Credit Risk Management and Financial Performance of Deposit Money Banks: Evidence from Nigeria

International Journal of Economics and Management Studies

© 2021 by SSRG - IJEMS Journal

Volume 8 Issue 10

Year of Publication : 2021

Authors : Abiodun Thomas Ogundele, Paul Obogo Ushie, Muideen Adeseye Awodiran, Felix Olusegun Ibukun

10.14445/23939125/IJEMS-V8I10P118

How to Cite?

Abiodun Thomas Ogundele, Paul Obogo Ushie, Muideen Adeseye Awodiran, Felix Olusegun Ibukun, "Credit Risk Management and Financial Performance of Deposit Money Banks: Evidence from Nigeria," SSRG International Journal of Economics and Management Studies, vol. 8,  no. 10, pp. 139-145, 2021. Crossref, https://doi.org/10.14445/23939125/IJEMS-V8I10P118

Abstract:

The study examined the effect of credit risk management on the financial performance of deposit money banks in Nigeria with the view to know what influence non-performing loans of deposit money banks have on return on assets. The study employed the Autoregressive Distributed Lag on the variables between 1995 and 2019. The findings show that non-performing loan as a percentage of total loan has a negative and significant effect on return on asset. It was also found out that capital adequacy possessed a positive but not significant effect on return on assets while liquidity ratio had a negative influence on return on asset. The study that credit risk management is a fundamental and vital aspect of deposit money banks and its proper monitoring could help foster financial development. It was recommended in the study that deposit money banks should employ modern techniques in the performance of their financial intermediation function.

Keywords:

Capital Adequacy, Credit Risk Management, Credit Risk, Deposit Money Banks Performance, Financial Sector

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