2013 Annual Report
179%
PROVISIONING FOR NPL IN EXCESS
OF 90 DAYS
Santander
Encinat
RISK
MANAGEMENT
PRUDENT RISK
MANAGEMENT
Involvement of top management
in decision making is a key
advantage.
2013 was a year marked by an
economic growth below expectation.
Important factors such as higher
inflation rates and thus the need to increase the
benchmark interest rate took a toll on credit
markets. Therefore, even with a low
unemployment rate, the trend for an increase in
household indebtedness persisted, another factor
that contributed with credit deceleration.
Under this scenario, credit risk management was
one of the main focuses of the year as it
demanded the review of credit concession
policies, and new follow up procedures and
methods to recover loans. As a result the Bank
enjoyed a considerable reduction in NPL ratio
and a tighter control in loan concession.
THE BANK KEEPS A RISK
PROFILE THAT IS CONSISTENT
WITH OUR PROFITABILITY, IN
SUCH A WAY AS TO OFFSET
THE ESTIMATED NPL RATIO,
BOTH IN TERMS OF CLIENTS
AND PORTFOLIOS
Risk Committee Meeting with participation of the
Brazil and Spain teams
R$ 2.4
Billion
IN RECOVERED CREDITS
Dealing with uncertainties in the economic environment
while assessing the risks associated with each scenario is
an integral part of the baking activity both locally and
worldwide. Risk management is the security foundation
for decision making in the Bank and provides better
control over potential losses while making business
performance sounder and more sustainable.
Santander Brazil abides by the Santander Model, relying
on prudent risk management with the definition of
appetite for risk provided by top management. One of
the characteristics of the Bank performance in this
activity is the direct involvement of top management in
decision making, which takes place on a team basis in
the Risk Committee, which is independent from the
business areas.
The management style adopted by Santander Brazil includes
the use of statistical tools such as scoring and internal
valuation models (credit scoring, behavior scoring, rating),
return on risk-adjusted capital (RORAC), Value at Risk (VaR),
economic capital and scenario analysis.
RISK GOVERNANCE
The Risk Management structure is defined according to the corporate standards and meets the requirements
of local regulations.
Chairman
Executive Vice-Presidency
for Credit & Market Risks
Board of Directors
Executive Risk Committee -
Brazil
Higher Committee for
Client Risks
40 Annual Report 2013
Executive Board for Credit
& Market Risks
Other Committees for Retail
& Wholesale Credit Risks
Risk Organization Charts and Authority Structures/Committees. Participation of top management in credit decision making
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