Risk Management in Islamic Banking
RISK MANAGEMENT IN ISLAMIC BANKING
Chief Risk Officer BANK ISLAM MALAYSIA BERHAD
Jeroen P.M.M. Thijs
Bank Islam reserves all propriety rights to the contents of this Presentation. No part of this Presentation may be used or reproduced in any form reproduced without Bank Islam’s prior written permission. Islam’ This Presentation is provided for information purposes only. Neither Bank Islam nor the Presenter makes any warranty, expressed or implied, nor Neither assumes any legal liability or responsibility for the accuracy, completeness or currency of the contents of this Presentation.
STRICTLY PRIVATE & CONFIDENTIAL
BEFORE WE START
Why the title “Risk Management in Islamic Banking” instead of “Islamic Risk Management?”
Risk Management in Islamic Banking is not significantly different from conventional banking. There are additional risks that are unique to Islamic Banking
Page 2
IBFIM i-Series Program on Risk Management
CONCEPT OF RISK MANAGEMENT IN ISLAM
Page 3
IBFIM i-Series Program on Risk Management
AGENDA o Introduction to Risk Management o Risk Management in Islamic Banks o Guiding Principles of Risk Management o Risk Management Governance o Risk Management Tools
Page 4
IBFIM i-Series Program on Risk Management
INTRODUCTION TO RISK MANAGEMENT
Concept of risk management Definition of risk Risk management process
Page 5
IBFIM i-Series Program on Risk Management
WHAT IS RISK?
Risks are uncertain future events that could influence the achievement of the Bank’s objectives, including strategic, operational, financial and compliance objectives.
Uncertain future events could be: • Failure of a borrower to repay a financing • Fluctuation of foreign exchange rates • Fraud, incomplete security documentations, etc • Non-compliance with shariah law and principles • Other events that may result in a loss to the Bank
Page 6
IBFIM i-Series Program on Risk Management
WHAT IS RISK?
A Bank’s business
Chief Risk Officer BANK ISLAM MALAYSIA BERHAD
Jeroen P.M.M. Thijs
Bank Islam reserves all propriety rights to the contents of this Presentation. No part of this Presentation may be used or reproduced in any form reproduced without Bank Islam’s prior written permission. Islam’ This Presentation is provided for information purposes only. Neither Bank Islam nor the Presenter makes any warranty, expressed or implied, nor Neither assumes any legal liability or responsibility for the accuracy, completeness or currency of the contents of this Presentation.
STRICTLY PRIVATE & CONFIDENTIAL
BEFORE WE START
Why the title “Risk Management in Islamic Banking” instead of “Islamic Risk Management?”
Risk Management in Islamic Banking is not significantly different from conventional banking. There are additional risks that are unique to Islamic Banking
Page 2
IBFIM i-Series Program on Risk Management
CONCEPT OF RISK MANAGEMENT IN ISLAM
Page 3
IBFIM i-Series Program on Risk Management
AGENDA o Introduction to Risk Management o Risk Management in Islamic Banks o Guiding Principles of Risk Management o Risk Management Governance o Risk Management Tools
Page 4
IBFIM i-Series Program on Risk Management
INTRODUCTION TO RISK MANAGEMENT
Concept of risk management Definition of risk Risk management process
Page 5
IBFIM i-Series Program on Risk Management
WHAT IS RISK?
Risks are uncertain future events that could influence the achievement of the Bank’s objectives, including strategic, operational, financial and compliance objectives.
Uncertain future events could be: • Failure of a borrower to repay a financing • Fluctuation of foreign exchange rates • Fraud, incomplete security documentations, etc • Non-compliance with shariah law and principles • Other events that may result in a loss to the Bank
Page 6
IBFIM i-Series Program on Risk Management
WHAT IS RISK?
A Bank’s business