Bank Muscat, the flagship financial services provider in the Sultanate, has won the Best Bank in Middle East and Africa for Liquidity Risk Management award by the Asian Banker. The bank is the first in the region to win this prestigious award from the Asian Banker.
The Asian Banker Risk Management Awards programme is designed to identify emerging best practices and outstanding achievements of the best run risk management teams in financial institutions. The awards are benchmarked globally by tracking developments around the world.
Risk management is at the heart of decision making at financial institutions and its importance has been underscored in the aftermath of multiple global financial crises. In this context, the prestigious award comes as a testimony to the superior risk management practices adopted by the bank and the investment it has made over the years in developing its risk management as an area of core competence.
AbdulRazak Ali Issa, Chief Executive, said: “Bank Muscat is proud to be the first in the region to win the liquidity risk management award which endorses the global best practices adopted by the bank. Risk management function is a core competence of the bank to ensure maintenance of risks at appropriate levels, thereby positioning the bank for optimal growth by maximising on revenue opportunities.”
“The bank has a risk appetite framework in place that defines the enterprise-wide risk capacity, risk appetite and risk thresholds. The bank’s long-term growth rests in achieving a sustainable and consistent return on equity and profit growth. With this objective in consideration, the bank defines its business strategy and prioritises growth areas,” he added.
The bank’s risk appetite framework is cascaded top-down to reflect in business units which enables them to manage product pricing in line with the corporate return-on-equity objective. In step with the global economic and financial developments, the bank maintains an appropriate risk profile by reducing exposure to areas of stress.
Bank Muscat considers liquidity risk management as paramount to its successful growth and continued value-added customer service. Being the largest bank in the Sultanate, Bank Muscat strives to maintain sufficient and good quality liquid assets so as to be in a position to meet any liquidity condition. The bank dynamically introduces measures to mitigate liquidity risk based on evolving market conditions.
The bank follows a stock approach to hold high quality liquid assets as part of its balance sheet and a cash flow approach wherein the bank manages its cash and liquid assets position based on ensuing and forecast cash flows. The bank has in place a well-oiled liquidity stress testing and maintains a contingency funding plan to meet any unforeseen stressed liquidity situation.