As a Group, managing risk effectively is fundamental to our strategy and future success.
Our approach to risk
We are a simple, low risk, UK-focused financial services provider with a culture founded on strong risk management and a prudent through the cycle risk appetite. These are at the heart of everything we do, and ensure constructive challenge takes place across the business and underpins sustainable growth. Our approach to risk is founded on an effective control framework, which guides how our colleagues work, behave and the decisions they make.
As part of this framework, risk appetite – the amount and type of risk that the Group is prepared to seek, accept or tolerate in delivering our Group Strategy – is embedded in policies, authorities and limits across the Group. Our prudent risk culture and appetite, along with close collaboration between Risk division and the business, supports decision‑making and has enabled us to continue to deliver against our strategic priorities. Our approach to risk plays a key role in the Group’s strategy of becoming the best bank for customers, colleagues and shareholders.
Risks are identified, managed, mitigated and monitored using our comprehensive enterprise risk management framework, and our well-articulated risk appetite provides a clear framework for decision-making.
Prudent approach to risk
Being low risk is fundamental to our business model and drives our participation choices. Strategy and risk appetite are developed in tandem and together outline the parameters within which the Group operates.
Effective risk analysis, management and reporting
Regular close monitoring and comprehensive reporting to all levels of management and the Board ensures appetite limits are maintained and subject to stress analysis at a risk type and portfolio level, as appropriate.
Business focus and accountability
Risk management is an integral feature of how we measure and manage performance – for individuals, businesses and the Group. In the first line of defence, business units are accountable for managing risk with oversight from a strong and independent second line of defence Risk division.
Our priorities for risk management have continued to evolve, alongside progression of the Group’s strategy and development of external factors and some themes have been particularly prevalent in 2019.
Our external environment
We operate in an increasingly dynamic market and have to respoind to an ever-changing external environment. We've built our business and our strategy to manage the fluctuations we see.