EFFECT OF CREDIT RISK MANAGEMENT ON FINANCIAL PERFORMANCE OF LISTED DEPOSIT MONEY BANKS IN NIGERIA

This study examined the ef ect of credit risk management on the financial performance of listeddeposit money banks in Nigeria. Specifically, it investigated the ef ect between Non-PerformingLoan Ratio (NPL), Loan Loss Provision (LLP), and Loan-to-Deposit Ratio (LDR) as proxies forcredit risk management, and Return on Assets (ROA), Return on Equity (ROE), and Net Profit Margin (NPM) as indicators of financial performance. Employing an ex post facto researchdesign, the study utilizes secondary data from the annual reports of thirteen purposively selectedbanks listed on the Nigeria Exchange Limited (NEL) between 2013 and 2024. Panel datamethodology is adopted, and the analysis is conducted using descriptive statistics, correlationanalysis, and panel regression models via Stata software. Findings revealed that credit riskmanagement significantly influences ROA and NPM, indicating that ef ective oversight of loandefaults and provisioning enhances asset utilization and profit ef iciency. However, the studyfound no significant relationship between credit risk management and ROE, suggestingthat equity-based profitability may be driven more by strategic and market factors than by credit riskcontrols. These results have practical implications for bank management, investors, andregulators, emphasizing the need for robust credit evaluation systems and policy reforms that promote financial discipline. It advocates for the integration of advanced credit risk frameworksto strengthen financial stability and align Nigerian banking practices with global.