毕博上海银行咨询BOD presentation(1).ppt

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1、,SIME Bank BerhadRisk Management Project,Board of Directors Presentation6 January1998,Strictly Private and Confidential,Todays presentation addresses Sime Banks highest priority risk management issues,Credit RiskAsset and Liability ManagementInformation TechnologyConclusion,These initiatives will ju

2、mp start the longer term programme of improving the quality of risk management,We believe the major priorities for Sime Bank over the next 6 months should be,6 months,ALM/Market Risk,Address liquidity risk immediatelyEstablish infrastructure for managing ALM/Treasury,Credit Risk,Undertake risk expos

3、ure reviewDevelop action plans to improve or reduce exposuresEstablish credit management infrastructure,Operational Risk,Establish approach for addressing Year 2000Review IT strategy and prepare contingency planDevelop performance management and manpower planning modulesImplement systematic operatio

4、nal risk programme,CREDIT RISK,BackgroundObjectives of KPMGs workWhat we deliver to Sime BankMethodologyResourcing and costsWhy KPMG?Next steps,Contents,1.Background,Rapid loan book growth,weak credit systems followed by deteriorating economic conditions can create significant asset quality problems

5、.Quick,decisive and“hardnosed”action is critical to overcoming these concerns.A comprehensive review of risk exposure is necessary to evaluate the problem and focus resources and actions.External investors prefer comprehensive upfront assessments rather than“death by a thousand cuts”.,Lessons KPMG h

6、as learned:,2.Objectives of KPMGs work,2.1Swift evaluation of high risk/high value exposures.2.2Develop action plans to improve or reduce exposures.2.3 Support Sime Bank by“jump starting”its credit infrastructure development.,3.What we deliver,3.1Focused assessment of risk exposures(including our ri

7、sk grading).3.2Detailed action plans for key accounts.3.3Advice on resourcing,strategy,lending policy and organisational change.,We are able to support implementation if necessary,4.Methodology,5.Resourcing and costs,5.1 Team Structure,Sime BankCredit Committee,Team LeaderColin Nicol,KPMG Malaysia,S

8、ime Bank Officers,KPMG Australia,Benefits:Close involvement by top executivesProfessional project managementKPMGs prior experienceLocal knowledgeSkills transferCost efficiency,5.2Team size and costs depends on desired level of coverage and team composition.Scoping study will enable this judgement to

9、 be made.,6.Why KPMG?,Detailed knowledge of Sime Bank credit processesKPMGs Asia Pacific Risk Management headquarters are in Kuala LumpurWe bring specialised experience to bear:world class credit managementrisk grading expertise and methodologyloan book due diligence and methodologyproblem loan mana

10、gement experienceMajor client experience:National Australia BankANZ Banking Group LtdColonial State BankNational MutualSuncorp MetwayBankWest,7.Next steps.Short Term,7.1Scoping studyReview portfolio compositionRecommend level of coverage to Sime BankAgree resources and costsTailor loan review templa

11、tes and databaseDuration-1 week,7.2Commence risk exposure reviewMid January commencement,Next Steps.Medium Term,Immediate,Short Term Development,Medium Term Development,Roll-out,Risk Exposure ReviewRecruit new Head of Credit Risk,New Credit DepartmentReview and formalise credit strategyDocument Cred

12、it PolicyNew Financial Analysis ToolNew C.A.Format,Risk GradingAnnual ReviewsPortfolio reporting and managementIT credit strategy,TrainingFull implementation,3 months,6 months,9 months,ASSET AND LIABILITY MANAGEMENT,ALM Overview,Key features of our proposal to assist Sime Bank,2 prong attack:the goa

13、l is to gain the confidence of investorsimmediate liquidityrisk management capability Continued support through a longer term risk management capability core project team which will work as line managers to ensure the continued success of all risk management enhancementsThe two goals are inexorably

14、linkedobjectivesforecastsmeasurementmonitoring and control,Recommendations for change,“Quick fix”solutions to address liquidity risksDevelop ALM capability in line with international“best practice”(e.g.strategy,processes and infrastructure)roles and responsibilities,identification and measurement,po

