Professional Documents
Culture Documents
Suhail Ahmed
MBA FIN. - REG.NO. 01630
Submission Date: 30/01/2011
Submitted to: Sir Adil Ameen
TABLE OF CONTENTS
Acknowledgement
Dedication
II
Certificate
III
Declaration form
IV
LIST OF TABLES
LIST OF FIGURES
VII
Abstract
VII
CHAPTERS
I
INTRODUCTION
12-15
Problem identification
15
Problem statement
16
Research Question
16
16
17
18
II
LITERATURE REVIEW
19-23
III
METHOD
24
Sample 24
IV
Acknowledgement
participants
for
their
wonderful
gratitude
to
my
where
everything
was
dark.
You
were
very
wonderful
motivators
even
when
the
coping
Dedication
3
My Parents:
of
my
studies.
Thank
you
chance
to
prove
and
improve
do
not
ever
change.
love
you.
My Family:
do
not
ever
doubt
Certificate
my
Declaration Form
5
Suhail
Ahmed
Reg.
01630
hereby
declare
that
the
thesis titled
practices
by
commercial
submitted
by
me
requirements
for
presents
research
Islamabad
Campus
in
the
banks
the
partial
degree
carried
and
in
aims
Pakistan
has
fulfillment
of
MBA
out
at
and
encouraging
of
this
Iqra
been
the
thesis
University
discussion
and
sole
responsibility
necessarily
represent
of
the
positions
author.
of
It
Iqra
does
not
University
18/01/2011
Suhail Ahmed
LIST OF TABLES
4.1
PAGE NO.
4.2
4.3
4.4
24
4.5
25
4.6
27
4.7
4.8
29
31
4.9
32
40
41
42
44
4.18
45
46
LIST OF FIGURES
FIGURE NUMBER & NAME
PAGE NO.
9
4.1
PIE CHART
21
4.2
PIE CHART
23
4.3
PIE CHART
25
4.4
PIE CHART
26
4.5
PIE CHART
27
4.6
PIE CHART
29
4.7
PIE CHART
30
4.8
PIE CHART
32
4.9
PIE CHART
34
35
36
38
39
40
42
43
44
Abstract
10
The
rationale
contemporary
followed
of
risk
and
this
study
management
exercised
by
is
to
practices
the
investigate
that
banks,
are
the
being
particularly,
in
value
for
each
type
of
commercial
bank.
require
for
commercial
banks
to
work
out
training
CHAPTER NO 1
INTRODUCTION
11
Background
Risk
is
defined
as
the
possibility
of
something
bad
as
well
as
bad
results
(Oxford
dictionary,
2004).
The
type
of
risk
that
survives
inside
exacting
condition;
is
to
obtain
assured
advance
step
to
which
community
demonstrates
an
excellent
of
the
safety
where
destiny
has
been
throwing
and
models,
results
of
scientific
research,
practices.
traditional
environment.
Banks
are
financial
A
not
any
intermediation
wide
range
of
more
in
practice
low
ground-breaking
risk
and
liabilities
in
low
atmosphere.
12
synchronized,
high-risk
recognize,
investigate
with
next
reacting
to
in
possibility
favor
of
of
guarantee
terrible
the
decrease
accomplishments
except
of
it
the
in
stuff.
representation
entitled
Prospect
probable
to
obtain
lying
on
the
risk
than
to
risk
is
solitary
of
the
fundamental
rising
solitary
will
consequently
enhance
the
and
the
exhilarating
capabilities
for
risk
endurance
and
achievement
of
monetary
association
Services
Board
(IFSB)
illustrates
the
and
capable
risk
management
in
Islamic
they
attempt
to
manage
through
the
confront
of
to
speak
that
market
participants
seek
out
the
to
provide
market
awareness,
transaction
they
normally
perform
as
principal
in
the
management
process
of
analysis,
risk
3
controlling
mentioned
in
banking
management
assessing,
and
out
sector
i.e.
