Financial Risk Management and Bank Performance: An Evidence of Selected Nigerian Deposit Money Banks (Published)
The issue of financial risk management has been a burning issue throughout the banking industry in Nigeria especially in the wake of global financial crisis and the ensuing regulatory changes. Nigerian deposit money banks (NDMBs) face a number of financial risks which can impact their capacity to earn sustainable returns and financial sustainability to a large extent. It is thus necessary to understand the impact of these risks on financial performance in a bid to supervise banks and make managerial decisions in Nigeria. The paper explores the effect of financial risk on financial performance in NDMBs on an expo facto research design. The data were collected using secondary sources in the years between 2010 and 2022 and on selected NDMBs. The study utilised stratified sampling to identify the diversity of the NDMBs as 20 banks were purposively identified to participate in the study. The year 2010 was taken as the base year due to the fact that it was the year when the world came out of a global economic crisis and new risk and governance policies were implemented by the bank management and regulators. The information regarding the financial and bank performance was obtained through the Central Bank of Nigeria (CBN) reports and Annual Financial reports of the chosen banks. The data obtained was analysed with the help of proper descriptive and panel least square regression analysis methods. The results exhibited credit risks (CRR), cost-income ratio (CIR), total regulatory capital (TRC), and bank size (SIZE) as factors influencing financial performance through both return on assets (ROA) and return on equity (ROE). CRR showed a negative coefficient value of 0.0002 and probability of 0.0419, LQR has a negative coefficient value of 0.0594 which is statistically significant (p-value = 0.0498), CIR (coefficient = -0.0281 and probability = 0.0106), TRC with a positive coefficient value of 0.0358 on the level of ROA which is statistically significant (p-value = 0.0457), and SIZE showed a coefficient value of 0.0088 which is statistically significant (p-value = 0.0210). While CRR negatively and significantly influenced ROE with a negative coefficient value of 0.0039 and probability of 0.0254, LQR had a positive coefficient value of 0.0867 on ROE which is statistically significant (p-value = 0.0317), CIR (coefficient = 0.0785 and probability = 0.0472), SIZE is significantly influenced the returns with coefficient value of 0.097 and probability of 0.0016. The study concludes that financial risk management significantly influences financial performance of NDMBs. The study recommends that banks must observe strict compliance with regulatory positions on lending and ensure that their credit risk management is tailored towards generating sufficient earnings that will improve financial performance. Also, bank management must endeavor to have a robust risk management strategy that incorporates global best practices so as to improve their financial performance and be better prepared for economic challenges.
Keywords: Financial Performance, Nigerian deposit money banks, financial risk management
Effect of Sanitization Measures on the Financial Risk Management of Public Universities in Kenya (Published)
Public universities in Kenya are struggling to fund their core operations and at the same time respond COVID-19 at the backdrop of low operational revenue and additional demands imposed by the pandemic on all main sources of finance. As a result, the pandemic adds to the complexity of higher education by posing new financial risks prior to COVID 19. However, for the universities to thrive under these new developments there is need for robust financial risk management. This study intended to examine how implementation of COVID 19 prevention and mitigation measures has affected financial risk management of public universities, specifically, sanitization. The study adopted explanatory research design. The target population was 62 staff of Public Universities. A census study was considered. The study used both descriptive and inferential statistical analysis and data was presented both in tables and graphs. The findings indicated that technological factors accounted for 56.3% variation in financial risk management. Linear regression coefficient indicated that a unit increase in sanitization measures would results to financial risk measures to significantly increase by 0.637 units. The study concluded that Covid-19 prevention and mitigation measures significantly (P=0.000) affect financial risk management of public universities in Kenya. The study recommended that university management should offer intensive training to her employees and clearly defined structures, policies and responsibilities for managing financial risks. Successful feedback from employees would make them mindful of the financial risk in the organizations is exceptionally which will enable them to comprehend the direction on financial management.
Keywords: Public Universities, corona virus disease of 2019, financial risk management, sanitization measures