Interest rate risk is one of the most significant risks in bank operations, and the subject of research in this thesis is the influence of interest rate risk, how interest rate risk affects the operations of banks, and how banks manage interest rate risk. Interest rate risk is the risk of interest rate changes that can negatively affect the bank's financial position. The fact is that the bank's operations are constantly exposed to interest rate risk and when interest rates rise, the bank's earnings may fall due to the unfavorable ratio of interest on liabilities compared to interest on assets. When the bank repays it´s obligations at higher interest rates than those charged on it´s assets. For this reason, the bank cannot avoid the negative effect of interest rate risk, but it can develop an adequate risk management system to which it is exposed, because risk management is precisely the most crucial and demanding area of risk management. Considering the importance of interest rate risk proper management and transparent reporting of interest risk is crucial for the stability of banks and the wider financial system. High-quality management of interest rate risk represents the safe operation of banks and the trust of citizens in the entire banking system. Research on interest rate risk is based on publicly available data and will be conducted through the presentation of annual and credit reports on the example of Privredna banka Zagreb.