Liquidity Ratio Risk Asset Ratio

s study examines the complex relationship between credit risk management strategies and the financial performance of Deposit Money Banks (DMBs) in Nigeria. The study analyzes the impact of important variables, including Return on Equity (ROE), Non-Performing Loans (NPLs), Loan Loss Provision (LLP), Liquidity Ratio, and Risk Asset Ratio, on the overall health of the banking system. The study uncovers significant insights by employing panel regression analysis from 2014 to 2022. The findings demonstrate a positive connection between successful
management of credit risk, as seen by cautious provisioning for loan losses, and consistent profitability. In contrast, Non-Performing Loans have a negative effect on Return on Equity, highlighting the importance of implementing strategic initiatives to reduce loan defaults. The study highlights a trade-off between the management of available cash and the potential to generate profit, underscoring the need of adopting a well-balanced strategy to ensure financial stability. Furthermore, effectively managed risk assets have a favorable impact on a bank's financial performance, underscoring the significance of strategic risk management. The recommendations emphasize the necessity of enhancing credit risk management techniques, optimizing liquidity management, and implementing strategic actions to minimize Non- Performing Loans keywords