European Journal of Accounting, Auditing and Finance Research (EJAAFR)

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liquidity-profitability trade off

Credit Risk and Performance of Deposit Money Banks in Nigeria (Published)

Citation: Ozigbo A. Sylvester and Ekane Rapheal Ogagaoghene (2022), Credit Risk and Performance of Deposit Money Banks in Nigeria, European Journal of Accounting, Auditing and Finance Research, Vol.10, No. 3, pp.31-41

Abstract: The research focuses on the impact of credit risk on the performance of deposit money banks in Nigeria. It covers the period between 2000 and 2020 .Secondary data sourced from the Central Bank of Nigeria and annual reports of the selected banks were utilized for the study. Ordinary Least Square estimation technique which is compatible with the multiple regression   method was also adopted .It was discovered that capital adequacy and non-performing loan were not statistically significant in influencing the changes in bank performance, while loan loss provision as well as loan and advances were significant to changes in bank performances with in the period of the study. It was therefore recommended   that the regulatory authority should ensure that banks are focused on their primary role  of supplying needed funds for the real  sector to finance their investment. Also, Deposit money banks should be encouraged to reduce their service charges. This is the only way their impact can be felt as one of the drivers of economic growth in Nigeria. 

Keywords: Deposit Mobilization, Loan overhang, liquidity-profitability trade off, pre-provision profit

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