Credit Risk
As of December 2017, the Total Portfolio amounted to 239.6 billion pesos, with a nonperforming loans portfolio of 1.9 billion pesos, a delinquency of 0.8% and coverage of nonperforming loans of twice that percentage. The increase in the Total Portfolio balance was derived mainly from an increase of 14.8 billion pesos in the Private Sector Portfolio.
Also, specific monitoring of the risk of the Private Sector Portfolio was carried out, making quarterly estimates of Credit VaR, expected and unexpected losses, the percentage of preventive reserves and concentration indicators.
As for the Guarantee Portfolio, as of December 2017, the balance is 12.3 billion pesos, consisting of the Automatic Approval Program and the Transactional Program. In the last three years, the collateral portfolio has grown at a rate of approximately 23% per year (mainly due to the Automatic Guarantee).
Of all the programs, only the Automatic Guarantee (current portfolio) shows losses, with a contingent liabilities balance of 375 million pesos. The observed losses have been lower than the expected as planned, enabling the reallocation of funds to new operations.
In general, the losses observed in the different types of guarantees have been lower than those established in design.
For a six-month period, monthly reports on loan and guarantees portfolios and daily reports on counterparty risk were generated, and disseminated across the various business areas, also informing the collegiate bodies.
Likewise, a periodic report was prepared for each loan portfolio in the economic sectors where the Institution is mainly engaged, including its main risk and profitability indicators.
Legal Risk
The Bank’s Legal Risk and constituted reserves were monitored according to the procedural stage of each trial and the expectation of adverse legal outcomes.
As of December 2017, the reserves set aside for legal risk amounted to 817 million pesos, with a coverage rate of 89%.
The reserves are sufficient to cover the volume of legal contingencies for judicial or administrative resolutions unfavorable to the Institution, according to their procedural stage and the possibilities of an undesirable outcome.
Operational and Technological Risk
Operational.- Based on the Comprehensive Operational Risk Methodology, five types of risks were identified for the Institution’s substantive processes with a rating below the tolerance level.
The total capital requirement for operational risk amounted to 821 million pesos, according to the Basic Indicator Method; this represents a level of 90% in the strategic level limit occupancy.
Additionally, an analysis of loss events and their average cost was
performed, based on historical data from January 2008 to date, as well as by taxonomy and line of business. From January 2008 to December 2017, we have registered 73 incidents with a total economic impact of 8.5 million pesos at an average cost of 0.1 million pesos per event.
Technological.- As of December 2017, the technological risk evaluated aspects show that the behavior of the detected events was within the parameters of compliance, with no impacts to the Bank's critical processes