Credit Risk and Financial performance: An empirical study of deposit money banks in Nigeria (Published)
Money deposit banks’ ability to mitigate credit risks has been a contemporary and controversial debate in literature, in contributing and extending the frontiers, this study examined the effect of credit risk on financial performance of money deposit banks in Nigeria. The study adopted an expo facto research design, descriptive and using inferential statistics to analyse the data. The population consisted of all the 19 money deposits banks (MDB) listed on the Nigeria stock exchange as at 31st December, 2018. A sample of 13 MDB were chosen on purpose, based mainly on availability of complete data within the study period under consideration. The study covered 169 firm-year observations for the period of 2006-2018. The study extracted secondary data from the financial statements of the banks explored for the study. The study identified three variables of financial performance (dependent variable) surrogated with return on capital employed (ROCE), the independent variable of credit risk proxied with non-performing loans, capital adequacy ratio, loan loss provisions loan to deposit ratio and the control variables of bank Size. The study found that credit management had a positive significant effect on financial performance of the MDB.(Ad R2=0.028,F(4,4170) =2.26;P-value <0.05)When the control variable of bank size (BSZ), stronger effect was exhibited, the study found that credit risk with bank size had a stronger significant effect on financial performance of MDB in Nigeria(Ad.R2=0.4311,F(4,4170)=321.95;p-value<0.05). The study concluded that credit management influences the financial performance of Deposit Money Banks in Nigeria. The study recommended that management of the MBD should design and maintain a robust credit management strategy and framework as well as stringent credit policy that would decrease non-performing loan and default level; and improve their performance level in Nigeria.
Keywords: Credit risk, Financial Performance, capital employed, dividend, money deposit banks, nonperforming loans
Effect of Chief Executive Officer Duality on the Profitability of Money Deposit Banks (Published)
The purpose of this study is to determine the effect of chief executive officer duality on the profitability of money deposit banks. The research design adopted by this study is the quantitative approach. The population of interest for this study comprised the twenty-two deposit money banks listed on the Nigerian Stock Exchange (NSE) as at March (2016) for the period of sixteen years from 2000 to 2016. The study utilized only the secondary source of data. There exists a negative relationship between CEO duality and profitability. This further entails that for the sampled banks, CEO duality contributes negatively to the profitability of the selected money deposit banks in Nigeria. The coefficient of determination which measures the control power of the independent variable over the dependent variable was calculated with the instrument of adjusted R-Squared and it yielded 0.296170. This entails that the variations in profitability of the selected deposit money banks is not significantly influenced by CEO duality. Based on the findings, the study concludes that on the average, effect of chief executive officer duality has no significant effect on the profitability of money deposit banks. This finding reveals that dual role has no positive and significant influence and contribution towards profitability in money deposit banks. This should be thoroughly ascertained for it to be either suspended or significantly minimized.
Keywords: Chief executive officer, Duality, Profitability, money deposit banks