44
Disclosure in Accordance with Part 8 of Regulation (EU) No. 575/2013 (CRR) of Western Union International Bank GmbH
Disclosure in Accordance with Part 8 of Regulation (EU)
No. 575/2013 (CRR)
of Western Union International Bank GmbH
Table of Contents
About this document ............................................................................................................................................. 3
1. General information about Western Union International Bank GmbH ............................................................ 3
2. Risk management objectives and policy (Art. 435 CRR) .................................................................................... 4
3. Scope (Art. 436) ............................................................................................................................................... 13
4. Own funds (Art. 437 CRR) ................................................................................................................................ 14
5. Own funds requirements (Art. 438 CRR) ......................................................................................................... 17
6. Counterparty credit risk (Art. 439 CRR) ........................................................................................................... 19
7. Capital buffers (Art. 440 CRR) .......................................................................................................................... 20
8. Indicators of global systemic importance (Art. 441 CRR) ................................................................................ 22
9. Credit risk adjustments (Art. 442 CRR) ............................................................................................................ 22
10. Unencumbered assets (Art. 443 CRR) ........................................................................................................... 35
11. Use of External Credit Assessment Institutions (ECAIs) (Art. 444 CRR) ........................................................ 35
12. Market risk (Art. 445 CRR) ............................................................................................................................. 37
13. Operational risk (Art. 446 CRR) ...................................................................................................................... 37
14. Exposures in equities not included in the trading book (Art. 447 CRR) ........................................................ 37
15. Exposure to interest rate risk on positions not included in the trading book (Art. 448 CRR) ....................... 38
16. Exposure to securitisation positions (Art. 449 CRR) ...................................................................................... 38
17. Remuneration policy (Art. 450 CRR) .............................................................................................................. 38
18. Leverage ratio (Art. 451 CRR) ........................................................................................................................ 41
19. Use of the IRB approach to credit risks (Art. 452 CRR).................................................................................. 42
20. Use of credit risk mitigation techniques (Art. 453 CRR) ................................................................................ 42
21. Use of Advanced Measurement Approaches to operational risk (Art. 454 CRR) ......................................... 43
22. Use of Internal Market Risk Models (Art. 455 CRR) ...................................................................................... 43
23. Evaluation of Risks in connection with COVID-19 ......................................................................................... 43
3
About this document
In accordance with Part 8 of Regulation (EU) No. 575/2013 (Capital Requirements Regulation – CRR), institutions
within the meaning of Art. 4 (3) CRR are required to fulfil increased information duties in relation to their organisa-
tional structure, their risk management and their risk capital situation within the scope of their external reporting.
With Part 8 of the CRR, the third pillar of Basel II (“Market Discipline”) was implemented in Europe. The CRR applies
directly and uniformly in all Member States of the European Economic Area (EEA) as an EU Regulation and requires
no implementation in national law. In addition to Part 8 of the CRR, all implementing regulations of the European
Commission and guidelines of the European Banking Authority (EBA) have been taken into consideration in the
preparation of this document.
Western Union International Bank GmbH is fulfilling these information duties at the consolidated level of the credit
institution group with this document, which is available on the website www.westernunionbank.com. Unless stated
otherwise, all data refer to 31 December 2019 and to the credit institution group of Western Union International
Bank GmbH.
The structure of this document follows the structure from Part 8 of the CRR.
1. General information about Western Union International Bank GmbH
Western Union International Bank GmbH (WUIB), with its registered office in Vienna and its business address at The
Icon Vienna (Turm 24), Wiedner Gürtel 13, 1100 Vienna, registered with the commercial register under no. 256184 t,
was founded in 2004 and is a wholly-owned indirect subsidiary of The Western Union Company, which is listed on
the New York Stock Exchange (NYSE: WU) and is the leading service provider for money transfer globally.
WUIB engages in the following business areas:
Money transfer business (private and corporate clients):
WUIB engages in the money transfer business in its own branches in Austria, Germany and France, through branches
of a sales partner (agents) in Austria as well as through an Internet platform (www.westernunion.com) in all coun-
tries in the European Economic Area.
At present, WUIB offers the following products:
• Cash transfer (Cash-to-Cash Money Transfer): This is the standard product, which is sold via WUIB branches
or via the branches of agents by the sender and recipient of the cash transfer. The conclusion of the contract
takes place by order placement and paying-in of the amount to be transferred and the service fees by the
sender. The sender specifies the recipient and the country in which the cash transfer shall be disbursed. This
disbursement takes place in cash to the recipient, whose identity is verified by presenting a valid identification
document. Alternatively, disbursement can be made to a (bank) account.
• Online money transfer: This product version allows the sender to send funds from a credit card and/or from
an online (bank) account via an Internet platform of Western Union (www.westernunion.com) or via the
online banking platform of specific banks. As with the standard product, the sender specifies the recipient
and the country in which the money transfer shall be disbursed. The disbursement takes place in cash to the
recipient. Alternatively, the disbursement can be made to a (bank) account.
• Money transfer for corporate clients (QuickPay/QuickCash): The first product version in the corporate client
area (QuickPay) enables private individuals to pay amounts directly to a company, which is in a contractual
4
relationship with WUIB, for the payment of invoices. The processing takes place by the private individual
handing over the amount to a branch of WUIB or one of its agents, which subsequently transfers the amount
to the corporate client. The second product version in the corporate client area (QuickCash) enables corpo-
rate clients to send monetary amounts worldwide swiftly via the Western Union money transfer system to
private individuals (for example, as “Emergency Cash”). The recipient may collect the money transfer from a
Western Union agent. The corporate client subsequently transfers the owed monetary amounts to WUIB.
• Foreign currency solutions for corporate clients (Western Union Business Solutions or WUBS): WUIB offers
foreign currency solutions with hedging instruments in the form of FX forwards and FX options for corporate
clients in Great Britain, France, Austria, Germany, Belgium, Italy, the Czech Republic, Poland, Slovakia and
Spain.
This business division primarily aims at small and medium-sized enterprises (SMEs) and occasionally at other
corporates in import and export business with the need for foreign currency payments. For example, if an
importer of specific goods must make a payment in foreign currency, he can process the payment service, as
well as the required foreign currency transaction (FX spot, for example) via WUIB. Furthermore, if a date of
payment is agreed and if there is need for hedging the foreign currency movements, in addition to the pay-
ment service, WUIB also offers clients the above-mentioned foreign currency hedging instruments.
• The business activities of WUIB in the field of money transfer business are complemented by banking business
activities including deposit, giro and credit business with a view to WUBS business partners of WUIB. In this
area, loan products with a short tenor respectively trade credit and settlement credit products are covering
the need for short-term financing.
• WUIB offers FX exchange business in the WUIB branches in Austria, Germany and France.
2. Risk management objectives and policy (Art. 435 CRR)
2.1. Risk management objectives and policies (Art. 435 (1) letter a CRR)
On the one hand, the risk strategy of WUIB refers to Section 39a BWG [Austrian Banking Act] and on the other hand
to the specifics of WUIB (e.g. the business strategy or organisational structure).
With its risk policy, WUIB follows the general goal of increasing the risk awareness of all employees, in order to
identify all banking business risks and banking operational risks at an early stage, control such risks and align all
bank’s activities in a risk-oriented manner.
Within the scope of its annual risk identification process, WUIB defines all banking business and banking operational
risks, reviews their applicability with respect to the business model operated by WUIB and analyses their materiality
for WUIB within the scope of a risk assessment. Based on the result of this analysis, the management and limitation
of risk categories is defined.
The risk management system of WUIB comprises all banking business and banking operational risks. The manage-
ment of the risks is integrated into the comprehensive procedure of overall bank management in an appropriate
manner, by taking account of the various risk types, as follows:
Credit risk:
The credit risk is the risk of a contracting party failing to fulfil its payment obligations at all or on time. To secure the
payment obligations, WUIB accepts bank guarantees, guarantees from corporates and private individuals, letters of
5
comfort and cash collateral. The credit risk is addressed by detailed and regular creditworthiness checks (balance
sheet analyses, assessment of the business models and industries, internal rating etc.). All clients/counterparts are
subject to regular credit monitoring, including adherence to approved limits and repayment terms.
Market risk:
The market risk comprises the price, currency and interest rate risk. Due to WUIB’s business model, these risks are
non-material to WUIB:
- WUIB does not have any trading book activities and therefore does not exceed the limits of Art 94 CRR for
the application of the relevant exceptions.
- Around foreign currency solutions for corporate clients, the contracted option and forward transactions
with customers are secured simultaneously and congruently with a hedging counterparty, which is part of
the Western Union Group.
- The interest rate risk is limited by linking the loan interest to interest rate indices (as a rule, EURIBOR/LI-
BOR), as well as limiting the maturities of term investments.
Risks from the banking book, i.e. interest change risk and the credit-spread risk, are calculated separately and
recorded under pillar 2, as well as being allocated internal limits/warning limits.
Liquidity risk:
The liquidity risk is the risk that WUIB will not be able to fulfil present or future payment obligations completely or
not on time due to a lack of corresponding liquidity (available funds). Through internal settlement systems in the
areas of money transfer, foreign currency payments and nostro account management, the available liquidity and a
possible liquidity requirement can be shown, and the liquidity requirements are known. The investments of WUIB
are also aligned towards the requirement for availability of a large part of the liquidity at short notice. For the cov-
erage of additional liquidity requirements, bank credit facilities and a liquidity emergency line provided by another
company in the Western Union Group are set up.
Operational risk:
The operational risk is the risk of losses, which are caused by inadequacy or failure of internal systems or procedures,
due to human error or external events. WUIB classifies operational risks in categories in accordance with the BCBS
(Basel Committee for Banking Supervision) Guidelines.
