Risk Management Practices and Financial Performance: The Case of Banks in Sultanate of Oman

Essia Ries Ahmed, Shima Hamdan AL Mamar, Ahad Said AL Ghassani

Abstract


The main objective of this project is to define the relationship between risk management practices and a bank's financial performance. This is a quantitative study, where the quantitative data was collected via secondary data. Data collection from the annual reports of banks in Muscat Securities Market (MSM).The Sample size of 8 banks. 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 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 insignificant with a (ROE)

 


Keywords


Banks, Financial Performance, and Risk Management Practices

Full Text:

PDF

References


Abbas, F., Iqbal, S., & Aziz, B. (2019). The impact of bank capital, bank liquidity and credit risk on profitability in postcrisis period:‎ A comparative study of US and Asia. Cogent Economics and Finance, 7(1). https://doi.org/10.1080/23322039.2019.1605683

Alabdullah, T.T.Y., Ahmed, E. R., & Nor, M. I. (2020). the World Declining Economy and Coronavirus Pandemic: Systems Should Be Continued. Russian Journal of Agricultural and Socio-Economic Sciences, 102(6), 89–96. https://doi.org/10.18551/rjoas.2020-06.11

Alabdullah, Tariq Tawfeeq Yousif, & Ahmed, E. R. (2020). Audit Committee Impact on Corporate Profitability in Oman Companies: an Auditing and Companies: an Auditing and Management Accounting Perspective. Jurnal Riset Akuntansi Dan Keuangan Indonesia, 5(2), 121–128. http://journals.ums.ac.id/index.php/reaksi/index

Alfadli, A., & Rjoub, H. (2020). The impacts of bank-specific, industry-specific and macroeconomic variables on commercial bank financial performance: evidence from the Gulf cooperation council countries. Applied Economics Letters, 27(15), 1284–1288. https://doi.org/10.1080/13504851.2019.1676870

Alharthi, M. (2017). Financial performance and stability in Islamic banks: Evidence from GCC countries. Corporate Ownership and Control, 14(4), 103–113. https://doi.org/10.22495/cocv14i4art9

ALi, B. J. A., & Oudat, M. S. (2020). Financial Risk and the Financial Performance in listed Commercial and Investment Banks in Bahrain Bourse. International Journal of Innovation, Creativity and Change, 13(12). https://www.researchgate.net/profile/Mohammad-Oudat-2/publication/345491005_Financial_Risk_and_the_Financial_Performance_in_listed_Commercial_and_Investment_Banks_in_Bahrain_Bourse/links/5fa7a78392851cc286a03740/Financial-Risk-and-the-Financial-Performanc

Alsulmani, A. H., Alkindi, S. S., & Ahmed, E. R. (2021). Customer Accounting Information and Omani Service Companies’ Performance. International Journal of Finance & Banking Studies (2147-4486), 10(2), 79–88. https://doi.org/10.20525/ijfbs.v10i2.1245

Alyaarubi, H. J., Alkindi, D. S., & Ahmed, E. R. (2021). Internal Auditing Quality and Earnings Management: Evidence from Sultanate of Oman. Journal of Governance and Integrity, 4(2), 115–124. https://doi.org/10.15282/jgi.4.2.2021.6054

Arief, M. (2020). Mediasi Profitabilitas Dalam Menilai Hubungan Antara Manajemen Modal Kerja dan Nilai Perusahaan. AFRE Accounting and Financial Review, 3(2), 126–135.

Bilal, Z. O., & Salim, B. F. (2016). Does basil III implementation impact on financial performance? Evidence from Omani’s commercial banks. International Journal of Economics and Financial Issues, 6(3), 963–970.

Dang, H. N., Nguyen, T. T. C., & Tran, D. M. (2020). The impact of earnings quality on firm value: The case of Vietnam. Journal of Asian Finance, Economics and Business, 7(3), 63–72. https://doi.org/10.13106/jafeb.2020.vol7.no3.63

Ding, D. K., Ferreira, C., & Wongchoti, U. (2016). value Does it pay to outclass ? Corporate social responsibility. International Review of Financial Analysis, 47(October), 86–98.

