Risk Management Structure

The Company promotes an integrative risk management. The Company evaluates the various risks the Group faces by risk category, and appropriately manages the risks in light of the Group’s corporate strength, thereby maintaining management soundness and contributing to achieving more certain and consistent operating results.
As a structure to promote this risk management, the Company has established the Risk Management and Compliance Department to oversee risk management of the Group.
The Internal Control Committee comprehensively studies and deliberates on matters relating to overall risk management in the Group and refers important matters to the Board of Directors.
The role of the Board of Directors with respect to risk management is to regularly receive reports on the status of risk management, perform monitoring of risk management, and deliberate and decide on important fundamental matters relating to risk management.
The Group categorizes risks that occur in the course of operations into a number of categories: credit risk, market risk, liquidity risk, and operational risk. Risks are managed according to their specific characteristics.

Risk Management Structure

Credit risk management

Credit risk management is primarily related to credit provided to individuals, such as housing loans and credit cards, and therefore these risks are diversified into small lots. Credit risk associated with housing loans is reduced through stringent pre-screening and follow-up monitoring, as well as by securing loans with the associated properties.

Market risk management

Market risk management is carried out by ensuring a mutual check and balance system for business operations through the development of risk management organs and systems that are independent from profit-making departments. Quantitative analysis of risks from financial instruments held is also carried out. Specifically, risk is managed to ensure that the measured risk does not exceed the maximum risk amount resolved at the Board of Directors.

Liquidity risk management

Liquidity risk management involves systems that are developed to respond to the actual cash flow situation at each Group company. Risk is managed with an emphasis on securing liquidity, while also taking the efficiency of funds operations into consideration.

Operational risk management

With respect to operational risk management, the Group classifies operational risks into six categories: administrative risk, system risk, human resource risk, tangible asset risk, reputation risk, and legal and compliance risk. Departments responsible for each risk management manage risks from its position of expertise, while the Risk Management and Compliance Department identifies and manages operational risk on a comprehensive level.