We have used a multiple regression model to identify the impacts of the variables of credit risk management on the Nigerian deposit money banks’ performance from 2000 to 2020. The estimation was completed using the ordinary least squares method with E-Views 12. The data was sourced from the Nigerian Stock Exchange for information and the Statistical Bulletin of the Central Bank of Nigeria. The outcome determined that return on equity (ROE) is negatively correlated with the nonperforming loan/loan and advances ratio. Last but not least, the ROE measurements of the deposit money banks in Nigeria show a substantial correlation between the ratios of advances and loans to nonperforming loans, loan loss provision to loans and advances, and capital adequacy. These ratios are positively correlated with each other and negatively correlated with the capital adequacy ratio. We advise effective surveillance of pre- and post-deposit financial institution loans for the early detection of problematic debts that won’t be repaid according to schedule and for the thorough analysis of prospective projects as indicated in the financial statement given by the intended client (cash budget, income statement). Accurate identification of realistic projects and repayment terms based on the customer’s past performance will be achieved.
Effect of Credit Risk Management Practices on Profitability of Listed Commerc...iosrjce
The study sought to analyze the effect of credit risk management practices on profitability of listed
commercial banks at Nairobi Security Exchange in Kenya. A descriptive research design was adopted. The
population comprised of listed commerical banks where a sample of 55 employees was purposively sampled. It
was established that credit appraisal practices had a significant positive effect on profitability and that it
explained 14.4% of the variations in profitability. The results also found that credit monitoring had a
significative positive effect on profitability and that 47.8% of the variance in profitability. The findings further,
indicated that debt collection practices had a positive and significant relationship and explained 17.4% of the
variations in profitability. Lastly, the results indicated that credit risk governance had a positive and significant
effect on profitability. Based on the study findings the study concluded that credit appraisal, debt collection and
credit risk governance have a significant positive effect on profitability. It is thus recommended that commercial
banks should have stringent credit appraisal and debt collection policies, credit personnel at all levels must
work in co-ordination in order to ensure that credit is collected in a timely manner and banks should also adopt
credit risk governance frameworks which can be attained by making the process of interaction between senior
management and the Board more effective
Credit Risk and Bank Performance in Nigeriaiosrjce
This study investigates the impact of credit risk on banks’ performance in Nigeria. A panel
estimation of six banks from 2000 to 2013 was done using the random effect model framework. Our findings
show that credit risk is negatively and significantly related to bank performance, measured by return on assets
(ROA). This suggests that an increased exposure to credit risk reduces bank profitability. We also found that
total loan has a positive and significant impact on bank performance. Therefore, to stem the cyclical nature of
non-performing loans and increase their profits, the banks should adopt an aggressive deposit mobilization to
increase credit availability and develop a reliable credit risk management strategy with adequate punishment
for loan payment defaults
This study examined the effect of interest rate deregulation on Nigerian banking system. The study adopted Augmented Dickey – Fuller (ADF), Bound test and Autoregressive Distributed Lag (ARDL). The correlation result indicated that of the correlation matrix that all the explanatory variables (interest rate, lending rate and deposit rate) had effect on loan and advances. The results of the unit root test revealed that interest rate and lending rate were stationary at level 1(0) while loan and advances and deposit rate were stationary at first difference 1(1). Also the results of the bound test revealed that there exist long run equilibrium relationship among the variables. The result of the ARDL indicated that interest rate had significant effect on loan and advances while lending rate and deposit rate had an insignificant effect on loan and advances. It was concluded that banks should monitor the level of loan and advances in respect to major ratios for effective performance. The study thus, recommended that banks should monitor lending rate which should be fixed in order to enhance lending performance. Regulatory authority should ensure that macroeconomic variables such as money supply, liquidity ratio, lending rate, monetary policy rate are effectively managed to enhance bank performance.
Effect of Credit Risk Management Practices on Profitability of Listed Commerc...iosrjce
The study sought to analyze the effect of credit risk management practices on profitability of listed
commercial banks at Nairobi Security Exchange in Kenya. A descriptive research design was adopted. The
population comprised of listed commerical banks where a sample of 55 employees was purposively sampled. It
was established that credit appraisal practices had a significant positive effect on profitability and that it
explained 14.4% of the variations in profitability. The results also found that credit monitoring had a
significative positive effect on profitability and that 47.8% of the variance in profitability. The findings further,
indicated that debt collection practices had a positive and significant relationship and explained 17.4% of the
variations in profitability. Lastly, the results indicated that credit risk governance had a positive and significant
effect on profitability. Based on the study findings the study concluded that credit appraisal, debt collection and
credit risk governance have a significant positive effect on profitability. It is thus recommended that commercial
banks should have stringent credit appraisal and debt collection policies, credit personnel at all levels must
work in co-ordination in order to ensure that credit is collected in a timely manner and banks should also adopt
credit risk governance frameworks which can be attained by making the process of interaction between senior
management and the Board more effective
Credit Risk and Bank Performance in Nigeriaiosrjce
This study investigates the impact of credit risk on banks’ performance in Nigeria. A panel
estimation of six banks from 2000 to 2013 was done using the random effect model framework. Our findings
show that credit risk is negatively and significantly related to bank performance, measured by return on assets
(ROA). This suggests that an increased exposure to credit risk reduces bank profitability. We also found that
total loan has a positive and significant impact on bank performance. Therefore, to stem the cyclical nature of
non-performing loans and increase their profits, the banks should adopt an aggressive deposit mobilization to
increase credit availability and develop a reliable credit risk management strategy with adequate punishment
for loan payment defaults
This study examined the effect of interest rate deregulation on Nigerian banking system. The study adopted Augmented Dickey – Fuller (ADF), Bound test and Autoregressive Distributed Lag (ARDL). The correlation result indicated that of the correlation matrix that all the explanatory variables (interest rate, lending rate and deposit rate) had effect on loan and advances. The results of the unit root test revealed that interest rate and lending rate were stationary at level 1(0) while loan and advances and deposit rate were stationary at first difference 1(1). Also the results of the bound test revealed that there exist long run equilibrium relationship among the variables. The result of the ARDL indicated that interest rate had significant effect on loan and advances while lending rate and deposit rate had an insignificant effect on loan and advances. It was concluded that banks should monitor the level of loan and advances in respect to major ratios for effective performance. The study thus, recommended that banks should monitor lending rate which should be fixed in order to enhance lending performance. Regulatory authority should ensure that macroeconomic variables such as money supply, liquidity ratio, lending rate, monetary policy rate are effectively managed to enhance bank performance.
