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Impact of Credit Risk Management on the Performance of Selected Nigerian Banks

Author

Listed:
  • E. Chuke Nwude

    (Department of Banking and Finance, Faculty of Business Administration, University of Nigeria, Nsukka, Enugu Campus. Nigeria)

  • Chinedu Okeke

    (Department of Banking and Finance, Faculty of Business Administration, University of Nigeria, Nsukka, Enugu Campus, Enugu State, Nigeria)

Abstract

This study investigated the impact of credit risk management on the performance of deposit money banks in Nigeria using five banks that had highest asset base. Ex-post facto research design was adopted using dataset for the period 2000 to 2014 collated from the annual reports and financial statement of the selected deposit money banks. Three hypotheses were proposed and tested using ordinary least square (OLS) regression model. The findings reveal that credit risk management had a positive and significant impact on total loans and advances, the return on asset and return on equity of the deposit money banks. The study recommended that bank managers need to put more efforts to control the NPL by critically evaluating borrowers' ability to pay back. The regulator should strengthen its monitoring capacity in this regard.

Suggested Citation

  • E. Chuke Nwude & Chinedu Okeke, 2018. "Impact of Credit Risk Management on the Performance of Selected Nigerian Banks," International Journal of Economics and Financial Issues, Econjournals, vol. 8(2), pages 287-297.
    • Handle: RePEc:eco:journ1:2018-02-34
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    Citations

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    Cited by:

    1. Oritsegbubemi Kehinde Natufe & Esther Ikavbo Evbayiro-Osagie, 2023. "Credit Risk Management and the Financial Performance of Deposit Money Banks: Some New Evidence," JRFM, MDPI, vol. 16(7), pages 1-23, June.
    2. Charles Ayodele JEGEDE & Yusuf Aina SOYEBO & Segun Kamoru FAKUNMOJU & Olajide Idowu OKUNBANJO, 2021. "Financial Risk Management and Financial Performance of International Authorisation Quoted Deposit Money Banks (DMBs) in Nigeria," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 2, pages 178-185.
    3. Henry Inegbedion & Bello Deva Vincent & Eseosa Obadiaru, 2020. "Risk Management and the Financial Performance of Banks in Nigeria," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(5), pages 115-128, October.

    More about this item

    Keywords

    credit risk; bank performance; risk management; return on equity; return on asset; non-performing loans.;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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