Final Project on Risk Management & Risk Mitigation by Banks

Acknowledgement

First of all, I am grateful to Almighty Allah, who gave me good health abilities to successfully complete my final project, without HIS support I cannot do anything.

I want to give acknowledged to the people who have guided me in the creating of this project. It would not be possible to make such an extensive project report without their help and guidance. I got much information from the bank’s book, staff and websites.

I would like to express my gratitude first towards my guide instructor COM 619 for so much flexibility & guidance in such a way that I was able to learn how to make proposal of project and what sources should use. He also helped me in deciding the project topic, and project proposal. He has showed a lot of openness and full guidance in his approach. I would really like to thank him for his full support in a way that has lead to proper and effective learning.

I would like to thank my family and friends because without their support I will not able to complete my final project report.

Executive Summary

Risk management is the essential function for every bank. This report will indicate the effective management of HBL and SCB. After reading this project report you will be able to know the tools and strategies used by both banks. Banking sector has the major types of risks; their business faces risk after every second. Risk management is not a function of eliminating risk totally, but it the function which describes how one can win high reward by having risk.

Introduction

I’ve chosen topic on Risk management and Risk mitigation of two banks named HBL and Standard Chartered. This report will improve financial environment of both banks as well as stakeholder’s financial decision making. My research will be focus on the risk identification and reduction process. The present banking system has to face diverse market and non-market risks. It is essential to protect not only the interests of the stakeholders, but also protect shareholders and creditors interests. Our growing economy demands a safe and sound banking system but this is not possible until good steps are taken towards the risk management system. Nowadays, risk management has become a serious issue for the banking sectors, taking in stability in the financial markets. A need of good supervision for all the factors involved, can lead to identifying, assessing, and promoting a secured risk management system.

Our banking sector is increasingly faced tougher challenges in meeting various risk management requirements. So, there is a need of risk managers to be cautious, and attentively perceptive towards the causes of protecting the interest of the people concerned. Poor data availability is one of the main causes in inefficient risk 

Objectives;

To understand the risk that is faced by both banks and to evaluate the risk management and risk mitigation strategies tools and techniques used by both banks.

Significance;

This research will help all the stakeholders (i-e, investors, lenders, customers, govt.etc.) in understanding the risk faced by both the banks and strategies used by both the bank in risk management and risk mitigation. So they will be able to take their decisions accordingly. i-e whether to invest in a particular bank or not, whether to keep their savings in a particular bank or not etc. This research will also be used for assessment of risk factor, and what are tools and techniques should used by both banks. It will also explore that what standards firms are currently using against risk and how efficiently taking care of stakeholder’s interests. The outcome of this search will give brief understanding of risks faced by both banks and how they can overcome the risk. This study will also explore what is current market situation of both banks. This report will give benefit to stakeholders for the investment decision.

Data Processing Analysis

Data collection sources;

Primary source: Data will be collect through thoughts, and suggestions of bank’s staff.

Secondary sources will be the use of internet research and periodically publications related to topic, both banks websites will also use.

Data Collection Tools/Instruments:

 Questionnaire will be used. The purpose of this tool is to assess the information about banks and it is use to evaluate the risk faced by banks and their risk mitigation strategies.

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