DBSA Risk by monkey6


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									                                         Media Release

                                     For immediate release

                                         28 August 2008

          DBSA instills a risk management culture that involves every employee

The Development Bank of Southern Africa (DBSA), because of its particular and unique role in
the financial markets, understandably has a unique approach to risk management which adopts
the rigour of best practice risk management models and methodologies.

As the DBSA has expanded its traditional roles of financier, advisor and partner, to now include
those of implementer and integrator, this has meant a more hands-on approach to development.
This shift has also meant an increase in the complexity and range of risks that the bank is faced

DBSA Chief Risk Officer, Leonie van Lelyveld, says that in the financial year ending March
2008, the bank has accordingly had to enhance its risk management capability so it can more
accurately identify and assess the risks it faces so as to mitigate and manage them more

Van Lelyveld says that in 2006 the bank foresaw a tightening of market conditions that have
subsequently become evident, and reviewed its approach to risk management, developing the
philosophy that risk management is an enterprise-wide activity that involves every employee.

“If we want to attain our strategic goals, we must proactively and effectively manage our risks
through a holistic view of the strategic, business and operational risks faced by DBSA in all its

“This means our risk approach must be embedded in management processes and
accountability for reducing vulnerability to risks is entrenched throughout the organisation. One
way of doing this is to embed a culture of risk awareness among all employees through effective
communication and performance measures.”

As banks across the world have been preparing for the requirements of Basel II, the DBSA, not
regulated under the Banks Act, is therefore not formally obliged to comply with the requirements
of this new regime. But Van Lelyveld says that as a leveraged financial institution, it is prudent
that DBSA maintains the same levels of risk management as set out in Basel II, particularly with
regard to capital.
“In line with Basel II we are also considering the adoption of the „capital-at-risk‟ model‟ which
would ensure more precise assessment, measurement and management of our risks. And
moving into the 2009 financial year, we continue to review our approach to Basel II principles.”

When it comes to credit risk management, Van Lelyveld says initiatives during the recent
financial year now enable the bank to understand and mitigate the risks inherent in new
business with greater rigour. Van Lelyveld says that over the years the Bank has been
increasing its exposure to private sector intermediaries, a portfolio which is more susceptible to
adverse market and economic conditions.

“We have placed this portfolio on special watch so we are able to identify distress situations and
intervene timeously.”

Into the new financial year, Van Lelyveld says that ensuring the sustained risk management
capability through the recruitment, development and retention of risk professionals will continue
to be a significant element of the Bank‟s risk management strategy.

“We will also continue to develop and refine our key measures, policies and procedures and
develop capacities further down in the organisation so that each business area is competently
able to identify and manage its own risks, within the overall enterprise-wide risk reporting
framework of the Bank.”


Issued by

Hloni Motloung

The Gate

Tel: +2711 523 5600

Cell: +2782 218 0506

E-mail: hloni.motloung@thegateworldwide.com

For further information, please contact:
Karen Four

Acting Manager: Corporate Communications

Development Bank of Southern Africa

Tel: +2711 313 3500

Cell: +2778 800 5589

E-mail: karen4@dbsa.org

The Development Bank of Southern Africa is a leading Development Finance Institution (DFI)
in Africa, South of the Sahara, playing the roles of Financier, Advisor, Partner, Implementer and
Integrator. The Bank maximises its contribution to sustainable development by mobilising
financial, knowledge and human capital to support Government and other development role-
players in improving the quality of life of people in the region through funding infrastructure
projects; accelerating the sustainable reduction of poverty and dependency; and
promoting broad-based economic growth and regional economic integration.

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