Given the continued poor performance experienced in the banking sector as indicated by high levels of credit risk, poor quality loans and high incidence of non-performing loans, in spite of the frequent reforms that various governments in Nigeria have embarked upon, there is the need to constantly examine and analyse the factors that could affect bank performance with the aim of providing empirical evidence based on which solutions can be proffered. The paper examined the impact of asset quality management on the performance of deposit money banks in Nigeria. The paper adopted the ECM and co-integration techniques using annual aggregate data sourced from the CBN and the NDIC publications for the period 1990-2013. The findings of the study indicate that the selected measures of asset quality have significant impact on all the three indicators of bank performance namely- return on equity, return on total assets and return on shareholders’ fund respectively. In addition, the results of the impulse response and variance decomposition show that own shocks from the performance indicators ROE, ROTA and ROSF account for a greater proportion of the forecast errors of the variables within the ten-year forecast period. In the light of the above, it is recommended that deposit money banks in Nigeria should intensify their efforts in designing and implementing good asset quality management policies in order to further improve on their performance. This can be through human capacity building for personnel in the form of frequent professional training as well as strict adherence to the prudential guidelines.
Effect of Portfolio Diversification on Commercial Banks Financial Performance...inventionjournals
The study examined the effect of portfolio diversification on Commercial Banks financial performance. Mixed method of research design was used and data was collected using questionnaires and interview schedules. Target population was 43 licensed Commercial Banks in Kenya from which one hundred and thirty three (133) managers were randomly selected to form sample size. Validity of the research instruments was ensured through content, face and construct validity testing. Data was analyzed using descriptive statistics and inferential statistics which included correlation analysis and bivariate regression analysis. The study established a positive statistically significant relationship between portfolio diversification and financial performance. The portfolio diversification explained 68% of the changes in the financial performance of commercial banks in Kenya and that most banks diversify their investments which has enabled them to increase profits and performance in the past years.The study recommended that financial institutions should invest in a combination of assets which are negatively correlated because this maximizes revenue (returns) and minimizes losses (risks). Further study should be undertaken to establish the best combination of assets that can yield an efficient portfolio.
The impact of Non-performing Loans and Bank Performance in Nigeriainventionjournals
This study investigated the relationship between non-performing loans and bank performance in Nigeria for the period 1994-2014. The study employed ADF Unit Root test, descriptive statistics, and multiple regression techniques to analyze data collected for the study from the CBN, NDIC and annual reports of listed banks. The results of the study show that BAL and DOL had statistically negative significant influence on ROCE, while SUL had statistically negative insignificant impact on ROCE. These results show that high level of non-performing loans would reduce the performance of banks in the long run in Nigeria. The study therefore recommended that credit reporting agencies and supervising authorities should be strengthen in order to reduce the high level of non-performing loans in the banking sector of Nigeria.
The Performance of Financial Institutions and Internal Control System A Case ...ijtsrd
The study was all about internal control systems and the performance of financial institutions of GT Bank, Kigali, Rwanda 2016 2020 .Methodology of the study based on explanatory research design the population of this study was 105 of employees of GT Bank Rwanda, which was used as sample size using universal sampling method to gather information from respondents. The study used descriptive and inferential statistics. Findings on the effect of control activities on financial performance of GT Bank Rwanda were presented on Table 4.9 indicates the value of R square in this study is 87.3 means that the proportion of financial performance as dependent variable is explained by the independent variables control activities at 87.3 . This indicates that the model is very strong, as the independent variable very highly explain the dependent variable. The adjusted R square is used to compensate for additional variable in the model. In this case, the adjusted R square is 87.2 . Findings on the effect of risk assessment on financial performance of GTBank Rwanda were presented on Table 4.12 show the value of R square in this study is 61.1 means that the proportion of financial performance dependent variable is explained by the independent variables Risk assessment at 61.1 . This indicated that the model was strong, as the independent variable highly explain the dependent variable. The adjusted R square was used to compensate for additional variable in the model. In this case, the adjusted R square is 60.8 . Findings on the effect of control environment on financial performance of banking institutions in Rwanda confirmed on table 4.15 present the value of R square in this study was 51.1 means that the proportion of financial performance dependent variable is explained by the independent variables Control environment at 51.1 . Dr. Vidhya K | Dr. Neelam Maurya | Dr. Umamaheswari K "The Performance of Financial Institutions & Internal Control System - A Case Study of Guaranty Trust Bank, Kigali Rwanda" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-6 | Issue-4 , June 2022, URL: https://www.ijtsrd.com/papers/ijtsrd50323.pdf Paper URL: https://www.ijtsrd.com/management/accounting-and-finance/50323/the-performance-of-financial-institutions-and-internal-control-system--a-case-study-of-guaranty-trust-bank-kigali-rwanda/dr-vidhya-k
Modelling the sensitivity of zimbabwean commercial banks’ non performing loan...kudzai sauka
This paper used complementary panel data models that are fixed effect regression model and panel vector auto regression model. The study was motivated by the hypothesis that both macroeconomic and microeconomic variables have an effect on the loan quality. The first part of the research was to determine the specific macro and microeconomic variables that give rise to the non-performing loans (NPLs) using fixed effect regression model. The empirical findings of this study provide evidence that nonperforming loans depends on macro and micro economic variables, the trend analysis of Zimbabwean commercial banks’ shows an upward movement of over the period of study. The study found out that Gross domestic product (GDP), Inflation, loan deposit ratio and bank size had a statistical significant effect on the level of non-performing loans (NPLs). The second part was mainly to model the dynamic relationship of all the variables that were found to affect non-performing loans (NPLs); this was done through impulse response analysis based on PANEL VAR model. One standard shock to credit growth will be greatly felt in the sixth year, whereas of size of the bank will have a great negative impulse in the seventh year.
Although Chinese banks have in the past not focused tremendously on risk management in the past, recent events and comments from regulators indicate that risk management will be more of a focus for banks. In the second of our series of webinars on risk management in China, we look at credit risk management in chinese banks to understand more about what it is, how things are different in China and what will happen in the near future. This webinar will give you an in-depth look at the opportunities and challenges for banks as well as the potential implications for vendors and vendor solution offerings.
A STUDY OF NON-PERFORMING ASSETS AND ITS IMPACT ON BANKING SECTORJournal For Research
Banks plays an important role in the economic development of a country. Banks are growth-driver and the banking business is exposed to various risk, such as credit risk, liquidity risk, interest risk, market risk, operational risk and management risk. Apart from these risks the very important risk is loan recovery. The sound financial position of a bank depends upon the recovery of loans or its level of Non-performing assets (NPAs). Reduced NPAs generally gives the impression that banks have strengthened their credit appraisal processes over the years and growth in NPAs involves the necessity of provisions, which bring down the overall profitability of banks. The Indian banking sector is facing a serious problem of NPA. The magnitude of NPA is comparatively higher in public sectors banks. To improve the efficiency and profitability of banks the NPA need to be reduced and controlled.
