Browsing by Author "Surajudeen Tiamiyu"

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    Credit Risk, Market Risk and Financial Performance of Selected Deposit Money Banks in Nigeria
    (Amity Journal of Management Research, 2022) Lukman Adebayo Oke; Surajudeen Tiamiyu
    Effective mitigation of credit risk and market risk is vital for the well-being of banks as it has the propensity of either making or marring the sustainable performance of the banks. Against this backdrop, the study examined the effect of credit and market risk on the financial performance of twelve (12) deposit money banks that are listed on the floor of the Nigerian stock exchange. The study covered the period of 2008-2017 being the time of stock market crisis, corporate governance and recession problem. The data used was obtained from the financial reports of the twelve selected banks and Nigerian stock exchange publications. The collected data was analyzed employing random effect model. The study used return on equity (ROE) to proxy banks financial performance; non-performing loans ratio and loan loss provisions ratio as proxies for credit risk; and net interest income ratio and foreign currency ratio as proxies for market risk. The findings revealed that Non-performing loan ratio (credit risk) has negative statistically significant effect on return on equity (β=--0.165, p<0.01). Loan loss provision ratio (credit risk) also has negative statistically significant effect on return on equity (β=-0.738, p<0.01). Foreign currency ratio (market risk) has statistically significant effect on return on equity (β=-0.233, p<0.05). Meanwhile, Net interest income ratio (market risk) has positive statistically significant influence on return on equity (β=0.050, p<0.10). Total assets have positive statistically significant influence on return on equity (β=0.050, p<0.10). The study concluded that credit and market risks exert significant influence on Nigerian deposit money banks’ financial performance. Accordingly, it is recommended that the Nigerian banks should be more proactive in the assessment and management of credit risk together with market risk with a view to mitigating their exposure to these risks as well as enhancing their financial performance.