Risk management at Swedbank
Preventing and managing risk is central to Swedbank’s operations.
Risk management begins with our business operations – in meetings
with customers, for example – and encompasses every employee. Within Swedbank, a separate risk organisation ensures that risk management is conducted efficiently and in accordance with Group-wide procedures.
Risks arise in all financial operations. Swedbank shall have a low risk level. A strong common risk culture within the bank, with decision-making and responsibility kept close to the customer, serves as the foundation for efficient risk management and, by extension, a strong risk-adjusted return. A clear majority of credit exposures should be in mature markets such as Sweden. Swedbank achieves a favourable risk distribution by means of a broad customer base among private individuals and companies in many different industries.
As a financial partner, it is in the bank’s interest that its customers do not take unnecessary risks. This is why meeting with them is so important. Personal meetings provide an opportunity to give the customer advice on their entire financial situation. The customer’s solvency is analysed primarily with a focus on cash flow as well as collateral, and forms the basis for all lending. The long-term risk profile that the bank aims for is ensured by means of a favourable risk culture, clear operating guidelines and strong internal control of credit, market and operational risks.
| Risk | Description |
| Credit risk | The risk that a counterparty, or obligor, fails to meet contractual obligations to Swedbank and the risk that collateral will not cover the claim. |
| Market risk | The risk that changes in interest rates, exchange rates and equity prices will lead to a decline in the value of Swedbank’s net assets, including derivatives. |
| Liquidity risk | The risk that Swedbank cannot fulfil its payment commitments on any given due date without significantly raising the cost of obtaining means of payment. |
| Operational risk | The risk of losses resulting from inadequate or failed internal processes or routines, human error, incorrect systems or external events. |
| Other risks | Includes earnings volatility risk, insurance risk, pension risk, strategic risk, reputational risk and security risk. |
The risk organisation, which is organised under the Chief Risk Officer (CRO), is comprised of three specialised units: the risk control organisation, the credit organisation and Swedbank’s special units to handle problem loans (FR&R).
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