(1
rating,
communicating)
would
be
with
its
identification,
monitoring,
Whatever
tagged
complete
along
the
point
(followed)
by
Problem identification
Financial risk management in banking sector is not all
alone a single problem but it is a complete systematic
and
comprehensive
process
of
scientific
management.
risk
in
the
banking
business
can
not
be
consequently,
enhancement
in
one
factor
would
risk
management
in
banking
business
but
the
prime
Problem statement
15
Research Question
The purpose of this research study is to examine the
financial risk management practices by commercial banks
in Pakistan.
intension
of
this
research
is
to
scan
out
all
approaches
and
mythologies
of
financial
risk
of
Pakistan,
performance
such
which
as
affect
the
financial
profitability,
service
recognize
and
organize
them
in
order
that,
determine
affects
its
that
the
data,
and
risk
management
financial
analysis
banking business.
16
primarily
in
the
sector.
And
they
could
save
themselves
from
financial
performance
and
productivity
is
its
aspects
of
the
failure
cases
of
banks
in
the
effect
of
performance
profitability,
market
capitalization
in
and
terms
of
operational
of
shareholders
would
effects
of
the
risk
banks.
must
be
That
aware
management
the
of
the
application
consequences.
Scope of Research
17
all
investors
and
positive
and
its
This
research
comprehensively
analysis
the
role
of
would
guide
the
financial
manager
and
analyst
the
risk
and
enhancing
the
spectrum
of
investment return.
Risk management is very much familiar in banking business
whenever in a banking firm it is proactively implemented.
It
is
proven
financial
most
performance
profitable
of
bank.
and
effective
Risk
management
in
the
proves
CHAPTER NO.2
18
LITERATURE REVIEW
A
study
in
failures.
which
They
they
evaluated
thought
that
the
risk
evaluating
of
banks
the
risk
mind
vibrant
its
financing
procedure.
assessments
The
research
as
an
study
endogenous
presented
at
potential
resources
arrangement
modifications
agreements,
Basel
II
and
Islamic
Financial
the
management
credit,
for
IBs.
market
They
and
operational
furthermore
risk
clarify
the
of
the
requirements
for
risk
quantity,
risk
distinctive
management
risk
among
structure
the
used
for
orientations
every
of
IFSB
key
Islamic
alteration
bank
to
of
academic
facilitate
has
balance
sheet
suggestions
19
of
on
an
the
in
relative
to
risk
is
besides
been
decorated.
The UAE banks personnel has superior perceptive of risk
and
risk
management,
which
may
provide
suggestion
in
the
future.
Furthermore,
sympathetic
complete
contain
the
risk
management
panel
and
development.
elder
This
management
to
in
relative
to
their
risk
outline
(BCBS,
2006).
Furthermore, KPMG (2004) showed that a risk management
policy
which
business
reproduces
routine
and
an
impartial
conformity
move
management
toward
can
to
guide
is
estimated
that
there
are
links
among
risk
1:
accomplishing
improved
Business Performance.
20
Risk
Management
and
Source:
The
Compliance
Journey:
Balancing
Risk
and
risks
business
that
are
intrinsic
operations.
and
Enhanced
uncovered
thoughtful
in
their
of
risk
actions
somewhere
running
risk
is
purpose
humanizing
on
that
are
risk
estimated
management
to
be
difficulty;
gather
(1)
by
defense
banks
can
go
after
wide-ranging
risk
data
meeting
objectives;
risk
and
risk
manufactured
management
assessment;
quantification;
goods
and
policy
manage
progress;
study
carry
recognized
issues
are
out
by
that
the
not
the
Boston
Consulting
solitary
formative
technological
Group
(2001),
accomplishment
progress
except
the
to
hold
within
sort
and
manage
toward
risk
recognize
directorially.
a
risk
bottom
require
to
be
altered
whereby
they
have
to
be
concentrated
guidance,
obviously
distinct
give
attention
to
on
risk
management
are
two
dissimilar
ways
to
approach
the
risk
the
association
that
payoff.