Effect of Liquidity Risk on the Profitability of Mortgage Banks in Nigeriaijtsrd
The study was inspired by the liquidity risk that the Nigerian mortgage banking business faces in terms of profitability. As a result, the study investigates the impact of liquidity risk on the profitability of Nigerian mortgage banks. This research effort was carried out using secondary data and an ex post facto research design. The regression statistical technique in the Statistical Package for Social Sciences SPSS Version 22.0 was used to assess data derived from the financial statements of listed mortgage banks on the Nigerian Stock Exchange NSE . The results of the analysis demonstrate that Loan to Deposit has a substantial impact on mortgage banks net interest margins in Nigeria, and that Current Ratio has a significant impact on mortgage banks net interest margins in Nigeria. It was so recommended, among other things, that bank management adopt sound lending policies and maintain a sufficient balance between loans and deposits, because bank profit is largely dependent on deposits mobilized and liquidity created through loans given. Ekwueme, Chizoba M | Onakeke, Newman "Effect of Liquidity Risk on the Profitability of Mortgage Banks in Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-5 | Issue-5 , August 2021, URL: https://www.ijtsrd.com/papers/ijtsrd46349.pdf Paper URL: https://www.ijtsrd.com/management/accounting-and-finance/46349/effect-of-liquidity-risk-on-the-profitability-of-mortgage-banks-in-nigeria/ekwueme-chizoba-m
The growth of rapid financial technology (fintech) is expected to contribute more than 12% of compound annual growth rate (CAGR) to the economy. India is gradually becoming the hub for many prominent fintech startups such as Paytm, Pine Labs, PayU, Razorpay, and others. However, as per the survey by Financial Express, only 27% of Indians are financially literate. This article investigates the factors that influence the millennial generation and their financial literacy and the relationship between their knowledge, their objectives, their outlook, and their behavior toward the use of fintech applications. The questionnaire is used to gather the main data. Chisquared analysis was used to test the hypotheses, and correspondence analysis was used to determine the characteristics of the millennial generation and visually demonstrate the discrepancy.
The Granger causality model is used in the current study to analyze the short-run cause–effect relationship between two stock market indices between 2001 and 2021 using time series data of the daily closing prices of the BSE Sensex and S&P 500 indices listed in the Indian and US stock markets, respectively. The Granger causality model and the augmented Dickey–Fuller test for data stationarity were used in the study to examine the short-term causal link between two market indices during the time period. The outcomes demonstrated the connection between the Indian and US stock markets. The findings imply that both markets have a dynamic, bidirectional relationship. This study provides the investor’s essential inputs for investment decision-making and portfolio diversification. In the current era of globalization, the study is crucial because investors and fund managers now place a high priority on stock market integration. Through fund diversification across equity markets, this study subsequently makes it easier to reduce portfolio risk by providing useful insights on diversification strategies across the stock markets.
More Related Content
Similar to Credit Risk Management and the Performance of Nigerian Deposit Money Banks
Given the continued poor performance experienced in the banking sector as indicated by high levels of credit risk, poor quality loans and high incidence of non-performing loans, in spite of the frequent reforms that various governments in Nigeria have embarked upon, there is the need to constantly examine and analyse the factors that could affect bank performance with the aim of providing empirical evidence based on which solutions can be proffered. The paper examined the impact of asset quality management on the performance of deposit money banks in Nigeria. The paper adopted the ECM and co-integration techniques using annual aggregate data sourced from the CBN and the NDIC publications for the period 1990-2013. The findings of the study indicate that the selected measures of asset quality have significant impact on all the three indicators of bank performance namely- return on equity, return on total assets and return on shareholders’ fund respectively. In addition, the results of the impulse response and variance decomposition show that own shocks from the performance indicators ROE, ROTA and ROSF account for a greater proportion of the forecast errors of the variables within the ten-year forecast period. In the light of the above, it is recommended that deposit money banks in Nigeria should intensify their efforts in designing and implementing good asset quality management policies in order to further improve on their performance. This can be through human capacity building for personnel in the form of frequent professional training as well as strict adherence to the prudential guidelines.
Effect of Portfolio Diversification on Commercial Banks Financial Performance...inventionjournals
The study examined the effect of portfolio diversification on Commercial Banks financial performance. Mixed method of research design was used and data was collected using questionnaires and interview schedules. Target population was 43 licensed Commercial Banks in Kenya from which one hundred and thirty three (133) managers were randomly selected to form sample size. Validity of the research instruments was ensured through content, face and construct validity testing. Data was analyzed using descriptive statistics and inferential statistics which included correlation analysis and bivariate regression analysis. The study established a positive statistically significant relationship between portfolio diversification and financial performance. The portfolio diversification explained 68% of the changes in the financial performance of commercial banks in Kenya and that most banks diversify their investments which has enabled them to increase profits and performance in the past years.The study recommended that financial institutions should invest in a combination of assets which are negatively correlated because this maximizes revenue (returns) and minimizes losses (risks). Further study should be undertaken to establish the best combination of assets that can yield an efficient portfolio.
The impact of Non-performing Loans and Bank Performance in Nigeriainventionjournals
This study investigated the relationship between non-performing loans and bank performance in Nigeria for the period 1994-2014. The study employed ADF Unit Root test, descriptive statistics, and multiple regression techniques to analyze data collected for the study from the CBN, NDIC and annual reports of listed banks. The results of the study show that BAL and DOL had statistically negative significant influence on ROCE, while SUL had statistically negative insignificant impact on ROCE. These results show that high level of non-performing loans would reduce the performance of banks in the long run in Nigeria. The study therefore recommended that credit reporting agencies and supervising authorities should be strengthen in order to reduce the high level of non-performing loans in the banking sector of Nigeria.
The Performance of Financial Institutions and Internal Control System A Case ...ijtsrd
The study was all about internal control systems and the performance of financial institutions of GT Bank, Kigali, Rwanda 2016 2020 .Methodology of the study based on explanatory research design the population of this study was 105 of employees of GT Bank Rwanda, which was used as sample size using universal sampling method to gather information from respondents. The study used descriptive and inferential statistics. Findings on the effect of control activities on financial performance of GT Bank Rwanda were presented on Table 4.9 indicates the value of R square in this study is 87.3 means that the proportion of financial performance as dependent variable is explained by the independent variables control activities at 87.3 . This indicates that the model is very strong, as the independent variable very highly explain the dependent variable. The adjusted R square is used to compensate for additional variable in the model. In this case, the adjusted R square is 87.2 . Findings on the effect of risk assessment on financial performance of GTBank Rwanda were presented on Table 4.12 show the value of R square in this study is 61.1 means that the proportion of financial performance dependent variable is explained by the independent variables Risk assessment at 61.1 . This indicated that the model was strong, as the independent variable highly explain the dependent variable. The adjusted R square was used to compensate for additional variable in the model. In this case, the adjusted R square is 60.8 . Findings on the effect of control environment on financial performance of banking institutions in Rwanda confirmed on table 4.15 present the value of R square in this study was 51.1 means that the proportion of financial performance dependent variable is explained by the independent variables Control environment at 51.1 . Dr. Vidhya K | Dr. Neelam Maurya | Dr. Umamaheswari K "The Performance of Financial Institutions & Internal Control System - A Case Study of Guaranty Trust Bank, Kigali Rwanda" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-6 | Issue-4 , June 2022, URL: https://www.ijtsrd.com/papers/ijtsrd50323.pdf Paper URL: https://www.ijtsrd.com/management/accounting-and-finance/50323/the-performance-of-financial-institutions-and-internal-control-system--a-case-study-of-guaranty-trust-bank-kigali-rwanda/dr-vidhya-k
Modelling the sensitivity of zimbabwean commercial banks’ non performing loan...kudzai sauka
This paper used complementary panel data models that are fixed effect regression model and panel vector auto regression model. The study was motivated by the hypothesis that both macroeconomic and microeconomic variables have an effect on the loan quality. The first part of the research was to determine the specific macro and microeconomic variables that give rise to the non-performing loans (NPLs) using fixed effect regression model. The empirical findings of this study provide evidence that nonperforming loans depends on macro and micro economic variables, the trend analysis of Zimbabwean commercial banks’ shows an upward movement of over the period of study. The study found out that Gross domestic product (GDP), Inflation, loan deposit ratio and bank size had a statistical significant effect on the level of non-performing loans (NPLs). The second part was mainly to model the dynamic relationship of all the variables that were found to affect non-performing loans (NPLs); this was done through impulse response analysis based on PANEL VAR model. One standard shock to credit growth will be greatly felt in the sixth year, whereas of size of the bank will have a great negative impulse in the seventh year.
