Strategic, reputational, contagion and emerging risk

Strategic risk consists in a decline in earnings or capital arising from incorrect business decisions, inadequate implementation of business plans or strategies, incorrect allocation of resources, lack of responsiveness to changes in the business environment that could lead to a fundamental change in the Group’s risk profile. In the Management report, the main objectives of the Group have been indicated. Strategic risk management is embedded in the strategic planning process and, consistently with that, it is arranged with a three-year horizon and reviewed annually. In this context the hypothesis made are subject to periodical evaluation and, in case, adapted to new market conditions.

Reputational risk derives from a deterioration of reputation or from a negative perception of the Group image among its customers, counterparties, shareholders or Supervisory Authorities.

Contagion risk follows from being part of the Group and derives from the possibility that problems arising within one of the Group’s companies negatively affect the solvency, economic or financial situation of other companies within the Group.

Finally, emerging risks derive from internal or external environment changes, that may bring to increased exposures to risks already included in the Group Risk Map described above or risks that may require the introduction of new categories.