Title:
ASSESSING THE IMPACT OF OPERATIONAL RISK MANAGEMENT ON FINANCIAL PERFORMANCE OF SELECTED MAINSTREAM COMMERCIAL BANKS IN CAMEROON

Authors:
Alain Vilard Ndi Isoh, Ph.D, Egute Mispar Ambang and NCHISE Delphine NCHANG

Abstract:
The Basel Committee for Bank Supervision (BCBS) is aimed at enhancing financial stability of banking system by providing quality supervision and regulatory frameworks for global banking operations. The committee provides recommendations on capital risk, market risk, and operational risk; with the objective of ensuring that financial institutions have adequate capital reserved to absorb unpredicted losses. It is on this premise that this study seeks to analysis the impact of operational risk management strategies on financial performance of selected mainstream commercial banks in Cameroon. A quantitative case study design was used and supported with the philosophical underpins of objectivism ontology and positivism epistemology. Data was primarily sourced using structured questionnaires from two hundred and fifty (250) employees purposively sampled from National Financial Credit Bank (NFCB), the United Bank for Africa (UBA) and Eco Bank from the centre and littoral regions of Cameroon. Data was analysed using Structural Equation Modelling (SEM) with the aid of SPSS 23 and Amos 24. The study revealed that internal operational risk management practices, risk monitoring and control, and training and reporting have significant positive impact on financial performance. This study opined that financial performance increases with the implementation of internal operational risk management strategies. Furthermore, risk monitoring and control have significant mediating impact between training and reporting and financial performance. This study therefore recommends that the provisions of operational risk management strategies as prescribed by the Basel I, II, III and IV accords are significant drivers of a stable and resilient financial system in the case of Cameroon.

Keywords:
Risk Management; Basel Accords, Operational Risks, Financial Performance; Cameroon