Although Chinese banks have in the past not focused tremendously on risk management in the past, recent events and comments from regulators indicate that risk management will be more of a focus for banks. In the second of our series of webinars on risk management in China, we look at credit risk management in chinese banks to understand more about what it is, how things are different in China and what will happen in the near future. This webinar will give you an in-depth look at the opportunities and challenges for banks as well as the potential implications for vendors and vendor solution offerings.
A STUDY OF NON-PERFORMING ASSETS AND ITS IMPACT ON BANKING SECTORJournal For Research
Banks plays an important role in the economic development of a country. Banks are growth-driver and the banking business is exposed to various risk, such as credit risk, liquidity risk, interest risk, market risk, operational risk and management risk. Apart from these risks the very important risk is loan recovery. The sound financial position of a bank depends upon the recovery of loans or its level of Non-performing assets (NPAs). Reduced NPAs generally gives the impression that banks have strengthened their credit appraisal processes over the years and growth in NPAs involves the necessity of provisions, which bring down the overall profitability of banks. The Indian banking sector is facing a serious problem of NPA. The magnitude of NPA is comparatively higher in public sectors banks. To improve the efficiency and profitability of banks the NPA need to be reduced and controlled.
Effect of Liquidity Risk on the Profitability of Mortgage Banks in Nigeriaijtsrd
The study was inspired by the liquidity risk that the Nigerian mortgage banking business faces in terms of profitability. As a result, the study investigates the impact of liquidity risk on the profitability of Nigerian mortgage banks. This research effort was carried out using secondary data and an ex post facto research design. The regression statistical technique in the Statistical Package for Social Sciences SPSS Version 22.0 was used to assess data derived from the financial statements of listed mortgage banks on the Nigerian Stock Exchange NSE . The results of the analysis demonstrate that Loan to Deposit has a substantial impact on mortgage banks net interest margins in Nigeria, and that Current Ratio has a significant impact on mortgage banks net interest margins in Nigeria. It was so recommended, among other things, that bank management adopt sound lending policies and maintain a sufficient balance between loans and deposits, because bank profit is largely dependent on deposits mobilized and liquidity created through loans given. Ekwueme, Chizoba M | Onakeke, Newman "Effect of Liquidity Risk on the Profitability of Mortgage Banks in Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-5 | Issue-5 , August 2021, URL: https://www.ijtsrd.com/papers/ijtsrd46349.pdf Paper URL: https://www.ijtsrd.com/management/accounting-and-finance/46349/effect-of-liquidity-risk-on-the-profitability-of-mortgage-banks-in-nigeria/ekwueme-chizoba-m
Similar to Credit Risk Management and the Performance of Nigerian Deposit Money Banks (20)
The growth of rapid financial technology (fintech) is expected to contribute more than 12% of compound annual growth rate (CAGR) to the economy. India is gradually becoming the hub for many prominent fintech startups such as Paytm, Pine Labs, PayU, Razorpay, and others. However, as per the survey by Financial Express, only 27% of Indians are financially literate. This article investigates the factors that influence the millennial generation and their financial literacy and the relationship between their knowledge, their objectives, their outlook, and their behavior toward the use of fintech applications. The questionnaire is used to gather the main data. Chisquared analysis was used to test the hypotheses, and correspondence analysis was used to determine the characteristics of the millennial generation and visually demonstrate the discrepancy.
The Granger causality model is used in the current study to analyze the short-run cause–effect relationship between two stock market indices between 2001 and 2021 using time series data of the daily closing prices of the BSE Sensex and S&P 500 indices listed in the Indian and US stock markets, respectively. The Granger causality model and the augmented Dickey–Fuller test for data stationarity were used in the study to examine the short-term causal link between two market indices during the time period. The outcomes demonstrated the connection between the Indian and US stock markets. The findings imply that both markets have a dynamic, bidirectional relationship. This study provides the investor’s essential inputs for investment decision-making and portfolio diversification. In the current era of globalization, the study is crucial because investors and fund managers now place a high priority on stock market integration. Through fund diversification across equity markets, this study subsequently makes it easier to reduce portfolio risk by providing useful insights on diversification strategies across the stock markets.
The study provides an empirical assessment of how institutions and trade liberalization affect Malawi’s economic expansion. It tackles the absence of empirical research into how institutions affect economic growth and how trade liberalization policy affects institutions’ influence on growth (interaction effect). The study also seeks to find out if economic growth, however, affects institutions as theories differ on causality. The study uses a time series analysis and autoregressive distribution lag (ARDL) technique to obtain short-run and long-run results. The study was conducted from 1988, the official inception year of trade liberalization in Malawi, to 2014. The empirical results show that political and economic institutions, as well as trade liberalization, affect Malawi’s economic growth in both the short term and the long term. Trade liberalization and political institutions negatively affect economic growth in the short run and long run, whereas economic institutions positively affect economic growth in the short run and long run. The findings also show that when strong economic institutions rather than strong political institutions are present, the effect of trade liberalization on economic development is more prominent (positive). Finally, the study also finds that it is institutions that affect economic growth in Malawi and not the other way around.
Sustainable development of the regions is presently an often discussed theme, mainly due to the worldwide situation. The goal of the contribution is therefore to find regions in Slovakia and Ukraine that have the possibility to have mutually advantageous ways of cooperation. The selection of the regions results from the comparison of European Union (EU) Member State’s situations and not EU Member State situations. The situation in the regions is compared according to the regional gross domestic product per capita, the unemployment rate in the region and the average monthly wage of employees in the regions. The results of the contribution show possible cooperation of the analyzed regions in business, mainly in the area of industrial production, with unemployment decreasing. The use of the results is in the area of finding strategies for improvement and cooperation.