The operational risk potential is addressed within the scope of regular self-assessments, as well as annual risk as-
sessments, the monitoring of early-warning indicators and through the systematic evaluation of the events database
in operational risk. The “Incident Reports” contained therein are reports, which are prepared after each operational
risk event. The events are classified, inter alia, according to business sector, product, department and the potential
implications for the before mentioned categories. Subsequently, the organisational structure and process organisa-
tion, including the internal rules of conduct and work instructions, are constantly reviewed. If necessary, the internal
rules of policies and operating instructions are revised, and additional measures are implemented for the reduction
or avoidance of operational risks (Action Plans).
Macroeconomic risk:
The macroeconomic risk is defined as the risk of loss, which results from the sensitivity of WUIB’s business activity
to macroeconomic indicators (e.g. GDP growth, unemployment, etc.). The biggest risk is a persistent recession,
which results in a rise in unemployment and thereby impairs the exposures WUIB has vis-à-vis its clients.
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Business risk:
The business risk is the risk of losses from unexpected profit fluctuations, which result from changes to external
general conditions with a given business strategy and cannot be compensated with cost reductions.
Risk of excessive leverage (leverage risk):
The leverage risk means the risk resulting from an institution's vulnerability due to leverage or contingent leverage
that may require unintended corrective measures to its business plan, including distressed selling of assets which
might result in losses or in valuation adjustments to its remaining assets.
2.2. Organisational structure of risk management and monitoring, as well as the scope and nature of the risk
reporting and measurement systems (Art. 435 (1) letter b and c CRR)
The Management Board of WUIB has the joint responsibility for the ICAAP and the ILAAP. It derives the risk policy
principles and the risk strategy from the business strategy of WUIB. The Management Board also makes decisions
about the basic risk management procedures to apply. The Management Board informs the Supervisory Board
about the risk situation of WUIB.
The organisational structure of WUIB is consistently based on a clear and distinct separation between the risk-taking
organisational units in the “market” area (Sales, Marketing, Product Development, etc.) and other - particularly risk-
monitoring organisational units in the “risk controlling and shared services” area (Accounting, Risk Management,
Operations, Legal, IT, Compliance etc.), in order to avoid conflicts of interest from the very outset. WUIB’s Manage-
ment Board comprises of three Managing Directors as of December 31, 2019, whose organisational areas of respon-
sibility are distributed according to this approach, with 1 MD director being responsible for the “market” units, 1
MD/Chief Risk Officer being responsible for the Risk management area and the Chief Executive Officer being respon-
sible for shared services.
The Risk Management is under the management of the Chief Risk Officer (CRO) and is completely independent from
the risk-taking business divisions of WUIB. Risk activities are organised through several departments: Credit man-
agement (with separated Credit Underwriting and Credit Monitoring teams), Risk Steering and Management, Oper-
ational Risk and Outsourcing Oversight (including Fraud Risk oversight and Internal Controls with the Internal Control
officer reporting directly to the CRO). The CRO also oversees the Data Privacy area for WUIB.
The Internal Audit and Compliance departments, which additionally have a risk monitoring function in the wider
sense, report directly to the entire Management Board.
Efficient risk management steering is complemented by several committees (ref. 2.9).
Within the scope of the Risk Committee, reporting takes place on a monthly basis concerning the risk-bearing ca-
pacity of WUIB (ICAAP reporting), within the scope of the Asset and Liabilities Committee (ALCO), on a monthly
basis, reporting takes place concerning the liquidity situation of WUIB (ILAAP reporting).
Quarterly, the Supervisory Board receives a full report about the risk-bearing capacity (ICAAP)/liquidity situation
(ILAAP) of WUIB.
For the addition of new business fields, new markets, new client categories or new products, a formalised and struc-
tured product approval process is followed. This ensures that adequate review and approval by all relevant depart-
ments and the Management Board, is done prior to entering into new business fields, new markets, new products
etc. Subsequently, the product approval process also ensures the correct recording of the innovations concerned
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around transaction management, risk management, reporting, accounting and regulatory/statistical reporting.
2.3. Risk policy guidelines of risk management (Art. 435 (1) letter d CRR)
The Management Board specifies the risk management principles and is responsible for their implementation. The
risk management principles, as part of the risk strategy and the risk management processes (procedures) are laid
down in internal policies, operating instructions and process diagrams, which ensure an effective process organisa-
tion. The documents referred to are subject to a review at least once per year and are constantly monitored,
whereas the Internal Audit department has an essential function. Furthermore, the employees are trained on a
regular basis in relation to operating instructions and process flows.
2.4. Risk declaration of the Management Board regarding the adequacy of risk management procedures and the
risk profile of WUIB (Art. 435 (1) letters e and f CRR)
Completeness of risk identification is ensured by the annual risk identification process.
A risk management function is set up, which is independent from the operational business and has direct access to
and a reporting duty to the Management Board.
The risk management system and the risk management process of WUIB are appropriately set-up with respect to
the relevance and materiality of the risks and with respect to the complexity of the business model and comply with
the generally applicable standards on risk management according to the regulatory standards (BWG, KI-RMVO, CRR,
CRD IV).
The implemented risk management procedures and processes are subjected to the annually prescribed review. This
review includes:
- the complete recording of all banking business and banking operational risks, in consideration of the spe-
cific business model of WUIB
- the adequacy of the strategies and the methods for measurement and limitation of the material risk cate-
gories
- the adequacy of the hedging objectives within the scope of the risk-bearing capacity analysis
- the adequacy of the internal reporting
- the adequacy of the organisational set-up in risk management
The review process is conducted by “Risk Steering and Management” with the involvement of all departments of
the bank, as well as the Management Board. The results are documented in the form of a risk identification report
and communicated to the Management Board and the Supervisory Board.
To safeguard and monitor the capital adequacy, all significant quantifiable risks are integrated into the risk-bearing
capacity analysis, quantified and compared to the available funds on a monthly basis. Using the defined hedging
objectives for both views of risk-bearing capacity (going concern and gone concern), the risk tolerance is specified
and subject to a monthly review.
The risk tolerance is defined in the gone-concern view and in the going concern view, with consideration of the
results of the yearly stress tests. The risk appetite is defined with respect to the material risks and at the overall bank
level in consideration of a minimum capital buffer, in proportion to the risk tolerance.
The utilisation of the risk limits and the amount of the actual capital buffer are determined and reviewed on a
monthly basis using a confidence level of 99.9% in the gone-concern view and with a confidence level of 95% in the
going-concern view.
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In 2019, WUIB had a sufficient economic capital base (Risk Bearing Capacity, RBC):
As of December 31, 2019, the capital adequacy of WUIB constitutes of:
Value in EUR million
as of December 31, 2019
Gone-concern view Going-concern view
Available funds 77.65 39.53
Economic risk exposure 61.48 26.66
Capital buffer 16.17 12.87
Capital buffer in % 20.8 32.6
To check the resilience of the business model and the capital base, stress tests were performed.
The reporting duties to the Supervisory Board were fulfilled in the form of a comprehensive risk report.
The Management Board and the Supervisory Board have determined that the risk-bearing capacity of the bank ex-
isted at all times in the financial year 2019 and that no risks were identified, which jeopardised the risk-bearing
capacity.
2.5. Management and supervisory functions of the management body (Art. 435 (2) letter a CRR) as at December
31, 2019
Name Function in WUIB Other companies
with a management
function
Peter Bucher Chairman of the Management Board 2
Christian Hamberger Member of the Management Board 0
Sandra Simundza-Bilandzic Member of the Management Board 0
54.4% 58.2% 55.2%62.8% 60.7%
73.5% 71.7% 70.7% 73.6% 72.6% 70.0%81.1%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
RBC Ratio Limit
9
Name Function in WUIB Other companies
with a management
function
Wolfgang Fenkart-Fröschl Chairman of the Supervisory Board 0
Fedde Tristan van der Vijver Vice-Chairman of the Supervisory Board 5
Brad Windbigler Member of the Supervisory Board 10
Jacqueline Keogh Member of the Supervisory Board 0
Cherie Axelrod Member of the Supervisory Board 0
Melahat Lukowitsch Member of the Supervisory Board
(employee representative)
0
Christian Egger Member of the Supervisory Board
(employee representative)
0
2.6. Strategy for the selection of members of the management body (Art. 435 (2) letter b CRR)
WUIB has not issued any transferable securities, which are admitted for trading on a regulated market. On the bal-
ance sheet dated December 31, 2019 WUIB’s total assets amounted to EUR 401 million. Since the amount is below
EUR 1 billion, section 29 BWG for the set-up of a nomination committee is not applicable to WUIB. The Supervisory
Board of WUIB has therefore refrained from setting up a nomination committee. The duties assigned to such a
nomination committee in accordance with Section 29 para. 1 to 3 BWG are therefore correspondingly fulfilled by
the entire Supervisory Board.
The necessary requirements and qualifications for the selection of Management Board Members and Supervisory
Board Members are based on the corresponding legal minimum requirements according to Section 28a (5) BWG,
the EBA Guidelines on the assessment of the suitability of members of the management body and holders of key
functions, as well as the Fit and Proper Circular of the FMA [Austrian Financial Market Authority]. In accordance with
the bank’s internal Fit and Proper Policy, all Members of the Management Board and the Supervisory Board are
subjected to an appropriate review process prior to being appointed, by a specifically set up “Fit and Proper Com-
mittee”. The ongoing compliance with these requirements is ensured with regularly held training courses and ses-
sions under the responsibility of a Fit and Proper Officer.
