Risk Assessment and Handling in Ethiopian Commercial Banks: A Comparative Study of Public and Private Sectors

Abstract

In recent times Ethiopian economy is one of the booming in African countries. In modern business world operating banking business is a challenging one, especially in developing country like Ethiopia. At this juncture researcher tries to find how both public and private sector banks are performing in risk assessment and handling/managing risks effectively to overcome their problems. By applying Statistical Package for Social Sciences (SPSS) tools, for data analysis, the researcher identifies that there is approximately similar extent of credit risk exposure between state owned and private banks for all attributes of credit risks, operating efficiency is good in public sector than private sector and better risk management environment could found in private banks compared to state owned banks. All banks are influenced by many factors such as credit risk, liquidity risk and operational risk. Hence, it is recommended for banks' management to effectively assess and handle risks during this typical time.