The coronavirus disease-19 pandemic and the impact of Sino-US trade have accelerated and intensified changes in consumer behavior and promoted the motherboard industry’s digital transformation. However, before entering the implementation stage of digital transformation, enterprises need to examine their readiness. Therefore, we hope to provide a reference for the motherboard industry in the implementation stage of digital transformation in the face of fast-changing market demands by constructing a digital transformation maturity assessment scale. Previously, maturity assessments were performed for manufacturing and smart manufacturing. The digital transformation maturity assessment of the motherboard industry lacks rigorous research in relevant
literature. Therefore, this study uses the current state of the motherboard industry to assess its digital transformation maturity and uses the fuzzy analytic hierarchy process and expert interviews to summarize and analyze the assessment mode of the digital transformation maturity of the motherboard industry. By analyzing digital transformation maturity and using an objective assessment scale, we can understand the current state of operations and set the right direction. This enables enterprises to obtain maximum benefits with limited resources when facing rapid changes in consumer behavior. We further show the implications of the industry’s operations, and finally, provide practical recommendations and conclusions.
The COVID-19 pandemic has taught us the need to rethink towards future risk and possibly how to mitigate or deal with such risk. To do this, the right risk culture needs to be embedded into the organization’s setting. In recent times, there has been an increase in regulatory pressure for effective risk management governance and strategy. An inspiring risk governance and strategy will never be realized without the backing of a strong risk culture. This paper discusses risk culture within an organization and rethinking risk culture in a post-pandemic era.
Global warming has affected the whole world negatively as it is experiencing uncertainty in weather. It is the long-term warming of the Earth’s climate system that has been seen since pre-industrial times (between 1850 and 1900). Human activities and the combustion of fossil fuels contribute to global warming by increasing heat-trapping
greenhouse gas levels in the Earth’s atmosphere. Although the phrases are commonly interchanged, the latter refers to both man-made and natural warming, as well as the consequences for our world. It’s generally calculated as the average increase in the Earth’s global surface temperature. To save the mother earth and to save themselves from the negative impacts of global warming, many countries have started taking initiatives of which green finance is the one. Many countries have started issuing green bonds. The bonds that are issued to raise money to be used in climate and environmental projects. This paper is written to define the importance of green finance for the world’s environment. It will describe how the term green finance
emerged and the status of different countries. The paper is based on secondary data only collected by accessing various online sources.
This study develops an insolvency model to predict the possible wilful non-payment of debt obligations that turn into bad assets. This paper reveals that financially weak firms have been in deep financial distress somewhere between two to three years prior to their declaration as a wilful defaulter by the initial credit institution and its reporting on the same to the credit information companies. The Cox proportional hazards model (PHM) has been employed, which is a well-known and profusely applied approach not just in medical science but also in forecasting firm bankruptcy. This widely recognized model has been utilized to estimate the effects of different covariates influencing the times-to-event data. The application of Bayesian methods has the benefit in dealing with censored data in
small sample over frequentists’ approach. Herein, Bayesian survival framework is applied incorporating normal priors that generally performs better than the traditional likelihood estimation to forecast wilful default. Subsequently, Markov Chain Monte Carlo (MCMC) sampling enables to provide the Bayesian estimator. In the Bayesian structure, the Survival model is used with the help of hazard function. The gamma distribution is selected as the prior for the standard hazard equation in PHM. In order to solve for posterior distribution, the Metropolis Hastings scheme is followed that avoids solving complicated equations with OpenBugs platform
The intention of this paper is to provide a clear idea about the current education scenario practiced in Kanyakumari District, Tamil Nadu, India, its associated drawbacks and to propose innovative teaching methods. For this purpose, various schools in the district were visited and surveys had been conducted to bring out the expectations and interests of students towards our education system. Based on the feedback given by the students and teachers, an analysis was performed and the shortcomings in the current education system were spotted out. The suggestions and expectations on the existing education scheme are being discussed in this paper.
Finance is the lifeblood and lifeline of any business entity either commercial or non-commercial. The
Survival, Stability and Sustainability of a firm is highly associated with its financial wellness. It can be observed through its ability to pay(re) short-term as well as long term liabilities, meeting the regular financial obligations, to increase the value of firm and ability to generate profit. Financial analysis, evaluation, and assessment help in determines the financial position and financial strength of a firm. Among the plenty of methods and tolls available for financial performance, ratio analysis is more useful and meaningful. These ratios make it possible to analyze the evolution of the financial situation of a firm (trend analysis), cross-sectional analysis and comparative analysis.
The aim is to determine the short-term profitability of IPOs and to surrounding the evolution of this profitability on the middle/long run. Therefore, we used the raw initial returns and the adjusted initial returns methods to assess the short-term performance. We determined the long-term performance through the cumulative abnormal returns and the buy-and-hold abnormal returns, abnormal returns being adjusted to the market index and to the market model.
Banking system occupies an important place in Indian economy.
It provides various services to its customer. The nature of its services has evolved as the advancement of technology. It has become most challengeable to understand the customer satisfaction with quality of services. The present investigation was planned with the objective to analyse the customer choice towards the services provided by the bank. The research data was collected by the various bank customers for analysing the service quality from the ratings provided by the customer. In this regard, this research paper focuses with a purpose to report the findings of selected banking services which are used by the customers in India.
India is a fast becoming country of mobile and internet. Government of India initiative such as “Digital India”, in future our country will become cashless economy. Due to advancement of technology, man becomes more convenient and comfortable. Mobile Wallet is a platform for making payment through mobile. There are various
applications available like google pay, paytm citrus, etc. by using of such platforms payment can become more easy for online shopping, money transfer, utility bill payment, etc. Through mobile payment is very convenient and more secure to the public. Here, is an attempt to make a study on how the mobile wallet used by the consumers and their perception and satisfaction level towards using of such m-wallet payment gateways.
This study reports survivorship bias for the momentum effect. Effectively, this study shows that the Portuguese stock market does not exhibit the “momentum effect” when all listed stocks are considered spanning the period from January 1991 to December 2016. However, this phenomenon was detected when only survivor stocks are used. This study also shows that average returns for momentum portfolios were similar before and after the 2007
financial crisis.
If I may be allowed to appropriate the term speculation
for the activity of forecasting the psychology of the market, and the term enterprise for the activity of forecasting the prospective yield of assets over their whole life, it is by no means always the case that speculation predominates over enterprise. As the organisation of investment markets improves, the risk of the predominance of speculation does, however, increase
The International Journal of Finance and Market Research (IJFMR) is an open access peer-reviewed journal that publishes articles which contribute new results in all the areas of Finance and Market Research. Authors are solicited to contribute to the journal by submitting articles that illustrate research results, projects, surveying works and industrial experiences that describe significant advances in this area.
More from BOHR International Journal of Finance and Market Research (16)
how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
what is the future of Pi Network currency.DOT TECH
The future of the Pi cryptocurrency is uncertain, and its success will depend on several factors. Pi is a relatively new cryptocurrency that aims to be user-friendly and accessible to a wide audience. Here are a few key considerations for its future:
Message: @Pi_vendor_247 on telegram if u want to sell PI COINS.
1. Mainnet Launch: As of my last knowledge update in January 2022, Pi was still in the testnet phase. Its success will depend on a successful transition to a mainnet, where actual transactions can take place.