Fristiani, N. L., Pangastuti, D. A., & Harmono, H. (2020). Intellectual Capital Dan Kinerja Keuangan Terhadap Nilai Perusahaan: Pada Industri Perbankan. AFRE (Accounting and Financial Review), 3(1), 35–42. https://doi.org/10.26905/afr.v3i1.4223

Galdeano, D. M., Fati, M., Ahmed, U., Rehan, R., & Ahmed, A. (2019). Financial performance and corporate social responsibility in the banking sector of Bahrain: Can engagement moderate? Management Science Letters, 9(10), 1529–1542. https://doi.org/10.5267/j.msl.2019.5.032

Gani, A. A. M. O., Al Rahbi, A. H. S. S., & Ahmed, E. R. (2021). Empirical Analysis on Corporate Transparency, Competitive Advantage, and Performance: An Insight of Muscat Securities Market. Journal of Governance and Integrity, 4(2), 96–102. https://doi.org/10.15282/jgi.4.2.2021.6091

Haryanto, S., Aristanto, E., Assih, P., Aripin, Z., & Bachtiar, Y. (2021). Loan to Deposit Ratio , Risiko Kredit , Net Interest Margin dan Profitabilitas Bank. AFRE Accounting and Financial Review, 4(1), 146–154.

Haryanto, S., Rahadian, N., Mbapa, M. F. I., Rahayu, E. N., & Febriyanti, K. V. (2018). Kebijakan Hutang, Ukuran Perusahaan dan Kinerja Keuangan Terhadap Nilai Perusahaan: Industri Perbankan di Indonesia. AFRE (Accounting and Financial Review), 1(2), 62–70. https://doi.org/10.26905/afr.v1i2.2279

Hasan, I., Kobeissi, N., Liu, L., & Wang, H. (2018). Corporate Social Responsibility and Firm Financial Performance: The Mediating Role of Productivity. Journal of Business Ethics, 149(3), 671–688. https://doi.org/10.1007/s10551-016-3066-1

Maqbool, S., & Zameer, M. N. (2018). Corporate social responsibility and financial performance: An empirical analysis of Indian banks. Future Business Journal, 4(1), 84–93. https://doi.org/10.1016/j.fbj.2017.12.002

Murashima, M. (2020). Do investors’ reactions to CSR-related news communication differ by shareholder? An empirical analysis from Japan. Corporate Governance (Bingley), 20(5), 781–796. https://doi.org/10.1108/CG-11-2019-0346

Nomran, N. M., & Haron, R. (2019). Dual board governance structure and multi-bank performance: a comparative analysis between Islamic banks in Southeast Asia and GCC countries. Corporate Governance (Bingley), 19(6), 1377–1402. https://doi.org/10.1108/CG-10-2018-0329

Ogboi, C., & Unuafe, O. K. (2013). Impact of Credit Risk Management and Capital Adequacy on the Financial Performance of Commercial Banks in Nigeria. Journal of Emerging Issues in Economics, Finance and Banking (JEIEFB) An Online International Monthly Journal, 2(3). www.globalbizresearch.com

Olamide, O., Uwalomwa, U., & Uwuigbe, O. R. (2015). The effect of risk management on bank’s financial performance in Nigeria. Journal of Accounting and Auditing: Research & Practice, 1, 2795–2806. https://doi.org/10.5171/2015.239854

Salim, B. F., & Bilal, Z. O. (2016). The impact of liquidity management on financial performance in Omani Banking Sector. International Journal of Applied Business and Economic Research, 14(1), 545–565.

Sleimi, M. T. (2020). Effects of risk management practices on banks’ performance: An empirical study of the Jordanian banks. Management Science Letters, 10(2), 489–496. https://doi.org/10.5267/j.msl.2019.8.021

Thottoli, M. M., K.V., T., & Ahmed, E. R. (2019). Qualitative Analysis on Information Communication Technology and Auditing Practices of Accounting Professionals. Journal of Information and Computational Science, 9(9), 529–537. http://www.joics.org/VOL-9-ISSUE-9-2019/

Wasiaturrahma, Sukmana, R., Ajija, S. R., Salama, S. C. U., & Hudaifah, A. (2020). Financial performance of rural banks in Indonesia: A two-stage DEA approach. Heliyon, 6(7), e04390. https://doi.org/10.1016/j.heliyon.2020.e04390

Yulandreano, E., Atahau, A. D. R., & Sakti, I. M. (2020). Apakah Profitabilitas Memediasi Pengaruh Manajemen Modal Kerja Terhadap Nilai Perusahaan ? AFRE Accounting and Financial Review, 3(2), 103–114.




DOI: https://doi.org/10.26905/afr.v4i2.6312

Refbacks

  • There are currently no refbacks.


Bookmark and Share


Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

AFRE (Accounting and Financial Review)

Postgraduate - University of Merdeka Malang

Postgraduate  Building, Terusan Dieng Street 62-64
Malang City, East Java, Indonesia, 65146.

View My Stats      Web Analytics

Other Link

Follow Us

Site Home Journal
Unmer Malang
Postgraduate
LPPM
Library
Repository 
 Email
jurnalafre@unmer.ac.id
 Phone
(0341) 567617
 Fax(0341) 567617

AFRE (Accounting and Financial Review)  Creative Commons License This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.