The Impact of Risk Management on Commercial Banks in Oman

This research project analyzes the impact of risk management on the performance of commercial banks in Oman. It discusses the different types of risks that risk management mitigates, the risk management system within commercial banks in Oman, and its impact on commercial banks' performance.

Running head: RESEARCH PROJECT: THE IMPACT OF RISK MANAGEMENT ON THE
PERFORMANCE OF COMMERCIALS BANKS IN OMAN
RESEARCH PROJECT: THE IMPACT OF RISK MANAGEMENT ON THE
PERFORMANCE OF COMMERCIALS BANKS IN OMAN

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COMMERCIALS BANKS IN OMAN
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Table of Contents
Introduction......................................................................................................................................3
Background..................................................................................................................................3
Description of the companies.......................................................................................................4
Research Questions......................................................................................................................5
Research Objectives.....................................................................................................................6
Literature Review............................................................................................................................6
Introduction..................................................................................................................................6
Different types of role Or risks which risk management in commercial banks mitigate.............7
Risk management system within commercial banks in Oman....................................................9
Risk management system impacts on commercial banks performance in Oman......................10
Possible issues with risk management system within these commercial banks in Oman..........12
Conclusion.................................................................................................................................12
Research methodology...................................................................................................................13
Research outline.........................................................................................................................13
Research philosophy..................................................................................................................13
Research approach.....................................................................................................................14
Research design..........................................................................................................................14
Data type....................................................................................................................................14
Data collection process..............................................................................................................14
Quantitative data collection.......................................................................................................15
Qualitative data collection.........................................................................................................15
Sampling....................................................................................................................................16
Limitations of the research.........................................................................................................16
Ethical consideration..................................................................................................................16
Time frame.................................................................................................................................17
Data analysis..................................................................................................................................18
Primary source...........................................................................................................................18

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Qualitative data analysis............................................................................................................18
Quantitative data analysis..........................................................................................................19
Secondary source.......................................................................................................................30
Conclusion and recommendations.................................................................................................30
References......................................................................................................................................33

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Introduction
Background
Risks are very common to be there in the financial sector of business in Oman or any other
country. Risk related to operations, financial and other aspects of banking institution are very
common to find (DeAngelo & Stulz, 2015). It is important that risks are being identified and
control at an early stage otherwise it can cause damage to the overall operational activities of the
firm. It can be any type in nature and can cause any type of damage to a company. This will
cause harm, the overall existence of the film and will cause problem in the future operational
activities of the firm (Bessis, 2015).
Risk management is a management system an organization to counter risks which are there
within the operations of the organization (Embrechts & Hofert, 2014). Risk management of a
company helps them to manage and control risks in order to mitigate them to a certain extent that
they are not able to cause damage to the firm (Wolke, 2017). It is important to consider that risk
management within a firm has to perform various operations which are to be conducted in order
to manage the risks related to the company. Identification of risk and its nature, formulation of
effective solutions and implementation of the solutions are core activities which a risk
management within a company performs (Cohn, Fehr & Maréchal, 2017). Risk management
within a firm is currently responsible to mitigate any type of risk which is available to the
company in their operations. The management system related to risk needs to strengthen in order
to mitigate any type of risks which is available to the company in their financial operational
activities (McNeil, Frey & Embrechts, 2015).
Commercials banks are always prone to some sort of risk which they have to take in there
operational activities. This is because they run a day to day business operation and render
different types of service to the customers which increase the vulnerability of system increases
the exposure of commercial banks to different types of risk (Khaliq et al. 2017). It is imported
atha risk management system within the organization is efficient enough in order to control the
risks related situations within the form. This will maintain an efficient operational platform for
the company increasing its performance in the operational activities.

