IDEAS home Printed from https://ideas.repec.org/a/bcp/journl/v7y2023i12p908-918.html
   My bibliography  Save this article

Risk Management and Financial Performance of Commercial Banks in Nigeria

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: https://www.rsisinternational.org/journals/ijriss/Digital-Library/volume-7-issue-12/908-918.pdf
    Download Restriction: no
    File URL: https://www.rsisinternational.org/journals/ijriss/articles/risk-management-and-finanacial-performance-of-commercial-banks-in-nigeria/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    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.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Paul Munene Muiruri & Florence S. Memba & Agnes Njeru, 2015. "Moderating Effects of Bank Ownership on the Relationship between Securitization Uptake and Financial Performance of Commercial Banks in Kenya," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 1(2), pages 24-43, June.
    2. Moses Ochieng Gweyi & John Karanja, 2014. "Effect of Financial Leverage on Financial Performance of Deposit Taking Savings and Credit Co-operative in Kenya," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 4(2), pages 176-184, April.
    3. Alihodžić Almir, 2020. "The Factors Affecting Bank Profitability: the Case of Bosnia and Herzegovina," Financial Sciences. Nauki o Finansach, Sciendo, vol. 25(2-3), pages 1-23, September.
    4. David Haritone Shikumo & Mwangi Mirie, 2020. "Determinants of Lending to Small and Medium Enterprises by Commercial Banks in Kenya," Papers 2010.12550, arXiv.org.
    5. Niluthpaul Sarker & S. M. Khaled Hossain, 2023. "Ownership Structure and Financial Distress: Investigating the Moderating Effect of Audit Quality," International Journal of Economics and Financial Issues, Econjournals, vol. 13(6), pages 187-202, November.
    6. Maria Elisabete Duarte Neves & Maria Do Castelo Gouveia & Catarina Alexandra Neves Proença, 2020. "European Bank’s Performance and Efficiency," JRFM, MDPI, vol. 13(4), pages 1-17, April.
    7. Pejman Ebrahimi & Maria Fekete-Farkas & Parisa Bouzari & Róbert Magda, 2021. "Financial Performance of Iranian Banks from 2013 to 2019: A Panel Data Approach," JRFM, MDPI, vol. 14(6), pages 1-15, June.
    8. Ozili, Peterson, K, 2016. "Bank Profitability and Capital Regulation: Evidence from Listed and non-Listed Banks in Africa," MPRA Paper 75856, University Library of Munich, Germany.
    9. Sreemanta Sarkar & Debdas Rakshit, 2023. "Factors Influencing the Performance of Commercial Banks: A Dynamic Panel Study on India," FIIB Business Review, , vol. 12(1), pages 85-99, March.
    10. Ally R. Ally, 2022. "Influence of Macro-Economic Factors on Financial Performance of Commercial Banks in Tanzania," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 14(7), pages 1-1, July.
    11. Gahé Zimy Samuel Yannick, 2021. "Determinants of Banks’ Technical Efficiency in Loans Allocation: Evidence from Côte d’Ivoire," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 13(1), pages 124-124, January.
    12. Ngeta Jacqueline & Evusa Zablon & Wahome Ndirangu, 2022. "The Impact of Internal Control Systems on the Financial Performance of Listed Commercial Banks in Machakos Town, Kenya," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 6(6), pages 62-73, June.
    13. Kennedy Ochuka & Kennedy Okiro & Fredrick Ogilo, 2024. "Effect of Efficiency on the Relationship between Organization Characteristics and Financial Performance of Commercial Banks in Kenya," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(7), pages 2613-2623, July.
    14. Mosab I. Tabash & Eissa A. Al-Homaidi & Anwar Ahmad & Najib H.S. Farhan, 2020. "Factors affecting financial performance of Indian firms: an empirical investigation of firms listed on Bombay Stock Exchange," International Journal of Economic Policy in Emerging Economies, Inderscience Enterprises Ltd, vol. 13(2), pages 152-172.
    15. Hua Song & Yudong Yang & Zheng Tao, 2020. "How different types of financial service providers support small- and medium- enterprises under the impact of COVID-19 pandemic: from the perspective of expectancy theory," Frontiers of Business Research in China, Springer, vol. 14(1), pages 1-27, December.
    16. Santosh Kumar Das & Khushboo Uppal, 2021. "NPAs and profitability in Indian banks: an empirical analysis," Future Business Journal, Springer, vol. 7(1), pages 1-9, December.
    17. Taslima Akther & Mushfiqur Rahman & Md. Mufidur Rahman, 2023. "Factors influencing commercial bank profitability in Bangladesh: a panel data approach," Future Business Journal, Springer, vol. 9(1), pages 1-20, December.
    18. Maria Carmen HUIAN & Marilena MIRONIUC & Oana Iuliana MIHAI, 2018. "Studying banking performance from an accounting perspective: Evidence from Europe," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(2(615), S), pages 5-26, Summer.
    19. Wai‐Peng Wong & Qiang Deng & Ming-Lang Tseng & Loo‐Hay Lee & Chee‐Wooi Hooy, 2014. "A Stochastic Setting To Bank Financial Performance For Refining Efficiency Estimates," Intelligent Systems in Accounting, Finance and Management, John Wiley & Sons, Ltd., vol. 21(4), pages 225-245, October.
    20. Elie M. El Hokayem, 2024. "The Impact of Risk Taking and Institutional Quality on MENA Region Banking Performance," International Business Research, Canadian Center of Science and Education, vol. 17(1), pages 1-32, February.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bcp:journl:v:7:y:2023:i:12:p:908-918. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr. Pawan Verma (email available below). General contact details of provider: https://rsisinternational.org/journals/ijriss/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.