ENTERPRISE RISK MANAGEMENT

Risks are inherent in the business activities of the UnionBank Group. Among its identified risks are credit risk, liquidity risk, market risk, interest rate risk, foreign exchange risk, operational risk, legal risk, and regulatory risk. These are managed through a risk management framework and governance structure that provides comprehensive controls and management of major risks on an ongoing basis. Risk management is the process by which the Group identifies its key risks, obtains consistent and understandable risk measures, decides which risks to take on or reduce and how this will be done, and establishes procedures for monitoring the resultant risk positions. The objective of risk management is to ensure that the Group conducts its business within the risk levels set by the Board of Directors while business units pursue their objective of maximizing returns.

Risk Management Strategies

The Group maintains a prudent risk management strategy to ensure its soundness and profitability. Business units are held accountable for all the risks and related returns, and ensure that decisions are consistent with business objectives and risk tolerance. Strategies, policies and limits are reviewed regularly and updated to ensure that risks are well-diversified and risk mitigation measures are undertaken when necessary. A system for managing and monitoring risks is in place so that all relevant issues are identified at an early stage and appropriate actions are taken. The risk policies, guidelines and processes are designed to ensure that risks are continuously identified, analysed, measured, monitored and managed. Risk reporting is done on a regular basis, either monthly or quarterly. Although the BOD is primarily responsible for the overall risk management of the Group’s activities, the responsibility rests at all levels of the organization. The risk appetite is defined and communicated through an enterprise-wide risk policy framework.

Risk Management Structure

The BOD of the Parent Bank exercises oversight of the Parent Bank’s risk management process as a whole and through its various risk committees. For the purpose of day-to-day management of risks, the Parent Bank has established independent Risk Management units (RMUs) that objectively review and ensure compliance to the risk parameters set by the BOD. They are responsible for the monitoring and reporting of risks to senior management and the various committees of the Parent Bank.

On the other hand, the risk management processes of its subsidiaries are handled separately by their respective BODs. The Parent Bank’s BOD is primarily responsible for setting the risk appetite, approving risk parameters, credit policies, and investment guidelines, as well as establishing the overall risk taking capacity of the Parent Bank. To fulfill its responsibilities in risk management, the BOD has established the following committees, whose functions are described below.

(a) The Executive Committee (EXCOM), composed of seven members of the BOD, exercises certain functions as delegated by the BOD including, among others, the approval of credit proposals, asset recovery and ROPA sales within its delegated limits.

(b) The Risk Management Committee (RMC), composed of seven members of the BOD, is responsible for the development and oversight of the Parent Bank’s risk management program. It assists the BOD in the management of identified risks and reviewing risk policies, strategies and procedures. It receives and reviews management reports on risk exposures and provides guidance when needed. The RMC also provides oversight, direction, and guidance to the other risk committees, specifically the Market Risk Committee (MRC) and the Operations Risk Management Committee (ORMC).

(c) The MRC, composed of six members of the BOD, sets policies and standards for market risk identification, analysis and management. The MRC also monitors the sensitivity of the Group’s financial condition to the effects of market volatility and adverse price changes on the Group’s portfolio of financial instrument and oversees the Group’s liquidity position through the Asset and Liability Committee (ALCO).

(d) The ORMC, composed of at least five members of the BOD and two members from Senior Management, reviews various operations risk policies and practices.

(e) The Audit Committee is a committee of the BOD that is composed of five members, most of whom are with accounting, auditing, or related financial management expertise or experience. The skills, qualifications, and experience of the committee members are appropriate for them to perform their duties as laid down by the BOD. Two of these five members are independent directors, including the Chairman. The Audit Committee serves as principal agent of the BOD in ensuring independence of the Bank’s external auditors and the internal audit function, the integrity of management, and the adequacy of disclosures and reporting to stockholders. It also oversees the Bank’s financial reporting process on behalf of the BOD. It assists the BOD in fulfilling its fiduciary responsibilities as to accounting policies, reporting practices and the sufficiency of auditing relative thereto, and regulatory compliance
                        

1 Make sure that the website address appearing on your browser starts with https://ebanking.unionbankph.com/ and a padlock symbol (🔒) beside it.If you see something different or there is no address appearing, please do not proceed and report to us immediately.

