Effect of Risk Management on the Financial Performance of Bank of Kigali Plc, Rwanda

Living Kwizera
University of Kigali, Rwanda
Email: livingkwizera@gmail.com

Abstract: This study examined the effect of risk management on the financial performance of Bank of Kigali Plc in Kigali, Rwanda. An ex post facto design was adopted, using secondary data from the bank’s audited financial statements and annual reports for 2016–2025. The population comprised the bank’s financial records on risk management and financial performance, and all ten annual observations were studied through a census. A secondary data extraction sheet was the data collection instrument, and the data were analysed with descriptive statistics, Pearson correlation, and multiple regression in SPSS Version 26. Credit risk management had a significant positive relationship with financial performance (r = 0.725, p = 0.018) and a significant positive effect (β = 0.756, p = 0.036). Operational risk management (β = 0.484, p= 0.113) and strategic and reputation risk management (β = 0.176, p = 0.595) had positive but insignificant effects. The model explained 55.1% of the variation in financial performance (adjusted R²) but was not significant overall (F = 4.689, p = 0.051). With only ten annual observations, the findings should be interpreted cautiously. The bank is advised to strengthen credit assessment and monitoring, improve operational efficiency and cost control, and integrate strategic and reputational risks into its risk management framework.