IDEAS home Printed from https://ideas.repec.org/a/bcp/journl/v7y2023i5p352-362.html
   My bibliography  Save this article

Risk Management and Sustainability of Deposit Money Banks in Nigeria

Author

Listed:
  • Ike R, C

    (Admiralty University of Nigeria, Department of Accounting, Business Administration and Economics, Faculty of Arts, Management and Social Sciences)

  • Anuolam, M. O

    (Admiralty University of Nigeria, Department of Accounting, Business Administration and Economics, Faculty of Arts, Management and Social Sciences)

Abstract

This study investigated the nexus between risk management and the sustainability of banks in Nigeria by means of expost-facto research design. Risk management measures of non-performing loan-to-total loans, loan-loss provision-to-total loans and bad debt-to-total loans and sustainability measure of equity-to-asset ratio of banks were obtained from the annual reports and accounts of banks and Central Bank of Nigerian statistical bulletin during the period 2007-2017. The data obtained were analyzed using both descriptive (mean, standard deviation, minimum, maximum values, normality and correlation tests) and inferential (linear regression) statistical techniques. Based on the analysis, a nexus between risk management measures (non-performing loan-to-total loans loan-loss provision-to-total loans and equity-to-asset ratio of banks) and sustainability measure (equity to asset ratio of banks) in Nigeria was found. On the basis of the findings, it was recommended among others that bank management as well as the regulatory framework of the banking subsector should devise risk management strategies or measures aimed at curbing or reducing the level of non-performing loans so as to further sustain banks and make them going concern. As a matter of fact and urgency, the loan loss provision of banks should be further reviewed such that banks are made to reduce their loan losses in every financial period.

Suggested Citation

  • Ike R, C & Anuolam, M. O, 2023. "Risk Management and Sustainability of Deposit Money Banks in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(5), pages 352-362, May.
    • Handle: RePEc:bcp:journl:v:7:y:2023:i:5:p:352-362
    as

    Download full text from publisher

    File URL: https://www.rsisinternational.org/journals/ijriss/Digital-Library/volume-7-issue-5/352-362.pdf
    Download Restriction: no
    File URL: https://www.rsisinternational.org/journals/ijriss/articles/risk-management-and-sustainability-of-deposit-money-banks-in-nigeria/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Onaolapo A. R., 2012. "Analysis Of Credit Risk Management Efficiency In Nigeria Commercial Banking Sector,(2004-2009)," Far East Journal of Marketing and Management, Far East Research Centre, vol. 2(4), pages 39-52, April.
    2. Brian W. Nocco & René M. Stulz, 2006. "Enterprise Risk Management: Theory and Practice," Journal of Applied Corporate Finance, Morgan Stanley, vol. 18(4), pages 8-20, September.
    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. Jiao Wang & Lima Zhao & Arnd Huchzermeier, 2021. "Operations‐Finance Interface in Risk Management: Research Evolution and Opportunities," Production and Operations Management, Production and Operations Management Society, vol. 30(2), pages 355-389, February.
    2. Christopher D. Ittner & Jeremy Michels, 2017. "Risk-based forecasting and planning and management earnings forecasts," Review of Accounting Studies, Springer, vol. 22(3), pages 1005-1047, September.
    3. Kafigi Jeje, 2020. "Risk-Taking and Performance of Small and Medium-Sized Enterprises: Lessons from Tanzanian Bakeries," Journal of Economics and Behavioral Studies, AMH International, vol. 12(3), pages 1-22.
    4. Al-Amri, Khalid & Davydov, Yevgeniy, 2016. "Testing the effectiveness of ERM: Evidence from operational losses," Journal of Economics and Business, Elsevier, vol. 87(C), pages 70-82.
    5. Müzeyyen Çiğdem Akbaş, 2024. "Measuring the impact of enterprise risk management on performance, value, and risk indicators of Borsa Istanbul XBANK companies with data mining prediction models," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-19, December.
    6. Wafa Mohammad Abdaljabar & Norhayati Zakuan & Muhamad Zameri Mat Saman & Mariam Setapa, 2024. "The Practice of Enterprise Risk Management and Sustainable Performance in Jordan," Information Management and Business Review, AMH International, vol. 16(1), pages 329-342.
    7. Elizabeth Sheedy & Patrick Garcia & Denise Jepsen, 2021. "The Role of Risk Climate and Ethical Self-interest Climate in Predicting Unethical Pro-organisational Behaviour," Journal of Business Ethics, Springer, vol. 173(2), pages 281-300, October.
    8. Rene M. Stulz, 2016. "Risk management, governance, culture, and risk taking in banks," Economic Policy Review, Federal Reserve Bank of New York, issue Aug, pages 43-60.
    9. Patrick Dahmen, 2023. "Organizational resilience as a key property of enterprise risk management in response to novel and severe crisis events," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 26(2), pages 203-245, July.
    10. José Ruiz-Canela López, 2021. "How Can Enterprise Risk Management Help in Evaluating the Operational Risks for a Telecommunications Company?," JRFM, MDPI, vol. 14(3), pages 1-26, March.
    11. Sara Faedfar & Mustafa Özyeşil & Mustafa Çıkrıkçı & Esin Benhür Aktürk, 2022. "Effective Risk Management and Sustainable Corporate Performance Integrating Innovation and Intellectual Capital: An Application on Istanbul Exchange Market," Sustainability, MDPI, vol. 14(18), pages 1-13, September.
    12. Nadia Abu Kwaik & Rateb Sweis & Baraa Allan & Ghaleb Sweis, 2023. "Factors Affecting Risk Management in Industrial Companies in Jordan," Administrative Sciences, MDPI, vol. 13(5), pages 1-28, May.
    13. Posch, Arthur, 2020. "Integrating risk into control system design: The complementarity between risk-focused results controls and risk-focused information sharing," Accounting, Organizations and Society, Elsevier, vol. 86(C).
    14. Desheng Wu & David Olson, 2011. "Foreword," Annals of Operations Research, Springer, vol. 185(1), pages 1-3, May.
    15. Yingyu Zhang & Hui Luan & Wei Shao & Yingjun Xu, 2016. "Managerial risk preference and its influencing factors: analysis of large state-owned enterprises management personnel in China," Risk Management, Palgrave Macmillan, vol. 18(2), pages 135-158, August.
    16. Panos Kouvelis & Rong Li, 2019. "Integrated Risk Management for Newsvendors with Value-at-Risk Constraints," Manufacturing & Service Operations Management, INFORMS, vol. 21(4), pages 816-832, October.
    17. Ai Ping Teoh & Kaih Yeang Lee & Rajendran Muthuveloo, 2017. "The Impact of Enterprise Risk Management, Strategic Agility, and Quality of Internal Audit Function on Firm Performance," International Review of Management and Marketing, Econjournals, vol. 7(1), pages 222-229.
    18. Stavros Kalogiannidis & Stamatis Kontsas & Dimitrios Kalfas & Fotios Chatzitheodoridis, 2024. "Operational risk management in managerial accounting: a comprehensive examination of strategies and implementation in medium size organizations," Operational Research, Springer, vol. 24(3), pages 1-27, September.
    19. Lidiia Karpenko & Iryna Chunytska & Nataliia Oliinyk & Nataliia Poprozman & Olha Bezkorovaina, 2020. "Consideration of Risk Factors in Corporate Property Portfolio Management," JRFM, MDPI, vol. 13(12), pages 1-14, November.
    20. Jia, Jing & Bradbury, Michael E., 2020. "Complying with best practice risk management committee guidance and performance," Journal of Contemporary Accounting and Economics, Elsevier, vol. 16(3).

    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:5:p:352-362. 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.