@article{10.11648/j.ijfbr.20220802.13,
  author = {Akodu Ayomide Emmanuel and Nwaobia Apollos Nwabuisi and Owolabi Sunday Alao},
  title = {An Empirical Investigation into the Relationship Between Financial Risk and Bank Performance},
  journal = {International Journal of Finance and Banking Research},
  volume = {8},
  number = {2},
  pages = {67-72},
  doi = {10.11648/j.ijfbr.20220802.13},
  url = {https://doi.org/10.11648/j.ijfbr.20220802.13},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijfbr.20220802.13},
  abstract = {The importance of an optimally operation of the banking sector in any society cannot be over-emphasized thus the need for the government to pay particular attention on the operation and sustainability of the banking sector. However, the banking industry's services are highly volatile, and the sector's existence exposes it to numerous risks. Since deposit money banks are at the core of financial activity regulation, they are often exposed to threats and uncertainties which has unfavorable effect on their performance. The study examined the relationship between financial risk and bank performance of deposit money banks in Nigeria. A total of 11 deposit money banks were purposively selected for a period of 10 years (2010-2020). Relevant information for our analysis were obtained from the audited report of the selected banks. These data sources were seen to be appropriate for this study because have been validated by external auditors and relevant regulatory agencies. Ex-post facto research design was adjudged the appropriate design for the study. From our result we identified that financial risk has no momentous effect on return on equity of deposit money banks in Nigeria, Adj. R2 = 0.0077, F(4, 116) = 1.23, P > .05). When the variables of financial risk were regressed against the variables of performances, the result indicated that financial risk variables jointly and significantly affected performances of deposit money banks in Nigeria, Adj. R2 = 0.0672, F(4, 116) = 44.08, P < .05). Based on the findings we concluded that risk has a momentous effect on the performance of deposit money banks in Nigeria. The study recommended that credit risk assessment processes should be more intensified to reduce the value and volume of non-performing loans in the banks. A reduction in non-performing will result to an increase in the total asset of the bank and result to increase in interest income which as a positive effect on both the top line and bottom line of the bank.},
 year = {2022}
}

Copy | Download

TY  - JOUR
T1  - An Empirical Investigation into the Relationship Between Financial Risk and Bank Performance
AU  - Akodu Ayomide Emmanuel
AU  - Nwaobia Apollos Nwabuisi
AU  - Owolabi Sunday Alao
Y1  - 2022/04/14
PY  - 2022
N1  - https://doi.org/10.11648/j.ijfbr.20220802.13
DO  - 10.11648/j.ijfbr.20220802.13
T2  - International Journal of Finance and Banking Research
JF  - International Journal of Finance and Banking Research
JO  - International Journal of Finance and Banking Research
SP  - 67
EP  - 72
PB  - Science Publishing Group
SN  - 2472-2278
UR  - https://doi.org/10.11648/j.ijfbr.20220802.13
AB  - The importance of an optimally operation of the banking sector in any society cannot be over-emphasized thus the need for the government to pay particular attention on the operation and sustainability of the banking sector. However, the banking industry's services are highly volatile, and the sector's existence exposes it to numerous risks. Since deposit money banks are at the core of financial activity regulation, they are often exposed to threats and uncertainties which has unfavorable effect on their performance. The study examined the relationship between financial risk and bank performance of deposit money banks in Nigeria. A total of 11 deposit money banks were purposively selected for a period of 10 years (2010-2020). Relevant information for our analysis were obtained from the audited report of the selected banks. These data sources were seen to be appropriate for this study because have been validated by external auditors and relevant regulatory agencies. Ex-post facto research design was adjudged the appropriate design for the study. From our result we identified that financial risk has no momentous effect on return on equity of deposit money banks in Nigeria, Adj. R2 = 0.0077, F(4, 116) = 1.23, P > .05). When the variables of financial risk were regressed against the variables of performances, the result indicated that financial risk variables jointly and significantly affected performances of deposit money banks in Nigeria, Adj. R2 = 0.0672, F(4, 116) = 44.08, P < .05). Based on the findings we concluded that risk has a momentous effect on the performance of deposit money banks in Nigeria. The study recommended that credit risk assessment processes should be more intensified to reduce the value and volume of non-performing loans in the banks. A reduction in non-performing will result to an increase in the total asset of the bank and result to increase in interest income which as a positive effect on both the top line and bottom line of the bank.
VL  - 8
IS  - 2
ER  - 

Copy | Download