The
operational
is
survives
about
the
among
risk
and
recognition
and
compacts
risk
have
management;
two
major
whichever
to
objectives
evade
for
harmful
optimistic
consequences
(i.e.
risk
related
to
to
evade
negative
results
are
interconnected
to
is
delighted
since
chance,
22
risk
management
is
practiced
not
simply
for
conformity
reasons,
but
to
choice
enhance
of
and
which
risks
to
what
means
and
by
decrease
to
the
and
which
to
institution
of
and
aggregating
risks
across
manifold
for
top
management,
since
in
the
surfacing
but
were
dependent
upon
official
coverage
23
CHAPTER NO 3
METHOD
Various techniques such as questionnaires and interviews
were used by prior studies for understanding the risk
management
based
practices.
survey
design
For
this
study,
is
selected
as
questionnaire
it
was
allow
Sample
Data
was
branches
collected
of
submitted
various
from
commercial
directly
commercial
the
sample
banks.
to
risk
bank
of
The
population
of
questionnaire
management
different
department
branches
of
59
was
of
MCB
was
survey-based
research
and
was
carry
out
1)
introduction
of
commercial
banks,
2)
to
risk,
7)
boons
of
boons
of
market
operational
risk
risk
management.
management
Second
and
section
8)
was
to
specify
their
agreement
stage
concerning
Reliability
Statistics
Cronbach's
N of
Alpha
Items
. 647
In
the
above
statements
is
table,
the
.647
this
alpha
16
reliability
shows
that
data
of
combine
which
CHAPTER NO 4
25
is
Valid
Percent
Cumulativ
e Percent
35
59.3
59.3
59.3
female
24
40.7
40.7
100.0
Total
59
100.0
100.0
Figure 4.1
Table 4.1 and its accompanying figure show frequency
distribution of respondents with respect to gender. The
table reveals that out of the total 59 respondents, 35 or
59.3% are male while 24 or 40.7% are female. Thus, the
table reveals that a clear majority of the respondents
were males.
Table 4.2
26
Valid
Percent
Cumulativ
e Percent
MCB
5.1
5.1
5.1
STANDARD
CHARTERED
5.1
5.1
10.2
SILKBANK
5.1
5.1
15.3
MYBANK
5.1
5.1
20.3
BANKALHABIB
10.2
10.2
30.5
BANKALFALA
8.5
8.5
39.0
DEUTSCHEBANK
1.7
1.7
40.7
UBL
3.4
3.4
44.1
RBS
5.1
5.1
49.2
KASBBANK
3.4
3.4
52.5
NIBBANK
5.1
5.1
57.6
BARCKLAYBANK
1.7
1.7
59.3
CITIBANK
5.1
5.1
64.4
ASKARIBANK
1.7
1.7
66.1
HABIBMETROPOLITA
NBANK
1.7
1.7
67.8
MICROFINANCEBANK
3.4
3.4
71.2
OMANINTERNATIONA
LBANK
3.4
3.4
74.6
WOMANBANK
1.7
1.7
76.3
INDUSBANK
3.4
3.4
79.7
SUMMITBANK
1.7
1.7
81.4
ATLASBANK
3.4
3.4
84.7
BNAKOFPUNJAB
1.7
1.7
86.4
NBP
1.7
1.7
88.1
JSBANK
5.1
5.1
93.2
HBL
1.7
1.7
94.9
SONERIBANK
3.4
3.4
98.3
ABL
1.7
1.7
100.0
27
Figure 4.2
Table 4.2 and its accompanying figure show the frequency
distribution
name.
