The main objective of capital management for the Bank is to ensure the Bank's compliance with external regulatory capital requirements and to maintain a high credit rating and capital adequacy ratios necessary to conduct operations and maximize shareholder value.

The Bank implements an integrated approach to capital management, ensuring alignment with the current market situation, long-term strategy, and the scale of the Bank's operations. The capital management system is aimed at effective monitoring and control of the level of total capital adequacy.

Components of the capital management system:

1)   capital management policy;

2)   capital funding plan;

3)   procedures for monitoring and controlling the level of capital adequacy;

4)   management information system;

5)   internal control mechanisms;

6)   regular assessment of the capital management system's effectiveness by the internal audit unit.

              For the purpose of assessing capital adequacy, the Bank has developed the Regulations on the Internal Capital Adequacy Assessment Process (ICAAP), approved by the Bank's Board of Directors.

Within the framework of ICAAP, the Bank performs:

-     identification, assessment, and control of material risks inherent in the Bank's activities;

-     strategic capital planning;

-     stress testing of the Bank's financial stability;

-     monitoring of the compliance of the Bank's total capital adequacy with regulatory requirements.

Procedures for conducting total capital adequacy analysis, taking into account the current risk profile and future development plans of the Bank, as well as the results of stress testing of the Bank's material risks to identify potential capital needs, include the following activities:

1)   conducting regular stress testing of the Bank's risks and assessing their aggregate impact on the Bank's total capital adequacy level;

2)   calculation of current and forecast risk levels;

3)   determination of the need for capital increase during the development/adjustment of the Bank's budget/development plan/long-term strategy;

4)   approval of the Bank's budget/development plan/long-term strategy by the Board of Directors, including the Bank's intentions to change the capital level, taking into account the risk appetite level of the Bank's strategy.

For the purpose of assessing liquidity adequacy, the Bank has developed and implemented the Regulations on the Internal Liquidity Adequacy Assessment Process (ILAAP), approved by the Bank's Board of Directors. Within the framework of ILAAP, the Bank carries out an effective process for identifying, assessing, monitoring, and controlling liquidity risk, which includes forecasting cash flows for assets and liabilities across different time intervals. The Bank assesses all balance sheet and off-balance sheet items affecting the level of liquidity risk, as well as the liquidity level in the market, to cover the Bank's need for raising funding in order to regulate liquidity risk.

The time horizons for liquidity assessment provide for the need for:

-     liquidity and funding opportunities on an intraday basis;

-     liquidity and funding opportunities for short and medium-term horizons up to 1 (one) year;

-     long-term liquidity of more than 1 (one) year.

Procedures for conducting liquidity adequacy analysis include the calculation of current and forecast risk levels, regular stress testing of the Bank's risks and assessing their aggregate impact on the Bank's liquidity level, as well as the development and implementation of measures for prompt response to potential crisis situations aimed at ensuring financial stability and compliance with liquidity ratios in the long term.