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Risk Management Systems

Risk Management Systems

Basic Approach to Risk Management

We deeply regret the serious concern and inconvenience that the application for an injection of public funds in May 2003 caused the people of Japan, our customers, and other stakeholders. Consequently, we have established the risk management principles below to enhance our risk management systems and methods as well as risk control. The Resona Group conducts its risk management activities with an eye to securing the soundness of operations and enhancing profitability.

  1. 1.We will not assume levels of risk in excess of our economic capital.
  2. 2.We will deal promptly with losses that we have incurred or expect to incur.
  3. 3.We will take risks appropriate for our earnings power.

Risk Management Policies and Systems

The Company has established the Group Risk Management Policy that serves as the Group's basic risk management policy.

Based on the Group Risk Management Policy, ResonaBank, Saitama Resona Bank, and Kansai Mirai FinancialGroup and its group companies (the “Group banks”) have established risk management policies that are tailored to their operations, unique characteristics, and the risks they must address.

These risk management policies create a basic framework for managing risk by defining the types of risk that must be managed and establishing organizations or systems that manage risk.

The Company and the Group banks have established risk management departments for managing different types of risk, along with a Risk Management Division, to integrate the management and control of all types of risk. Principal risk categories are outlined below, and each risk is managed using a method that is tailored to its characteristics.

Principal Group companies, other than the banks, have also established risk management policies that are tailored to their own operations, special characteristics and risks. In addition to establishing risk management systems and frameworks, these policies establish guidelines for avoiding risks outside their fundamental business areas. These Group companies have also established risk management departments for managing different categories of risk and risk management divisions for comprehensive risk management.

Risk Category, Definition and Management Methods

Risk Management Policies and Systems

Group Management by Resona Holdings

The Company provides direction and suggestions to all Group companies regarding risk management policies,standards and systems.

When making decisions on important matters related to risk management, Group companies confer with the Company in advance and base their decisions on those consultations or decide matters through the exchange of opinions, and report those decisions to the Company.

Based on the above, the Company maintains the riskmanagement framework of Group companies by providing direction and suggestions to Group companies regarding risk management policies, as well as rules, standards and systems, or by providing verifi cation through prior consultation.

Furthermore, the Company manages the risk-taking policies of Group companies through prior consultation on limits and guidelines or through the exchange of opinions.

Group companies must report to the Company regarding the risk conditions and their management on a regular and as-needed basis so that the holding company can provide guidance and advice as necessary.

As shown by the figure below, we have formed risk management divisions by risk category within the Company for managing each type of risk on a Group-wide basis.

Group Risk Management System

Group Risk Management Systems in Outline