DEPOSIT MONEY BANKS’ RISK MANAGEMENT STRATEGY AND CORPORATE PERFORMANCE

Abstract

Deposit money banks in Nigeria's annual reports from 2010 to 2020 were used in this study to investigate the influence of risk management on business performance. It was decided to use the Autoregressive Distributive Lag Model (ARDL) for estimate. NPL has a detrimental influence on risk management, but CAR and LDR have a favourable and statistically significant impact on short-term business performance. Companies in Nigeria are less successful because of a lower capital to asset ratio. Companies' performance in Nigeria is negatively impacted by the high cost of agency fees. According to the findings of this study, the bank's ability to absorb credit losses would be enhanced if lending procedures were tightened, monitoring operations were increased, and enough collateral protection and impairment allowances were ensured. Liquidity risk can have a short-term and long-term impact on financial performance, according to this study. By managing their risks effectively, they will be able to more effectively manage their assets and equity stockholders in the long run.