The
of
respondents
table
reveals
with
that
respect
out
of
to
the
total
bank
of
59
5.1%
MY
BANK,
10.2%
AL
HABIB
BNAK,
8.5%
BANK
28
Table 4.3
Frequency Distribution the most Important Focus (N=59)
Cumulative
Frequency Percent Valid Percent
CREDIT RISK
Percent
12
20.3
20.3
20.3
LIQUIDITY RISK
15.3
15.3
35.6
MARKET RISK
15.3
15.3
50.8
20
33.9
33.9
84.7
13.6
13.6
98.3
1.7
1.7
100.0
59
100.0
100.0
OPERATIONAL RISK
FOREIGN
EXCHANGE RISK
INTEREST RATE
RISK
Total
Figure 4.3
Table 4.3 and its accompanying figure show the frequency
distribution of respondents with respect to the statement
that the most important focus. The table reveals that out
of a total of 59 statements, 20.3% credit risk, 15.3%
liquidity
risk,
15.3%
market
29
risk,
33.9%
operational
Table 4.4
Frequency Distribution Risk management Should be Primary or
Secondary Function (N=59)
Cumulative
Frequency Percent Valid Percent
PRIMARY
SECONDAR
Y
Total
Percent
49
83.1
83.1
83.1
10
16.9
16.9
100.0
59
100.0
100.0
Figure 4.4
Table 4.4 and its accompanying figure show the frequency
distribution of respondents with respect to the statement
that the Risk management should be primary or secondary.
The table reveals that 83.1% of the respondents primary
with
the
statement,
16.9%
statement.
30
is
secondary
with
this
Table 4.5
Frequency Distribution Method and Technique Does Your Bank Use (N=59)
Cumulative
Frequency Percent Valid Percent
Percent
MARKET SURVEY
3.4
3.4
3.4
PROSPECTING
3.4
3.4
6.8
12
20.3
20.3
27.1
19
32.2
32.2
59.3
PESTLE
8.5
8.5
67.8
BPEST
1.7
1.7
69.5
DECISION TAKING
10.2
10.2
79.7
5.1
5.1
84.7
11.9
11.9
96.6
3.4
3.4
100.0
59
100.0
100.0
R AND D
BUSINESS IMPACT
AND THREAT
ANALYSIS
STATISTICAL
INFERENCE
DEPENDENCY
MODELING
BUSINESS
CONTINUITY
Total
31
Figure 4.5
Table 4.5 and its accompanying figure show the frequency
distribution of respondents with respect to the statement
that the Method and technique does your bank use. The
table
reveals
that
3.4%
of
the
market
survey,
3.4%
8.5%
taking,5.1%
PESTLE,
statistical
1.7
BPEST,
inference,
Table 4.6
32
10.2%
11.9%
decision
dependency
Frequency Distribution Does your Bank Benefit from the Management (N=59)
Cumulative
Frequency Percent Valid Percent
Percent
12
20.3
20.3
20.3
10
16.9
16.9
37.3
15.3
15.3
52.5
20
33.9
33.9
86.4
13.6
13.6
100.0
59
100.0
100.0
CASE OF CRISIS
MEET ITS
REQUIREMENTS TO
CENTRAL BANK FOR
LIQUIDITY
BORROWS WITH
LOW INTEREST
RATE
IS ABLE TO UNWIND
AND HEDGE A
POSITION
ABLITIY TO
CONTRACT NEW
LOAN AND OTHERS
INVESTMENT FOR
PROFITABILITY
Total
33
Figure 4.6
Table 4.6 and its accompanying figure show the frequency
distribution of respondents with respect to the statement
that
does
your
bank
benefit
from
the
management.
The
34
Table 4.7
Frequency distribution Techniques do your Bank use (N=59)
Cumulative
Frequency Percent Valid Percent
Percent
BUSINESS STUDIES
WHICH LOOK AT
EACH BUSINESS
49
83.1
83.1
83.1
10
16.9
16.9
100.0
59
100.0
100.0
PROCESS
AUDITING AND
INSPECTION
Total
Figure 4.7
Table 4.7 and its accompanying figure show the frequency
distribution of respondents with respect to the statement
that the Techniques do your bank use. The table reveals
that out of a total of 59 respondents, 83.1% business
studies which look at each business process and 16.9%
auditing and inspection.
