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Risk Management and Financial Performance of Commercial Banks in Nigeria

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  • Yusuf Surajudeen Kayode

    (Faculty of Humanities, Management and Social Sciences. Department of Accounting and Finance, Kwara State University Malete)

Abstract

This study establishes the degree to which risk management has impacted profitability of commercial banks with the aim of contributing to improving the financial performance improvement. This study used secondary data from listed banks extracted from Central Bank of Nigeria list of financial institutions. The study was 2012 to 2021. The sample size of fourteen commercial banks in Nigeria was utilized for the study. Data were analysed using descriptive, Pearson correlation, r and Multiple linear regression (ANOVA) r statistical analysis. Findings were that the Pearson results posted significant relationships among credit risk, operational risk as measures of risks with profitability measures of net interest margin except the liquidity risk. The linear regression result indicated that Credit risk has significant effect on Net interest margin. However, there is no significant effect of liquidity and operation risk on net interest margin of commercial banks in Nigeria. The findings suggest that effective risk management strategy play a key role in commercial banks profitability in Nigeria. Therefore, this study recommended that effective risk management framework to improve financial performance.

Suggested Citation

  • Yusuf Surajudeen Kayode, 2023. "Risk Management and Financial Performance of Commercial Banks in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(12), pages 908-918, December.
    • Handle: RePEc:bcp:journl:v:7:y:2023:i:12:p:908-918
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    References listed on IDEAS

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    1. Marcellina Mvula Chijoriga, 2011. "Application of multiple discriminant analysis (MDA) as a credit scoring and risk assessment model," International Journal of Emerging Markets, Emerald Group Publishing Limited, vol. 6(2), pages 132-147, April.
    2. Vincent Okoth Ongore & Gemechu Berhanu Kusa, 2013. "Determinants of Financial Performance of Commercial Banks in Kenya," International Journal of Economics and Financial Issues, Econjournals, vol. 3(1), pages 237-252.
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