2. User Adoption: Pi's success will be closely tied to user adoption. The more users who join the network and actively participate, the stronger the ecosystem can become.
3. Utility and Use Cases: For a cryptocurrency to thrive, it must offer utility and practical use cases. The Pi team has talked about various applications, including peer-to-peer transactions, smart contracts, and more. The development and implementation of these features will be essential.
4. Regulatory Environment: The regulatory environment for cryptocurrencies is evolving globally. How Pi navigates and complies with regulations in various jurisdictions will significantly impact its future.
5. Technology Development: The Pi network must continue to develop and improve its technology, security, and scalability to compete with established cryptocurrencies.
6. Community Engagement: The Pi community plays a critical role in its future. Engaged users can help build trust and grow the network.
7. Monetization and Sustainability: The Pi team's monetization strategy, such as fees, partnerships, or other revenue sources, will affect its long-term sustainability.
It's essential to approach Pi or any new cryptocurrency with caution and conduct due diligence. Cryptocurrency investments involve risks, and potential rewards can be uncertain. The success and future of Pi will depend on the collective efforts of its team, community, and the broader cryptocurrency market dynamics. It's advisable to stay updated on Pi's development and follow any updates from the official Pi Network website or announcements from the team.
how to sell pi coins at high rate quickly.DOT TECH
Where can I sell my pi coins at a high rate.
Pi is not launched yet on any exchange. But one can easily sell his or her pi coins to investors who want to hold pi till mainnet launch.
This means crypto whales want to hold pi. And you can get a good rate for selling pi to them. I will leave the telegram contact of my personal pi vendor below.
A vendor is someone who buys from a miner and resell it to a holder or crypto whale.
Here is the telegram contact of my vendor:
@Pi_vendor_247
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
Seminar: Gender Board Diversity through Ownership NetworksGRAPE
Seminar on gender diversity spillovers through ownership networks at FAME|GRAPE. Presenting novel research. Studies in economics and management using econometrics methods.
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
what is the best method to sell pi coins in 2024DOT TECH
The best way to sell your pi coins safely is trading with an exchange..but since pi is not launched in any exchange, and second option is through a VERIFIED pi merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and pioneers and resell them to Investors looking forward to hold massive amounts before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade pi coins with.
@Pi_vendor_247
Turin Startup Ecosystem 2024 - Ricerca sulle Startup e il Sistema dell'Innov...Quotidiano Piemontese
Turin Startup Ecosystem 2024
Una ricerca de il Club degli Investitori, in collaborazione con ToTeM Torino Tech Map e con il supporto della ESCP Business School e di Growth Capital
USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
Key Features of USDA Loans:
Zero Down Payment: USDA loans require no down payment, making homeownership more accessible.
Competitive Interest Rates: These loans often come with lower interest rates compared to conventional loans.
Flexible Credit Requirements: USDA loans have more lenient credit score requirements, helping those with less-than-perfect credit.
Guaranteed Loan Program: The USDA guarantees a portion of the loan, reducing risk for lenders and expanding borrowing options.
Eligibility Criteria:
Location: The property must be located in a USDA-designated rural or suburban area. Many areas in California qualify.
Income Limits: Applicants must meet income guidelines, which vary by region and household size.
Primary Residence: The home must be used as the borrower's primary residence.
Application Process:
Find a USDA-Approved Lender: Not all lenders offer USDA loans, so it's essential to choose one approved by the USDA.
Pre-Qualification: Determine your eligibility and the amount you can borrow.
Property Search: Look for properties in eligible rural or suburban areas.
Loan Application: Submit your application, including financial and personal information.
Processing and Approval: The lender and USDA will review your application. If approved, you can proceed to closing.
USDA loans are an excellent option for those looking to buy a home in California's rural and suburban areas. With no down payment and flexible requirements, these loans make homeownership more attainable for many families. Explore your eligibility today and take the first step toward owning your dream home.
where can I find a legit pi merchant onlineDOT TECH
Yes. This is very easy what you need is a recommendation from someone who has successfully traded pi coins before with a merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi network coins and resell them to Investors looking forward to hold thousands of pi coins before the open mainnet.
I will leave the telegram contact of my personal pi merchant to trade with
@Pi_vendor_247
Currently pi network is not tradable on binance or any other exchange because we are still in the enclosed mainnet.
Right now the only way to sell pi coins is by trading with a verified merchant.
What is a pi merchant?
A pi merchant is someone verified by pi network team and allowed to barter pi coins for goods and services.
Since pi network is not doing any pre-sale The only way exchanges like binance/huobi or crypto whales can get pi is by buying from miners. And a merchant stands in between the exchanges and the miners.
I will leave the telegram contact of my personal pi merchant. I and my friends has traded more than 6000pi coins successfully
Tele-gram
@Pi_vendor_247
BYD SWOT Analysis and In-Depth Insights 2024.pptxmikemetalprod
Indepth analysis of the BYD 2024
BYD (Build Your Dreams) is a Chinese automaker and battery manufacturer that has snowballed over the past two decades to become a significant player in electric vehicles and global clean energy technology.
This SWOT analysis examines BYD's strengths, weaknesses, opportunities, and threats as it competes in the fast-changing automotive and energy storage industries.
Founded in 1995 and headquartered in Shenzhen, BYD started as a battery company before expanding into automobiles in the early 2000s.
Initially manufacturing gasoline-powered vehicles, BYD focused on plug-in hybrid and fully electric vehicles, leveraging its expertise in battery technology.
Today, BYD is the world’s largest electric vehicle manufacturer, delivering over 1.2 million electric cars globally. The company also produces electric buses, trucks, forklifts, and rail transit.
On the energy side, BYD is a major supplier of rechargeable batteries for cell phones, laptops, electric vehicles, and energy storage systems.
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
Credit Risk Management and the Performance of Nigerian Deposit Money Banks
1. ISSN (online) 2583-4541
BOHR International Journal of Finance and Market Research
2022, Vol. 1, No. 1, pp. 92–95
https://doi.org/10.54646/bijfmr.015
www.bohrpub.com
Credit Risk Management and the Performance of Nigerian Deposit
Money Banks
P. O. Okey-Nwala, J. I. Kenn-Ndubuisi∗, and P. I. Wachukwu
Rivers State University, Port Harcourt, Rivers State, Nigeria
∗Corresponding author: kenndubuisijuliet@gmail.com
Abstract. We have used a multiple regression model to identify the impacts of the variables of credit risk
management on the Nigerian deposit money banks’ performance from 2000 to 2020. The estimation was completed
using the ordinary least squares method with E-Views 12. The data was sourced from the Nigerian Stock Exchange
for information and the Statistical Bulletin of the Central Bank of Nigeria. The outcome determined that return
on equity (ROE) is negatively correlated with the nonperforming loan/loan and advances ratio. Last but not
least, the ROE measurements of the deposit money banks in Nigeria show a substantial correlation between the
ratios of advances and loans to nonperforming loans, loan loss provision to loans and advances, and capital
adequacy. These ratios are positively correlated with each other and negatively correlated with the capital adequacy
ratio. We advise effective surveillance of pre- and post-deposit financial institution loans for the early detection
of problematic debts that won’t be repaid according to schedule and for the thorough analysis of prospective
projects as indicated in the financial statement given by the intended client (cash budget, income statement).
