Risk management is an integral part of all Group decisions and business processes. The variety of business activities performed makes it essential that opportunities and risks are systematically identified, evaluated and managed across the entire enterprise. To ensure that this is possible, the opportunities and risk management system is systematically integrated into the existing management and controlling processes. The close intermeshing of the opportunities and risk information with the management and controlling instruments enables the Group to guarantee the regular exchange of opportunities and risk information between strategic and operational control and the management responsible using standardized processes. Risk control uses the Group’s financial control structures to manage the information process. It defines standardized Group methods and procedures, ensures that these are adhered to, and coordinates the regular implementation of the risk control process within the Group.
Postbank’s risk control system is designed to meet the banking supervision requirements laid down in the second consultation paper of the Basel Committee on Banking Supervision (Basel II). Postbank is integrated into the Group’s opportunity and risk control process.
Throughout the Group, risk control follows a clearly defined process whose content and timing have been coordinated with the range of management and financial control instruments deployed. Risks are identified by considering events and developments within the company or its environment that may lead to deviations from the financial plan. Responsibility for each opportunity and risk is assigned to a member of staff who assesses these using scenario modeling, implements appropriate measures to take advantage of opportunities or manage risks, and monitors these with the aid of suitable early-warning indicators. The relevant information is communicated from the corporate divisions to Corporate Controlling on a quarterly basis via the multi-level risk reporting system. Risk reporting to the Board of Management takes into account interactions between individual opportunities and risks. Should new opportunities and risks and significant changes in individual items arise, they are also reported outside the fixed reporting intervals.
The following paragraphs outline those risks that could potentially have a material adverse effect on our net assets, financial position and results of operations. However, these are not necessarily the only risks to which the Group is exposed. Risks of which we are currently unaware or which we do not yet consider to be material could also have an adverse effect on our business activities.