This document provides an overview of KBC Group, a Belgian multinational banking and insurance group. It discusses KBC's risk culture and risk appetite, highlighting that risk appetite involves taking risks in a controlled way that is aligned with the vision, mission, and strategy of the company and supported by a strong risk culture. It also notes that defining and cascading risk appetite properly requires linking it to strategy, making it measurable, and communicating it throughout the organization.

1. Marie-Anne Haegeman
CRO KBC Business Unit Belgium
CRO CBC
Risk Culture & Risk
Appetite

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KBC Group passport
Clients 10 million
Staff (FTEs) 36 177 57% 43% BEL 45% CEE 51% Rest 4%
Network 1 616 bank branches worldwide
470 tied insurance agencies in Belgium
various insurance distribution channels in CEE
various online channels
Principal brands and
market share
Belgium: KBC and CBC (20% in banking, 17% in life , 9% in non-life, 33% in investment funds )
Czech Republic: ČSOB (19% in banking, 6% in life, 6% in non-life, 28% in investment funds )
Slovakia: ČSOB (10% in banking, 5% in life, 3% in non-life, 7% in investment funds)
Hungary: K&H (9% in banking, 3% in life, 5% in non-life, 17% in investment funds)
Bulgaria: CIBANK and DZI (2% in banking, 10% in life, 10% in non-life)
Ireland: KBC Bank Ireland (10% in retail mortgage loans, 3% in retail deposits)
Balance sheet total EUR 246 bn
AUM EUR 167 bn
Loans EUR 120 bn
Deposits EUR 151 bn
Life reserves EUR 27 bn
Market share: KBC’s own estimates; Loans: loans and advances to customers (excl. reverse repos); deposits; deposits from customers and debt certificates (excl. repos).
Financial data at 31 March 2014; other data at 31 December 2013
KBC Investor Day - June 2014

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Passport of the Belgium Business Unit

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Risk appetite is not about avoiding risks

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It’s about taking risks in a controlled way

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In line with the vision, mission & strategy

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Supported by a strong risk culture

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And with client focus

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Reality check
When setting the risk appetite, does your firm:
1. Balance the risks with the mitigation costs
2. Balance the risks with the mitigation costs AND the client
focus
3. None of the above

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=> Risk appetite
The amount and type of risk a company
is able and willing to accept in pursuit of
its strategic objectives.

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Different stakeholders

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Risk management starts with the business
1st line
2nd line
3rd line
Risk
Audit
Support, challenge,
report
Non
financial
risk Credit risk
ALM &
Liquidity
Technical
insurance risk
Control
Compliance

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Actors?

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Reality check
Is the risk appetite statement within your firm:
1. Really owned by the management?
2. Mainly a risk owned exercise?
3. None of the above

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How to cascade risk appetite to actionable level?

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Link with strategy

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But also making it measurable

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Link with building blocks risk management
Risk identification
Risk assessment
Risk monitoring
Reporting
Risk response & acceptance
Risk
culture

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Communicate!

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Monitor
MEDIUM
Risk Appetite Current risk score

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Reality check
Is the risk appetite statement within your firm:
1. Known by most of the employees and really cascaded down to
the operational level?
2. Only known up to the management level and monitored
through high level management dashboards?
3. None of the above

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Focus points

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Watch the front door

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Pick your battles carefully

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Challenge the road towards the goal!

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Be independent

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Define the tipping point

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Be brave

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And KBC Business Unit Belgium?

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LIQUIDITY
PROFIT
CAPITAL
STAKEHOLDERS
KBC Group going forward:
Monitored through the KBC performance diamond
KBC ‘Performance Diamond’
The performance diamond defines,
within the limits of the risk
management playing field, the (nominal)
targets for 4 performance dimensions:
- Net profit
- Capital
- Liquidity
- Stakeholders
(clients, staff, society, shareholders)
for KBC Group and for all the business
units.
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Aligned with our strategy

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Part of our culture