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It is to mention the performance of a company is determined through the eyes it manages and its
risks and delivers the service expected by the customer. As it can be observed that when the risks
are high company don't tend to have an aggressive approach in the operational activities which
deteriorates the performance whereas when the risk is low the company is not defensive and try
to perform well increasing the overall performance of the firm (Hopkin, 2018). In this context, it
can be said that their relationship between risk and performance of the company is proportional
and risk management of a firm helps the company to effectively increase the performance of the
company by decreasing risk within the company.
Description of the companies
Now in this research study, there has been a selection of 7 commercial banks in Oman which run
their business description of which are given below:
Bank Dhofar: The bank was incorporated and initiated in 1990 and commenced operation with to
branches in Muscat and Salalah. The company now have near 70 branches in the country It is
regarded as one of the fastest growing financial services in the Sultanate of Oman. In the current
time, it is the second biggest bank in Oman by Market Value (Lundqvist & Vilhelmsson, 2018).
Bank Muscat: Bank Muscat is considered to have the largest network in Oman with over 130
branches, 368 ATMs and 131 CDMs in the country. It can be said that the company is leading
commercial bank in the country. The bank is headquartered in Muscat the company is currently
on the verge of growth which shows its financial strength of the financial market of Oman.
National Bank of Oman: The company was founded in 1973 and is the country of local
commercial ba to operate in the financial sector. Today it is one of the biggest banks in Oman in
regards to paid-up capital which it has amounting to 110.8 million OMR (Bromiley, McShane,
Nair & Rustambekov, 2015).
Oman Arab Bank: This bank is a joint venture held by Omnivest and Arab bank the bank opened
in the year 1984. The company operate in the financial sector as well as Islamic Finance Sectors.
Omnivest holds 515 of the share whereas 49% is held by Arab Bank Group.
Bank Sohar: The company is headquartered in Sohar Oman the company is also considered as
one of fastest growing bank company in Oman. It also operates in the financial and Islamic
Finance Sector.

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Ahli Bank: Ahli Bank in Qatar is a financial institution serving in the financial sector as from the
last 15 years. The company has 14 branches in Qatar and over 60 ATMs in the city (Huang,
2017).
HSBC Bank: HSBC bank is the most widespread international bank in the Middle East and has
been operating since 1889. The firm operating in the finance and insurance sector of the country.
Research Questions
Research questions will help the research to create a bedrock of objective based on which the
above research study will be conducted. The research question for the following research process
are as follows:
1. What is risk management system within commercial banks?
2. What are different types of role in risks which risk management in commercial banks
mitigate?
3. How doe risk management system impact on a commercial banks performance in Oman?
4. What is the possible issue with risk management system within these commercial banks
In Oman?
5. How the following problems can be mitigated?
Research Objectives
Based on the above research questions there is some research objective developed for the current
study and they are as follows:
6. To know about risk management system within commercial banks in Oman
7. To identify different types of role in risks which risk management in commercial banks
mitigate
8. To know on how risk management system impacts on commercial banks performance in
Oman
9. To know the possible issues with risk management system within these commercial
banks In Oman
10. To recommend possible solutions

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Literature Review
Introduction
In this literature review, we are going to discuss the risk management system which was
followed by the commercial banks in Oman and also how its effect on their performance. The
banks of Oman have dominated 90 per cent of the whole financial system i.e total no. asset and
liabilities of the financial sector. In the last few years, the banking industry of Oman shows a
very vast growth. The reason behind this significant of the banking sector of Oman is due to rise
of oil prices, many large industries have been implemented also, there is also a growth of real
estate and infrastructure projects in private sectors, and also the efforts that diversify the
economy. So this literature review attempts to evaluate the risk management system which bank
are using to mitigate their risk and also how it has an impact on their performance.
Different types of role Or risks which risk management in commercial banks mitigate
The commercial sector of Oman consists or made up the by the Central bank of Oman(CBO),
specialized banks, Commercial banks, money exchange companies that dealing solely in money
exchange business, non-bank finance and leasing companies. There have been many mergers
since the 1990s in the Omani banking system and only a few banks that exits at the end of 2009
(Olson & Zoubi, 2017). There are total no. of 17 commercial banks that stand in the Oman
banking system out of which 7 are locally incorporated and 10 are the branches of foreign banks
(Elamer, Ntim & Abdou, 2017). The locally incorporated commercial bank is the National bank
of Oman(NBO), Oman International Bank(OIB), Bank Muscat(BM), Oman Arab Bank(OAB),
Bank Dhofar(BD), Bank Sohar(BS), and Al Ahli Bank(AB) (Hesse & Poghosyan, 2016). The
major risks which were faced by the companies in Oman are Foreign Exchange Risk, Credit risk
and Operational risk.
Credit risk occurs when the borrowers did not return the loans and become insolvent. Credit risk
is largely defined as the risk of not receiving the payments by the borrowers that take the credit
or money by the banks and did not return that amount in the given period of time. So the risk of
delayed payments is also included by the bank in this category (Prabhakaran & Karthika, 2018).
This cash flow risk occurs when borrowers become bankrupt and unable to pay the debt that was

