THE ANALYSIS OF BANKING RISKS INFLUENCE TOWARDS UNEXPECTED LOSS OF MILITARY BANK (MB) PHNOM PENH BRANCH DURING THE PERIOD OF 2010-APRIL 2013

Abstract

This research is to find out the main risks that causing unexpected loss of MB bank Phnom Penh branch in Cambodia from 2010 to April 2013. The researcher directly found the secondary data in headquarter of MB bank in Vietnam which was calculated based on Economic Capital Theory and BASEL accord about risk management in banking sector by bank lenders. Based on the data from MB bank, it is stated that there are 4 main risks that affecting to unexpected loss in MB bank Phnom Penh branch from 2010 to April 2013: credit risk, market risk, operational risk and compliance risk.. This study is a quantitative research. The researcher uses multiple regression model to analyze the data contains F test and T test. F test is conducted to find out the simultaneous influence of independent variables to dependent variable. T test is conducted to find out the partial influence of independent variables to dependent variable. The regression model has another function to find out which variable (risk) is the dominant variable (risk) that affect to expand business in Cambodia market. The result of this research shows out that credit risk, market risk, operational risk and compliance risk has simultaneous influence to unexpected loss of MB bank Phnom Penh branch from 2010 to April 2013. Credit risk, operational risk and compliance risk have significant influence to unexpected loss of MB bank Phnom Penh branch from 2010 to April 2013 while market risk has no significant influence. It was found out that Compliance risk is the dominant variable that to expand business of MB bank Phnom Penh branch from 2010 to April 2013 The researcher recommends that MB bank Phnom Penh branch should pay more attention to compliance risk when conducting its in order to minimize violation when expand business in Cambodia market. Meanwhile, Mb bank Phnom Penh Branch cannot ignore other risks.