Abstract:
The issue of credit risk is of greater concern because of the higher levels
of perceived risks resulting from some of the characteristics of clients and the
business conditions that these clients find themselves in. The structure of risk
management calls for a review that reflect on policies and procedures which will
help manage risk as well as conform to the best practices. As a contribution to this
exercise, this study focuses on Unique Trust (UT) Bank and Teachers’ Fund (TF)
Financial Services with the aim of comparing the firms’ risk practices as well as
assessing their risk management practices.
A structured interview guide covering understanding risk and risk
management; risk identification; risk assessment and analysis; risk monitoring;
risk management practices; and credit risk analysis was developed and posed to
the credit officials of Unique Trust Bank and Teachers’ Fund Financial Services.
The study revealed that both firms have a good risk profile. It also found that
Unique Trust Bank is somewhat efficient in risk management, and risk
identification and risk assessment and analysis are the most influencing variables
in risk management practices.
Finally, the results indicate that there is a significant difference between
Unique Trust and Teachers’ Fund Financial Services in the practice of risk
assessment, risk analysis, risk monitoring and risk control. Thus the study
recommends that TF should pay more attention to monitoring risk exposure and
revising its traditional techniques of credit mitigation. Also UT and TF should
review the methods used in risk assessment and analysis.