Accurate identification of realistic projects and repayment terms based on the customer’s past performance will be
achieved.
Keywords: Credit risk, bank performance, credit management.
INTRODUCTION
Any economy may expand thanks to the financial ser-
vices provided by the banking industry of that nation.
A nation’s financial stability index is determined by the
banking sector’s long-term efficiency and effectiveness to
the extent to which the public can evaluate bank credit for
productive endeavors to aid the quickening of the speed
of a country’s economic expansion and also ensure its
long-term viability [6]. Lending activities carried out by
the banks expose them to significant credit risk, which
can result in financial difficulty and possibly bankruptcy
(nonperforming loans).
Simply put, credit risk is the potential to lose an existing
debt entirely or substantially as a result of credit events.
It is also significant in commercial banks’ profitability
because loans with interest generate a significant portion
of commercial banks’ income [5]. Given that credit is one
of the primary sources of income for commercial banks,
controlling credit-related risk is critical for profitability [7].
According to Ejoh et al. [3], credit risk increases when-
ever there may be a contravention to the principles of
credit. Since lending comprises a reasonable portion of
the resource exposure of Nigeria’s deposit-taking banks,
the capacity to generate profit and stay sound for banks
becomes a function of effective and efficient management
of their risk and lending portfolio.
Therefore, an important component of lending is credit
risk management, and as such, its absence can turn a
good loan into a bad one. For banks to be successful and
maintain their soundness while enhancing performance,
their corporate credit appraisal, disbursement, adequate
monitoring, and repayment practices must be assured [1].
This study draws from the foregoing and intends to
carry out an empirical analysis of the correlation between
the efficiency of Nigeria’s deposit money banks and credit
risk management. Some of the previous studies include the
following:
Examining the credit risk management practices and the
profitability satisfaction inventory through banks’ credit
92
2. Credit Risk Management and the Performance of Nigerian Deposit Money Banks 93
risk management practices (BACRIMAP), in Ekpoma, Edo
State, Nigeria, Aigbomian and Akinlosotu [1] conducted
their study on deposit money banks’ profitability and
credit risk management (PSI) for profitability indices of
banks. Their results showed a strong correlation between
deposit money institutions’ profitability and credit risk
management.
Ifeanyi and Francis [4] tested the nexus that exists
between Nigeria’s deposit money banks’ profitability
(ROA) and credit management (DMBs) from 2006 to 2015.
Secondary data bulletins and bank annual reports were
given by the Central Bank of Nigeria’s Statistical Depart-
ment. They discovered that nonperforming loans were
detrimental but very slightly affected profitability, whereas
loans, advances, and loan loss provisions had a positive but
insignificant impact.
Olalere and Ahmad [9] tested eight commercial banks
(SIBs) from 2011 to 2014, using a panel data analysis to
investigate how Nigerian commercial banks’ profitability
is affected by credit risk. The findings revealed a signif-
icant and adverse relationship between profitability and
the nonperforming loan ratio. During the research period,
there was no relationship between bank profitability and
the debt-to-equity ratio or the debt-to-total assets ratio.
In their 2014 study, Alalade, Binuyo, and Oguntodu
looked at how the profitability of Lagos State’s banks was
impacted by credit risk. They advised managers of the
banks to place a great deal of importance on credit risk as
a result of their discovery that credit risk may contribute to
a decline in earnings.
METHODOLOGY
The study used secondary data from 24 DMBs from the
data gathered from the Central Bank of Nigeria (CBN)
and the Nigerian Stock Exchange (NSE) database between
2000 and 2020. The ordinary least square technique using
EViews 12 statistical package was used to estimate the
model. The dependent variable is the return on equity
(ROE). The independent variable includes the nonper-
forming loan/loan and advances ratio (NPLR), loan loss
provision/loan and advances ratio (LLPR), and capital
adequacy ratio (CAR) (Tables 1 and 3).
The multiple regression model used for this investiga-
tion is as follows:
Y = K0 + K1X1 + K2X2 + · · · + KnXn + u (1)
where
Y = the dependent variable representing measure of
performance of deposit money banks
X1 . . .Xn = the independent variables representing
proxies for credit risk management
When transformed into a mathematical model, this reads
as follows:
ROE = K0 + K1NPLR + K2LLPR + K3CA (2)
Table 1. Time series data on measures of performance and proxies
of credit management of deposit money banks in Nigeria.
ROE NPLR LLPR CAR
Years (%) (%) (%) (%)
2000 2.06 6.21 2.28 7.76
2001 3.3 5.65 3.05 7.95
2002 2.63 5.13 2.74 8.19
2003 2 7.24 3.91 8.47
2004 2.58 6.25 1.90 8.25
2005 0.21 7.91 2.45 8.93
2006 2.16 9.30 3.07 9.30
2007 4.54 10.06 2.68 10.97
2008 7.3 10.57 4.83 11.23
2009 4.41 12.69 4.41 12.11
2010 4.11 11.46 5.68 12.82
2011 2.06 10.00 7.33 13.49
2012 13.79 9.67 6.90 14.32
2013 15.72 13.85 9.71 16.43
2014 7.3 14.10 7.22 17.16
2015 2.68 11.50 5.51 18.45
2016 2.55 14.21 9.80 16.45
2017 6.49 12.35 4.81 17.04
2018 16.75 10.99 6.77 17.84
2019 9.04 18.66 5.98 16.89
2020 13.27 15.76 5.44 16.58
Source: CBN Statistical Bulletin and NSE database.
Table 2. Descriptive statistics of employed research variables.
ROE NPLR LLPR CAR
Mean 5.645714 10.64571 5.070000 12.88333
Median 4.110000 10.57000 4.830000 12.82000
Maximum 16.75000 18.66000 9.800000 18.45000
Minimum 0.210000 5.130000 1.900000 7.760000
Std. Dev. 4.682639 3.541704 2.315463 3.853662
Skewness 1.251037 0.293049 0.509208 -0.012555
Kurtosis 3.490108 2.585726 2.442739 1.425260
Jarque-Bera 5.688006 0.450741 1.179246 2.170382
Probability 0.058192 0.798220 0.554536 0.337837
Sum 118.5600 223.5600 106.4700 270.5500
Sum Sq. Dev. 438.5421 250.8733 107.2274 297.0143
Observations 21 21 21 21
Source: EViews 12-based results.
where
ROE = return on equity; NPLR = nonperforming
loan/loan and advances ratio
LLPR = loan loss provision/loan and advances ratio;
CAR = capital adequacy ratio
K0 = Regression constant
FINDINGS
The following are the findings of our study:
1. NPLR and the ROE are negatively correlated.
3. 94 P. O. Okey-Nwala et al.
Table 3. Ordinary least square technique of regression analysis.
Variables Coefficients Std. Error t-Statistic Prob.
