63 I N T E G R A T E D R E P O R T 2 0 2 1 R I S K M A N A G E M E N T CREDIT RISK MANAGEMENT In parallel, a set of client treatment strategies was developed. Consumer Finance clients were given a reasonable delay to pay their monthly instalments, with no penalty applied during the lockdown. In other cases, support measures, such as a moratorium, were granted to customers and sectors that were immediately and directly affected by COVID-19. Assessment of the economic impact on the existing portfolio We have reviewed our credit portfolio, assessed the impact of the crisis on our portfolio, defined our collection strategy, refined our risk appetite and reviewed our tactical and longterm strategies to meet the changes in client demand. Understanding the impact on our portfolio has been a collaborative effort between the business and risk team to identify stressed sectors and clients. We achieved this through a combination of expert judgment, early warning signals and public data. The Risk team has been working towards reinforcing the stress testing framework and conducted various stress-testing and scenario-based forecasting to project the expected credit losses under IFRS9 and to ensure we maintain adequate buffers in terms of capital adequacy, funding and liquidity ratios, thus, preserving our financial soundness against any expected credit losses. The business, together with the Risk and Finance teams, has used the results of the analysis to refine our near-term lending capacity and strategy in line with the risk appetite. 3 CREDIT RISK MANAGEMENT FRAMEWORK Risk Limit Management Credit Administration Early Warning & Monitoring Non-Performing Asset Management Risk-Based Pricing Independent Credit Officers Internal Scoring System Know Your Customer 1 2 3 4 5 6 7 8
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