Key Risks | Yoma Bank | Top Banks in Myanmar

Key Risks

Key Risk	Definition	How risk is managed
Legal and Compliance Risk	Compliance and Legal Risk is the risk of failure to act in accordance with laws, regulations, industry standards and codes (including all banking regulations and AML/CFT requirements)	Through its Audit Committee, the Board is ultimately responsible for ensuring the compliance of the Bank with all relevant regulations and laws. The Chief Compliance Officer is responsible for ensuring that all the functions and employees of the Bank operate according to our standards and policies.
Human Capital Risk	Human Capital Risk is the risk that our people’s capability falls short of our strategic and operational requirements. This risk can be driven by poor culture, losing key personnel, having insufficient succession planning for business continuity, having inadequate investment in developing staff, having inadequate performance management processes and weak employee engagement or value proposition, as well as non-compliance with labor laws and regulations, human rights issues, and unethical employment practices.	The Board through People Remuneration and Nomination Committee is responsible for fostering our values and enabling a positive corporate culture through the implementation of our Code of Conduct. Our People division is responsible for enhancing our working environment, enhancing our employer branding and offering our employees fulfilling jobs and career opportunities. Human Capital Risk is managed through merit-based recruitment processes, employee identity and background verification, mandatory compliance and Code of Conduct training, employee grievance and Speak-Up channels, succession planning, employee engagement programmes, and oversight by Compliance and Internal Audit functions. The Bank also expects suppliers, contractors and business partners in accordance with applicable laws and human rights standards. Yoma Bank maintains a zero-tolerance approach to child labor and forced labor.
Credit Risk	Credit Risk is the risk of financial loss resulting from a borrower or counterparty failing to fulfill its credit obligations or decrease in credit quality resulting in a loss in value.	The Board approves major policies and limits that govern monitoring of the credit risk. The Bank structures the levels of credit risk by placing limits on the amount of risk acceptable in relation to one borrower, or group of borrowers and industry segments.
Market Risk	Market Risk is the risk of financial loss resulting from the Bank’s treasury and balance sheet management activities due to changes in market rates (interest rate, foreign currency exchange rate, etc.)	The Board approves Enterprise Risk Management Policy and limits that governs monitoring of market risk. The Risk team monitors the market risks using Board Approved NOP limits and Value-at-Risk (VaR) limits.
Technology and Project Risk	Technology and Project Risk is the risk resulting from inadequate or failed information technology assets (including compromise of confidentiality, integrity, and availability). This risk also includes capability to manage key projects and change management required to deliver our strategic objectives.	The Bank invests in developing its IT assets and enhancing its technology infrastructure and enhancing its customer experience.
Liquidity and Funding Risk	Liquidity and Funding Risk is the risk that Yoma Bank is unable to meet its payment obligations as they fall due, including repaying depositors or other maturing debt or that the Bank has insufficient capacity to fund increases in assets.	The Board approves Asset-Liability Management (ALM) policies. Liquidity limits are set to address liquidity shocks, whether affecting most financial institutions or Yoma Bank uniquely, are fully covered, and a Contingent Funding Plan is developed. Liquidity levels are being strictly monitored for adherence to the Board’s specified minimums (as defined in the ALM policy) or the requirements prescribed by the Central Bank of Myanmar.
Operational Risk	Operational Risk covers many types of risk, including but not limited to, strategic risk, compliance, legal, technology, vendor, business continuity, reputation, financial crime, miss-selling, responsible lending, fraud and process failures.	Balancing the cost and risk within the constraints of the risk appetite of the Bank and consistent with the prudent management required of a large financial organization.
Reputational Risk	Reputation Risk is the risk arising from negative perceptions from stakeholders that can adversely affect Yoma Bank’s ability to maintain existing, or establish new, business relationships and continue to access sources of funding.	The Board periodically approves and reviews our Code of Conduct. All the new recruits are trained to understand our Code of Conduct during employee onboarding process and their duties. Regarding the projects we finance, our Chief Compliance Officer assures that Yoma Bank operates according to its Anti-Money Laundering and Counter Financing of Terrorism Policy.
Capital Risk	Capital Risk is the risk that Yoma Bank failing to maintain the level of capital required by regulators or other key stakeholders (shareholders, investors, depositors, etc.) to support the Bank’s operations and risk appetite.	The Board is responsible for governing the Capital Adequacy of the Bank. Assets and Liability Committee (ALCO) monitors the growth of its assets and liabilities to ensure that capital adequacy levels can be sustained and provide sufficient buffer over minimum regulatory requirements. The Risk team is also responsible for performing the annual stress testing of financial plan to confirm sufficient capital adequacy to the potential downside risk.
Social and environmental risk	Social and Environmental Risk refers to the risk arising from business activities that may result in adverse impacts on people, communities, and/or the environment.	The Bank manages Environmental and Social Risk through its Environmental, Social and Governance (ESG) Guideline, which establishes the framework for assessing and monitoring environmental, social and governance risks associated with customers, projects and financing activities.
Strategic Risk	Strategic Risk is the risk that an organization’s long‑term direction, decisions, or business model fails to achieve intended objectives because of internal or external changes.	Strategic Risk management at the Bank involves the proactive calibration of our multi-year strategic plans against established risk appetite boundaries. By continuously monitoring macroeconomic trends, embedding forward-looking Key Risk Indicators, and enforcing strong project governance, the Board and management ensure that strategic execution remains disciplined, resilient, and fully aligned with our capital and liquidity position.

You may also be interested in

Approach and governance

Approach and governance

Yoma Bank’s risk philosophy is based on its commitment to be the “Responsible Bank” in…