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owned by them. This credit risk can only be avoided by the bank if the bank conducts a brief
check on the borrowers before the sanction of loan that the individuals will not run out of the
income before the loan period overs (Shiraz & Ramezani, 2016). There are many credit rating
agencies that provide a sufficient information about the borrowers so that a bank can make a
decision according to that. The profit of the bank is directly proportional to the credit risk as if
the credit risk rises by a small amount then also it has a large impact on the profitability of the
bank (Sangeetha, 2015).
Operational risk also plays a very important role in Oman banking system. Many operations have
been conducted by the bank in order to be profitable. If the business processes failed in the banks
day to day activity then it causes an operational risk. One of the common examples of
operational risk is a credit of a payment in the wrong account or while dealing in the market
there is an execution in the wrong order. There are no departments that are immune from the
operational risk. Operational risk generally occurs when the wrong person is hired or there is a
breakdown of the information technology systems (Al Shubiri, & Jamil, 2017).
Foreign exchange risk is also one of the major risks that were faced by the Omani commercial
bank. This risk occurs when an asset or investments denominated in a foreign currency other
than that of the base currency and foreign currency lose values and as a result, gives an
unfavourable exchange rate. Risk managed by the commercial banks of Oman is very well and
has a great impact on their economic system. Their banking policy and foreign exchange policy
are very attracting and they ensure that their will no foreign exchange risk to their stakeholder
and customers.
Risk management system within commercial banks in Oman
Oman is an open and oil-dependent economy so a sound and a resilient financial system is a
very important precondition to actively encourage the continued economic development of
Oman. In 2004, the total asset of the commercial bank was 4.9bn Rials but at the end of 2009, it
rose to 14.2bn Rials. This shows a significant growth of commercial bank in Oman with an
annual average growth of 38 per cent in the last years(2004-2009). In the development of the
economy, commercial bank plays a very vital and important role. If the economic growth can be
promoted by a competitive and efficient financial system then there will be a risk that was
thrown by the economic forces too (Khandelwal, Miyajima & Santos, 2016). There will be

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various types and sources of risk in the financial system that can be traced and has a direct
impact on the performance of local as well as global economy. This risks could differ by a bank
to bank and also could be totally internal to a specific bank. Risk management in the Oman
banking system is very superior. Banks like National Bank of Oman(NBO), Bank Muscat(BM)
and Bank Dhofar(BD) have engaged with some credit rating agencies which give ideas and
pieces of information about the borrower that the individual will able to pay the credit loan or
not. This bank checks the background and business of the borrower very well and in a detailed
manner before the sanctions of loans and ensures that the individual will not run over the money
or become bankrupt during the loan period (Ramady, 2015). This practice will lower the chance
of credit risk and serves as one of the effective ways for risk management systems in Omani
commercial banking system. Oman International Bank(OIB) and Oman Arab Bank(OAB)
regularly check their business process and ensure that it does not fail because falling of any
business process causes a operational risk.
Risk management system impacts on commercial banks performance in Oman
Now as discussed above there are various financial risks which are valuable to the commercial
banks in Oman hence it will have a significant impact on the overall operational activities of the
company. Although the risk management process within an organization helps an organization to
effectively mitigate such kind of risk and enhance the performance of the company's in an
effective manner. According to Waemustafa & Sukri, (2016), financial risks are the most
observed and serious risks when it comes to the operation of the firm. Risk management process
within the commercial bank helps the following financial institutions to counter financial risk
and to optimize such risks for better operational activities.
The major risks which faced by the companies in Oman are foreign Exchange Risk, Credit risk
and operational risk. In accordance to Härle, Havas & Samandari, (2016), it was seen that banks
in Oman were efficient in managing risk but the major factors which influenced the commercial
banks in Oman were the identification of risk, assessment of risk and analysis of the risk. It was
significantly proved by Abbas, Haider, Zainab & Hassan (2018), that the process used by
commercial banks in Oman for risk assessment, risk monitoring and controlling were
significantly different from that of Foreign Banks. It was found that as commercial banks in

