Page 177 - Bank Muamalat_AR24

ANNUAL REPORT 2024 1 2 3 4 5 6 Governance 7 8 175

RISK CULTURE

The Bank continues to enhance and strengthen its risk management capability by reinforcing and embedding a 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 “tone from the top” and holding management accountable for the maintenance of high ethical
standards and effective policies and practices.
The Bank acknowledges that continuous communication of its core values and sound risk practices is essential to embed a robust
risk culture for its long-term sustainability. Management is therefore committed to driving the established risk and compliance
programmes, which include reinforcement of shared values, engagement sessions, e-learnings, and roadshows. The focus is
on fostering a strong and coherent risk culture among all staff and on building and sustaining long-term relationships with customers
by enhancing customer experience, building trust, and increasing the brand value of the Bank.
The Bank has established an Enterprise Risk Management (ERM) framework as part of initiatives to promote a strong risk culture
that integrates risk management into significant activities and functions.

RISK APPETITE

The risk appetite serves as a foundation and reference for the Bank’s aspired risk culture and is integral in providing the necessary
guidance and parameters for all business and risk-taking activities.
The Bank defines its risk appetite by the amount and types of risk that it is willing to accept in pursuit of its strategic and business
objectives. The Board reviews and approves the Bank’s risk appetite annually and receives monthly updates on its status.

RISK MANAGEMENT PROCESS

The Bank has established a continuous risk management approach that facilitates the 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

Identify Assess & Measure Mitigate & Control Monitor & Report

• Identify and • Assess and measure • Establish quantitative • Monitor key risk
understand risks risk exposures in terms and qualitative controls indicators and early
inherent in products of risk types, quantum, to oversee and warning signals to
and business activities. impact severity, and manage the identified ensure that sufficient
occurrence probability risk exposures. and timely action are
• Identify emerging as well as the short and taken to mitigate any
trends and risks to long-term impact. • Implement risk potential risk.
ensure steps are taken mitigation measures
to minimise Bank’s • Implement quantitative to minimise existing • Monitor potential
exposure. 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
reassessment and • Report to the
identification of risks. Management and Board
level risk committees as
well as to the Board on
a regular basis.