Risk Management of Selected Quoted Commercial Banks in Nigeria: Its Implications for Financial Performance
Okogbue Chijioke1 and Orji Uka Odim2
1Department of Economics, Michael Okpara University of Agriculture, Umudike and Development Strategy Centre, Enugu, Nigeria.
2Department of Economics, Tansian University, Umunya Anambra State, Nigeria.
Corresponding Author ceejaydatabase@gmail.com
ABSTRACT
Commercial banks and other profit making organizations want to sustain their profit. This made them improve on their financial management practices. However, risks are inevitable in business and to improve on the indices of organizations, financial risks are expected to be properly managed. Hence this study examined the effect of financial risk assets management on financial performance of quoted commercial banks in Nigeria using data from seven selected quoted commercial banks for the period between 2014 and 2023. This study examined in details the effect of liquidity risk, operational risk, capital risk, credit risk, and market risk on the profitability of quoted commercial banks in Nigeria. The study adopted a dynamic approach of using the Autoregressive Distributed Lag (ARDL) model. The lag length selection criteria revealed that it is appropriate to use lag one in our dynamic approach. The study revealed significant effect of liquidity risk, operational risk, capital risk and market risk on the profitability of quoted commercial banks in Nigeria, both at the short run as well as the long run. It was further revealed that credit risk management have no significant effect on the profitability of quoted banks in Nigeria. The study therefore recommend that proper review of the credit risk structure should be done for aggressive loan recovery by the banks. The banks should adopt various methods necessary in other to ensure massive recovery of their funds that has been a source of negative financial performance to their organizations. Such methods to adopt should include, but not limited to, meetings and dialogue with the debtors, moral suasion, and litigations.
Email: Risk Management, Commercial Banks, Nigeria and Financial Performance
CITE AS: Okogbue Chijioke and Orji Uka Odim (2025). Risk Management of Selected Quoted Commercial Banks in Nigeria: Its Implications for Financial Performance. NEWPORT INTERNATIONAL JOURNAL OF CURRENT RESEARCH IN HUMANITIES AND SOCIAL SCIENCES, 5(2):32-44. https://doi.org/10.59298/NIJCRHSS/2025/5.2.324400