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Risk components and banks performance in Nigeria: a panel data approach

Abdullahi, Yusuf and Oyedeko, Yusuf Olatunji (2016) Risk components and banks performance in Nigeria: a panel data approach. In: International Conference on Government & Public Affairs 2016 (ICOGPA2016), October 5th - 6th, 2016, School of Government, Universiti Utara Malaysia (UUM), Sintok, Kedah, Malaysia.

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The banking sector is viewed as an important source of financing for many businesses. In order to appraise and weigh up the soundness and reliability of banking industry, the information on the risk and how the fluctuations are managed are important to consider.Among the financial risks liquidity is one of the most crucial to consider.Appalling financial condition of the banks has led to incessant decrease in the banks value of assets.The study examined the impact of risk components on the banks performance in Nigeria.Data was source from a ten years annual reports and financial statements of fourteen listed banks at the Nigerian stock exchange and a panel data estimation technique adopted.The result showed that the credit risk indicators of ratio of total equity to total asset and ratio of equity to depositors to short-term funding has positive and negative effect respectively on return on asset (ROA). Also the liquidity risk indicator of ratio of net loan to total asset and net loans to deposit and short-term funding has negative and positive effect respectively on ROA.In view of this, the study recommended setting up credit policy that will not negatively affects profitability and liquidity model which predicts the liquidity requirements of banks should be designed so that they can fix up any liquidity risk and its problems within a reasonable tolerance.

Item Type: Conference or Workshop Item (Paper)
Additional Information: ISBN: 97898344661-7-6 Organized by: School of Government, Universiti Utara Malaysia (UUM), Sintok, Kedah, Malaysia
Uncontrolled Keywords: Risk components, Panel data, Bank performance
Subjects: H Social Sciences > HG Finance
Divisions: School of Business Management
Depositing User: Mrs. Norazmilah Yaakub
Date Deposited: 21 Dec 2016 02:00
Last Modified: 21 Dec 2016 02:00
URI: http://repo.uum.edu.my/id/eprint/20403

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