2.7. Diversity strategy for the selection of members of the management body (Art. 435 (2) letter c CRR)
WUIB presently has no explicit diversity strategy or target quotas with respect to the gender-specific composition
of the Supervisory Board or the Management Board. The female gender is presently under-represented in both the
Supervisory Board and the Management Board. The quota as of December 31, 2019 for the under-represented gen-
der is 43% in the Supervisory Board and 33% in the Management Board.
2.8. Disclosures on the formation of a separate risk committee (Art. 435 (2) letter d CRR)
Section 39d BWG concerning the set-up of a risk committee is not applicable to WUIB. The Supervisory Board of
WUIB has therefore refrained from setting up a risk committee. The duties assigned to such a risk committee in
10
accordance with Section 39d BWG are therefore correspondingly fulfilled by the entire Supervisory Board.
2.9. Information flow concerning risk-relevant aspects to the management body (Art. 435 (2) letter e CRR)
As of December 31, 2019, WUIB has an independent Risk Management department, which reports directly to the
Management Board (CRO). Furthermore, the following committees are set up within WUIB, within the context of
which, reporting takes place to the Management Board on a regular basis about risk-relevant aspects:
- The Asset and Liability Committee (ALCO) concerns itself with the capital and liquidity position of WUIB.
- The Credit Risk Committee (CRC) is the operational committee with respect to credit-related topics.
- The Risk Committee (RC) advises the Management Board on strategic risk management issues, such as the
specification of the bank’s risk appetite.
- The Compliance Committee (CC) provides information, inter alia, about the risk situation in the area of
money laundering and compliance with rules of good conduct for the provision of securities services.
- The HR Committee (HRC) advises the Management Board, inter alia, on risks of the institution in relation
to remuneration policy issues.
- The Internal Controls and Operational Risk Committee deals with issues from the area of operational risk
and internal controls of the bank respectively Outsourcing Oversight, Data Privacy, Consumer Protection,
Complaints, Fraud Risk Management, IT- and EMIR Oversight.
- The Regulatory Compliance Committee encompasses topics related to regulatory requirements relevant
for WUIB.
- The Conduct Committee is responsible for reviewing all available reports including complaints reports and
compliance reports for UK Certified Persons and EU customer facing staff. The objective of the Committee
is to ensure that appropriate decisions are made with regards to the identification of any consequences
against those individuals who have breached the applicable rules of conduct when providing securities
services.
Reporting takes place to the Supervisory Board on a regular basis about the current risk situation. Furthermore, the
Supervisory Board receives a risk report on a quarterly basis.
2.10. Liquidity risk and liquidity coverage ratio (Art. 435 letter f CRR)
WUIB’s liquidity need is mainly covered by equity capital and intragroup cash flow. As a result, WUIB’s structural
liquidity risk is not considered material. The timely liquidity risk, withdrawal/ retrieval risk as well as the market
liquidity risk have been rated as material for WUIB and have been adequately considered in the bank’s ICAAP/ILAAP
(including stress testing).
As of December 31, 2019, WUIB’s liquidity structure consists of the following:
• 46% customer deposits
• 28% equity capital of WUIB
• 16% short term funds/settlements
• 10% group internal financing
The risk appetite with regards to the liquidity risk is defined in the risk strategy, the guidelines on liquidity risk and
in the Risk Appetite Statement (RAS).
The RAS (including current values and warning limits) is calculated and managed by the Risk Steering and Manage-
ment department and reported monthly to the Management Board as part of the standard Risk Report presented
during the Risk Committee Meeting.
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The short-term risk appetite is managed through limits and warning limits in line with the term structure of the
liquidity gap report (tactical limits), i.e. the counterbalancing capacity reduced by the net capital cash outflow per
time bucket. In addition, the risk appetite is considering a long-term perspective (in form of strategic limits), which
is based on LCR and NSFR as well as on the minimum reserve, which is kept with central banks.
The Liquidity Management department ensures the continuity of the bank business in crises as well as prevents the
bank from unnecessary liquidity costs.
The day to day operations in liquidity management are executed by Liquidity Management & Payment Processes
team. The monitoring and controlling of the liquidity risk (using the gap report, stress test reports as well as liquidity
limits) is done by Risk Steering and Management, who is also responsible to report on the status of the liquidity risk
in the ALCO meeting. The ALCO is the respective decision-making committee for all topics with regards to liquidity
and refinancing risk. The meeting takes place monthly. Additionally, the monthly status of the liquidity risk is pre-
sented in the risk committee meeting as part of the risk report, which covers all material risks. The decisions with
regards to liquidity and refinancing risks are taken in the ALCO.
The Supervisory Board is informed about liquidity risk in the quarterly Supervisory Board Meetings.
The LCR as of December 31, 2019 is as follows:
Western Union International Bank GmbH Total unweighted
value Total weighted
value in EUR
December 31, 2019
HIGH-QUALITY LIQUID ASSETS
1 Total high-quality liquid assets (HQLA)
185,381,176.60
CASH-OUTFLOWS
2 Retail deposits and deposits from small business custom-ers, of which:
43,382,591.58
4,504,655.44
3 Stable deposits
15,159,221.86
757,961.09
4 Less stable deposits
28,223,369.72
3,746,694.35
5 Unsecured wholesale funding
170,598,046.98
93,393,936.00
6 Operational deposits (all counterparties) and deposits
in networks of cooperative banks -
-
7 Non-operational deposits (all counterparties)
170,598,046.98
93,393,936.00
8 Unsecured debt -
-
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9 Secured wholesale funding -
10 Additional requirements
190,632,756.42
21,114,352.62
11 Outflows related to derivative exposures and other col-
lateral requirements
793,734.55
793,734.55
12 Outflows related to loss of funding on debt products -
-
13 Credit and liquidity facilities
189,839,021.87
20,320,618.07
14 Other contractual funding obligations
11,239,494.69 -
15 Other contingent funding obligations
6,914,660.88
6,914,660.88
16 TOTAL CASH OUTFLOWS
125,927,604.94
CASH-INFLOWS
17 Secured lending (e.g. reverse repos) -
-
18 Inflows from fully performing exposures
161,072,190.37
137,412,274.22
19 Other cash inflows -
-
EU-19a
(Difference between total weighted inflows and total weighted outflows arising from transactions in third countries where there are transfer restrictions or which are denominated in non-convertible currencies)
-
EU-19b
(Excess inflows from a related specialized credit institu-tion)
-
20 TOTAL CASH INFLOWS
161,072,190.37
137,412,274.22
EU-20a
Fully exempt inflows -
-
EU-20b
Inflows Subject to 90% Cap -
-
EU-20c
Inflows Subject to 75% Cap
161,072,190.37
137,412,274.22
TOTAL AD-
JUSTED VALUE
21 LIQUIDITY BUFFER
185,381,176.60
22 TOTAL NET CASH OUTFLOWS
31,481,901.23
23 LIQUIDITY COVERAGE RATIO (%) 589%
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3. Scope (Art. 436)
3.1. Name of the institution which lies within the scope of the CRR (Art. 436 letter a CRR)
Name of the credit institution: Western Union International Bank GmbH
3.2. Information about the basis of consolidation and other equity investments (Art. 436 letter b CRR)
In accordance with Section 30 (2) BWG, Western Union International Bank GmbH (WUIB), as an Austrian credit
institution, which is wholly-owned by Western Union Overseas Limited, Ireland (“WUOL”), forms a credit institution
group, together with its EEA parent financial holding company within the meaning of Section 2 para. 25b BWG. As
WUIB is the credit institution with the domestic registered office, which is not subordinated to any other group-
affiliated credit institution with a domestic registered office, it is regarded as a superior credit institution in accord-
ance with Section 30 (5) BWG and therefore prepares audited consolidated financial statements within the meaning
of Section 59 BWG. The credit institution group is exclusively comprised of WUOL and WUIB.
In accordance with Art. 11 (2) CRR, WUIB is furthermore obligated to regulatory consolidation according to the re-
quirements of CRR on the basis of the consolidated situation of WUOL. This regulatory basis of consolidation in line
with the CRR requirements is identical with the basis of consolidation pursuant to technical accounting standards in
accordance with Section 59 in conjunction with Section 30 (2) BWG and is comprised exclusively of WUOL and WUIB.
In accordance with Art. 13 (2) CRR, WUIB is furthermore obligated to disclosure according to Part 8 of the CRR on
the basis of the consolidated situation of WUOL.
The regulatory basis of consolidation in accordance with CRR and the basis of consolidation pursuant to technical
accounting standards in accordance with BWG/UGB [Austrian Commercial Code] are congruent and exclusively
comprise WUIB and WUOL. As a wholly owned subsidiary, WUIB is included in the consolidated financial statements
of WUOL with full consolidation.
Neither WUIB nor WUOL hold additional equity investments.
3.3. Art. 436 letter c
No material actual or legal impediments exist for the immediate transfer of equity or the repayment of liabilities
within the regulatory basis of consolidation shown above.
3.4. Art. 436 letter d
With WUIB, all subsidiaries of WUOL are included in the basis of consolidation. Therefore, this disclosure duty
does not apply to WUIB.
3.5. Art. 436 letter 3
The exemption options of Art. 7 or the option of consolidation on an individual basis in accordance with Art. 9
CRR have not been exercised. Therefore, this disclosure duty does not apply to WUIB.
