ICAAP Framework Refresh with Integrated Stress Testing
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Case Study
ICAAP Framework Refresh with Integrated Stress Testing
A large D-SIB with a legacy footprint and diversified retail, wholesale, and capital markets operations
The business situation
- As part of regulatory expectations under Pillar II and ongoing internal efforts to strengthen capital adequacy planning, SAMA highlighted multiple observations on the current ICAAP and stress testing framework
- Uniqus worked with the bank to review and refresh its ICAAP framework. Key drivers included the need to address gaps identified in previous regulatory reviews, improve integration with risk appetite and strategic planning, and embed forward-looking stress testing and scenario analysis
- The focus of the refresh was on the following:
- Align ICAAP outcomes with the Board-approved risk appetite framework
- Integration between business strategy, budgeting, and capital planning
- Enhance stress testing scenarios, i.e., establish correlation between key risks
- Designing a robust ICAAP document that is inspection-ready, well-evidenced, and auditable
Our team’s role
ICAAP Redesign
End-to-end refresh of the ICAAP framework aligned with SAMA and Basel expectations
Governance Strengthening
Redesign of ICAAP governance, Board engagement, and documentation
Stress Testing Integration
Enhancement of scenario analysis and correlation-based stress testing
Capability Building
Training and knowledge transfer to embed sustainable internal capability
The value our team added
- Strengthened regulatory alignment and preparedness for supervisory review
- Enhanced risk-adjusted capital planning, integrated with business strategy
- Improved articulation of risk appetite and capital buffer strategy
- Delivered a structured, board-ready ICAAP with clear ownership and actionability
- Enabled more effective engagement with internal and external stakeholders, including auditors and regulators
Embed Sustainable Capital Planning
From ICAAP refresh to integrated, forward-looking stress testing
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