C 4.905308 0.670213 7.319027 0.0000
NPLR -0.246894 0.133960 -3.843041 0.0009
LLPR 0.234100 0.144704 2.617782 0.0183
CAR 0.518059 0.275724 2.478907 0.0220
R-squared 0.852676 Mean dependent var 13.57438
Adjusted R-squared 0.844997 S.D. dependent var 1.322470
S.E. of regression 0.304464 Akaike info criterion 0.586917
Sum squared resid 2.317465 Schwarz criterion 0.775510
Log likelihood -4.510298 Hannan-Quinn criter. 0.645982
F-statistic 167.7570 Durbin-Watson stat 2.063538
Prob (F-statistic) 0.000000
Source: EViews 12-based results.
Table 4. Summary of t-test.
Variables t-Calculated Values t-Tabulated Values Prob. Values Decision Rules Conclusions
NPLR 3.843041 2.110 0.0009 Reject H0 Significant
LLPR 2.617782 2.110 0.0183 Reject H0 Significant
CAR 2.478907 2.110 0.0220 Reject H0 Significant
Source: Researcher’s Computation (2022).
2. ROE and LLPR have a positive correlation of
0.234100.
3. The CAR and ROE are positively correlated.
Analysis of t-Test
The summary of our t-test as presented in Table 4 reveals
that all our estimated parameters are individually signif-
icant. This is further ascertained by their P-values (i.e.,
0.0009, 0.0183, and 0.0220, respectively), which are less than
0.05.
Finally, it can therefore be inferred based on this outcome
that ROE is significantly impacted by each of the following
metrics: CAR, loan loss provisions and loan and advance
ratios, often known as NPLR and LLPR, respectively.
CONCLUSIONS AND
RECOMMENDATIONS
The study looked at how credit risk management in
Nigeria had an influence on deposit money banks’ per-
formance from 2000 to 2020 using a multiple regression
model estimated by the ordinary least square technique
using the EViews 12 statistical package to analyze both
the individual and joint performance of Nigerian deposit
money banks as measured by ROE, credit risk manage-
ment variables (interactions between NPLR, LLPR, and
loan loss provision). The data were gathered from the
Central Bank of Nigeria (CBN) and the Nigerian Stock
Exchange Nigeria’s Statistical Bulletin (NSE).
The findings are consistent with the hypothesis that
NPLR and ROE of deposit money banks in Nigeria have
a negative and significant impact on the Nigerian banks
that take deposits, according to prior findings of Kolapo
et al.’s [6] study on credit risk.
Second, there is a significant and positive correlation
between the Nigerian deposit money banks’ ROE and their
LLPR as aforementioned by Olalere and Ahmad [9] who
indicated that the LLPR and the performance of Nigeria’s
deposit money banks are highly positively associated.
Thirdly, there is a strong and positive correlation
between deposit money banks’ capital adequacy ratio and
ROE in Nigeria. This is consistent with the results that the
CAR significantly improves the performance of Nigeria’s
deposit money banks, as agreed by Saeed and Zahid [10],
who established that the CAR has a significant positive
effect on deposit money banks’ returns on assets and ROE.
Finally, there is a joint influence on the performance of
deposit money banks in Nigeria as evaluated by ROE. It
is notably influenced by the loan loss provision, loans and
advances, and nonperforming loans to loans and advances,
and capital adequacy.
The following recommendations have been provided
based on the research findings and its conclusions:
1. Deposit money institutions should keep track of their
outstanding loans to identify payment loans that the
borrower will fail to repay as scheduled as soon as
possible.
2. Prior to making a loan, deposit money institutions
should carefully review the project as described
in the customer-provided financial statement (cash
budget, income statement). Based on the clients’ prior
performance, they will be able to determine reason-
able projects and payback conditions.
3. Deposit money banks should strictly follow loss pre-
vention methods for risk management. An excellent
4. Credit Risk Management and the Performance of Nigerian Deposit Money Banks 95
example is the written agreement in which the bor-
rower agrees to deliver specified financial statements
at specific times during the loan’s life.
4. Loans and advances should be given to borrowers on
a merit basis and not on personal recognition. Thus,
credit facilities should be granted only after a thor-
ough evaluation of the loan applicants’ proposals.
5. Efficient supervision and collection systems should
be given priority as this will reduce the possibility
of diversion of loans to other uses, which always
hinders effective loan recovery.
CONFLICT OF INTEREST
The authors hereby declare that the research was con-
ducted in the absence of any commercial or financial
relationships that could be construed as a potential conflict
of interest.
AUTHOR CONTRIBUTIONS
Okey-Nwala, P. O; Kenn-Ndubuisi, J. I.; and Wachukwu,
P. I. contributed by collecting articles and materials for
publication, preparing the paper and submitting it for
publication, proofreading of the article, correcting and final
submission. We agree to be accountable for the content of
the work.
REFERENCES
[1] Aigbomian, E. & Akinlosotu, N. T. (2017). Credit Risk Management
and Profitability of Deposit Money Banks in Ekpoma, Edo State.
Journal of Economics and Sustainable Development, 8(3), 1–5.
[2] Alalade, S., Binuyo, O. & Oguntodu, A. (2014). Managing credit risk
to optimize banks’ profitability: A survey of selected banks in Lagos
State, Nigeria. Research Journal of Finance and Accounting, 5(18), 76–84.
[3] Ejoh, N. O., Okpa, I. B. & Egbe, A. A. (2014). The Impact of Credit and
Liquidity Risk Management on the Profitability of Deposit Money
Banks in Nigeria. International Journal of Economics, Commerce and
Management, 2(9), 1–15.
[4] Ifeanyi, O. N. & Francis, C. O. (2017). Effect of Credit Management on
Profitability of Deposit Money Banks in Nigeria. International Journal
of Banking and Finance Research, 3(2), 137–160.
[5] Kayode, O. F.; Obamuyi, T. M.; Owoputi, J. A. & Adeyefa, F. A. (2015).
Credit Risk and Bank Performance in Nigeria. Journal of Economics
and Finance, 6(2), 21–28.
[6] Kolapo, T. F.; Ayeni, R. K. & Oke, M. O. (2012). Credit Risk and
Deposit money banks Performance in Nigeria: A Panel Model
Approach. Australian Journal of Business and Management Research,
2(2), 31–38.
[7] Li, F. & Zou, Y. (2014). The impact of credit risk management on
profitability of deposit money banks: A study of Europe. Umea School
of Business and Economics, 2(2), 8–17.
[8] Okereke, E. J. (2006). Banking in Nigeria, Practice and Management.
Owerri; Jeso Int.
[9] Olalere, O. E. & Ahmad, W. O. (2015). The Empirical Effects of Credit
Risk on Profitability of Deposit money banks: Evidence from Nigeria.
International Journal of Science and Research, 5(1), 1645–1650.
[10] Saeed, M. & Zahid, N. (2016).The Impact of Credit Risk on Prof-
itability of the Deposit money banks. Journal of Business and Financial
Affairs, 5(2), 1–7.