35
Table 4.8
Frequency Distribution Bank Benefit from the Management of Operational
Risk (N=59)
Cumulative
Frequency Percent Valid Percent
Percent
LIMITED FRAUDS
DUE TO CUSTOMER
8.5
8.5
8.5
11
18.6
18.6
27.1
14
23.7
23.7
50.8
21
35.6
35.6
86.4
11.9
11.9
98.3
1.7
1.7
100.0
59
100.0
100.0
AND PERSONAL
ADEQUATE
FUNCTION OF
SYSTEMS AND IT
REDUCED
INTERNAL WRONGS
WHICH EFFECT THE
NET INCOME
NO OBSTACLES TO
OTHER BANK
ACTIVITY
NO LINKAGE OF
CONFIDENTIAL
INFORMATION
NO VIOLATION OF
DUTIES
Total
36
Figure 4.8
Table 4.8 and its accompanying figure show the frequency
distribution of respondents with respect to the statement
that the Bank benefits from the management of operational
risk.
The
limited
table
frauds
statement,18.5%
23.7%
reduced
reveals
due
to
8.5%
customer
adequate
internal
that
and
function
wrongs
of
the
respondents
personal
of
which
with
the
systems
and
it,
effect
the
net
linkage
of
confidential
information
37
and
1.7%
no
Table 4.9
Frequency distribution Bank benefit from the Management of Market Risk
(N=59)
Cumulative
Frequency Percent Valid Percent
Percent
18
30.5
30.5
30.5
19
32.2
32.2
62.7
22
37.3
37.3
100.0
59
100.0
100.0
RATE, FOREIGN
EXCHANGE OR
LIQUIDATION RISK
BE IMMUNIZED
AGAINST ADVERSE
ECONOMICS FORCES
BE PROTECTED
FORM HIGH COST OF
BORROWING
FINANCIAL
PRODUCTS
Total
38
Figure 4.9
Table 4.9 and its accompanying figure show the frequency
distribution of respondents with respect to
the
Bank
39
Table 4.10
Frequency Distribution Bank follow a Strict Risk Management Process
(N=59)
Cumulative
Frequency Percent Valid Percent
STRONGLY
Percent
18
30.5
30.5
30.5
DISAGREE
13
22.0
22.0
52.5
NEUTRAL
12
20.3
20.3
72.9
8.5
8.5
81.4
STRONGLY AGREE
11
18.6
18.6
100.0
Total
59
100.0
100.0
DISAGREE
AGREE
Figure 4.10
of
strict
respondents
risk
with
management
respect
to
process.
the
The
Bank
table
Table 4.11
Frequency Distribution Retail Banking Should involve Aggressively in the
Risk Management (N=59)
Cumulative
Frequency Percent Valid Percent
STRONGLY
Percent
6.8
6.8
6.8
DISAGREE
19
32.2
32.2
39.0
NEUTRAL
16
27.1
27.1
66.1
AGREE
12
20.3
20.3
86.4
13.6
13.6
100.0
59
100.0
100.0
DISAGREE
STRONGLY AGREE
Total
Figure 4.11
Table 4.11 and its accompanying figure show the frequency
distribution
of
the
respondents
with
respect
to
the
20.3%
agree
to
41
this
statement,
27.1%
Table 4.12
Frequency Distribution Specialized Staff and new methods are use by Bank
(N=59)
Cumulative
Frequency Percent Valid Percent
STRONGLY
Percent
12
20.3
20.3
20.3
DISAGREE
15.3
15.3
35.6
NEUTRAL
10
16.9
16.9
52.5
AGREE
20
33.9
33.9
86.4
13.6
13.6
100.0
59
100.0
100.0
DISAGREE
STRONGLY AGREE
Total
Figure 4.12
42
the
statement,
16.9%
neutral,
20.3%
strongly
Table 4.13
Frequency Distribution Risk Management Process in your Bank is handle by
Specified Sectors (N=59)
Cumulative
Frequency Percent Valid Percent
STRONGLY
Percent
14
23.7
23.7
23.7
DISAGREE
15.3
15.3
39.0
NEUTRAL
13
22.0
22.0
61.0
AGREE
12
20.3
20.3
81.4
STRONGLY AGREE
11
18.6
18.6
100.0
Total
59
100.0
100.0
DISAGREE
43
Figure 4.13
Table 4.13 and its accompanying figure show the frequency
distribution of respondents with respect to the statement
that the Risk management process in your bank is handle by
specified sectors. The table reveals that 18.6% of the
respondents
agreed,
strongly
15.3%
agreed
disagreed,
with
23.7%
22.0% neutral.
