RISK MANAGEMENT AND FINANCIAL PERFORMANCE OF LISTED DEPOSIT MONEY BANKS IN NIGERIA

ABSTRACT Risks management have continued to gain attention from various stakeholders and from financial regulatory compliance perspectives. The Basel accord, international standards setting bodies such as IFRS, and various country’s central banks had at one time or the other formulated frameworks for the effective management of risks for banks and other financial institutions across the world. This study investigates the effect of risks management on financial performance of Banks in Nigeria by examining how the independent risk management variables of credit risk, market risk, liquidity risk and solvency risk has affected the financial performance of the deposit money banks in Nigeria. This study used the ex-post facto research design, utilising secondary data extracted from a sample of 12 banks covering a period of 5 years from 2020 to 2024 and adopted capital adequacy and firm’s value as measurement for financial performance and thereafter, conducted a pooled OLS multivariate regression analysis. The result revealed that risks management variables have overall positive and significant effect on the financial performance measured with capital adequacy and firm’s value of the bank. Findings also revealed that the price earnings ratio model which proxied firms value is a better predictor of financial performance and thus concludes that proper management of these risk elements would lead to better performance of the banks. Consequently, this study recommends that executive management of banks and financial regulatory bodies should ensure proper adherence to the risk management codes by the banks in other to achieve good financial performance.