Our performance is based on qualified management in the origination, structuring of assets and identification of funding sources. Through this strategy and our deep knowledge of the Brazilian and global markets, we seek to obtain favorable financial conditions in terms of cost and tenor in all our operations.
Our Funding team is responsible for offering and trading fixed income securities and bilateral operations with institutional clients, such as banks, assets, investment platforms and insurance companies. This structure further reinforces the integrity and security of our financial processes, both in Brazil and abroad.
In the local market, we operate mainly with instruments such as LCA (Agribusiness Letters of Credit) and LFs (Financial Bills). In the international market, we have expanded our relationship network with banks in various markets such as Asia, the Middle East, North America, Europe, among others.
The credibility and solidity of our management are attested by the largest rating agencies in the world. In 2024, Moody’s upgraded BOCOM BBM’s global rating (local and foreign currency) from Ba1 to Baa3. With this update, the Bank achieved international investment grade rating.
On a national scale, Moody’s awarded us the AAA.br rating, the best credit rating in this category. Fitch also reaffirmed its assessment in 2024, rating BOCOM BBM AAA(bra), the highest level on a local scale.
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Risk management is a fundamental pillar for building sustainable businesses and ensuring the Bank’s good performance in the long term. Therefore, we adopt the highest governance standards and seek the continuous improvement of our processes, placing BOCOM BBM at the frontier of the country’s financial industry.
Over the past decades, we have developed a series of improvements to our proprietary models and applied appropriate risk management methodologies to the business environment in Brazil, always prioritizing transparency and safety.
From these initiatives, we create conditions to offer credit in a safe and responsible manner. We also carry out an adapted, transparent and efficient liquidity management, adding value to our business.
Find out more details about our risk management model below.
At BOCOM BBM, all members of senior management and employees participate in an integrated manner in the monitoring, evaluating and controlling of risks. In this way, we further strengthen our governance and decision-making processes.
Our teams use risk models and parameters in actions such as calculating economic capital, funding policy, origination and management of the credit portfolio.
The Board of Directors is the collegiate body responsible for defining the guidelines, responsibilities and models used in risk management. It also approves the Risk Appetite Statement (RAS), which guides and directs our control policies and practices.
Thus, we manage risks cautiously and efficiently, with the effective participation of the entire Organization.
Credit risk
Market risk
Liquidity risk
Operational risk
Information security risk
Country risk
Reputational risk
Credit risk
It is the possibility of losses associated with failure by borrowers or counterparties to honor their financial commitments on time and in accordance with their contractual obligations.
We have a credit risk management structure composed of seven agents. Check them out in detail:
Sets credit limits for business groups; tracks and assesses the portfolio and levels of concentration and risk. Executes the Bank’s credit policies and establishes deadlines for solutions to issues relating to past-due loans or to deteriorating loan collaterals. If debt collection via the courts is necessary, for example, it decides when to file suit.
Approves risk management policies and limits at least once a year.
It is committed to monitoring the credit risk of operations, in accordance with the Bank’s rules and goals. Responsible for monitoring, identifying, measuring, controlling and reporting credit risk, and assuring compliance with the limits set by the Bank. Subordinated to the chief risk officer, it centralizes and analyzes information relating to the management of individual risk per transaction and consolidated credit portfolio risk. It produces reports that are used by the Credit Committee as a basis for its decisions.
Analyzes the credit risk of business groups with which the Bank has or plans to have credit relationships.
Draws up or analyzes all contracts signed by the Bank with clients; organizes and coordinates action to collect debts and protect the Bank’s rights.
Ensures that transactions comply with the terms and conditions stipulated in the Credit Limit Proposal (CLP), and that loan security is in order. Also responsible for issuing the contracts signed by the Bank with clients.
Assesses and continuously monitors all business units and credit facility extension processes to ensure they are implemented in accordance with the Bank’s governance and risk management policies.
Market risk
Market risk is the possibility of losses in the market value of portfolios, instruments or investments due to variations in prices, interest rates or exchange rates. Inflation and fluctuations in stock and commodity prices are some of the key market risk factors.