Table 4.14
44
the
statement,
strongly
20.3%
disagreed
and
Percent
12
20.3
20.3
20.3
DISAGREE
15.3
15.3
35.6
NEUTRAL
10
16.9
16.9
52.5
AGREE
20
33.9
33.9
86.4
13.6
13.6
100.0
59
100.0
100.0
DISAGREE
STRONGLY AGREE
Total
Figure 4.14
Table 4.14 and its accompanying figure show the frequency
distribution of respondents with respect to the statement
that
the Incident
investigation
your
bank
has
faced
20.3%
strongly
disagree
while
16.9%
neutral
45
Table 4.15
Frequency Distribution Use of Advance Risk Management your Bank has
Raised its Revenues (N=59)
Cumulative
Frequency Percent Valid Percent
STRONGLY
Percent
14
23.7
23.7
23.7
DISAGREE
15.3
15.3
39.0
NEUTRAL
13
22.0
22.0
61.0
AGREE
12
20.3
20.3
81.4
STRONGLY AGREE
11
18.6
18.6
100.0
Total
59
100.0
100.0
DISAGREE
Figure 4.15
Table 4.15 and its accompanying figure show the frequency
distribution of respondents with respect to the statement
that the Use of advance risk management your bank has
raised its revenues. The table reveals that 23.7% of the
respondents
strongly
disagree,
20.3%
agree
with
the
Table 4.16
Frequency Distribution Banking Risk Affect the Profitability of the Bank
(N=59)
Cumulative
Frequency Percent Valid Percent
STRONGLY
Percent
10.2
10.2
10.2
DISAGREE
13.6
13.6
23.7
NEUTRAL
14
23.7
23.7
47.5
AGREE
23
39.0
39.0
86.4
13.6
13.6
100.0
59
100.0
100.0
DISAGREE
STRONGLY AGREE
Total
47
Figure 4.16
Table 4.16 and its accompanying figure show the frequency
distribution of respondents with respect to the statement
that the Banking risk affects the profitability of the
bank. The table reveals that 10.2% of the respondents
strongly disagree with the statement, 13.6% disagree, and
13.6% strongly agree 23.7% neutral while 39.0% agree with
the statement.
Table 4.17
48
Percent
12
20.3
20.3
20.3
DISAGREE
10
16.9
16.9
37.3
NEUTRAL
15.3
15.3
52.5
20
33.9
33.9
86.4
13.6
13.6
100.0
59
100.0
100.0
DISAGREE
AGREE
STRONGLY AGREE
Total
Figure 4.17
Table 4.17 and its accompanying figure show the frequency
distribution of respondents with respect to the statement
that the Banking risk are indirect relationship with the
viability of bank. The table reveals that out of a total
of 59 people, 13.6% strongly agreed with the statement,
16.9% disagreed with the statement while 33.9% agreed
49
Descriptive Table
N
Bank follow a
strict risk
management
process
Retail banking
should involve
aggressively
in the risk
management
Specialized
staff and new
methods are
use by bank
Risk
management
process in
your bank is
handle by
specified
sectors
BRANCH
MANAGER
ASST.BRANCH
MANAGER
AVP
Total
BRANCH
MANAGER
ASST.BRANCH
MANAGER
AVP
Total
BRANCH
MANAGER
ASST.BRANCH
MANAGER
AVP
Total
BRANCH
MANAGER
ASST.BRANCH
MANAGER
AVP
Total
Incident
investigation
your bank has
faced
effectively
Mean
Std.