2 You can only type in your password or PIN using the virtual keyboard.

3 Keepyour device virus-free. Make sure you have an updatedanti-virus software.

4 To secure your account, we strongly advise you to avoid downloading your banking documents using a public computer




For more information, please visit theSafe Surfing Guidelinespage or call our 24-hour Customer Support at (02)8418600.
1 Make sure that the website address appearing on your browser is Union Bank of the Philippines and has a padlock symbol (🔒) beside it. If you see something different or there is no address appearing, please do not proceed and report to us immediately.

2 You can only type in your password or PIN using the virtual keyboard.

3 Keepyour device virus-free. Make sure you have an updatedanti-virus software.

4 To secure your account, we strongly advise you to avoid downloading your banking documents using a public computer




For more information, please visit theSafe Surfing Guidelinespage or call our 24-hour Customer Support at (02)8418600.
1 Make sure that the website address appearing on your browser starts with https://ebanking.unionbankph.com and a padlock symbol (🔒) beside it.If you see something different or there is no address appearing, please do not proceed and report to us immediately.

2 You can only type in your password or PIN using the virtual keyboard.

3 Keepyour device virus-free. Make sure you have an updatedanti-virus software.

4 To secure your account, we strongly advise you to avoid downloading your banking documents using a public computer




For more information, please visit theSafe Surfing Guidelinespage or call our 24-hour Customer Support at (02)8418600.
1 Make sure that the website address appearing on your browser is Union Bank of the Philippines and has a padlock symbol (🔒) beside it. If you see something different or there is no address appearing, please do not proceed and report to us immediately.

2 You can only type in your password or PIN using the virtual keyboard.

3 Keepyour device virus-free. Make sure you have an updatedanti-virus software.

4 To secure your account, we strongly advise you to avoid downloading your banking documents using a public computer




For more information, please visit theSafe Surfing Guidelinespage or call our 24-hour Customer Support at (02)8418600.
1 Make sure that the website address appearing on your browser starts with https://ebanking.unionbankph.com and a padlock symbol (🔒) beside it.If you see something different or there is no address appearing, please do not proceed and report to us immediately.

2 Keepyour device virus-free. Make sure you have an updatedanti-virus software.

3 To secure your account, we strongly advise you to avoid downloading your banking documents using a public computer




For more information, please visit theSafe Surfing Guidelinespage or call our 24-hour Customer Support at (02)8418600.
1 Make sure that the website address appearing on your browser is Union Bank of the Philippines and has a padlock symbol (🔒) beside it. If you see something different or there is no address appearing, please do not proceed and report to us immediately.

2 Keepyour device virus-free. Make sure you have an updatedanti-virus software.

3 To secure your account, we strongly advise you to avoid downloading your banking documents using a public computer




For more information, please visit theSafe Surfing Guidelinespage or call our 24-hour Customer Support at (02)8418600.
1 Make sure that the website address appearing on your browser starts with https://ebanking.unionbankph.com and a padlock symbol (🔒) beside it.If you see something different or there is no address appearing, please do not proceed and report to us immediately.

2 Keepyour device virus-free. Make sure you have an updatedanti-virus software.

3 To secure your account, we strongly advise you to avoid downloading your banking documents using a public computer




For more information, please visit theSafe Surfing Guidelinespage or call our 24-hour Customer Support at (02)8418600.
1 Make sure that the website address appearing on your browser is Union Bank of the Philippines and has a padlock symbol (🔒) beside it. If you see something different or there is no address appearing, please do not proceed and report to us immediately.

2 Keepyour device virus-free. Make sure you have an updatedanti-virus software.

3 To secure your account, we strongly advise you to avoid downloading your banking documents using a public computer




For more information, please visit theSafe Surfing Guidelinespage or call our 24-hour Customer Support at (02)8418600.