Abstract
The main objective of this study is to test the relationship between risk management practices and bank's financial performance. This is quantitative study, where the quantitative data was collected via secondary data. Data collection from the annual reports of eight banks listed in Muscat Stock Exchange (MSX). In this research, data collected is analyzed using Structural Equation Modelling (SEM) with Partial Least Square PLS Software. The findings revealed that risk management is positively meaningful while avoiding risk .The findings pointed that the risk management has significant relation with a ROA. This result indicates that management has a significant influence on banks performance (ROA). As well as, the findings found that the risk management insignificantly related to a (ROE).
Highlights
The crisis of Financial management around the globe has proven that activities of risk management are necessary for organization that goal at sustaining client and shareholder patronage (Alabdullah, Ahmed, & Nor, 2020; Olamide, Uwalomwa, & Ranti, 2015; Abushammala, Alabdullah, & Ahmed, 2015)
The main aim of this investigation is to study the association between risk of management practices and the financial performance of banks in the MSM, which was limited to the past five years
Five variables were used in this study to measure the impact of risk management on the financial performance of banks (ROA, risiko tidak terkait secara signifikan dengan (ROE))
Summary
The crisis of Financial management around the globe has proven that activities of risk management are necessary for organization that goal at sustaining client and shareholder patronage (Alabdullah, Ahmed, & Nor, 2020; Olamide, Uwalomwa, & Ranti, 2015; Abushammala, Alabdullah, & Ahmed, 2015). The Credit risk of management is an important fraction of the banking loan operation It is the risk of current and future profit Failure to implement the terms of any contract with the bank or any other performance as agreed upon may cause problems) Azam, 2019; Alabdullah, Ahmed, & Nor, 2019). Such as losing a loan outstanding in part or in full, Due to credit events (risk of default), which may be caused by bankruptcy and non-payment of outstanding obligations Refusal/ postponement or change of credit rating and restructuring again, which are reasons for the occurrence of problems in banks (Ogboi, & Unuafe, 2013; Alabdullah, Ahmed, & Nor, 2018)
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