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Oman was Islamic sector banks they have a higher risk associated with them because of the
additional range of products which are offered in addition to the conventional products. This
increased the vulnerability of the system towards financial risk. It has been seen that commercial
banks in the middle east have influenced through variables like risk assessment and monitoring
which has created some problems in their operational activities. It is to be mentioned that
through the use of a risk management procedure have been very efficient in commercial banks to
mitigate such risks.
Now in the context of risk, management relation to companies performance it has been stated by
Waemustaf & Sukri (2015), that risk management procedure in the financial sector of business is
directly related to the financial, credit, operating performance of the banks. This means when the
risk management procedure is efficient the performance of the company will be highly efficient
and when the risk management of the company is not efficient it will tend to cause problems and
effective performance by the company. It is to be mentioned that the performance of the
commercial bank dependent on its risk management procedure. Hence it is also clear that Risk
management procedure is a major influence which influences the performance of a company. On
the other hand, it is to be mentioned that for this purpose a company tries to improve its risk
management procedure which will create an efficient operational platform helping the
organization do well in their operational activities (Grace, Leverty, Phillips & Shimpi, 2015).
Banks like Bank Dhofar, Bank Muscat, National Bank of Oman, Oman Arab Bank, Bank Sohar,
Ahli bank, HSBC bank have always tried to increase the operational efficiency in the market for
this purpose they try to have an efficient riks management system which would help them to
counter risk to which the company is exposed to in their operational activities. This makes sure
that the company optimizes the risks and operates in an efficient manner within the firm. It can
be stated that above-mentioned firm also is prone to some risks which are to be mitigated in
order to increase their performance (Sadgrove, 2016). Performance is one effect n when the risks
are low then the financial institution is able to take chances in order to do well in their
operational activities. This also helps them to increase the violet of the operation with reliable
profit sources within their operations (Adeusi, Akeke, Adebisi & Oladunjoye, 2014).

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Possible issues with risk management system within these commercial banks in Oman
The risk management system for the given banks which are Bank Dhofar, Bank Muscat, National
Bank of Oman, Oman Arab Bank, Bank Sohar, Ahli Bank and HSBC Bank work well in most
of the banks but few of the bank are better at certain risk management and certain banks are
better at risk management in certain fields ( Reason, 2016). Here we will consider the seven
number of banks and all of them are situated in Oman. Not all the banks are good at risk
management systems and also, none of the bank’s risk management system is best in the market.
Every bank has its own strong points in risk management and also week points in the risk
management systems. Example, the banks like bank Dhofar and bank Muscat have issues with
the Exchange risk, whereas these banks are good at analysing the other risk involved (Hillson &
Murray-Webster 2017). Similarly, the banks like the National Bank of Oman, Oman Arab Bank
and Bank Sohar have a problem with the risk management system in the field of Credit type of
risk involved. But on the other hand, these banks are better at few other risk management system
and are progressing in the other field. In addition, the banks like Ahli Bank and HSBC bank have
issues with the operational type of risk involved in the risk management system. But are better in
the few other risk management risk like Exchange risk and Credit risk (Aven, 2016). These were
the possible issues with risk management system for the given seven banks in Oman ( Kerzner &
Kerzner 2017).
Conclusion
In the light of the above context, it can be said that the banks in Oman have great influence in
the performance of them due to the risk management systems. The background of these banks
has described in the above context. The topics like the risk management systems, their impacts,
types of risk management and also the different types of issues related to them are discussed in
the above research thoroughly. Risk management systems play an important role in the
performance of the bank in Oman, thus should be operated in abundance of precautions.

