Risk Management

Risk Management

Risk Management Policy and Mechanisms

SKFH has adopted strategic risk management concepts for evaluation and decision-making. In addition to compliance with related laws and regulations, we also established a comprehensive “Risk Management Policy”, “Risk Management Regulations”, and other integrated risk management rules. We aim to adopt a comprehensive risk management system, management organization, and control measures to keep the risks in operations within a tolerable range to protect assets of the Company and customers, increase value for shareholders, and maximize benefits for customers.
 

To ensure that SKFH attains the goal of “optimization of risks and returns”, SKFH considers the capital adequacy requirements, related laws and regulations, and the nature of their businesses and established integrated or individual risk measurement tools for main risk factors (e.g., market risks, credit risks, concentration risks, liquidity risks, operational risks, and climate-related risk, etc.), We also established related risk control regulations, risk limits, early warning mechanisms, and other related regulations.
 

Limit control management

SKFH and its subsidiaries have established suitable limits on risks and losses in accordance with the characteristics of their business operations and risks. Examples include: market VaR limits (Value at Risk Limit, VaR Limit), limits on expected losses in credit risks, limits on the classification and control of risks concentrated in individual countries, regions, industries, and companies, foreign exchange exposure risk limits, stock stop loss limit management, and control settings for the capital adequacy ratio. We regularly evaluate risk for various items to achieve an optimal balance of risks and returns while ensuring capital adequacy ratio.

Early warning mechanisms

The scope and key points for the measurement of risk indicators include the market risks, credit risks, liquidity risks, concentration risks, climate-related risks, and legal risks faced by the companies. SKFH provides risk information at suitable times to provide the management level with references for making decisions. In addition to regular monitoring of changes in related indicators, SKFH also retains related verification traces for determining future risk trends and risk prevention.