Regulatory Information

Risk Management Guidelines

IFB risk management guidelines

1. Credit risk

Conventional loans are generally provided through IFB’s correspondent banks. The following criteria apply whenever IFB provides, structures or arranges a facility.

  • Loan-to-value (LTV). A maximum LTV ratio of 80% applies to residential mortgages, leaving a cushion against falls in market value.
  • Debt service coverage ratio (DSCR). Commercial borrowers must maintain a DSCR above 1.2x, demonstrating sufficient income to service their loans.

2. Liquidity risk

  • Liquidity coverage ratio (LCR). In line with regulatory standards, IFB maintains an LCR of at least 100%, so that short-term obligations can always be met.
  • Net stable funding ratio (NSFR). The NSFR is maintained at a minimum of 100%, matching available and required stable funding over a one-year horizon.

3. Market risk

  • Value at risk (VaR). The one-day VaR at a 95% confidence level is limited to USD 10 million.
  • Stress testing. Stress tests simulate severe market movements, for example an equity price fall of 30 to 40%, to confirm resilience.

4. Operational risk

  • Loss tolerance. Operational losses are capped at USD 5 million a year; beyond that threshold, strategic corrective measures are taken.

5. Reputational risk

  • Client satisfaction. A minimum client satisfaction score is maintained to protect and strengthen IFB’s reputation.
  • Social media monitoring. Negative mentions are measured, and intervention follows once a defined threshold is crossed.

6. Systemic risk

  • Capital adequacy. IFB meets the Basel III minimum requirements: a CET1 ratio of at least 4.5%, a Tier 1 ratio of at least 6% and a total capital ratio of at least 8%.
  • Leverage ratio. A leverage ratio of at least 3% guards against excessive leverage.
  • Compliance thresholds. IFB sets benchmarks for compliance breaches; any exceedance triggers review and remediation.

These guidelines express IFB’s commitment to financial stability, operational integrity and the trust of its stakeholders. They are designed to anticipate risk rather than react to it, and they are reviewed and adjusted regularly in line with market conditions, regulation and our strategic objectives.