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Research methodology
Research outline
Research methods used by the research has been selected on the basis of getting descriptive
results for better information analysis which will tend to derive integrate data helping the
research in conducting a viable research on the subjected topic. It is to be mentioned that the
research has used positivism philosophy, descriptive design and a deductive approach to conduct
the following research (Gong, Morikawa, Yamamoto & Sato, 2014). Further data has been
collected from both primary and secondary sources under the mixed method including both
qualitative and quantitative data from both sources. Random sampling method has been used for
quantitative data sampling were for a sampling of qualitative data purposive sampling has been
opted by the researcher in order to conduct the following research (Almamy, Aston & Ngwa,
2016).
Research philosophy
Philosophy is a mental approach which the researcher takes in order to conduct a particular
research. In the current research, the researcher has used the positivist philosophy in order to
conduct the following research. This is because of positivism philosophy help in considering
data which relates to real-time practically under scientific process. This would help the
researcher to direct the research study in an efficient way (Dagiliene, Leitoniene & Grencikova,
2014).
Research approach
The research approach helps the researcher determine the phases of research which will be
undertaken by the researcher in order to get to the desired result. In the current research, the
researcher has used the deductive approach in order to direct the phases of the research process.
This is because the research will be conducted on the evidence which is currently present on the
subjected topic. In this sense, it will help the research to cut out unnecessary phases (Salviano,
Dezan,& Yanagihara, 2015).

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Research design
Design of research is the bedrock on which research conduct the research and collect data
accordingly. In this research, the researcher has used a descriptive design which will take out
descriptive data in relation to the subjected topi for the purpose of in-depth analysis which will
help in deriving a conclusive result on the above-stated topic (Bushuyev et al. 2015).
Data type
For conducting the following research mixed data type will be used which will include both
qualitative and quantitative data which will help the research to take out descriptive information
which will suit the descriptive design of the research study (Tonzer, 2015).
Data collection process
Data collection process can be divided into several classifications depending upon the type of
research that has to be done. Mainly there are two types of data collection process, primary data
collection process and secondary data collection process. The secondary data collection process
can be conducted in numerous ways, some of them be like books, journals, newspapers, articles
and also a few websites related to the same topic. The journals and articles are being used in the
current research mainly to understand the government policies and getting information about the
workforce performance for the given research(Lewis, 2015). And on the other hand, the primary
data collection process can be further divided into two types quantitative data collection process
and the qualitative data collection process, they are further explained in other paragraphs.
Quantitative data collection
The part of the primary data collection process is quantitative data collection process in which
the approach is to a collection of the data by the help of survey questionnaire approach ( Graham,
Fitzgerald & Simmons 2017). The reason for choosing the survey questionnaire approach is due
to the fact that the data collection can be collected by the number of more individual and the end
results are more prominent. The process of data collection was, on a specific date and time for
the selected people, a questionnaire was given to each of them and allowing a 15 mins time to fill
them up. The filled up questionnaire was collected and the data was able to analyse.