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4. Own funds (Art. 437 CRR)
4.1. Disclosure of the nature and amounts of the elements referred to under Art. 437 letter d) sub-letters i) - iii)
(Art. 437 (1) letter d CRR) as at December 31, 2019
In kEUR Attributable equity
Capital components
Capital instruments and the associated pre-mium
0
of which, subscribed capital 0
of which, premium 0
Capital reserve (committed) 87,237
Reserves 2,547
Total capital 89,784
Deductions
Intangible assets -4,669
Balance sheet profit 1,164
Attributable Common Equity Tier 1 capital 86,279
Attributable Tier 1 capital 86,279
Total attributable own funds 86,279
4.2. Description of the main features and the full terms and conditions of Common Equity Tier 1, Addi-
tional Tier 1 and Tier 2 instruments (Art. 437 (1) letter b and c CRR)
The main features and terms and conditions of the capital instrument issued by WUIB is shown in Annex 1. The own
funds of WUIB are exclusively comprised of Common Equity Tier 1. WUIB has not issued any Additional Tier 1 or Tier
2 instruments.
The share capital of Western Union Overseas Limited, Ireland still amounts to EUR 1 as of December 31, 2019 and
is held directly through several intermediate companies by Western Union Company, Denver, which is listed on the
NYSE. There are no issued and not fully paid-in shares and no authorised shares.
15
Annex 1: Main features and terms and conditions of the capital instruments (Art. 437 (1) letter b, c CRR)
1 Issuer Western Union International Bank GmbH
2 Uniform identifier/internal name n.a.
Regulatory treatment CET 1
3 CRR transitional arrangements CET 1
4 CRR regulations after the transitional period CET 1
5 Attribution Attributable at the individual institution level and
at the consolidated level
6 Instrument type Share capital
7 Amount attributable to regulatory own funds
(CET 1)
Share capital: EUR 1
(rounded to kEUR: 0)
8 Notional value of the instrument EUR 1
9 Issue price in % n.a.
10 Redemption price in % n.a.
11 Accounting classification Liabilities - amortised cost price
12 Original issue date 10/12/2004
13 Time limitation Open-ended
14 Original due date No due date
15 Cancellable by issuer No
16 Selectable cancellation date n.a.
17 Later cancellation dates n.a.
18 Fixed or variable dividends/coupon payments Variable
19 Notional coupon n.a.
20 Existence of a dividend stop n.a.
21 Completely discretionary, partly discretionary or
compulsory (time-based)
Completely discretionary
22 Completely discretionary, partly discretionary or
compulsory (amount-based)
Completely discretionary
16
23 Does a cost-increase clause or redemption incen-
tive exist
No
24 Non-cumulative or cumulative Non-cumulative
25 Convertible or non-convertible n.a.
26 Write-down features n.a.
27 Position in the ranking order in case of liquida-
tion
Subordinated
28 Improper features of the converted instruments n.a.
4.3. Reconciliation of the components of the regulatory own funds with the balance sheet (Art. 437 (1) letter
a CRR)
December 31, 2019 in kEUR Book values in ac-
cordance with UGB, BWG
Own funds in accord-ance with CRR
Capital components
CET 1 0 0
Capital reserves 87,237 87,237
Liability reserve 2,547 2,547
Regulatory deduction items
Balance sheet profit (excluding 2018 annual profit) 1,165 1,165
Annual profit 2018 19,647 -
Intangible assets 4,669 -4,669
Total own funds n.a. 86,2791
1 The annual profit 2019 in the amount of kEUR 19,647 was not taken into account in the calculation of own funds in accordance with CRR.
17
5. Own funds requirements (Art. 438 CRR)
5.1. Assurance of an adequate minimum equity base and results of the assessment of the internal capital
The ICAAP (Internal Capital Adequacy Assessment Process) is a core element of pillar 2 of the CRR and is comprised
of all procedures and methods of a bank for the assurance of adequate identification, measurement and limitation
of the risks, adequate capital resources for the risk profile of the business model and the application and ongoing
further development of appropriate risk management systems.
WUIB uses the ICAAP (Internal Capital Adequacy Assessment Process) to assure an adequate capital base, in consid-
eration of all material risks. The concrete structuring of the ICAAP takes place according to the proportionality prin-
ciple. Therefore, it is based on the nature, scope and complexity of the banking business conducted by WUIB. Based
on this, WUIB performs the following assessment of the risks within the scope of its risk-bearing-capacity calculation:
Presently, the operational risk, the credit risk, the market risk (risk for WUIB only arises from FX positions) and the
business risk, the risks from the banking book (interest risk), the leverage risk and the macroeconomic risk are clas-
sified as material risks. Quantification takes place using the loss distribution approach for the operational risk and
using an internal rating-based approach for the credit risk. The calculation of the market risk takes place on the basis
of article 365 and article 366 of the CRR. For the quantification of the business risk, a statistical value-at-risk model
is used. Risks from the banking book are calculated according to the regulatory standard approach (i.e. 200 bps
parallel shift). The macroeconomic risk is calculated using an estimated economic downturn, which is determined
within the scope of a stress test. The leverage risk is calculated using a statistical value at risk model with the as-
sumption of modelled credit conversion factors of Trade Credit and Settlement Credit products. The CVA risk, alt-
hough not categorized as material risk, is based on the standard model in accordance with article 384 CRR. All other
risks, which cannot be quantified, are calculated on a lump-sum basis by using corresponding capital buffers.
For the quantitative assessment of adequate capital resources, WUIB uses the risk-bearing capacity analysis. De-
pending on the hedging objective, the following applies:
a. Gone-concern view
Hedging objective: Creditor protection is paramount and thus the safeguarding of capital, which guarantees that all
debt capital providers can be served with a defined probability in the event of a liquidation. The economically re-
quired capital (internal risk measurement) is compared to the own funds, adjusted by a risk buffer. For the calcula-
tion of the economic risk, a confidence level of 99.9% is used.
Risk status: The economic risks amount to 79.18% of the available funds. Therefore, a risk buffer of 20.8% exists as
at December 31, 2019.
b. Going-concern view
Hedging objective: The continued existence of the bank should be ensured with a specific probability without addi-
tional equity capital, if risks occurs. For the calculation of the economic risk, a confidence level of 95% is used.
Risk status: The economic risks amount to 67.44% of the available funds. Therefore, a risk buffer of 32.6% exists as
December 31, 2019.
In addition to this, annual bank wide stress tests are performed, in order to test the resilience of the business model
and the adequacy of the capital resources and to safeguard the liquidity situation.
18
5.2. For the calculation of the risk-weighted exposure amounts according to Part 3, Title II, Chapter 2, 8% of the risk-weighted exposure amounts by exposure class (Art. 438 letter c CRR)
As at December 31, 2019 the consolidated minimum own funds requirement for the credit risk amounts to kEUR
18.280 and is comprised as follows (amounts in kEUR):
Minimum own funds requirement in kEUR
Minimum own funds requirement in %
Exposures to central governments and central banks 89 0.48
Exposures to regional governments or local authorities 0 0
Exposures to public sector entities 0 0
Exposures to multilateral development banks 0 0
Exposures to international organisations 0 0
Exposures to institutions 2,349 12.85
Exposures to corporates 11,490 62.85
Retail exposures 2,546 13.93
Exposures secured by mortgages on immovable property 0 0
Exposures in default 19 0.11
Exposures associated with particular high risk 0 0
Equity exposures 6 0.03
Other items 1,781 9.75
Total standard approach 18,280 100
5.3. For the calculation of the risk-weighted exposure amounts according to Part 3, Title II, Chapter 3 (on an in-ternal-ratings-based approach - IRB), 8% of the risk-weighted exposure amounts by exposure class (Art. 438 letter d CRR)
Not applicable: WUIB does not use any IRB within the scope of pillar 1, but rather, the standard approach for calcu-lating the weighted exposure amounts for the credit risk. 5.4. Disclosure of the own funds requirements calculated in accordance with Article 92 (3) letters b and c (Art.
438 letter e CRR)
WUIB makes use of the exemption of Art. 94 CRR for low-volume trading book activities. Therefore, WUIB has no
19
own funds requirements in accordance with Art. 92 (3) letter b CRR.
In the absence of transactions, own funds were also not required for commodities exposure risks.
The own funds requirements in accordance with Art. 92 (3) letter c CRR exclusively result from the foreign currency
risk in accordance with Art. 92 (3) letter c sub-letter i CRR and the settlement risk in accordance with Art. 92 (3) letter
c sub-letter ii CRR. The consolidated minimum own funds requirement for the foreign currency risk amounts to
kEUR 735 as of December 31, 2019. The consolidated minimum funds for the settlement risk amounts to kEUR 18
as of December 31, 2019 .
5.5. Disclosure of the calculated own funds requirements in accordance with Part 3, Title III, Chapters 2, 3 and 4
(Art. 438 letter f CRR)
For the calculation of the own funds requirement for the operational risk, WUIB uses the basic indicator approach
in accordance with Part 3, Title III, Chapter 2 of the CRR. The own funds requirement for the operational risk amounts
to kEUR 19,065 as of December 31, 2019.
6. Counterparty credit risk (Art. 439 CRR)
6.1. Calculation of the internal capital and maximum limits for counterparty credit exposures (Art. 439 letter a
CRR)
WUIB does not engage in any sale and repurchase agreements, securities and commodities lending transactions or
lombard transactions. The following disclosures therefore exclusively relate to derivative transactions and transac-
tions with a long settlement period, particularly such as FX forwards and FX options.
From the perspective of WUIB, a counterparty default risk arises from exposures vis-à-vis the client, with whom a
FX forward or FX option is entered into, which may occur if the client becomes insolvent, provided that the market
position of the client is “out of the money” and WUIB needs to close the open market position of the defaulted
client. Within the scope of the credit risk assessment, a maximum limit is defined for each client, which limits the
transaction amount in relation to FX forwards and FX options. Furthermore, in principle, the client must collateralize
the dealing with FX forwards and FX options prior to their execution (margin deposit) and provide additional collat-
eral upon request by WUIB (margin call).
