Effect of Risks Management on the Financial Performance of Listed Deposit Money Banks in Nigeria

Hauwa Modu Kumshe, Bamanga Umar, Salihu Aliyu Modibbo
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Abstract

This study examined the effect of risk management on the financial performance of listed DMBs in Nigeria. Adopting correlation research design, the target population was all the listed DMBs in Nigeria as at 31st December, 2022 and were nineteen (19) in number. Out of the 19 banks, 16 were purposively selected as sample based on the criteria that, the bank must have been listed before 31st December 2017 and also have complete annual report and account over the period of five years from 2018-2022. The study used descriptive statistics and panel regression analysis to analyze the data collected, and the results of the analyses revealed that, credit risk management, market risk management and capital adequacy risk management have positive and significant effect on the financial performance of the listed DMBs in Nigeria over the period of the study. However, liquidity risk management was found to have negative but insignificant effect on the financial performance of the banks. Hence, the study concluded that; effective risk management have positive and significant effect on the financial performance of listed DMBs in Nigeria.  Based on these findings, this study recommends that; the management of listed DMBs in Nigeria should improve and strengthen their liquidity management strategies, while keeping adequate watch on credit risk, market risk, and capital adequacy risk to further improve their financial performance. Therefore, further studies could look into the effect of effective risk management process (risk identification, assessment, monitoring, and controlling process) on the financial performance of DMBs. Also, future studies could consider the impact of the adoption of IFRS on risk management and financial performance of listed DMBs in Nigeria.
风险管理对尼日利亚上市存款银行财务业绩的影响
本研究探讨了风险管理对尼日利亚上市 DMB 财务业绩的影响。本研究采用相关性研究设计,目标群体是截至 2022 年 12 月 31 日在尼日利亚上市的所有 DMB,共十九(19)家。在这 19 家银行中,有目的性地选择了 16 家银行作为样本,选择标准是银行必须在 2017 年 12 月 31 日之前上市,并且在 2018-2022 年这五年期间有完整的年度报告和账目。研究采用描述性统计和面板回归分析法对收集到的数据进行分析,分析结果显示,在研究期间,信用风险管理、市场风险管理和资本充足率风险管理对尼日利亚上市 DMB 的财务绩效有积极而显著的影响。然而,研究发现流动性风险管理对银行的财务业绩有负面影响,但不明显。因此,本研究得出结论:有效的风险管理对尼日利亚上市 DMB 的财务业绩具有积极而显著的影响。 基于这些结论,本研究建议:尼日利亚上市 DMB 的管理层应改进和加强其流动性管理策略,同时对信贷风险、市场风险和资本充足率风险保持足够的警惕,以进一步提高其财务业绩。因此,可以进一步研究有效的风险管理流程(风险识别、评估、监测和控制流程)对 DMB 财务业绩的影响。此外,未来的研究还可以考虑采用《国际财务报告准则》对尼日利亚上市 DMB 风险管理和财务业绩的影响。
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