We have a team and specialized tools that help us identify, measure and monitor the risks we assume in this segment. The Market Risk unit reports to the chief risk officer (CRO) and shares its analyses with the Risk Committee and the Executive Committee. The unit comprises the following:
Meets every quarter to analyze and review risk management policies, sets operational limits for market risk, and presents these to the Board of Directors for approval.
Calculates and manages risk metrics.
Responsible, among other things, for the pricing models and sources used to mark products to market. It does so independently of management areas.
Ensures that our market risk management policies are consistent and adequate to procedures.
One of the statistical tools we use at BOCOM BBM to monitor risks is Value at Risk (VaR). Calculated daily, VaR is used to measure the institution’s potential loss under normal market conditions for a given confidence level and timeframe.
The model for calculating VaR is regularly backtested.
The limit we set for VaR can be allocated among the many risk factors by the chief treasury officer. Stress scenarios are established every quarter by the Risk Committee, with autonomy from the management areas, and these scenarios are analyzed on a daily basis by the Bank’s team.
Liquidity risk
Liquidity risk is the possibility of mismatched maturities, indexation mechanisms, currencies and/or values of possible payments and receivables. In practice, it is the risk that the institution is unable to honor its financial obligations, expected and unexpected, without affecting day-to-day operations and without incurring significant losses.
In accordance with the guidelines pre-defined by the Risk Committee and approved by the Board of Directors, the liquidity risk management strategy is oriented by the Bank’s liquidity goal, which is to guarantee sufficient funds to honor all liabilities and commitments at any time.
The objective is to ensure that free cash flow will always be sufficient to support business continuity even in a situation of severe stress.
Based on calculations performed to anticipate potential future scenarios, our team analyzes liquidity risk management information.
Consequently, all actions undertaken by the area are meticulously planned based on cash flow projections in anticipated scenarios and situations of financial stress.
We also monitor the inherent risk of each client, the necessity to inject new funds to meet liabilities, operational losses, derivative adjustments, and other existing obligations.
The main remit of Liquidity Risk, which reports to the chief risk officer, is to assure compliance with operating limits and issue internal reports designed to contribute to decision making.
In this cycle, Internal Auditing has three focuses: ensuring procedural compliance, consistency across policies, and the defined framework.
Operational risk
Operational risk is the possibility of losses resulting from failure, deficiency or inadequacy of internal processes, systems or people, as well as external events.
The definition includes legal risk associated with inadequacy or deficiency in contracts signed by the institution, sanctions due to non-compliance with legal provisions, and compensation for damages to third parties resulting from the activities carried out by the institution.
Our Operational Risk Management Policy is a document made available to all Bank’s collaborators to formalize the methodology, processes, roles and responsibilities in procedures for document registration and storage of the information used to manage operational risk.
The department, which is segregated from Internal Auditing and reports to the Director of Risk and Internal Controls, is also responsible for publishing data to ensure that risk management activities are transparent. In accordance with this policy, all decision-making follows the best practices and complies with the applicable rules and regulations.
Information security risk
Information security risk is the potential harm arising from unauthorized access, use, disclosure, interruption, modification or destruction of digital information.
This risk can originate from a variety of sources, including cyber threats, data breaches, malware, and other security incidents that compromise the confidentiality, integrity, and availability of information.
Our mitigation strategy is based on three pillars:
BOCOM BBM maintains an Information Security Policy in line with Resolution 4.893, of April 26, 2018, of the National Monetary Council (CMN), contemplating, among other aspects:
• The confidentiality, integrity, security and availability of the data and information systems used by the Bank;
• The registration, cause analysis and impact assessment of events related to BOCOM BBM’s information security, as well as the control of incidents relevant to the institution’s activities.
The Bank constantly invests in new technologies that seek to prevent, detect and reduce vulnerability to cyberattacks, in addition to implementing specific controls, including those aimed at information traceability, which seek to ensure the security of sensitive information and the monitoring of our data.
The Information Security area is responsible for directing, monitoring and following up on information protection actions at all levels, interacting with the responsible areas to ensure compliance with all determinations, including working together with the technology area to promote improvements in the controls, processes and technologies implemented.
In addition to that, as part of its strategy, the Bank invests in training its Security teams and seeks to promote awareness among all employees and related parties.