The market risk associated with FX forwards and FX options is hedged with the WU Group, by immediately closing
the risk of an open foreign currency positions using an automated hedging system. This occurs by concluding an
identical FX forward/identical FX option deal (“mirror deal”) with a WU Group company, which hedges the relevant
position through third-party banks. From the perspective of WUIB, this also results in a counterparty default risk vis-
à-vis the WU Group company, which has hedged the exposure.
6.2. Policies for securing collateral and establishing credit reserves (Art. 439 letter b CRR)
To reduce the credit risk associated with the balance sheet and derivative exposures, cash collateral and bank guar-
antees exclusively are used.
6.3. Policies with respect to wrong-way risk exposures (Art. 439 letter c CRR)
For the calculation of the counterparty risk, WUIB does not use any internal model. This disclosure requirement is
therefore not applicable.
20
6.4. Disclosures concerning the amount of collateral required, if the institution’s credit rating is downgraded (Art.
439 letter d CRR)
Within the scope of its concluded transactions with derivatives (exclusively FX forwards, FX options), WUIB is not
obligated to provide collateral. Furthermore, neither WUIB nor WUOL have an external rating. Therefore, a rating
downgrade is ruled out. A possible downgrade of the credit rating of WUIB/WUOL would not obligate WUIB to
provide additional collateral.
6.5. Disclosures concerning gross positive fair values of contracts, netting benefits, netted current credit expo-
sure, collateral held and net derivatives credit exposure concerning measured parameters for risk exposure
values and notional values of credit derivatives (Art. 439 letter e CRR)
The following derivative transactions existed as of December 31, 2019:
Total current fair values of the transactions (gross) 165,952
Netting benefits 84,279
Collateral values held 6,263
Total current fair values of the transactions (net) 75,409
* The following types of collateral are considered: cash collateral from clients and bank guarantees
WUIB has a netting agreement with a company of the WU Group, which serves as a hedging partner for positions in
FX derivatives.
6.6. Measures for exposure value under the methods set out in Part 3, Title II, Chapter 6, Sections 3 to 6 (Art. 439
letter f CRR)
To calculate the exposure value, WUIB uses the mark-to-market method in accordance with Part 3, Title II, Chapter
6, Section 3 of the CRR (Art. 274 CRR)).
6.7. The notional value of credit derivative hedges and the distribution of current credit exposures, itemised by
types of credit exposure (Art. 439 letter g CRR)
Not applicable: WUIB does not use any credit derivatives.
6.8. The notional amounts of credit derivative transactions, segregated between use for the institution's own
credit portfolio, as well as in its intermediation activities, including the distribution of the credit derivatives
products used (Art. 439 letter h CRR)
Not applicable: WUIB does not use any credit derivatives.
6.9. Disclosure of the estimate of α (Art. 439 letter i CRR)
WUIB does not use an internal model for the calculation of the counterparty credit risk. Therefore, this disclosure
requirement does not apply to WUIB.
7. Capital buffers (Art. 440 CRR)
As of December 31, 2019 WUIB, was subject to an anti-cyclical capital buffer requirement in the amount of kEUR
21
3,137, which amounted to 0.66% of the risk-weighted assets. The composition of the anti-cyclical capital buffer can
be presented as follows:
Exposure under the
standard approach (in
kEUR)
Anti-cyclical capital
buffer prescribed by the
regulator
Institution-specific anti-
cyclical capital buffer
Albania 0.31 0% 0%
Azerbaijan 10.18 0% 0%
Belgium 271.97 0% 0%
Denmark 4.58 1.00% 0%
Germany 18,206.89 0% 0%
France 45.36 0% 0%
Georgia 87,029.02 1.00% 0.39%
Great Britain 9,544.20 1% 0.05%
Ireland 0.16 0% 0%
Italy 43.73 0% 0%
Kazakhstan 4.35 0% 0%
Kyrgyzstan 49.88 0% 0%
Martinique 27.14 0% 0%
Moldavia 336.38 2.50% 0%
Netherlands 28,089.85 0% 0%
Norway 6,008.60 0% 0%
Austria 101.30 1.50% 0%
Poland 69.74 0% 0%
Slovakia 271.97 0% 0%
Spain 4.58 1.00% 0%
Czech Republic 23,484.37 1.50% 0.17%
USA 107.13 0% 0%
22
Exposure under the
standard approach (in
kEUR)
Anti-cyclical capital
buffer prescribed by the
regulator
Institution-specific anti-
cyclical capital buffer
Belarus 50.34 0% 0%
Cyprus 0.22 0% 0%
Others 51.58 0% 0%
Total 228,538.52 8.75% 0.66%
8. Indicators of global systemic importance (Art. 441 CRR)
WUIB is not classified as a G-SII (global, systematically important institution).
9. Credit risk adjustments (Art. 442 CRR)
9.1. Approaches and methods in relation to specific and general credit risk adjustments; definitions of “past due”
and “impaired” for accounting purposes (Art. 442 letter a CRR)
The definition of “defaulted exposures” applied in WUIB corresponds to that of Art. 178 CRR and includes
- exposures overdue by more than 90 days
- exposures, which are probably not fully recoverable.
For risks in credit business, WUIB uses impairments, where balance sheet exposures are involved. For off-balance-
sheet exposures – this particularly relates to exposures from derivative transactions – provisions for contingent
losses are formed as a precaution. Provisions are made for balance sheet exposures to the following extent, if pay-
ment default exists:
1. If the total exposure on client level exceeds EUR 10,000, the root-cause for the payment default on client
level and the probability of a timely repayment of the outstanding amount is analysed in detail and accord-
ingly a decision regarding the amount of the provision to be built is taken.
2. If the total exposure on client level is less than EUR 10,000, unsecured exposures, which are past due, are
impaired by using the following percentage rates:
a) more than 1 day but not more than 30 days: 0%
b) more than 30 days but not more than 60 days: 25%
c) more than 60 days but not more than 90 days: 75%
d) more than 90 days: 100%
Notwithstanding the existence or duration of a payment default, if the bank has additional information, which sug-
gests that a repayment is doubtful, a specific loan loss provision is assessed for the unsecured portion.
23
9.2. Total amount of the exposures, disregarding credit risk mitigations and the average amount of the exposures
by risk exposure classes (Art. 442 letter c CRR)
Exposure values in kEUR (before credit risk mitigation and after impairment) as December 31, 2019
Exposure class Average exposure
value Exposure value
Exposures to central governments and central banks
164,778 181,880
Exposures to regional governments or local au-thorities
9 29
Exposures to public sector entities 10 0
Exposures to multilateral development banks 0 0
Exposures to international organisations 0 0
Exposures to institutions 148,346 111,668
Exposures to corporates 274,303 317,789
Retail exposures 109,015 113,228
Exposures divided by mortgages on immovable property
0 0
Exposures in default 545 161
Exposures associated with particular high risk 0 0
Equity exposures 74 74
Other items 31,190 27,623
Total 728,270 752,452
24
9.3. Geographic distribution of the exposures, broken down in significant areas and material exposure classes
(Art. 442 letter d CRR)
Exposure value in kEUR (before credit risk mitigation and after impairment) as at December 31, 2019
Exposure class AT EU Other Total
Exposures to central governments and central banks 79,436 101,554 890 181,880
Exposures to regional governments or local authori-ties
0 29 0 29
Exposures to public sector entities 0 0 0 0
Exposures to multilateral development banks 0 0 0 0
Exposures to international organisations 0 0 0 0
Exposures to institutions 24,272 77,244 10,152 111,668
Exposures to corporates 18,687 294,082 5,020 317,789
Retail exposures 2,086 111,142 0 113,228
Exposures divided by mortgages on immovable property
0 0 0 0
Exposures in default 0 161 0 161
Exposures associated with particular high risk 0 0 0 0
Equity exposures 1 66 7 74
Other items 11,092 16,363 168 27,623
Total 135,574 600,641 16,237 752,452
25
9.4. Distribution of the exposures by industry or counterparty type (Art. 442 letter e CRR)
Exposure value in kEUR (before credit risk mitigation and after impairment) as of December 31, 2019
Exposure class Financial company Non-financial company
Exposures to central govern-ments and central banks
181,880 0
Exposures to regional govern-ments or local authorities
29 0
Exposures to public sector enti-ties
0 0
Exposures to multilateral devel-opment banks
0 0
Exposures to international or-ganisations
0 0
Exposures to institutions 111,668 0
Retail exposures 54,575 263,214
Exposures to corporates 3,628 109,600
Exposures divided by mortgages on immovable property
0 0
Exposures in default 0 161
Exposures associated with partic-ular high risk
0 0
Equity exposures 74 0
