Journal of
Economics and International Finance

  • Abbreviation: J. Econ. Int. Finance
  • Language: English
  • ISSN: 2006-9812
  • DOI: 10.5897/JEIF
  • Start Year: 2009
  • Published Articles: 354

Full Length Research Paper

Financial risk and financial performance of deposit money banks in Nigeria

Ademola Olufemi
  • Ademola Olufemi
  • Department of Finance, Babcock University, Ilishan-Remo, Ogun State, Nigeria.
  • Google Scholar
Ismaila Sunmisola
  • Ismaila Sunmisola
  • Department of Finance, Babcock University, Ilishan-Remo, Ogun State, Nigeria.
  • Google Scholar


  •  Received: 08 August 2021
  •  Accepted: 22 December 2022
  •  Published: 31 December 2022

Abstract

The study examined the risk and stability of the Nigerian deposit money institutions. The study, which is a quasi-experimental one, examines how an independent variable that participants already had before the study's start influences a dependent variable, hence the ex post facto design was adopted. As of December 31, 2019, the population will consist of all Deposit Money Banks that have been listed on the Nigerian Stock Exchange throughout the last ten years (2010-2019). Ten Deposit Money Banks that were listed on the Nigerian Stock Exchange as of December 31, 2019, make up the sample size for this study, which was chosen at random and comprised of those ten institutions. Panel data with statistical information were employed in the study (STATA, 17). The proposed analysis was carried out utilizing STATA as it is the best system-based tool for evaluating panel data (version 17). Panel data regression analysis was also used in the study to evaluate the research hypotheses. According to the study, credit risk and liquidity risk have a substantial impact on the financial performance (ROE) of Nigeria's deposit money institutions. The results of the study indicate that financial risk adversely affects the financial performance of Nigerian deposit money institutions.

                             

Key words: Deposit money banks, banking industry, Nigeria, financial risk, financial performance.