firm.

Advertising of goods or service: monitoring advertising and PR activity, drawing up the budget on advertising.

• Development of price and commodity policy and strategy.

• Situation analysis of the market.

• Forecasting of possible sales and volume of the occupied market share.

• Development (it is desirable together with other divisions that the purposes and tasks didn't disperse) strategy of activity of the enterprise in the internal and external markets.

• Definition strong and weaknesses of the company and their use in its further development.

As department of marketing search of necessary contacts for implementation of transactions, cooperation, signings of the necessary contracts also enters. Also in recent years tasks of marketing specialists include maintenance and development of the site of the company, group on social networks (SMM).

The department of marketing and PR is really necessary for the company in order that it had an opportunity to have and expand the market share that, respectively, means growth of sales level and as a result increase in profit.