International Journal of Social Science & Economic Research
Submit Paper

Title:
CREDIT RISK MANAGEMENT PRACTICES AND PERFORMANCE OF NIGERIA BANKS

Authors:
LUCKY EJIEH. UJUJU, JULIUS OVUEFEYEN EDORE

|| ||

1LUCKY EJIEH. UJUJU, 2 JULIUS OVUEFEYEN EDORE
1,2. DEPARTMENT OF BANKING/FINANCE, DELTA STATE POLYTECHNIC, OZORO, DELTA STATE

MLA 8
UJUJU, LUCKY EJIEH., and JULIUS OVUEFEYEN EDORE. "CREDIT RISK MANAGEMENT PRACTICES AND PERFORMANCE OF NIGERIA BANKS." Int. j. of Social Science and Economic Research, vol. 5, no. 5, May 2020, pp. 1223-1252, ijsser.org/more2020.php?id=84. Accessed May 2020.
APA(6)
UJUJU, L., & EDORE, J. (2020, May). CREDIT RISK MANAGEMENT PRACTICES AND PERFORMANCE OF NIGERIA BANKS. Int. j. of Social Science and Economic Research, 5(5), 1223-1252. Retrieved from ijsser.org/more2020.php?id=84
Chicago
UJUJU, LUCKY EJIEH., and JULIUS OVUEFEYEN EDORE. "CREDIT RISK MANAGEMENT PRACTICES AND PERFORMANCE OF NIGERIA BANKS." Int. j. of Social Science and Economic Research 5, no. 5 (May 2020), 1223-1252. Accessed May, 2020. ijsser.org/more2020.php?id=84.

References
[1]. Aremu, O., Suberu, J., and Oke, J., (2010). Effective Credit Processing and Administration as a Panacea for Non-performing Assets in the Nigerian Banking System. Kre Journal of Economics 1 (1), 53-56
[2]. Calandro J. and Lane S. (2006), Insights from the balanced scorecard - An introduction to the enterprise risk scorecard, Measuring Business Excellence, Vol. 10 No. 3, pp. 31-40.
[3]. Casu, B., Molyneux, P. And Girardone, C.(2006). Introduction to Banking, Prentice Hall/Financial Times, London.
[4]. Halkos, G. and Salamouris, D. (2004). Efficiency measurement of the Greek commercial banks with the use of financial ratios: a data envelope analysis approach. Management Accounting Research 15(2), pp 201- 224.
[5]. Kolapo T. F., Ayeni R. K, & Oke M. O.(2012). Credit Risk and Commercial Banks' Performance in Nigeria: A Panel Model Approach. Australian Journal of Business and Management Research. Vol. 2 No. 02 pp 31-38
[6]. Lacewell, S., K (2003). Do Efficient Institutions Score Well Using Ratio Analysis? An Examination of Commercial Banks in the 1990s. Journal of Commercial Banking and Finance 2, pp 17-33.
[7]. Marsh, I.W. (2008).The Effect of Lenders' Credit Risk Transfer Activities on Borrowing Firms' Equity Returns, Cass Business School, London and Bank of Finland.
[8]. Michalak, T. & Uhde, A. (2009).Credit Risk Securitization and Banking Stability: Evidence from the Micro-Level for Europe", Draft, University of Bochum, Bochum.
[9]. Study on the Karachi Stock Exchange of Pakistan". International Journal of Business and Social Science, 2 (6), 27 Omotola A., Roya A. & Safoura N. (2012).
[10]. Analysing Risk Management in Banks: Evidence of Bank Efficiency and Macroeconomic Impact. Journal of Social Sciences. Vol.3. no. 10
[11]. Sadaqat, M. S., Akhtar, M. F., & Ali, K.(2011). "An Analysis on the Performance of IPO A 5- 285.
[12]. Samad, A. (2004). Bahrain Commercial Bank's Performance during 1994-2001. Credit and Financial Management Review 10(1) pp 33-40.
[13]. Seiford, L., M and Zhu, J(1999). Profitability and Marketability of the Top 55 U.S. Commercial Banks Management Science 45 (9), pp 1270-1288.
[14]. Tarawneh, M. (2006). A Comparison of Financial Performance in the Banking Sector: Some Evidence from Omani Commercial Banks". International Research Journal of Finance and Economics 3, pp 103-112.
[15]. Thygerson, K., J. (1995). Management of financial Institutions, HarperCollins
[16]. Van der Stede, W. (2009), Enterprise Governance, Financial Management, February, pp. 38-40.
[17]. Webb, R.M. (2003). Levels of efficiency in UK retail banks: a DEA window analysis. Interational Journal of the Economics of Business Vol 10 (3), pp 305-322.
[18]. Woods, M. Kajuter, P. and Linsley, P. (2008), International risk management, CIMA publishing, London.
[19]. Yeh, Q., J. (1996). The Application of Data Envelopment Analysis in Conjunction with Financial Ratios for Bank Performance Evaluation. Journal of the Operational Research Society 47, pp 980-988.

Abstract:
The study investigates risk management, risk concentration and performance of Nigeria banks. The variables of credit to private sector, liquidity ratio, nonperforming loan and loan and advances were regressed in return on asset (ROA). Unit root and Ordinary Least Square (OLS) regression analysis were used to test the variables in the study. The study revealed that credit to private sector, liquidity ratio and loan and advances has positive and significant effect in return on asset (ROA) while nonperforming loan has negative and insignificant effect in return on asset (ROA). The study thus concludes that risk management has positive effect on the performance of commercial banks in Nigeria and support Moody`s KMV portfolio manager model which is a credit monitor model that helps to solve the lending problems of banks and further look at the repayment incentive problems. Among the recommendations is that banks Management should establish sound lending policies, adequate credit administration procedure and an effective and efficient machinery to monitor lending function with established guidelines, reduction of interest rates on lending. Financial institutions should all together, set up credit bureau system which is a form of data bank where every bank will submit the names of its defaulting customers for references by others. This will equally frustrate multiple borrowing from banks for the same purpose by the dubious customers

IJSSER is Member of