UniCredit Group announced today that it has joined the Risk Analysis Service (RAS), a credit risk benchmarking service developed jointly by RMA and AFS that is designed to enhance risk management practices. RAS is unique because it allows financial institutions to measure their respective risk profiles in defined portfolio segments relative to industry peers. Based on quarterly data from participating banks, RAS provides a timely metric that enables individual banks to more closely monitor risk exposures and thereby improve risk measurement and management practices.
RAS will also help satisfy a number of the new regulatory reporting requirements mandated by Basel II. In addition, it will prove useful to firms for model and parameter validation purposes. As the EU moves toward public disclosure of internal risk information such as Probability of Default (PD) and Loss Given Default (LGD) in early 2009, RAS could prove especially useful.
RAS is an industry-led data consortium that enables participating banks to monitor and track key risk metrics, including: Risk Ratings (PD and LGD), Exposure at Default, Past-Due/Delinquencies, Non-Accruals/Impaired Assets, Charge-offs, Concentrations, and Other Risk Metrics. RAS also allows participating institutions to perform meaningful segmentation as required by Basel II (Corporate, Sovereign, Bank, and Specialized Lending) and in-depth analysis by: Industry, Geography, Deal Size, Borrower Sales Size, Collateral, Product, and Vintage/Age.
UniCredit Group served on the RAS European Steering Committee, helping to define the parameters the data consortium would collect and track over time. Henning Giesecke, Chief Risk Officer of UniCredit Group and a member of its Management Committee, said, "We joined RAS so we could benchmark UniCredit against our competitors. The competitors' data is presented as an average or composite, not specific to any company. It is helpful to all who participate because it provides us with an overall view of how an industry sector is performing. It is extremely important because a good benchmark helps institutions improve their systems and asset quality."
John Shain, President, AFS, said, "We have made a significant commitment to develop this important risk management tool, with meaningful input from the industry, and I expect that we will soon see strong growth in the number of EU participants in the database. In today's environment, it is critical that the banking industry employ the best risk metrics available."
"Under Basel II, EU firms will begin making additional public disclosures that are required by Pillar 3 in 2009, and RAS participants will have a valuable tool to help promote comparability across institutions," said Kevin Blakely, President and CEO of RMA. "More importantly, RAS data consortium participants will have a forum that will enable members to shape public disclosure standards going forward," he further stated.
Milan, March 3, 2008
About UniCredit Group
Ranking among the top financial groups in Europe in terms of market capitalization (approx. €65 billion at current market price), UniCredit has a presence in 23 countries, with over 40 million clients and approx. 10,000 branches, 180,000 employees and total assets of €1,018 billion (pro-forma) as at 30 June 2007. In the CEE region, UniCredit operates the largest international banking network with over 3,700 branches and outlets, where more than 76,000 employees serve approximately 27 million customers. The Group operates in the following countries: Azerbaijan, Bosnia and Herzegovina, Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Kazakhstan, Kyrgyzstan, Poland, Romania, Russia, Serbia, Slovakia, Slovenia, Tajikistan, Turkey and Ukraine.
About AFS
Automated Financial Systems, Inc. (AFS) is an information technology and software development company providing products and professional services exclusively to the financial services industry. Its mission is to work with forward-looking financial institutions to build the industry-leading global franchise for lending processes based on a straight-through processing model and on-demand technology and services. AFS assists clients by combining the lending applications, execution expertise, and management information to mitigate risk, reduce costs, and increase revenue. The firm is headquartered in Exton, Pa.; its European subsidiary, Automated Financial Systems GmbH, is located in Vienna, Austria. For further information, visit the AFS Web site at www.afsvision.com.
About RMA
Founded in 1914, The Risk Management Association is a not-for-profit, member-driven professional association whose sole purpose is to advance the use of sound risk principles in the financial services industry. RMA promotes an enterprise-wide approach to risk management that focuses on credit risk, market risk, and operational risk. Headquartered in Philadelphia, Pa., RMA has 3,000 member firms that include financial institutions throughout North America, Europe, and Asia/Pacific. Visit RMA on the Web at www.rmahq.org.
Contacts:
UniCredit Group: Media Relations: mediarelations@unicreditgroup.eu +39 02 8862 8236
AFS: Doug Skinner, Director, dskinner@afsvision.com +1 (484) 875-1562
RMA: Suzanne Wharton, Associate Director, swharton@rmahq.org +1 (215) 446-4089
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