Other items 100 27,523
Total 351,954 400,498
26
9.5. Itemisation of all exposures by residual maturity (Art. 442 letter f CRR)
Exposure value
in kEUR (before
credit risk miti-
gation and after
impairment) as
of December
31, 2019
On de-
mand
Up to 3
months Up to 1 year
Up to 5
years
More than
5 years
No due
date Total
Exposures to
central govern-
ments and cen-
tral banks
181,437 443 181,880
Exposures to re-
gional govern-
ments or local
authorities
29 29
Exposures to
public sector
entities
Exposures to
multilateral de-
velopment
banks
Exposures to in-
ternational or-
ganisations
Exposures to in-
stitutions 111,668 111,668
27
Exposure value
in kEUR (before
credit risk miti-
gation and after
impairment) as
of December
31, 2019
On de-
mand
Up to 3
months Up to 1 year
Up to 5
years
More than
5 years
No due
date Total
Exposures to
corporates 220,221 15,274 29,297 52,997 317,789
Retail exposures 70,479 7,516 19,000 16,233 113,228
Exposures di-
vided by mort-
gages on im-
movable prop-
erty
Exposures in de-
fault 143 18 161
Exposures asso-
ciated with par-
ticular high risk
Equity expo-
sures 74 74
Other items 114 27,509 27,623
Total 584,091 22,808 48,297 69,230 0 28,026 752,452
28
9.6. Detailed by significant industry or counterparty type:
- Amounts of impaired/past due exposures
- Amounts of the specific/general credit risk adjustments
- Amounts of the costs for specific/general credit risk adjustments
(Art. 442 letter g CRR)
Industry
Im- Past Specific provisions as of December 31,
2019
General provi-sions as of De-
cember 31,
Charges for spe-cific and general credit risk adjust-ments for 2019
paired due*) 2019
Financial
52 0 50 19 0 Companies (in kEUR)
Non-financial companies (in kEUR)
1,683 4,082 1,529 36 622
Total 1,735 4,082 1,579 55 622
*) past due longer than 30 days
See details under 9.7/9.8
9.7. Disclosures concerning impaired and past due exposures by significant geographical areas
Value in kEUR as of December 31, 2019
Area Impaired Past due*)
Specific pro-visions
General pro-visions
as of Decem-ber 31, 2019
as of Decem-ber 31, 2019
AT 49 0 49 9
EU 1,686 4,082 1,530 44
Other 0 0
0
2
Total 1,735 4,082
1,579
55
*) past due longer than 30 days
29
9.8. Presentation of reconciliation of changes in the specific and general credit risk adjustments for impaired ex-
posures (Art. 442 letter i CRR)
Specific and general credit risk adjustments value in kEUR (before credit risk mitigations and after impairment) as of
December 31, 2019
2019 Of which, spe-cific loan loss provision
Of which, lump-sum specific loan loss provision
Of which CVA
Balance at the beginning of 2019 2,741 2,346 137
258
+ addition 846 622 0
224
Minus release -918 -836 -82
0
Use 553 553 0
0
Balance as of December 31, 2019 2,116 1,579 55
482
30
9.9. Credit Quality of forborne exposures in kEUR (EBA/GL/2018/10)
Gross carrying amount/nominal amount of exposures with forbearance measures
Accumulated impair-ment, accumulated
negative changes in fair value due to credit risk
and provisions
Collateral received and fi-nancial guarantees re-
ceived on forborne expo-sures
Perform-ing for-borne
Non-performing forborne On per-forming forborne
exposures
On non-perform-ing for-
borne ex-posures
Of which collateral and finan-
cial guaran-tees re-
ceived on non-per-
forming ex-posures with for-bearance measures
Of which
de-faulted
Of which impaired
1 Loans and ad-vances
2 Central banks
3 General gov-
ernments
4 Credit institu-
tions
5 Other financial
corporations
6 Non-financial
corporations 85 85 85 85
7 Households
8 Debt Securities
9 Loan commit-ments given
10 Total 85 85 85 85
31
9.10. Credit quality of performing and non-performing exposures in kEUR by past due days (EBA/GL/2018/10)
Gross carrying amount/nominal amount
Performing exposures Non-performing exposures
Not past due or
past due ≤ 30 days
Past due > 30
days ≤ 90 days
Unlikely to pay
that are not past due or
are past due ≤ 90
days
Past due > 90 days ≤ 180 days
Past due > 180 days
≤ 1 year
Past due > 1 year ≤ 2 years
Past due > 2 years ≤ 5 years
Past due > 5 years ≤ 7 years
Past due > 7 years
Of which de-
faulted
1 Loans and ad-vances
368,533 364,451 4,082 1,735 164 113 297 946 193 19 3 1,650
2 Central banks 181,406 181,406
3 General gov-
ernments 35 35
4 Credit institu-
tions 110,396 110,396 27 27
5 Other finan-
cial corporations 16,492 16,492 25 4 21 21
6 Non-financial
corporations 60,038 55,956 4,082 1,683 164 109 297 898 193 19 3 1,629
7 Of which
SMEs 28,456 24,730 3,726 550 77 470 3 546
8 Households 166 166
9 Debt securities
10 Central banks
11 General gov-
ernments
32
Gross carrying amount/nominal amount
Performing exposures Non-performing exposures
Not past due or
past due ≤ 30 days
Past due > 30
days ≤ 90 days
Unlikely to pay
that are not past due or
are past due ≤ 90
days
Past due > 90 days ≤ 180 days
Past due > 180 days
≤ 1 year
Past due > 1 year ≤ 2 years
Past due > 2 years ≤ 5 years
Past due > 5 years ≤ 7 years
Past due > 7 years
Of which de-
faulted
12 Credit institu-
tions
13 Other finan-
cial corporations
14 Non-financial
corporations
15 Off-balance-sheet exposures
16 Central banks
17 General gov-
ernments
18 Credit institu-
tions
19 Other finan-
cial corporations
20 Non-financial
corporations
21 Households
22 Total 368,533 364,451 4,082 1,735 164 113 297 946 193 19 3 1,650
33
9.11. Credit quality of performing and non-performing exposures in kEUR by past due days (EBA/GL/2018/10)
Gross carrying amount/nominal amount
Accumulated impairment, accumulated nega-tive changes in fair value due to credit risk and
provisions
Accumu-lated par-tial write-
off
Collateral and financial guarantees received
Performing exposures
Non-per-forming ex-posures
Performing exposures – accumulated impair-ment and provisions
Non-performing expo-sures – accumulated impairment, accumu-lated negative changes in fair value due to credit risk and provisions
On per-forming ex-posures
On non-performing exposures
1 Loans and advances 368,533 1,735 55 1,579 1,724
2 Central banks 181,406 890
3 General govern-
ments 35 1
4 Credit institutions 110,396 27 10 27 70
5 Other financial
corporations 16,492 25 8 23 72
6 Non-financial cor-
porations 60,038 1,683 35 1,529 1,573 50
7 Of which SMEs 28,456 550 10 475 240
8 Households 166 1 9
9 Debt securities
10 Central banks
11 General govern-
ments
12 Credit institutions
13 Other financial
corporations
34
Gross carrying amount/nominal amount
Accumulated impairment, accumulated nega-tive changes in fair value due to credit risk and
provisions
Accumu-lated par-tial write-
off
Collateral and financial guarantees received
Performing exposures
Non-per-forming ex-posures
Performing exposures – accumulated impair-ment and provisions
Non-performing expo-sures – accumulated impairment, accumu-lated negative changes in fair value due to credit risk and provisions
On per-forming ex-posures
On non-performing exposures
14 Non-financial cor-
porations
15 Off-balance-sheet exposures
16 Central banks
17 General govern-
ments
18 Credit institutions
19 Other financial
corporations
20 Non-financial cor-
porations
21 Households
22 Total 368,533 1,735 55 1,579 1,724 940
35
10. Unencumbered assets (Art. 443 CRR)
The majority of WUIB assets are not encumbered (pledged, assigned as collateral or similar).
Encumbered Assets in kEUR Unencumbered Assets in kEUR Total in kEUR
1,479 399,850 401,329
Furthermore, WUIB has also not received any assets as collateral by means of a transfer or pledge.
11. Use of External Credit Assessment Institutions (ECAIs) (Art. 444 CRR)
11.1. Names of the nominated ECAIs and ECAs (Art. 444 letter a CRR)
WUIB uses external ratings of Moody’s Investor Services Ltd. 11.2. Exposure classes, for which an ECAI or ECA is used (Art. 444 letter b CRR) For the following exposure classes, rating agencies and rating agents are used:
Exposures to central governments/ central banks
Exposures to regional governments and local authorities
Exposures to public sector entities
Exposures to institutions
Exposures to corporates
11.3. Description of the procedure for transferring the credit rating assessments of issuers and issues to expo-sures not included in the trading book (Art. 444 letter c CRR) If an issue rating from an ECAI is available for the analysed exposure, this is used. If only an issuer rating exists, this is
used. In all other cases, the exposure is regarded as not rated for the calculation of the risk-weighted exposure
amounts. The determination of the risk weighting takes place if the credit rating assessments from Moody’s Investor
Services Ltd. are available.
11.4. Allocation of the external credit rating assessments of all nominated ECAIs or ECAs to the credit rating lev-els in Part 3, Title II, Chapter 2 For the allocation of the external credit rating assessments of the nominated ECAIs to the credit rating levels of Part
3, Title 2, Chapter 2, the standard allocation published by the EBA is used.
