LOANS MANAGEMENT PRACTICES AND FINANCIAL PERFORMANCE OF COMMERCIAL BANKS IN NIGERIA (EVIDENCE OF UNITED BANK OF AFRICA PLC)

ABSTRACT The study is concerned with Loans Management Practices and Financial Performance of Commercial Banks in Nigeria (Evidence of United Bank of Africa Plc). Primary and Secondary methods of data collection were used in gathering relevant data for this research work. The secondary source adopted was the use of financial summary from First Bank of Nigeria Ltd. The researcher adopted survey and ex-post facto designs. Data were collected, coded and analyzed using simple linear regression to test the hypothesis. The Null Hypothesis is rejected. Finding reveals that Loan-to-deposit ratio significantly influence on profit for the year of commercial bank in Nigeria. The finding also reveals that Credit risk management ratio significantly influence on profit for the year of commercial bank in Nigeria. The finding also reveals that Non-performing loan significantly influence on profit for the year of commercial bank in Nigeria. It was recommended that Commercial banks to enhance their collateral lending practices since the practice leads to increased performance level of the banks. The banks can achieve this through practices such as establishing procedures for appraising loans for groups in the bank, assessing the governance procedures of the group to determine the group’s repayment competencies, and assessing the measures the group has put in place to ensure loan repayments. The study also recommended that, Commercial banks to enhance their collateral lending practices since the practice leads to increased performance level of the banks. The banks can achieve this through practices such as forming fixed assets as the main collateral, assessing the value and ownership of the collateral prior advancing loans that the borrower is issued with collateral loan in respect to the value of the collateral and that by holding client’s collaterals, our bank keeps the client focused on repaying the loan further.