For correspondence:-
Received: March 7, 2021 Accepted: March 30, 2021 Published: March 31, 2021
Citation: Impact of Specific Risk on Financial Performance of Listed Deposit Money Banks in Nigeria. Account Tax Rev 2006; 5(1):95-105 doi:
© 2006 The authors.
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Abstract
The study examines the impact of specific risk on financial performance of listed deposit money banks in Nigeria for the period of 2007 - 2019 using the sample size of 13 banks. Risk as an independent variable of the study is proxied by interest risk, capital adequacy risk and credit risk;while financial performance as dependent variable of the study is proxied by return on assets. Secondary data is collected from the financial statement of the selected banks which is analysed using random effect regression statistical tool of analysis. The result of the analysis reveals that interest risk has negative insignificant relationship with financial performance of banks, capital adequacy risk has negative significant relationship with banks financial performance and credit risk has negative significant impact on financial performance of Nigerian banks. The study recommended that management of listed deposit money banks in Nigeria should continue to increase their capital adequacy ratio properly based on regulatory requirements in order to reduce their capital adequacy risk as well as avoiding using their capital in a business that will not bring good returns. Also, management of listed deposit money banks in Nigeria should intensify more effort in recovering their non-performing loan and interest attached to it for better financial performance.