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  • Chapter VII: Risk Management

    No: 43083271 Date(g): 26/4/2022 | Date(h): 25/9/1443Status: In-Force

    • Article 29

      The Company shall: 
       
      1.Establish a clear written business strategy and risk management policy to be approved and updated annually by the board. The risk management policy must cover all relevant types of risks and include actions for addressing them, taking into consideration all business activities, including outsourced processes and tasks.
       
      2.Establish appropriate procedures to identify, assess, manage, monitor and report risks. Such procedures shall be included in a comprehensive risk management framework in order to ensure:
       
       a.Early and comprehensive identification of risks.
       
       b.Assessment of correlations between risks.
       
       c.Immediate coordination with the board, audit committee, risk and credit management committee, senior management, concerned staff and the internal audit department, where necessary.
       
      3.Establish a risk management function that reports directly to the risk and credit management committee. The committee shall present its views about risk management reporting to the board.
       

    • Article 30

      1.The Company shall prepare a quarterly risk report to be discussed by the risk and credit management committee and the board of directors. The report shall include at least the following:
       
       a.A comprehensive review of risk development and performance of financial positions exposed to market price risks.
       
       b.Amounts of financing assets owned by the company and the value of the collaterals covering the assets.
       
       c.Term cost mismatch risk between financing assets and source of refinancing.
       
       d.Total delinquencies.
       
       e.Portfolio concertation risk.
       
       f.Changes to assumptions and parameters which form the basis of risk assessment procedures.
       
       g.The extent of limits granted, external credit lines, and non-performing loans, which shall be listed and commented on.
       
       h.An analysis of the situations in which permissible limits are exceeded and a description of the reasons and risk provisions in the Company.
       
       i.Exposures to bonds, sukuk, securities and any other financial derivative products.
       
       j.Any major financing decisions that are inconsistent with the Company’s strategies or policies.
       
      2.The Company shall provide SAMA with the report referred to in Paragraph (1) of this Article, after being discussed and approved by the risk and credit management committee and the board, along with the decisions made in this regard.