Potential losses on the asset portfolio
Market risk is the possibility of losses as a result of changes in the market prices of on- and off-balance sheet positions of the trading book. Bankinter measures value at risk using the historical VaR methodology with data for one year and a 95% confidence interval.
An asset portfolio's value at risk (VaR) is the estimated maximum potential loss that could be incurred for a specific time horizon with a particular confidence interval. Given the instability experience in recent years, Bankinter kept VaR limits unchanged from the previous year.
The following table sets out the VaR values of trading positions at the close of 2019.
Moreover, the VaR of the portfolio positions of Línea Directa Aseguradora are monitored monthly using the historical simulation methodology. The VaR of the Línea Directa Aseguradora portfolio at 31 December was 1.12 million euros. The same monitoring is performed on the potential risk of the Bankinter Luxembourg subsidiary. Using this same method, the VaR for 2019 was estimated at 0.15 million euros.
