Page 47 - Bank-Muamalat_Annual-Report-2023

ANNUAL REPORT 2023
OUR STRATEGY

Type of Risk Description and impact of the risk How we manage or mitigate the risk

Strategic Risk The risk of unexpected adverse • Ongoing review, enhancement and monitoring of the business
developments in the Bank’s performance strategies, risk appetite and capital planning process
stemming from fundamental strategic and • Conduct periodic stress testing and scenario analysis
business decisions and their execution • Ongoing review, enhancements and monitoring of risk appetite
The risk may present impacts to the and business performance
Bank’s profitability, capital and reputation

Link to Material Matter Link to Impact on Capitals

Reputational The risk of loss arising from negative • Ongoing monitoring of Bank’s risk rating
Risk perception of the Banks’s image by • Perform competitive analysis on industry and market benchmark
conduct or business practice which • Build and protect goodwill
adversely impact profitability, operations • Institutionalise and monitor culture and compliance
or shareholder value
The Bank’s reputation, liquidity, capital
and profitability may be impacted by this
risk

Link to Material Matter Link to Impact on Capitals

Climate Risk The financial dangers stemming from • Thoroughly evaluating exposure to climate-related risks
climate change impacts and efforts to across portfolios for risk assessment, guided by Climate Risk
reduce carbon emissions, like potential Management Framework
losses from financings/loans to industries • Integrating climate risks into every aspect of planning and
vulnerable to extreme weather events or investment decisions
policy shifts • Thoroughly assessing potential impacts of different climate
Climate risk poses financial, operational, scenarios through Climate Risk Stress Testing
and reputational threats to the Bank • Close collaboration with stakeholders to effectively address
due to increased defaults on financings/ climate-related challenges
loans, reduced asset values, infrastructure • Enhancing resilience against climate hazards through
disruptions, and reputational damage implementation of strategies
• Actively supporting efforts aimed at reducing greenhouse gas
emissions
• Providing transparent information on climate risk is necessary for
informed decision-making
• Advocating for policies that promote sustainability and resilience
in the face of climate change

Link to Material Matter Link to Impact on Capitals

Social &
Financial Capital Manufactured Capital Human Capital Intellectual Capital
Relationship Capital
45