15、licy and limits,use of Sendero,analysis and reportingTrain staff to provide thorough and relevant understanding of ALM philosophy,techniques and management principles for each relevant functionEnsure that the data upon which ALM decisions are based is appropriateDevelop an independent,market risk fu

16、nction in line with international“best practice”(e.g.structure,policy,limits,methodologies and skills),Immediate Liquidity Risk,Issue:Focus on immediate liquidity needs,Benefits:Provides basic infrastructure for addressing liquidity riskFoundation for longer term liquidity management,Key Recommendat

17、ion-“Quick Fixes”:Draw up cash flow projections and analysisDefine liquidity limit structuresDevelop liquidity strategy:Consider selling assets/reducing size of loan bookExplore capital raising solutionsWrite liquidity contingency plan,Develop longer term ALM capability,Board,Audit Committee,Executi

18、ve Committee,CEO,Risk CommitteeALCO,Funding Committee,Business Units&Support Functions,Head of Market Risk/ALM,Group Finance,Foreign Exchange,ALM supportLiquidityBalance sheet management,Money Markets,Benefits:Clear accountability for ALMConsistent with best practice,Cashflow analysis&projectionsGap

19、&sensitivity analysisScenario analysis,Our project will consider.,ALM Organisation,ALM Processes,ALM Strategy,Develop ALCO policies and procedures/limit structuresDefine MIS,Develop ALM organisation structureDefine roles&responsibilities,Quantitative Analysis,Support business strategyFinancial/fundi

20、ng planning,Timetable,We are ready to begin in mid-January 1998The ALM project will last ten weeksMay be continued on a one month rolling basis,We propose a participative approach to maximise success,KPMG,SIME,Project ManagerBarbara Freeman,Address Liquidity Risk,Lars SoderlindTanny ChowMonalotte Th

21、eorell,Develop Risk Management Capability,Continue Support,Barbara FreemanRoseanne BurngissYon Kian Guan,We suggest the following representatives:,ALM strategy-Zulkefly AbdullahALM support-Zulkarnain TamanMoney MarketKek Kim LiauInformation Technology-Senior Management,Barbara FreemanYon Kian Guan,E

22、stimated project time,Quantitative analysisOrganisationProcessesStrategyManagement check-point,Activity,Duration(weeks),1,2,3,4,5,6,10,7,8,9,INFORMATION TECHNOLOGY,Workshops and interviews with the IT department identified a relatively mild IT risk profile for Sime Bank,MONITOR,Short IT Outages,Proj

23、ect Delays,MIS Shortfall,UNISYS Dependency,Year 2000 Failure,Loss of Information,IT Resources Shortfall,Business/IT Strategy Mismatch,Prolonged IT Outage,IMPORTANT,ADDRESS URGENTLY,Catastrophic,High,Medium,Low,BUSINESS IMPACT,Unlikely,Likely,Almost Certain,LIKELIHOOD,However,in our judgement,the pot

24、ential for adverse business impact was underestimated in several key areas,MONITOR,Short IT Outages,Project Delays,MIS Shortfall,UNISYS Dependency,Year 2000 Failure,Loss of Information,IT Resources Shortfall,Business/IT Strategy Mismatch,Prolonged IT Outage,IMPORTANT,ADDRESS URGENTLY,Catastrophic,Hi

25、gh,Medium,Low,BUSINESS IMPACT,Unlikely,Likely,Almost Certain,LIKELIHOOD,As a result,we recommend that Sime Bank address seven key areas of IT risk,TECHNOLOGY DIRECTION,INFRASTRUCTURE/SURVIVAL PROJECTS,HUMAN RESOURCES,Business/IT Plan MismatchUNISYS Dependency,Disaster Recovery(Business Continuity Pl

26、an)Year 2000 failureMIS Shortfall(Lack of integration),IT Resources Shortfall(quality and quantity of staff)IT Management and Organisation,Obtain maximum return on IT investmentsLong-term stability,Survival insurance,in case of major IT outage/lossAvoid calculation errors,system failures,etc.Better

