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Bank Supervision | Supervisory Review and Evaluation Process (SREP)

Business Model Analysis

The focus of the supervisory analysis of the bank's business model is on the assessment of the viability of the bank’s current business model and the sustainability of its strategic plans in the existing economic environment.

The business model analysis takes into account the following elements: ability to generate returns in view of the bank's risk appetite and its funding structure; (lack of) concentration of property/assets or income sources; bank's competitive advantages in the market and how the bank's strategy impacts its competitiveness; assessment of assumptions about the future business environment which the bank used in its financial forecasts; adequacy and/or feasibility of strategic goals.

The weaknesses identified in the business model analysis are used in detection of the bank's key vulnerabilities which will certainly have a significant impact on the bank's operation and its risk profile. In addition, the business model analysis enables early identification of problems which the bank is facing or is likely to face. The results obtained by the business model analysis are taken into account in the assessment of all other SREP elements.