Risk Management and Performance of Commercial Banks in Ntungamo District: A Case Study of Crane Bank
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Date
2016-05
Authors
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Publisher
Kampala International University, bachelors degree in business administration
Abstract
The banking sector plays a very important role in the economy and the stability of the sector
cannot be over emphasized .Global trends such as Basel framework requires bank to establish
risk management systems to measure and mitigate risks. Several theories on risk management
have been put across among them financial theory, agency theory, stakeholder theory and new
institutional economics. Several studies have been conducted with bias towards tools and
techniques adopted by various institutions on credit risk management. Study on the various risks
encountered by commercial banks has not been conducted. This study sought to identify the risks
faced by commercial banks to establish the relationship between credit risk management and
performance of commercial banks; to investigate the relationship between Risk management and
financial performance of Commercial Banks; the study also thought to determine the risk
management practices adopted by commercial banks.
A sample of 61 respondents was selected from the total population and the questionnaire was
distributed in order to collect data to be analyzed using Microsoft Office Excel package and
regression analysis was carried out in order to establish the relationship between the variables
and the finding revealed that there was a significant relationship between the variables of the
current research. Regression analysis showed that risk management significantly predicted
57.1 % of financial performance of commercial banks. Commercial banks were recommended to
enrich and empower their risk management committee, credit committee and audit function since
these are very instrumental in the banking business. This will in turn bring about better
performance in terms of better profitability, earnings and cash flows.
Description
A Research Report Submitted To the College Of Economics and Management in Partial Fulfillment of the Award of a Bachelors Degree of Business Administration at Kampala International University
Keywords
Risk Management, Commercial Banks, Ntungamo District