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Does credit risk management impact the financial performance of commercial banks?

Author

Listed:
  • Olajide Solomon Fadun

    (Department of Actuarial Science & Insurance, University of Lagos, Lagos)

  • Peter Silwimba

    (SILPET Consultancy, Lusaka, Zambia)

Abstract

Commercial banks accept deposits and lend money for investment and consumption. This study used five (5) first-tier banks in Nigeria as a case study to analyze the effects of credit risk management on the financial performance of commercial banks. The study examined fifteen (15) years' worth of panel data (from 2005 to 2019), taken from the audited financial reports of five first-tier listed banks. Deposit Money Banks (DMBs) are the only banks used, and they are all listed on the Nigerian Stock Exchange. Non-performing loans (NPL) and expected credit loss impairment provisions (ECL) were utilized in this study as indicators of credit risk management. At the same time, return on assets (ROA) was employed to measure financial performance.

Suggested Citation

  • Olajide Solomon Fadun & Peter Silwimba, 2023. "Does credit risk management impact the financial performance of commercial banks?," International Journal of Business Ecosystem & Strategy (2687-2293), Bussecon International Academy, vol. 5(2), pages 55-66, April.
    • Handle: RePEc:adi:ijbess:v:5:y:2023:i:2:p:55-66
    DOI: 10.36096/ijbes.v5i2.415
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    References listed on IDEAS

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    Cited by:

    1. Ever Obi & Olajide Solomon FADUN & Babajide Abayomi IJIMAKINWA, 2025. "The Impact of Credit Risk Management Policies on the Growth of Deposit Money Banks: The Nigerian Experience," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 14(3), pages 253-264, April.

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