by the Deputy Chief Executive Officer were completed by 18 March 2023, in compliance with the deadlines set. The Cheque Security Report was finalised and published on 31 May 2023, the campaign deadline. We have stepped up our efforts to provide the Banque de France with data on fraud and means of payment in 2021 by introducing half-yearly reporting. As part of the ECB's project to overhaul its reporting and the Group's compliance project, CFM Indosuez, through CAPS, has been granted a production exemption for the 2022 financial year. The first ECB report for CFMI was produced in April 2023 (first quarter report), then in July, October 2023 and January 2024, and the two half-yearly reports (Cartography and Fraud) in September 2023. The Specialised Audit and Risk Committee meetings were held and chaired by Mr François Veverka and attended by the directors, the Statutory Auditors, the General Secretary of CFM Indosuez Wealth, the Head of the General Inspection Department and, in turn, representatives of the Credit Risk, Permanent Control, Finance, Compliance and Fraud departments, on the day before the Board meetings of 22 March, 16 May, 28 September and 19 December 2023. At its meeting on 22 March 2023, the Board of Directors approved the risk appetite matrix, with no change in profile compared with the previous year. However, the calculation of operational risk indicators has been modified in line with Group guidelines. From 2023 onwards, operating losses and NBI will be calculated on a quarterly basis, instead of on a rolling basis. This system provides a more dynamic view of these indicators and enables us to better target any thresholds that are exceeded. CREDIT AND COUNTERPARTY RISK CFM Indosuez Wealth is exposed to counterparty risks in relation to natural persons, asset structures whose economic beneficiaries are natural persons or commercial companies linked to an entrepreneur client whose activity or decision-making centre is based in Monaco. Any exception to this scope of counterparties is subject to prior approval by Indosuez Wealth Group General Management and its RPC department. With regard to financial institutions, the Indosuez Wealth Group does not have any risk delegation (CACIB process). Management Granting process The Indosuez Wealth Group's Framework Directive defines credit risk management in private banking and specifies the nature and type of eligible counterparties and the financing methods that can be envisaged. The lending policy is based mainly on the nature of the transactions, the delegate system, the credit decision process and the management of collateral. Transactions are selected on the basis of the type of loan granted, which can take 8 distinct forms: cash flow requirements, investment in movable assets, specific assets, mortgage loans, corporate loans, asset management transactions, Private Equity subscriptions and, mainly, bond issues and guarantees. The Risk and Permanent Control Department examines all applications submitted by the Sales Department and issues an opinion on each loan application. The local Risk Committee has sole authority to decide on the granting of loans. The Legal and Compliance functions are represented on the Risk Committee. In the event of an unfavourable opinion, an appeal procedure may be activated to submit the application to the higher decision-making body (local Risk Committee/Indosuez Wealth Group Credit Committee). Delegation mechanism All lending decisions are governed by the principle of dual signature by an authorised sales manager (Front Office signature) and by an authorised Risk and Permanent Control representative (Risk signature) depending on the level of local delegation. The Chief Executive Officer of CFM Indosuez Wealth has delegated risk commitment authority for Wealth Management and Corporate clients. The Risk and Permanent Control Department manager has the same level of signing authority as the Managing Director. After being analysed and reviewed locally, loan files whose characteristics exceed CFM Indosuez's level of delegation are subject to an arbitration procedure and escalated to the Indosuez Wealth group and, where appropriate, to CACIB's RPC/DRI. Monitoring Credit and counterparty risks at CFM Indosuez Wealth are monitored by the Risk and Permanent Control Department, which reports operationally to the Chief Executive Officer and in terms of line management to the Indosuez Wealth Risk and Permanent Control function. Counterparty risk is focused on the client lending business and is part of Wealth Management business line’s risk management strategy, approved by the governing bodies of CA CIB and CA SA and transposed in Indosuez Wealth Group’s Framework Directive. Annual Report 2023 45
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