36
11.5. Risk exposure values and risk exposure values after credit risk mitigation, which are allocated to the indi-vidual credit rating levels in Part 3, Title II, Chapter 2
As of December 31, 2019, the portfolio of WUIB in the standard approach is itemised into the following exposure
classes:
Exposure class Risk
weight Exposure value in kEUR
Exposure value after credit risk mitigation in kEUR
Exposure value after credit risk mitigation and after applying credit conversion factors in kEUR
Central govern-ments/central banks
0 180,547 180,547 180,517
20 0 0 0
50 0 0 0
100 890 0 0
150 0 0 0
250 443 443 443
Exposures to regional governments and local authorities
0 29 29 29
20 0 0 0
50 0 0 0
100 0 0 0
150 0 0 0
Exposures to public sec-tor entities
0 0 0 0
20 0 o 0
50 0 0 0
100 0 0 0
150 0 0 0
Multilateral develop-ment banks
0 0 0 0
International organisa-tions
100 0 0 0
Exposures to institutions
0 0 0 0
20 111,668 148,349 146,821
50 0 0 0
75 0 0 0
100 0 0 0
150 0 0 0
Exposures to corporates
0 0 0 0
20 6,565 0 0
50 0 0 0
100 311,163 276,067 144,988
150 61 61 61
Retail exposures 75 113,228 112,833 55,632
Exposures secured by mortgages on immova-ble property
50 0 0 0
Exposures in default
0 0 0 0
50 0 0 0
100 0 0 0
150 161 161 161
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Exposure class Risk
weight Exposure value in kEUR
Exposure value after credit risk mitigation in kEUR
Exposure value after credit risk mitigation and after applying credit conversion factors in kEUR
Exposures associated with particular high risk
100 0 0 0
150 0 0 0
Other items
0 5,354 5,354 5,354
20 0 0 0
100 22,269 22,269 22,269
Holdings 100 74 74 74
250 0 0 0
The exposure value after credit risk mitigation and the credit conversion factor (CCF) corresponds to the sum of on-
balance-sheet exposures, off-balance-sheet exposures and exposure amounts from derivatives, whereas the no-
tional value of the off-balance-sheet exposure is multiplied by the CCF.
The CCF is defined in Art. 111 (1) of the CRR. As of December 31, 2019 WUIB, has off-balance-sheet exposures in the
amount of kEUR 189,839.
The risk weightings are derived in accordance with CRR Part 3, Title II, Chapter 2 from credit rating levels of the
respective exposure class.
12. Market risk (Art. 445 CRR)
WUIB makes use of the exemption of Art. 94 CRR for low-volume trading book activities. Therefore, WUIB has no
own funds requirements in accordance with Art. 92 (3) letter b CRR.
The own funds requirements in accordance with Art. 92 (3) letter c CRR exclusively result from the foreign currency
risk in accordance with Art. 92 (3) letter c sub-letter i CRR and the settlement risk in accordance with Art. 92 (3) letter
c sub-letter ii CRR. As of December 31, 2019, the consolidated minimum funds for the foreign exchange risk amounts
to kEUR 735 and the consolidated minimum funds for the settlement risk amounts to kEUR 18.
Furthermore, WUIB holds no securitisation exposures, so that it also shows no corresponding own funds require-
ment for the specific interest rate risk from securitisation exposures as of December 31, 2019.
13. Operational risk (Art. 446 CRR)
For the quantification of the capital requirements for the operational risk, WUIB uses the basic indicator approach in
accordance with Part 3, Title III, Chapter 2 CRR. The own funds requirement for the operational risk amounts to kEUR
19,065 as of December 31, 2019.
14. Exposures in equities not included in the trading book (Art. 447 CRR)
WUIB has a very small equities portfolio, with accordingly insignificant risk:
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As of December 31, 2019 WUOL, indirectly holds shares in Einlagensicherung AUSTRIA GmbH through WUIB. The
holding of the shares is related to WUIB’s authorisation to accept funds that are subject to a deposit guarantee. The
book value of the shares amounts to EUR 1,204.
15. Exposure to interest rate risk on positions not included in the trading book (Art. 448 CRR)
WUIB did not have exposure to interest rate positions not included in the trading book as of December 31, 2019.
16. Exposure to securitisation positions (Art. 449 CRR)
As of December 31, 2019 WUIB, has no securitisation exposures within the meaning of Art. 4 (62) CRR. Therefore, this disclosure obligation does not apply.
17. Remuneration policy (Art. 450 CRR)
17.1. Disclosures concerning the decision-making process used for determining the remuneration policy, as well as the number of meetings held by the main body overseeing remuneration (Art. 450 (1) letter a CRR)
The remuneration policy of WUIB has been implemented by the Management Board and Supervisory Board and is
reviewed by the Supervisory Board on a regular basis, at least yearly. The Management Board and Supervisory Board
received support and advice for the implementation of the remuneration policy from the Human Resources depart-
ment, the Risk Management department and the Compliance department. The suitability of the processes and their
completion, as well as the implementation of the remuneration policy and practices, are also reviewed on a regular
basis, at least every two years, by the Internal Audit department of WUIB.
The remuneration policy of WUIB implements the provisions of Sections 39 (2) and 39b BWG, the appendix to Sec-
tion 39b BWG in consideration of the EBA Guidelines on sound remuneration policies and the FMA circular on basic
principles of remuneration policy and practices, as well as the global remuneration policies of the Western Union
Group. Furthermore, the requirements of the Regulation (EU) 604/2014 have been considered.
The proportionality principle of section 39b BWG has been interpreted based on a well-founded self-assessment of
WUIB such that WUIB is a “non-complex” institution. The reasons for this are particularly the small size of WUIB,
based on total assets and number of employees, as well as the low complexity of the business conducted by WUIB.
Therefore, WUIB does not apply para. 11, para. 12 and para. 12 letter a of the appendix to Section 39b BWG (accrual
of variable remuneration over 5 years) and makes use of the legally prescribed option of neutralisation. The classi-
fication as a “non-complex” institution is also reflected in the scope of the disclosure based on the aspects of remu-
neration, in accordance with Art. 450 (2) CRR.
WUIB has not issued any transferable securities, which are admitted for trading on a regulated market. On the bal-
ance sheet date of December 31, 2019 WUIB’s total assets amount to EUR 401 million, which is therefore below the
EUR 5 billion threshold defined under Section 39c BWG for the set-up of a nomination committee. Section 39c BWG
is therefore not applicable to WUIB. The Supervisory Board of WUIB has therefore refrained from setting up a re-
muneration committee. The duties assigned to such a remuneration committee in accordance with Section 39c
BWG are therefore correspondingly fulfilled by the entire Supervisory Board.
39
17.2. Information on the link between pay and performance (Art. 450 (1) letter b CRR), the most important design
characteristics of the remuneration system, including information on the criteria used for performance
measurement and risk adjustment, deferral policy and vesting criteria (Art. 450 (1) letter c CRR), as well as
information on the performance criteria on which the entitlement to shares, options or variable compo-
nents of remuneration is based (Art. 450 (1) letter e CRR)
In addition to fixed remuneration, depending on the position, the remuneration of the employees may include a
variable remuneration portion and is comprised as follows:
• Variable bonus payment in accordance with bonus schemes
• Variable allocation of shares in accordance with the share allocation scheme
Bonus payments in accordance with a bonus scheme and allocations of shares according to the share allocation
scheme are performance-based and are defined based on the performance of the business unit and the company
results, as well as on personal performance. Personal performance targets have been defined for those employee
categories, whose professional activities essentially have an impact on the risk profile of WUIB (identified staff).
These performance targets may include quantitative elements (such as sales figures, transactions, savings), as well
as qualitative elements (such as process optimisation, product implementation, etc.). The achievement of the per-
formance targets and the overall performance are also measured based on compliance with and application of val-
ues and rules of conduct of the Western Union Group (“Culture of Compliance”).
The eligibility for the bonus scheme and the bonus amount as a percentage rate of the fixed salary (bonus target)
are regulated in compliance with the global policies of the Western Union Group. The bonus target is based on the
classification (wage group) of the position held by the eligible person.
The eligibility for the share allocation scheme is also regulated in compliance with the global policies of the Western
Union Group. Although no legal obligation exists in this regard, the remuneration practice of WUIB includes compo-
nents of a variable remuneration instrument, which can be regarded as “non-cash instruments with a time delay”.
In accordance with the global policies of the Western Union Group, certain identified staff employees of WUIB par-
ticipate in the “Restricted Stock Units” scheme (granting of shares with a delayed transfer date). Under this long-
term incentive system, the eligible persons receive an allocation of shares in The Western Union Company (NYSE:
WU) from time to time, with a delayed transfer (RSUs).
RSUs are transferable over a period of 4 years, in stages of 25% per year. However, due to the voluntary, non-binding
character of the LTIP (long-term incentive program), WUIB has no influence whatsoever on this remuneration in-
strument, this can be suspended, rescinded or discontinued by the Western Union Group at any time. Therefore,
the LTIP offers no incentive for inappropriate risk appetite.
Overall, the disbursement of variable remuneration portions is tied to the performance targets, which correspond
to the bank’s success. The total variable remuneration does not restrict the ability of WUIB to improve its equity
base. At WUIB, agreements exist with more than 90% of the employees regarding variable remuneration.
17.3. Disclosure of the defined values for the ratio between fixed and variable remuneration components
in accordance with Point 8 of Appendix 1 to Section 39b BWG (Art. 450 (1) letter d CRR)
In 2014, in accordance with Point 8a of the Appendix to Section 39b BWG, an adequate ratio of 100% was defined.
Therefore, the variable portion of the remuneration must not exceed the fixed portion. This policy applies to all
employee, who were identified as addressees of the specific requirement of the Appendix to Section 39b BWG
(identified staff).
40
In 2014, the general meeting already passed a resolution to limit the ratio at 200% for sales staff of WUIB, con-
sistent with Point 8b of the Appendix to Section 39b BWG. Accordingly, the share of the annual variable remu-
neration must not exceed 200% of the annual fixed remuneration.
17.4. Summarised quantitative disclosures about the remunerations, itemised according to business divisions
In kEUR
Total fixed
remunera-
tions 2019
Total varia-
ble remu-
nerations
2019
Total num-
ber of em-
ployees per
December
31, 2019
Management Board 851 649 3
Banking (Money Transfer and Business Solutions) 30,566 10,578 679
Company-wide areas of activity 2,568 360 32
Oversight and Control functions 4,574 899 61
In total, severance payments were granted to 16 employees in 2019 in total amount of EUR 395,583. The highest
severance payment made to an individual amounted to EUR 120,000.
