Page 293 - Bank Muamalat_AR24

ANNUAL REPORT 2024 1 2 3 4 5 6 7 Our Numbers 8 291

47. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

Overview
The integrated risk management system enables the Group and the Bank to achieve a single view of risks across its various
business operations and in order to gain strategic competitive advantage from its capabilities. It can be described as the
strategy and technique of managing risks by taking a holistic approach towards risk management process, which includes
risk identification, measurement and management. It also aims at integrating the control and optimisation of the principal
risk areas of Market Risk (“MR”), Asset and Liability Management (“ALM”), Credit Risk (“CR”), Operational Risk (“OR”) and
Shariah Compliance Risk; and building the requisite risk management organisation, infrastructure, process and technology
with the objective of advancing the Group and the Bank towards value protection and creation.

Generally, the objectives of the Group’s and the Bank’s integrated risk management system include the following:
• Identifying all the risks exposures and their impact;
• Establishment of sound policies and procedures in line with the Group’s and Bank’s strategy, lines of business and nature
of operations;
• Set out an enterprise-wide organisation structure and defining the appropriate roles and responsibilities; and
• Instill the risk culture within the Group and the Bank.
Risk governance

A stable enterprise-level organisation structure for risk management is necessary to ensure a uniform view of risks across
the Group and the Bank and form strong risk governance.
The Board of Directors has the overall responsibility for understanding the risks undertaken by the Group and the Bank and
ensuring that these risks are properly managed. While the Board of Directors is ultimately responsible for risk management
of the Group and the Bank, it has entrusted the Board Risk & Compliance Committee (“BRCC”) to carry out its functions.

BRCC, which is chaired by an independent director of the Board, oversees the overall management of risks.
The execution of the Board’s risk strategies and policies is the responsibility of the Group’s and the Bank’s Management
and the conduct of these functions are being exercised under a management committee structure, namely, the Executive
Risk Management Committee (“ERMC”), which is chaired by the Chief Executive Officer (“CEO”). The Committee focuses on
the overall business strategies and day-to-day business operations of the Group and the Bank in respect of risk management.

In addition, as an Islamic Bank, a Shariah Committee (“SC”) is set up as an independent external body to decide on
Shariah issues and simultaneously to assist towards risk mitigation and compliance with the Shariah principles.