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 with. 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 effectively. 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 activities.” “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.” [Ends] Issued by Hloni Motloung The Gate Tel: +2711 523 5600 Cell: +2782 218 0506 E-mail: firstname.lastname@example.org 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: email@example.com 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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