Annual and interim reports

Risk management

This chapter provides an overview of FMO's risk governance and risk management approach. The sections describe the key risk domains relevant for FMO and developments throughout 2019.

Enterprise Risk

Capital is central to a bank’s ability to absorb unexpected losses and to be able to continue its operations. FMO aims to maintain a strong capital position that meets regulatory requirements and supports its AAA rating.

Financial Risk

Investment risk is defined as the risk that actual investment returns will be lower than expected returns, and encompasses credit, equity, concentration and counterparty credit risks.

Non-Financial Risk

Environmental & Social (E&S) risk refers to potential adverse impacts of the FMO investments on the environment, the employees and workers, the communities, and other stakeholders.

Segment reporting by operating segments

The Management Board sets performance targets, approves and monitors the budgets prepared by servicing units.

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Information about geographical areas

FMO operates in the following four geographical markets: Africa, Asia, Europe & Central Asia, Latin America & the Caribbean. The allocation of revenues to the markets is based upon the geographical classification of the financing projects.

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Disaggregation of revenue

The following table sets out the disaggregation of the Remuneration for services rendered based on the primary geographical areas and strategic sector.

Segment reporting of funds managed for the risk of the Dutch State

Apart from financing from its own resources, FMO provides loans, guarantees and equity investments from special government funds, within the conditions and objectives of these facilities.

Read more ›Segment reporting of funds managed for the risk of the Dutch State

Analysis of financial assets and liabilities by measurement basis

The significant accounting policies summary describes how the classes of financial instruments are measured, and how income and expenses, including fair value gains and losses, are recognized.

Read more ›Analysis of financial assets and liabilities by measurement basis

Fair value of financial assets and liabilities

All financial instruments for which fair value is recognized or disclosed are categorized within the fair value hierarchy, based on lowest level input that is significant to the fair value measurement as a whole, as follows:

Read more ›Fair value of financial assets and liabilities