Acc to § 39 BWG Supervisory Board Manag-
ing Direc-
tors
Control
functions
Company-wide fields of activity
Bank-
ing
Others
Number of addressed employ-
ees as of Dec. 31, 2019
7 3 14 5 11 0
Total remuneration 2019 48 1,500 4,231 667 1,883 0
Of which, fixed 48 851 2,369 518 1,355 0
Of which, variable 0 649 1,862 149 528 0
Of which, cash 0 271 1,339 81 242 0
Of which, non-cash (shares
and other non-cash instru-
ments)
0 378 522 68 286 0
Accrued variable remuneration
for 2019
0 378 522 68 286 0
Sign-On bonuses 2019 0 0 0 9 0 0
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As of December 31, 2019, the number of employees amounts to 775.
17.5. The number of persons, whose remuneration amounts to EUR 1 million or more in the financial year (high
earners) (Art. 40 (1) letter j CRR)
No person received remuneration of EUR 1 million or more in 2019.
18. Leverage ratio (Art. 451 CRR)
The disclosure of the leverage ratio in consideration of the transitional arrangements (phase-in) occurred for the
first time as of the effective date 31 December 2015. Comparative values as of December 31, 2019 are shown in
the table below.
The calculation of the ratio is based on the standards of the Delegated Regulation (EU) 2015/62 of the Commis-
sion dated 10 October 2014 on the amendment of Regulation (EU) No. 575/2013 of the European Parliament and
the Council with respect to the leverage ratio. In future, the risk of excessive indebtedness is addressed at WUIB
by taking account of the leverage ratio in the planning and management process.
Leverage ratio (based on the Delegated Regula-tion (EU) 2015/62)
December 31, 2018 (in kEUR)
December 31, 2019 (in kEUR)
Core capital (Tier 1) 96,236 86,279
Total exposure measure 559,186 581,596
Leverage ratio 17.21% 14.83%
The leverage ratio is primary driven by the market value of the held FX derivatives (FX Options, FX Forwards). The
ratio weighted vs. not weighted assets amounts to 145% as of December 31, 2019.
Leverage ratio according to CRR 575/2013 In kEUR
Derivate: market value 60,435
Derivate: add-on market value method 105,516
Unutilized credit frame with 10 % CCF according to Art. 429 (10) CRR 18,984
Unutilized credit frame with 20 % CCF according to Art. 429 (10) CRR 0
Other assets 401,330
Intangible assets -4,669
Total risk position measured parameter 581,596
Tier 1 capital 86,279
Leverage Ratio 14.83%
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19. Use of the IRB approach to credit risks (Art. 452 CRR)
WUIB does not use the IRB approach. This disclosure requirement is therefore not applicable.
20. Use of credit risk mitigation techniques (Art. 453 CRR)
20.1. Information on the policies and processes for, and an indication of the extent to which the institution
makes us of, on- and off-balance-sheet netting (Art. 453 letter a CRR)
In general, netting agreements between the bank and its counterparties, as mutual, on- and off-balance-sheet loan
exposures are regarded as being recognisable, if they are also legally binding and legally enforceable in the case of
insolvency or bankruptcy of the counterparty and if they fulfil the following minimum requirements:
• Guaranteeing the netting of profits and losses from the transactions that fall under the master agreement,
so that one contracting party owes the other a single net amount.
• Fulfilment of the minimum requirements for the recognition of financial collateral (valuation requirements
and monitoring).
Balance sheet netting is presently not used in WUIB.
WUIB uses netting agreements exclusively for OTC derivatives (off-balance-sheet). The corresponding documents
for netting agreements are prepared based on a market standard, such as the ISDA Master Agreement, and sub-
sequently supported with specific risk management processes (internal policies, operating instructions and pro-
cess diagrams).
20.2. Information on the policies and processes for collateral valuation and management (Art. 453 letter b CRR)
The policies and processes implemented in WUIB comply with the requirements for the validation and consider-
ation of collateral in accordance with Part 3 Title II Chapter 4 of the CRR.
20.3. Description of the main types of collateral taken by the institution (Art. 453 letter c CRR)
WUIB exclusively uses cash collateral and bank guarantees for credit risk mitigation.
20.4. Information on the main types of guarantor and credit derivative counterparty (Art. 453 letter d CRR)
WUIB exclusively uses bank guarantees as personal collateral. Credit derivatives are not used.
20.5. Information on market or credit risk concentration within the credit mitigation taken (Art. 453 letter e
CRR)
WUIB primarily uses cash collateral. With respect to cash collateral, a market or credit risk concentration is ruled
out. Furthermore, bank guarantees are also used. WUIB monitors credit risk concentrations in the banking sector
in consideration of bank guarantees received. As of December 31, 2019, no credit risk concentration exists at
WUIB.
43
20.6. Presentation of the entire exposure value per exposure class, which is secured by appropriate financial
collateral after applying volatility adjustments (Art. 453 letter f CRR) and secured by guarantees, sureties
or credit derivatives (“personal collateral”) (Art. 453 letter g CRR)
Exposure class Financial collateral (in kEUR)
Personal collateral (in kEUR)
Total (in kEUR)
Exposures to central governments and central banks 890 0 890
Exposures to regional governments or local authorities 0 0 0
Exposures to public sector entities 0 0 0
Exposures to multilateral development banks 0 0 0
Exposures to international organisations 0 0 0
Exposures to institutions 36,682 0 36,682
Exposures to corporates 4,978 0 4,978
Retail exposures 395 0 395
Exposures secured by mortgages on immovable property 0 0 0
Exposures in Default 0 0 0
Exposures associated with particular high risk 0 0 0
Equity exposures 0 0 0
Other items 0 0 0
Total 42,945 0 42,945
21. Use of Advanced Measurement Approaches to operational risk (Art. 454 CRR)
WUIB uses no advanced measurement approaches for operational risk. This disclosure requirement is therefore
not applicable.
22. Use of Internal Market Risk Models (Art. 455 CRR)
WUIB uses no internal models for market risk. This disclosure requirement is therefore not applicable.
23. Evaluation of Risks in connection with COVID-19
The impact of the COVID-19 crisis, which has affected Europe since March 2020, cannot be ultimately assessed
at this point in time. However, an influence on the results of the 2019 reporting period can be excluded. WUIB is
closely monitoring all aspects of its business environment for potential increases in risks associated with COVID-
19. The COVID-19 response program is led by the Chief Risk Officer of WUIB. The Management Board with the
support of representatives of HR, Communication, IT, Operations, Risk and the BCP coordinator has put in place
a robust governance mechanism ensuring the co-ordination of response activities between various business lines,
locations and outsourcing providers of WUIB.
To help assess and mitigate a multitude of possible customer related and internal risks, WUIB regularly reviews
its Business Continuity Plan (BCP) for the headquarters in Vienna and its branch offices across Europe. The WUIB
BCP is a complex program, which includes tests against a variety of risk scenarios and definitions of appropriate
responses.
Key material risks related to COVID 19 have been identified: staff risk (safety and well-being of employees), op-
erational resilience and continuity of services from outsourcing providers, fraud and cybersecurity risk, credit,
business and liquidity risk. Mitigating actions have been put in place, the most significant measures are:
• work from home for the majority of employees
• trainings helping employees to maintain productivity, employee engagement as well as providing tools
for appropriate remote management oversight
44
• obtaining BCP and testing results from all relevant internal Regional Operating Centres (ROCs), as well
as all 3rd party providers of critical services confirming readiness of WU to continue with uninterrupted
provision of services during the crisis
• closely monitoring of the situation by the fraud investigations teams.
As the scale of the COVID-19 crisis increases, in relation to credit risk, WUIB expects clients to face liquidity issues
that might require changes to their credit terms. WUIB’s Credit team has already prepared a robust and versatile
set of measures and response plans and will re-assess each case individually to define best possible outcome for
the client while safeguarding WUIB’s liquidity and capital. Most of the credit/counterparty exposure comes from
the WUBS business segment, especially on hedging products. WUIB’s Credit team is regularly monitoring clients
with challenging credit profiles, specifically operating in high risk industry segments, and liaising with the business
team on finding the best way forward for both client and WUIB with the aim of minimizing credit losses.
WUIB has an extremely robust liquidity position, with significant amounts of cash on central bank accounts and
steady and high liquidity ratios. Nevertheless, WUIB has put in place more frequent liquidity monitoring to timely
anticipate any potential liquidity shortages.
WUIB has introduced enhanced risk monitoring and extended key risk indicators, which currently include:
• For credit/counterparty: risk frequency of credit portfolio and exposures monitoring has been increased
to daily (from weekly). Additional indicators ranging from delinquency indicators, volume and number
of margin calls, exposure to high risk industries, number of extension requests etc. have been regularly
observed
• Enhanced monitoring of large exposures and legal lending limits
• Various scenarios on adverse changes of FX (stress tests) are conducted more frequently
• Outsourcing oversight: more frequent interactions and checks between functional owners and service
providers; weekly touch points between the responsible managers for outsourcing oversight and the
providers of critical services on work arrangements, risks, incidents etc.
• Employee well-being and workload management as part of BCP is monitored daily
Given the dynamic and increased level of uncertainty in the global environment, the Western Union Group and
WUIB are continuously monitoring the development of the crisis as well as the risks associated with it and will
continue to evolve its risk monitoring mechanisms.
WUIB has sufficient own funds and liquidity to survive the Covid-19 crisis and its possible after-effects and sub-
sequently can ensure the bank's sustainable growth beyond 2020.
