CREDIT RISK MANAGEMENT AND ITS EFFECT ON THE PERFORMANCE OF BANK OF ABYSSINIA THE CASE OF WEST ADDIS ABABA DISTRICT

Abstract

The main objective of the study was to investigate Credit risk management on performance of bank of Abyssinia the case of west Addis district. This study is used to identify the capital adequacy of bank of Abyssinia in credit risk management practice in case of west Addis district, to investigate asset quality on bank of Abyssinia credit risk management practice, to examine the management quality of BOA in credit risk management practice in case of west Addis district, to assess the earning efficiency of BOA In credit risk management practice in case of west Addis district, to examine the liquidity ratio of BOA In credit risk management practice in case of west Addis district. This study used a descriptive and explanatory research design. The target population of the study was 150 employees in BOA. Primary data was collected using questionnaires and administered using by the researcher. The data was then analyzed using both quantitative and qualitative techniques. The study concluded that bank considers risk identification as a process in credit risk management, that the bank focuses in interest rate risks in the risk identification map and that the bank focuses in foreign exchange risks and in view of risk analysis as a credit risk management practice in the bank the application of modern approaches to risk measurement, particularly for credit and overall risks is important for BOA and that risk analysis helps the bank management to discover mistake at early stages and that risk monitoring can be used to make sure that risk management practices are in line with proper risk monitoring. The study recommended that BOA management should understand how they can edge themselves against the eminent dangers of over exposure to credit risks