Fiercer competition has been forcing organizations to develop more efficient processes, which require effective internal controls that assure risk levels and quality standards suitable to the desired results.

 

This management is important to protect investors, as well as provide assistance to the decision-making processes. It also ensures the achievement of goals that have been established, in addition to the increase in profitability. Therefore, the correct pricing of products, the elimination of inefficient processes, and the efficient allocation of resources have become companies' competitive advantages.

 

In order to respond to this demand, Unibanco has structured its Risk Management in an integrated way to ensure the best possible risk/return ratio for the Unibanco Group by measuring this ratio for the main transactions, products and business areas and incorporating the results into the decision-taking process and the recognition of results.

 

 

Risk management began by measuring the risks associated with the financial market (via VaR) and with credit. Once these had been quantified and dealt with, however, it was perceived that risks tend to relocate to areas where they were not measured. It is now being applied on a much wider basis, therefore, and ideally risk-management systems should offer a complete picture of all corporate risks.

 

Thus, the aim of integrated risk management is to identify, measure, minimize and manage all the risks of the Unibanco Group in order to reduce earnings volatility, maximize stockholder returns and strengthen corporate governance through the application of more effective internal controls and a more adequate use of resources.

 

The group called business risk is managed through decision-making processes which involve professionals in the areas of Risk, Compliance, Processes, Products, Quality, Operations and Business.

 

Business Risks are generally those risks assumed voluntarily when the company decides to create a competitive advantage and, therefore, value for the stockholders. Such risks are associated with the market in which the company operates, which includes product design and/or sales. The product's market creates an implicit exposure to macroeconomic risks, resulting from economic cycles, changes in monetary or fiscal policy, or even possible technological innovations. Business risks also include event risks, generally associated with the impact of financial variables. Until now, we have been dealing with market, credit and liquidity risks. These risks are also symmetrical, as they are capable of generating both gains and losses.