Integrated Report 2021

Other banking activity

Other banking activity of BNP Paribas Bank Polska S.A. (hereinafter: the Bank) is mainly operated by the Asset and Liability Management Division (hereinafter: ALM Treasury Division).

The ALM Treasury’s task is to ensure an appropriate and stable level of funding to guarantee security of the Bank’s activities and compliance with the standards defined in the applicable laws, as well as to reduce sensitivity of the Bank’s net interest income to changes in market interest rates.

The ALM Line combines the features of a business line with those of a competency centre responsible for the management of:

  • interest rate risk,
  • current and structural liquidity of the Bank,
  • structural currency risk,
  • determining and managing internal transfer prices for all products offered by the Bank (including their determination).

Tasks completed in the ALM Treasury Division cover both the prudential aspect (compliance with external regulations and internal orders) and the optimisation aspect (management of the cost of funding and generation of the result from the management of the Bank’s balance sheet items).

One of the key risk management mechanisms in place at the Bank is a systemic transfer of structural risks from all business lines to the ALM line. Structural riska are: currency risk, liquidity and banking book interest rate. The ALM Line manages those risks centrally. Risk is transferred mainly through the transfer pricing system, which reflects the business financing strategy adopted by the Bank.

Key obligations entrusted with ALM Treasury comprise ensuring a balanced liquidity position accompanied with optimized costs of funding the Bank’s operations and an appropriate structure of assets and liabilities, including sensitivity to interest rate changes.  Other units within this function focus on:

Other units within this function focus on:

  • management of an internal transfer pricing system,
  • balance sheet analysis,
  • modelling and measuring liquidity and interest rate risk for the Banking Book,
  • managing issues of debts securities,
  • arranging long-term credit facilities,
  • obtaining new sources of financing,
  • cooperation with business lines supporting sustainable development,
  • coordinating the securitization of non-banking customer portfolio,
  • organizing the work of the Asset-Liability Committee (ALCO).
  • organizing the work of the Asset-Liability Committee (ALCO).

During the period of increased incidence of COVID-19, the Bank adjusted internal product behaviour models affecting the Bank’s interest rate and liquidity risk profiles on an ongoing basis. The ALM Treasury division works with the business lines through regular meetings and consultations to optimise the Bank’s product structure and maintain the Bank’s profitability at the maximum possible level in the current macroeconomic conditions.  The Bank participates in activities supporting the fight against pandemics by purchasing additional issues of bonds issued under the introduced financial shields.

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