CREDIT RISK MANAGEMENT AND DEPOSIT MONEY BANK PERFORMANCE IN NIGERIA

This study empirically estimated the relationship between credit risk management and the performance of DMBs in Nigeria. Twelve (12) quoted deposit money banks were used in this study. Five variables such as; return on asset, non-performing loan, capital adequacy, leverage and loan loss provision were used for the estimation. The data used ranges from 2011 to 2020 across 12 deposit money banks in Nigeria. And the number of observation is (12 deposit money banks times 10 years) 120. This study used the pooled panel regression technique. This implies that the 120 observations are pooled together before the regression is run, thus neglecting the time series nature and cross sectional nature of the data. Specifically, the following findings were made: that non-performing loan has a negative significant impact on the DMBs performance in Nigeria; that capital adequacy does not have any impact on DMBs performance; that leverage does not have any impact on the DMBs performance; and that loan loss provision has a positive significant impact on the DMBs performance of in Nigeria. Following the findings from this study the following recommendations were made: that DMBs should adequately engage in the effective management of it loan in order to yield positive return and reduce non- performing loans; that DMBs should maintain the statutory minimum reserves of capital to avoid bank runs and the apex regulatory authority should supervise and monitor banks to ensure compliance; among others.