Operational Risk

The operational risk results from intentional or unintentional deviations from the standards adopted in daily operations of Hipoteku banka, for example human mistake of fraud, disturbances in the operation of the information systems, insufficient control procedures or their ignorance. Hipoteku banka manages operational risk according to the Operational Risk Management Policy. The Internal Control System provides management and control of the operational risk in the Bank. Hipoteku banka uses self-assessment method to measure the operational risk, whereas the Bank's operational risk information system is used to identify, analyse and control the operational risk. The structural units of Hipoteku banka are responsible for the management of the operational risk in the daily operations, but the Risk Management Committee monitor the operational risk. The Risk Management Department is responsible for the implementation of operational risk management in Hipoteku banka.

Hipoteku banka has implemented Business continuity plan that includes guidelines on actions to be taken by the Bank, its structural units and employees at occurrence of risks that can have substantial negative effect on the Bank's operations.

In the year 2007 Hipoteku banka extended its Bankers' Blanket Bond Policy obtained on Lloyd's insurance market. The Policy is a significant risk management instrument that protects the assets and capital of the Bank against various losses the Bank might incur due to its employees or third parties.