27、management decisions(funding,pricing,etc.),Appropriate staffing to get critical work done on time Essential for all other activities to succeed,AREA,RISK,VALUE TO CORRECT,If desired,KPMG Barents can assist Sime Bank in several of these areas,UNISYS Review,Provide independent assessment,Open,Business

28、 Continuity Plan,Lead the process;create the resultProvide facilitation,quality review,Open,MIS Design,Lead requirements and design stagesDo implementation plan,Proposal submitted,HR Strategy,Design selected,“high value”systemsOversee implementation,Proposal revised,IT Organisation,Lead design stage

29、Oversee implementation,Open,Program Area,Nature of Assistance,Status,Year 2000 compliance,Act as“program manager”,Open,Business/IT Planning,Lead the process;create the resultFacilitate business/IT integration,Open,NEAR-TERM,MID-TERM,In the near term,KPMG Barents can provide“Program Supervision Suppo

30、rt”for Sime Banks“Year 2000 Compliance”project,Review proposal,contract,approach,methods,plansInterview all personnel supplied by contractorMonitor progress at detailed level at least fortnightlyAttend formal progress review meetings,Provide independent assessment of suitability/feasibility of appro

31、ach,methods,plansAssess resourcing,pricing,valueProvide senior management view of progress vs.plan vs.targetsRecommend suitable corrective actions,SUPERVISION ELEMENTS,RESULTS,We are prepared to start this effort immediately,In the medium term,KPMG Barents can drive the process to make the IT Plan d

32、irectly support and enable the banks business strategy,Understand the IT Requirements of each and every element of the business strategyAssess IT alternatives,timing,cost/benefit and riskPrioritise IT projects by business impactSet IT management frame work,Ensure IT investments match top business pr

33、ioritiesGuarantee that each IT project has specific business objectivesDevelop specific resource plan and timetable for resultsMeasure/monitor progress vs.plan and corrective actions,BUSINESS/IT STRATEGY TASKS,RESULTS,We are prepared to start this project upon completion of the banks business strate

34、gy project,CONCLUSION,We believe the major priorities for Sime Bank over the next 6 months should be,6 months,ALM/Market Risk,Address liquidity risk immediatelyEstablish infrastructure for managing ALM/Treasury,Credit Risk,Undertake risk exposure reviewDevelop action plans to improve or reduce expos

35、uresEstablish credit management infrastructure,Operational Risk,Establish approach for addressing Year 2000Review IT strategy and prepare contingency planDevelop performance management and manpower planning modulesImplement systematic operational risk programme,Immediate next steps,Clear Board decis

36、ion on priority programmesNegotiation with management of outstanding detailsMobilise resources required swiftly,MajpjMVcyzj21HLfrvy96dv02lPPfYgxUS7IYmZkyEmZ0kGeYZS3bpLCkYH1lt4EK7CxmUX3ijoYSOer7ZuaVWYgz4EpZrUirVpMzzvNtf1XZw5oswSXOtFaejnOcmfE1lZgnN1RSXg8wLCG8CVQ3XPJMvodPFWcpiYJgZazNSEPNIaklYSu7qSd1Upa

37、xmZDlpN9zW7kljfsLCLi26Yv109ffbnDH8LbUN1G6ACURQ39eG12KHL9tXsZ1jzgoCK8g1kuNOh5eFvcmVT5ZYVQt9zk3rp3qLnf02FovEXxVRxjCcFRNppiJljNiOuk6fONnyX7fyGg7sXZ49BmCN5oy9VesHpKzdjTKwjrkCEQCFDehVmGax3lrOEbw63VscA3YSijtUKoCyiLzAlVRp7l4QgPNHxvJFFDyjUVN3oHlMah0XBd4uTbkfPIhHtw0evPmYOrdhEDoPwvYhzlGplU1AU9mpyiCXH8gpPCBRYj

38、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,