Page 177 - Bank-Muamalat_Annual-Report-2023

ANNUAL REPORT 2023
GOVERNANCE

RISK CULTURE The Bank has established Enterprise Risk Management (ERM)
framework as part of initiatives in promoting a strong risk culture
The Bank continues to enhance and strengthen its risk that integrates risk management into significant activities and
management capability by reinforcing and embedding a functions.
strong risk culture throughout the organisation. The Board
plays an active role in establishing and maintaining the
Bank’s risk culture through continuous emphasis on the RISK APPETITE
“tone from the top” and holding management accountable
The risk appetite serves as a foundation and reference
for maintenance of high ethical standards and effective policies
for the Bank’s aspired risk culture and is integral in providing
and practices.
the necessary guidance and parameters for all business
The Bank acknowledges that continuous communication and risk-taking activities and decision-making.
of its core values and sound risk practices are essential in
order to embed a robust risk culture for its long-term The Bank defines its risk appetite by the amount and
sustainability. The Management is therefore committed in types of risk that it is willing to accept in pursuit of its
driving the established risk and compliance programmes which strategic and business objectives. The Board reviews and
include reinforcement of shared values, engagement sessions, approves the Bank’s risk appetite annually and is kept
e-learnings and roadshows. Focus is on fostering a strong updated on its status on a monthly basis.
and coherent risk culture among all staff and on building and
sustaining long-term relationships with customers by enhancing RISK MANAGEMENT PROCESS
customer experience, building trust and increase the brand
value of the Bank. The Bank has established a continuous risk management
approach that facilitates systematic identification,
measurement, control, and monitoring of risk exposures and
produces appropriate and accurate risk reporting to enable
management to make informed risk decisions.

RISK MANAGEMENT PROCESS

1 IDENTIFY 2 ASSESS & 3 MITIGATE & 4 MONITOR &
MEASURE
CONTROL
REPORT
• Identify and understand • Assess and measure • Establish quantitative • Monitor key risk
risks inherent in products risk exposures in terms and qualitative controls indicators and early
and business activities. of risk types, quantum, to oversee and manage warning signals to
• Identify emerging trends impact severity, and the identified risk ensure that sufficient
and risks to ensure steps occurrence probability exposures. and timely action are
are taken to minimise as well as the short and • Implement risk taken to mitigate any
Bank’s exposure. long-term impact. mitigation measures potential risk.
• Implement quantitative to minimise existing • Monitor potential
and qualitative risks or prevent new impact to business
risk measurement or emerging risks from strategies and propose
approaches to measure occurring. corrective measures,
and assess risks and where necessary.
ensure the continual • Report to the
reassessment and Management and Board
identification of risks. level risk committees as
well as to the Board on a
regular basis.

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