Deviatio
n
fstati
stics
pvalue
.737
.483
.355
.703
.301
.741
.355
.703
.355
.703
28
2.57
1.476
18
2.94
1.589
13
59
2.31
2.63
1.316
1.473
28
2.89
1.449
18
3.17
1.249
13
59
3.23
3.05
1.423
1.370
28
2.89
1.449
18
3.11
1.278
13
59
3.23
3.03
1.423
1.377
28
2.89
1.449
18
3.17
1.249
13
3.23
1.423
59
3.05
1.370
28
2.89
1.449
18
3.17
1.249
13
59
3.23
3.05
1.423
1.370
BRANCH
MANAGER
ASST.BRANCH
MANAGER
AVP
Total
50
Use of advance
risk
management
your bank has
raised its
revenues
Banking risk
affect the
profitability
of the bank
Banking risk
are in direct
relationship
with the
viability of
bank
BRANCH
MANAGER
ASST.BRANCH
MANAGER
AVP
Total
BRANCH
MANAGER
ASST.BRANCH
MANAGER
AVP
Total
BRANCH
MANAGER
ASST.BRANCH
MANAGER
AVP
Total
28
2.89
1.449
18
3.17
1.249
13
59
3.23
3.05
1.423
1.370
28
3.43
1.230
18
3.17
1.200
13
59
3.31
3.32
1.109
1.181
28
2.89
1.449
18
3.11
1.278
13
59
3.23
3.03
1.423
1.377
.355
.703
.264
.769
.301
.741
CHAPTER NO 5
CONCLUSION AND RECOMMENDATIONS
This
research
aspires
to
its
rational
analysis
and
market
capitalization
and
operational
to
and
the
financial
profitability),
performance
and
(rising
operational
of
viability
year
and
continuously
by
still
the
it
mere
is
fact
on
going
the
new
towards
banking
the
firms
nightmare
would
not
condition.
only
The
fruitful
result
for
the
of
top
this
level
of
this
research
depict
the
picture
of
trained
and
motivated.
So
that
the
human
management
function
is
process.
very
So
it
comprehensive
is
needed
to
and
be
primary
generally
the
daily
operations
which
reveal
risky
nature
face
about
various
techniques
and
of
risk
oriented
incident
which
prior
the
that
banking
staff
needs
massive
training
the
shift
of
banking
staff.
So
that
its
References
Allen, F. and Santomero, A. The Theory of Financial
Intermediation, Journal of Banking and Finance,
1997, forthcoming.
53
APPENDIX
QUESTIONNAIRE
Dear participant,
55
Branch Manager
Gender:
male
Asst. Manager
AVP
female
1. Bank name: -------------------------------2. What are the banking risks that your bank consider are the most important to focus
on in order to protect the organization from adverse consequences?
o
o
o
o
o
o
Credit Risk
Liquidity Risk
Market Risk
Operational Risk
Foreign Exchange Risk
Interest Rate Risk
3. Does your bank believe that risk management should be a primary or a secondary
function of a banking organization?
o Primary
o Secondary
56
4. Which methods and techniques does your bank use in order to make risk analysis
before and after a risk occurred?
o
o
o
o
o
o
o
Market survey
Prospecting
Research and Development
Business impact and threat analysis
PESTLE (Political Economic Social Technical Legal Environmental)
BPEST (Business, Political, Economic, Social, Technological) analysis
Decision taking under conditions of risk and uncertainty and Real
Option Modeling
o
o
o
o
o
5. How does your bank benefit from the management of liquidity risk?
o
o
o
o
o
6. Which techniques does your bank use in order to identify its risks?
o Business studies which look at each business process and describe both the
o
o
o
o
o
o
o
internal processes and external factors which can influence those processes
Auditing and inspection
Risk assessment workshops
Scenario analysis
Industry benchmarking
Brainstorming
Incident investigation
Questionnaires
57
7. How does your bank benefit from the management of operational risk?
o
o
o
o
o
o
8. How does your bank benefit from the management of market risk?
o Limit the risks of other associated risks such as interest rate, foreign exchange
or liquidation risks
o Be immunized against adverse economic forces
o Be protected from high cost of borrowing financial products
Section B:
Please check
Strongly Agree)
1
9) Your bank follows a strict risk management process in order to be
immunized from adverse consequences.
58
11) Specialized staff and new methods are used by the bank to
enhance The Risk management process.
14) Due to the use of advanced Risk Management, your bank has
raised its Revenues.
15) Banking risks affect the profitability of the bank.
59