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Qualitative data collection
The qualitative data collection process was being held on the basis of verbal opinions for the
given research. For verbal opinions, the managers of the different banks were invited to a certain
place and a face-to-face interview session was fixed. The sessions were recorded with the help of
the normal microphone and the important sessions were recorded and analyzed for the data
collection process. The verbal conversations with the managers of the different banks were
analysed and reported for the important research development procedure (Palinkas, Horwitz,
Green, Wisdom, Duan & Hoagwood 2015).
Sampling
Sampling is a very important aspect in the field of data collection process mainly in the primary
data collection process, as it maintains the relevancy of the data collected for any kind of given
research. Both the quantitative and the qualitative data collection process in the primary data
collection process plays an important role in maintaining the relevancy and accuracy of the data
collected in the primary data collection process. In the quantitative data collection process, the
sampling process has been maintained as the larger population considered under the survey
( Csikszentmihalyi & Larson 2014). The sample size used for the current research is 7 manager
for an interview and 138 employees for the survey of the bank to mention the research
methodology.
Limitations of the research
The limitations to the current research being held in the quantitative data collection process as
the data collected were among the limited amount of people but the larger the population for the
survey. The more amount of questionnaire was distributed and more personals were invited for
the survey for research purposes the results could have been more accurate and help
understanding workforce productivity. Also in the qualitative data collection process, the number
of managers invited for face-to-face interview were less in number, if a number of persons were
invited for the interview from different banks then the results could have been more accurate and
a better understanding of workforce productivity ( Velte & Stawinoga 2017).

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Ethical consideration
The proposed current research has been done under the direct maintenance of the code of
conduct. While conducting the given research work none of the personal questions was asked by
the voluntary participants (Bilimoria, Chung & Hedges 2018). The strict maintenance of the code
of conduct was followed and the researcher has the confidence in the data collected by the
participants.
Time frame
Tasks Month 1 Month 2 Month 3 Month 4 Month 5
Topic selection and
proposal approval
Literature review and
secondary data collection
Identifying research
methodology
Data collection
Data analysis
Findings
Conclusions and
recommendations and
final proofreading
Final submission

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Data analysis
In this section, there will be an analysis of the data collected from both primary and secondary
source of data. Primary data will be analyzed in the first section from the data collected from
interview and surveys here as the secondary will analyzed in the second section form the data
collected from annual reports of banks:
Primary source
Qualitative data analysis
In this section, there will be an analysis of the data collected from an interview conducted which
comprised of 3 questions and they are as follows:
1. Which risk associated with your company is highly significant?
Answers: In regards to this question managers of Bank Dhofar, Bank Muscat and HSBC bank
felt that credit risk is highly significant within their companies. This is because the company has
had a high credit rating which means it payout high-risk wheels when they payout high credit
there is a significant risk of credit failures which can occur. In accordance to the bank manager
of National Bank of Oman, Oman Arab Bank and Bank Sohar feel that financial risks are highly
significant in the operations conducted by the firm because of the perform financial activities and
services which makes the financial system of the company vulnerable to final risks. While Ahli
bank manager felt that Operational risk is highly significant in their banks as there are
operational risks which can cause financial downfalls in the company.
2. Do the risks which are the highly significant impact on the performance of the company?
Answer: In response to this question to bank manager of HSBC, Bank Muscat and Bank Sohar
said that yes the risks have an impact on the overall performance as the firm has to take
precautions in their activities. On the other hand bank managers of Bank Dhofar, National bank
of Oman and Ahli bank feel that as there are measures taken to mitigate risk there is no impact of
these rocks which have affection on the overall performance of the company. Bank manager of
Oman Arab Bank does feel that when the risks are very high there is an impact on the
performance whereas the risks are low there is no such impact on the performance.
3. Does your risk management system help your company to mitigate risks and increase the
performance of the company?

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Answer: In accordance to this question every bank manager answered that they have a capable
risk management system which helps the firm to mitigate and counter any type of risk which is
associated with the firm and help the firm in performance their activities through an effective
manner. They also said that as risks are mitigated the company is able to conduct their
operations through efficiency which increases the firm's performance.
Quantitative data analysis
The data collected from the survey will be analyzed in this section. There was some demographic
question as well as the information question asked in the survey which is discussed as follows:
Age group
What is your age group ?
Options Perce
ntage
Responds No. Of
responde
nts
18-28 35% 48 138
28-38 22% 30 138
38-48 43% 60 138
48-58 7% 10 138

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This was a demographic question which was asked by the respondents and it is seen that majority
of the respondent fall in the age group of 38 -48. It is to state that as the age group are relatively
high the experience level will be high which show the viability of response.
Employment
Are your employed in any of the seven banks?
Options Perce
ntage
Response No. Of
responde
nts
Yes 100
%
138 138
No 0% 0 138

