The Board of Directors approves CTT’s main risk policies and orientations, defining the profile and targets related to risks and creating control systems. Every year the Board evaluates the risk management system’s efficiency to ensure that the risks taken match the targets established.

Risk at CTT

The risks coming from CTT and its subsidiaries’ activity are managed according to the established at the Risk Management System Regulations, approved by the Board of Directors. This document defines rules, principles and procedures that guide risk management. Furthermore, it also established functions, liabilities and a management model, ensuring the implementation of a framework that supports CTT’s decision making process.

Risk at Banco CTT

Banco CTT has an autonomous risk management system. It is based on a set of concepts, principles, rules, and on an organizational model adjusted to its activity and regulatory framework. However, there is an internal communication model among the departments liable for the Banco CTT risk management to ensure the alignment of the main interrelated risks.

Risk profile

The Risk Profile is the main output in the risk assessment process. It communicates the vision on the events that may negatively affect the ability to reach our strategic goals and compromising our sustainability. Therefore, it is crucial to continuously review and update our Risk Profile. This is a dynamic process, made up by four sequential and interrelated stages. Its inputs are:

• identification 
• evaluation
• mitigation
• supervision and report

Risks are identified and assessed according to the Risk Management System Regulations orientations, following qualitative and quantitative criteria:

• the likelihood of the event
• the effect’s impact and pace

The risk exposure level results from the combination of its likelihood and its impact. When the risk exposure level is not acceptable, we implement actions – corrective or mitigation – to reduce the likelihood or the impact and, consequently, reduce the exposure level.

Key Risk Indicators

The evolution of the main risks to CTT (those with a higher exposure level) is monitored through Key Risk Indicators (KRI). KRI work as a barometer. They alert us to any possible occurrence likelihood changes or to the impact of the risky event.

The main risks are described in the following table. For each risk, we present its rational, its score according to the taxonomy applied and the business segments affected.

For more information, please read the Integrated Report, pages 61 to 67.