Risk management policy and performance of commercial banks in Uganda

Abstract

This study examines risk management policy and the performance of commercial banks in Uganda looking at the case study as Global Trust Bank. It was based on three specific objectives which are: To identify various risks commercial banks face while doing business, to examine the performance of commercial banks, to examine the relationship between risk management policy and performance of commercial banks. The study applied a case study research design using both qualitative and quantitative approaches and also based on previous literature. A sample size of 48 was selected from a total population of 55 people. The researcher used interview guides and questionnaires for data collection. The findings of the study show that in Global Trust Bank there are major risks faced such as, Poor credit worthiness of the customers, risks that arise out of human error and natural disasters, risks in meeting its liquidity needs as they come due and many others. It also revealed that Global Trust bank has high level of performance. The findings also revealed that there is a significant relationship between risk management policy and performance of commercial banks. The researcher concludes that amidst the various factors that affect the performance of commercial banks, risk management policy is among the most important factors. The study therefore recommends that commercial banks should continue to formulate effective risk management policies in order to boost their performance.