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From the survey, it is seen that all of the respondents are employed in the above of 7 stated banks
in Oman. It is very likely that they know about the system within the bank which include the
process of risk management.
Credit risk
Do you agree that there is a Credit risk associated with your bank's operation?
Options Perce
ntage
Response No. Of
responde
nts
Strongly agree 29% 40 138
Agree 47% 65 138
Neutral 2% 3 138
Disagree 11% 15 138
Strongly disagree 11% 15 138

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The above chart and table show the response of the population which participated in the survey.
It is seen that most of the respondent feel that their banking institution have credit risks which
are associated with the operations as there is credit service which the company also renders to the
customer. Some feel that the banking system in the bank is strong enough to solve credit
problems and what they do not risk to the firm.
Financial risk
Do you agree that there is financial risk associated with your bank's operation?
Options Perce
ntage
Responds No. Of
responde

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nts
Strongly agree 36% 50 138
Agree 43% 59 138
Neutral 7% 9 138
Disagree 7% 10 138
Strongly disagree 7% 10 138
It can be said that most of the bank employee which were respondent in the current survey
agreed to the fact that there are financial risks which are associated with form activities as the
activities are hugely based on financial service the vulnerability of the company towards
financial risks are the highest. Only a few disagreed to the question saying the company know
how to perform financial activities are their minimal risk associated.
Operating risk
Do you agree that there is Operating risk associated with your bank's operation?
Options Perce
ntage
Responds No. Of
responde
nts
Strongly agree 22% 30 138
Agree 59% 81 138
Neutral 5% 7 138
Disagree 11% 15 138
Strongly disagree 4% 5 138

RESEARCH PROJECT: THE IMPACT OF RISK MANAGEMENT ON THE PERFORMANCE OF
COMMERCIALS BANKS IN OMAN
22
It is seen that in this question majority of the respondent agree that there operational risks which
associated with company and only few disagree to this point.
Impact of risk of company's performance
Do you agree that these risks affect the performance of the bank
Options Perce
ntage
Responds No. Of
responde
nts
Strongly agree 36% 50 138
Agree 47% 65 138
Neutral 2% 3 138
Disagree 12% 16 138
Strongly disagree 3% 4 138

RESEARCH PROJECT: THE IMPACT OF RISK MANAGEMENT ON THE PERFORMANCE OF
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23
Majority of the respondent feel that risk which is associated with the firm affect its performance
in an overall manner. The percentage of agreement is high in comparison to disagreement.
Risk management efficiency
Do you agree that the risk management system within your company is efficient to manage and
optimize risks in the company?
Options Perce
ntage
Responds No. Of
responde
nts
Strongly agree 33% 45 138
Agree 40% 55 138

RESEARCH PROJECT: THE IMPACT OF RISK MANAGEMENT ON THE PERFORMANCE OF
COMMERCIALS BANKS IN OMAN
24
Neutral 4% 5 138
Disagree 12% 17 138
Strongly disagree 12% 16 138
Nearly every participant agreed that their banking institution has an efficient its management
system to counter risks which are associated with the company. Whereas some feel the bank are
not able to identify risk tan faster pace.
Impact of risk management on overall performance
Do you agree that risk management in the company help in improving its overall performance?
Options Perce
ntage
Responds No. Of
responde
nts

RESEARCH PROJECT: THE IMPACT OF RISK MANAGEMENT ON THE PERFORMANCE OF
COMMERCIALS BANKS IN OMAN
25
Strongly agree 40% 55 138
Agree 47% 65 138
Neutral 1% 2 138
Disagree 6% 8 138
Strongly disagree 6% 8 138
Nearly every employee agreed to fact that Risks management of a company affects the overall
performance of a company. Hike some disagree as they think that every company has a risk
management system and its independence from the performance of the company.
Loopholes in risk management system
Do you agree that there are any possible loopholes in the risk management system of your
bank?
Options Perce
ntage
Responds No. Of
responde
nts