Country risk
Country risk refers to economic, political and social events and changes in a particular country or region that lead to the inability or refusal of debtors to pay their debts or that cause losses to their creditors. Its scope includes sovereign risk, transfer risk, contagion risk, foreign exchange risk, macroeconomic risk, political risk and indirect country risk.
BOCOM BBM effectively identifies, measures, monitors and controls country risk and formulates procedures based on its strategic objectives, risk exposure and business complexity.
Reputational risk
Reputational risk refers to the risk arising from internal or external events that may tarnish or damage BOCOM BBM’s reputation with: (I) the media; (II) our customers; (III) our employees; and (IV) the public (collectively referred to as “stakeholders”).
Our reputational risk management includes a classification mechanism that helps us assess reputational risk events, considering several factors, such as their nature, severity, dissemination, speed, impact and development trend, and allows us to prepare corresponding response plans. We have also established a reputational risk event reporting mechanism that includes reporting lines and timelines, which may vary depending on the degree of the event.
Also, in order to identify and prevent potential threats to the institution’s reputation, BOCOM BBM employs several controls and procedures, such as:
– Monitoring routines to ensure that publications and media related to BOCOM BBM are properly identified and addressed;
– Diligence of the parties with whom BOCOM BBM maintains a relationship (for example: clients, partners, employees, suppliers and service providers), as described in our Policy and in our Anti-Money Laundering procedures;
– Measures and controls based on regulatory requirements and best market practices to ensure information security and business continuity;
– Maintenance of Ombudsman and Complaint Channels to ensure proper compliance with complaints from users and whistleblowers;
– Monitoring routine to identify the issuance of regulations that may impact BOCOM BBM’s business and processes;
– Continuous monitoring and follow-up of operational risk events reported by BOCOM BBM areas.
The Compliance area acts to ensure that all employees and administrators of BOCOM BBM carry out their activities in accordance with the highest standards of integrity and responsible conduct, in compliance with our internal policies and with the laws and regulations in force.
Our structure has a Compliance Committee, which reports to the Board of Directors through the Executive Committee.
We also have a Code of Ethics and Conduct, through which we establish four basic principles that guide our processes: transparency, integrity, responsibility and excellence.
We disseminate our Compliance culture through periodic training, close monitoring and definition of internal regulations.
With these initiatives, we seek to strengthen the integrity and sustainability of our business, contributing to important fronts, such as the prevention of money laundering and terrorist financing, as well as the fight against corruption.
We offer a whistleblower channel so that employees, collaborators, clients, users, partners or suppliers can report, without the need to identify themselves, situations related to BOCOM BBM’s activities that involve any indication of violation of the laws or guidelines established in our Code of Ethics and Conduct.
Our governance structure is comprised of the Shareholder Meeting, the Board of Directors, the Executive Committee and 15 specialized committees, including the Women’s Engagement (WE) Committee.
The decisions made by these bodies seek to reflect our commitment to our values: transparency, agility, effectiveness and security. Banco BOCOM BBM’s guidelines are also constantly updated to ensure they are in line with the best market practices.
We consistently invest in the professional development of our employees, creating opportunities for them to reach their full potential.
Currently, around 80% of our senior executives and 70% of our managers began their careers at BOCOM BBM, which demonstrates our commitment to employee development. We work to provide a transparent, dynamic, and meritocratic environment. In this way, we ensure that everyone can build a consistent professional development journey aligned with the company’s objectives.
Our managers monitor the development of each of the Bank’s professionals. We also have a semi-annual variable compensation system, based on evaluations that combine individual and collective deliveries.
In this way, we align the achievements of each professional with long-term results.
We work to provide an inclusive, diverse and safe work environment with opportunities for all. Our actions are always conducted following the Code of Ethics and Conduct, which ensures fairness and transparency within the Bank.
As a part of our talent attraction strategy, we partner with renowned centers of higher education and research to offer scholarships for undergraduate, postgraduate and master’s programs at the best Brazilian universities.
We believe that it is essential to continuously invest in the education of our staff and in new talents to have teams increasingly qualified and prepared for the challenges presented by the market.
We also sponsor conferences, career fairs and hackathons. In this way, we contribute to bringing students closer to professionals, promoting an important link between the academic world and the labor market.
