IMPACT OF RISK MANAGEMENT ON THE PERFORMANCE OF FINANCIAL INSTITUTION: A CASE STUDY OF SELECTED FINANCIAL INSTITUTION IN ILORIN, KWARA STATE
Abstract
The financial performance of Deposit Money Banks (DMB) is hinged on the ability of the management to effectively and efficiently manage the risks and resources of the banks. Studies have shown that the financial performance is determined amongst others by risks management factors like non-performing loans, capital adequacy ratio, loan loss provisions and loan to deposit ratio. The study evaluated the effect of credit management on the financial performance of deposit money banks in Nigeria. The study adopted ex-post facto research design. The population was 21 Deposit Money Banks as per Central Bank Statistical Bulletin of January 2018. Using purposive sampling technique, fourteen (14) banks were selected as the sample subjects. The validity and reliability were based on the statutory audit of their financial statement approved for use by CBN. The study adopted descriptive and inferential (regression) statistics in data analysis. The findings revealed that: credit management has significant effect on financial performance of Deposit Money Banks in Nigeria with (ROCE: Adjusted R2=0.4196; Wald(4)=241.2; p0.05); credit management with controlling effect of bank size and total revenue has significant effect on financial performance of Deposit Money Banks in Nigeria (ROCE: Adjusted R2=0.4311; Wald(6)=321.95; p
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