Credit Risk Management Policy¶


Code	`CRE-001`
Domain	Credit Risk
Owner	Head of Credit Risk
Status	Draft
Applicability	Platform
Jurisdiction	NZ + AU
Business domain	BD05
Review date	2027-03-25

Regulations: APS 220 Credit Quality · RBNZ BS2A/BS2B Capital ¶

Purpose¶

Govern the platform's overall framework for identifying, measuring, monitoring, and managing credit risk across all lending products and counterparty exposures. Establishes the credit risk appetite, rating methodology, approval authority framework, portfolio monitoring standards, and watch list process.

Scope¶

All credit exposures including retail loans, personal credit facilities, revolving credit, and counterparty exposures arising from treasury activities. Covers the full credit lifecycle from origination through to collections and write-off. Applies to NZ and AU operations.

Policy statements¶

The platform SHALL maintain a credit risk management framework covering: credit risk appetite definitions, credit rating methodology, credit approval delegation authorities, portfolio concentration limits, credit risk monitoring standards, watch list procedures, and the process for managing deteriorating credit.

All credit exposures SHALL be rated using the approved credit risk rating methodology (CRE-003) at origination. Ratings SHALL be reviewed at least annually and following any material change in the borrower's circumstances or credit quality.

A monthly credit risk dashboard SHALL be produced and presented to the CRO covering: portfolio composition, delinquency rates by product and segment, stage migration trends, concentration metrics against limits, and watch list movements.

Portfolio concentration exposures against sector, geography, product type, and individual counterparty limits SHALL be monitored monthly by the credit risk function. Any breach of a concentration limit SHALL be escalated to the CRO within 24 hours per CRE-005.

The credit watch list SHALL be maintained by the credit risk function and reviewed monthly by the CRO. Exposures meeting any early warning indicator — including missed payments, adverse credit bureau events, financial statement deterioration, or sector stress signals — SHALL be placed on the watch list and subject to enhanced monitoring.

Where a watch-listed exposure deteriorates to the point that loss is probable, it SHALL be referred to the specialised asset management process and provisioned accordingly per CRE-006.

Credit risk models — including scorecards, rating models, and ECL models — SHALL be subject to independent validation per DT-005 (Model Risk Management Policy) before deployment and at least annually thereafter.

The credit risk framework SHALL be reviewed by the CRO at least annually and following any material change in the credit environment, product portfolio, or regulatory requirements.

The Board Risk Committee SHALL receive a credit risk report at each meeting covering portfolio quality, concentration exposures, and any material credit events since the previous meeting.

All credit exposures, rating records, watch list movements, and limit breach records SHALL be retained for 7 years.

Satisfying modules¶

Module	Name	Mode	Description
MOD-028	Credit score & risk rating	`AUTO`	Credit risk rating applied consistently to every borrower — no subjective override without documented justification
MOD-066	Collateral & security management	`CALC`	Feeds current collateral coverage ratios into credit risk monitoring so secured and unsecured exposure is correctly tracked.
MOD-105	Product eligibility engine	`GATE`	Credit product eligibility enforces maximum DTI, credit tier floor, and CDD tier requirements before the product can be offered or applied for.

MOD-106	ROTE engine	`CALC`	Risk-adjusted return calculated using RWA-based regulatory capital, ECL provision, and NIM attribution — providing a capital-efficiency view of credit product performance.

MOD-115	Property security and LVR management	`GATE`	Loan cannot settle without a registered security instrument recorded and LVR calculated within policy limits.
MOD-117	Overdraft management engine	`CALC`	Drawn overdraft balances contribute to credit exposure reporting and concentration risk calculations.
MOD-121	Construction loan drawdown engine	`CALC`	LVR is recalculated after each drawdown using the current drawn balance against the most recent valuation, with the result fed to MOD-115.
MOD-132	Loan restructure and variation workflow	`GATE`	Material variations — term extension, rate type change, and capitalisation of arrears — require a fresh creditworthiness check via MOD-029 before the variation can proceed.
MOD-167	Credit card facility engine	`AUTO`	Credit card revolving facility balance and utilisation are tracked per customer account with full audit trail for credit risk reporting.

Part of Credit Risk · Governance overview Compiled 2026-05-22 from source/entities/policies/CRE-001.yaml