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

Authors

  • Newstyle, Dountimiarye
  • Isele, Lilian Ebikemefa
  • Tekerebo, Izonebi Joyce

Keywords:

Financial risk management, credit risk management, liquidity risk management, operational risk management and return on average assets

Abstract

This study evaluated the effect of financial risk management on financial performance of listed deposit money banks in Nigeria. Specifically, the study evaluated the effect of credit risk management, liquidity risk management, credit risk management and operational risk management on return on average assets of listed deposit money banks in Nigeria, and finally, evaluate the extent to which firm size moderate the relationship between total financial risk management and returns on average assets of listed deposit money banks in Nigeria. The study adopted an ex-post facto research design. The population of the study was fourteen (14) listed deposits money banks in the Nigerian Exchange Group and nine (9) was used as sample size employing purposive sampling technique. The data used in the study was sourced from annual reports and statement of accounts of the selected firms between 2013 and 2022. The study adopted descriptive statistics, unit root test, diagnostics test, Hausman test and Panel Least Square of multiple regression techniques with the help of Eview 10 and Statistical Package for Social Science (SPSS v 20) for the purpose of Moderated Multiple Regression (MMR) technique. The study result disclosed that the effect of market risk management on return on average assets of listed deposit money banks in Nigeria is not significant, the effect of liquidity risk management on return on average assets of listed deposit money banks in Nigeria is not significant, the effect of credit risk management on return on average assets of listed deposit money banks in Nigeria is significant, the effect of operation risk management on return on average assets of listed deposit money banks in Nigeria is significant, and the moderating effect of firm size on the relationship between total financial risk management and returns on average assets of listed deposit money banks in Nigeria is not significant. Therefore, the study generally concluded that the effect of financial risk management on financial performance of listed deposit money banks in Nigeria is positive and statistically not significant for the period 2013 - 2022. The study recommends amongst others that since increase in market risk management increase financial performance in tern of return on assets of listed deposit money banks, the financial institutions should establish sound market risk committee that would evaluate market investment activities within the firm before investing.  

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Published

2024-05-28

How to Cite

Dountimiarye, N. ., Ebikemefa, I. L. ., & Joyce , T. I. . (2024). FINANCIAL RISK MANAGEMENT AND FINANCIAL PERFORMANCE OF LISTED DEPOSIT MONEY BANKS IN NIGERIA. BW Academic Journal. Retrieved from https://bwjournal.org/index.php/bsjournal/article/view/1904