The Study of Credit Risk Management and its Impact on Operational Performance: Case Study of the Standard Chartered Bank in Sierra Leone

Managing credit risk is a critical concern for banks amid global economic crises, digital transformation, technological advancements, and the increasing use of artificial intelligence. Regulatory frameworks, particularly the Basel II Accord, require banks to maintain a transparent and comprehensive understanding of customers and credit risk. Banks must identify, assess, monitor, and control credit risk across portfolios and individual transactions while considering its interaction with other risks. Effective credit risk management influences bank performance, profitability, and reputation. Liquidity risk management is equally important, requiring banks to establish robust processes for identifying, measuring, monitoring, and controlling liquidity risk. Banks must maintain contingency funding plans and adequate buffers of high-quality liquid assets to withstand liquidity stress scenarios. Bank performance is a multidimensional concept encompassing financial and market outcomes, human resource performance, organizational efficiency, and customer-focused performance. This study focuses on financial indicators, including profitability, equity, asset efficiency, and return on equity. Findings indicate that effective credit risk management enhances both operational performance and liquidity, contributing to stronger overall bank performance.