PROFITABILITY

This study examined how credit risk management affects the profitability of six listed deposit money banks in Nigeria from 2014 to 2023. Using a balanced panel of 60 observations and a fixed-effects model with robust standard errors, the results show that both the non-performing loan ratio (NPLR) and loan loss provision ratio (LLPR) significantly and negatively affect return on assets (ROA) and return on equity (ROE). A one-percentage-point increase in NPLR reduces ROA by about 0.08 percentage points and ROE by about 0.65 percentage points, while higher provisions further weaken earnings. Bank size has a positive impact on profitability, supporting the idea that larger banks benefit from efficiency and stronger risk-absorbing capacity. This study also finds that the 2015–2016 recession and high interest-rate volatility confirmed through a persistent GARCH (1,1) effect further reduce bank performance. All diagnostic tests validate the reliability of the model. This study suggests that effective credit risk management is essential for sustaining profitability in Nigerian banks and recommends stronger credit appraisal systems, improved NPL recovery, full IFRS 9 implementation, diversified income sources, and stronger macroprudential policies

The main aim of the study is to explore the impact of cash flow management on insurance firm profitability. Specifically, the study aims to examine the relationship between operating activities and insurance firm profitability, examine the relationship
between investing activities and insurance firm profitability, and to examine the relationship between financing activities and insurance firm profitability, using panel data covering the period 2013–2022. In this study, cash flow from operating activities, cash flow from investing activities, and cash flow from financing activities are employed as the main independent variables, while profitability is measured using return on assets. To achieve the objectives of the study, pooled Ordinary Least Squares regression was initially estimated, followed by diagnostic tests for multicollinearity and heteroscedasticity. Preliminary analyses, including descriptive statistics, normality tests, and Spearman rank correlation analysis, were also conducted to understand the distributional properties and associations among the variables. Given the presence of heteroscedasticity, robust regression techniques were employed to ensure reliable statistical inference. The empirical findings with respect to each specific objective of the study are summarized as follows. Cash flow from operating activities [coef. = 13.818 (0.000)] has a positive and statistically significant effect on the return on assets of the selected insurance firms in Nigeria during the period under study. This indicates that insurance firms with stronger operating cash inflows tend to record higher profitability. Cash flow from financing activities [coef. = –7.187 (0.048)] has a negative and statistically significant effect on the return on assets of the selected insurance firms in Nigeria during the period under study. This finding suggests that increased reliance on financing activities is associated with
lower profitability among the sampled insurance firms. Cash flow from investing activities [coef. = –7.117 (0.000)] has a negative and statistically significant effect on the return on assets of the selected insurance firms in Nigeria during the period under
study. This implies that higher investment-related cash outflows are associated with reduced profitability in the short run. The study recommend that insurance firms should strengthen the management of cash flow from operating activities by improving underwriting discipline, premium collection processes, and claims settlement efficiency. Corporate managers and directors are responsible for implementing robust internal controls and operational monitoring systems, which will enhance operating cash inflows and support sustained profitability. This will also improve investor confidence and enhance firm valuation