Effect of Credit Risk Management on Financial Performance of Listed Deposit Money Banks in Nigeria

Authors

  • Rasheed Olatunji ANIMASAUN Crescent University, Abeokuta, Ogun State, Nigeria https://orcid.org/0000-0003-3552-5811
  • Omolara Modinat OMOTUNWASE Federal Medical Center, Abeokuta, Ogun State, Nigeria
  • Abdul Ganiyu Akanji BABAYANJU University of Abuja, Abuja, Nigeria
  • Adedamola Ayinde BAMGBOYE Ogun State Television, Abeokuta, Ogun State, Nigeria

DOI:

https://doi.org/10.47505/IJRSS.2025.1.1

Keywords:

Credit risk management, Financial performance, Insolvency, Return on asset, Return on equity

Abstract

Deposit Money Banks (DMBs) deal with loans to customers that are anticipated to be returned following the terms of the arrangement. Customers who fail to repay their loans within the prearranged timeframe risk accruing bad and doubtful debt, which could have an adverse effect on the bank's stability and financial performance.

This study was conducted to explore the effect of credit risk management on the financial performance of listed deposit money banks in Nigeria for 2013-2022. The study adopted an ex-post facto research design and sampled ten (10) listed deposit money banks.

Using Panel Ordinary Least Square (OLS) regression as a data estimation technique, the result of the study showed that credit risk management has a significant effect on return on asset (Adj R2= 0.301, F-Statistics =4.561471, p-value=0.000011<0.05).

Based on the results, the study concluded that credit risk management has a significant effect on the financial performance of listed deposit money banks in Nigeria.

The study recommended that the management of deposit money banks should focus on strengthening their credit risk management practices and ensuring sufficient liquidity to mitigate the negative impact on profitability.

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How to Cite

Rasheed Olatunji ANIMASAUN, Omolara Modinat OMOTUNWASE, Abdul Ganiyu Akanji BABAYANJU, & Adedamola Ayinde BAMGBOYE. (2025). Effect of Credit Risk Management on Financial Performance of Listed Deposit Money Banks in Nigeria. International Journal of Research in Social Science and Humanities (IJRSS) ISSN:2582-6220, DOI: 10.47505/IJRSS, 6(1), 1–12. https://doi.org/10.47505/IJRSS.2025.1.1

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Articles