RESEARCH PROJECT: THE IMPACT OF RISK MANAGEMENT ON THE PERFORMANCE OF
COMMERCIALS BANKS IN OMAN
26
Strongly agree 21% 29 138
Agree 37% 51 138
Neutral 1% 2 138
Disagree 13% 18 138
Strongly disagree 28% 38 138
In this question, there was a 50 -50 situation some felt that there are no possible loopholes within
the risk management system of the company. While some felt that there are some loopholes in
the current system which is to be identified.
Secondary source
In this section data collected from the annual reports will be discussed. Annual report are
formidable sources of data which is audited and reliable to use in order to get information related
to the risk management procedures used by the firm. Through the annual reports of the above
stated firm it has been identified that the risk that have been identified by the organization are
credit risk, financial risk and operating risks. The companies have created their own Risk

RESEARCH PROJECT: THE IMPACT OF RISK MANAGEMENT ON THE PERFORMANCE OF
COMMERCIALS BANKS IN OMAN
27
manager structure which helps the company to manage and identify risks. It is seen that measure
which normally take the company in order to mitigate risks are Credit Risk Mitigation Policy to
manage risk, Financial risk like return risk, profit rate risk and liquidity risks are also identified
in the firm. Where in operational risk market risk seems to be very dominant through all the
annual reports of the firm (Lassoued, Sassi & Attia, 2016). The Risk management Directors in
all of the firm have also agreed to fact that runs management core objective is also to optimize
risk and to increase the performance of the company. It is also seen in every annual report of the
seven banks that their company have created a separate risk management system which helps the
organization to identify and mitigate risk an effective manner (Klomp & de Haan, 2014).
Conclusion and recommendations
Concluding in the light of the above context it can be said that risk is associated with every
financial institution operating around the globe as well as In Oman. Risk management system is
very important in order to mitigate different types of risks which present within a banking
institution. Through the above assessment and research, it has been seen that respondents in the
survey as well as in the interview have identified that there is a relationship between Risk and
company’s performance. This shows that organizations performance has effected through the
riks which were associated with the company. It is to mention that through the above research it
has also become very obvious that if there is high risk associated to the company the
performance will be low this means there is an inverse relationship between risk and a company's
performance. From this can be said that the banks in Oman have to be prone to risk and the risk
management within the firm has to mitigate such risk in order to maintain efficient performance
within the company. There is some recommendation which formulated out of this research
process in order to make sure that risk management is deceit which helps in better an
organization's performance and they are as follows:
1. In order to mitigate risk at an early phase, it is important that the risk management system
is able to identify risks at an early stage. Identification of risk is one of the most essential
things which is needed in a risk management procedure. It is very important that risk
which is associated with the operations of the firm are identified in an early stage. This
helps the organization to effectively monitor and mitigate risks which would help an
organization to effectively operate in the market. For this purpose, the organization will

RESEARCH PROJECT: THE IMPACT OF RISK MANAGEMENT ON THE PERFORMANCE OF
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28
have to better its risk assessment process which will further benefit the risk identification
within the firm.
2. It is to be mentioned that risk management should also identify the impact of risk which it
will have on the operations of a firm in an early stage. This ena th iodeto of the impact
which risks will have on the organization should be determined earlier. This would help
the organization in making decision on whether what should;l be the approach of the
company for mitigating the risk. This will ultimately help the organization to mitigating
risks in an effective way. It can be said that through this the process will be more efficient
and effective to mitigate any kind it which is there in the company (Faia & Ottaviano,
2017).
3. Risk management plan should also be updated through the change of scenarios. It can be
said that panning in accordance to the risk will be more viable as it will help the
organization to properly mitigate risk and attain proper controls the risks which is
associated with the organization. It is to mention the in order to make sure that riks
occurs minimal damage to the operation it is important to plan in accordance to ticks
which is there's this will increase the efficiency of risks management planning process
and will increase the performance of the company as well.

RESEARCH PROJECT: THE IMPACT OF RISK MANAGEMENT ON THE PERFORMANCE OF
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29
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