Cover Image

The effects of financial risks on financial performance of commercial banks in Nigeria

Master of Science in Finance

Saved in:
Bibliographic Details
Main Author: Olalere Oluwaseyi, Ebenezer
Other Authors: Wan Ahmad, Wan Omar, Dr.
Format: Thesis
Language:English
Published: Universiti Malaysia Perlis (UniMAP) 2017
Subjects:
Banks and banking
Banks and banking > Nigeria
Financial risk
Online Access:http://dspace.unimap.edu.my:80/xmlui/handle/123456789/76630
Tags: Add Tag
No Tags, Be the first to tag this record!
id my.unimap-76630
record_format dspace
spelling my.unimap-766302022-10-26T01:13:00Z The effects of financial risks on financial performance of commercial banks in Nigeria Olalere Oluwaseyi, Ebenezer Wan Ahmad, Wan Omar, Dr. Banks and banking Banks and banking -- Nigeria Financial risk Master of Science in Finance This study investigates the effects of financial risks on financial performance of selected commercial banks in Nigeria. The existing researches on financial risk and financial performance relationships in Nigeria are sketchy and inconclusive as well as they are more focus on individual financial risk components. Data on audited financial reports of the selected sixteen (16) commercial banks listed in the Nigerian stock market have been collected for the period of 7 years (2009-2015), making up to 112 data observations. Panel data approach is employed in the study for the analytical model with the following steps: unit root test, Hausman test for random or fixed effect choice and hypothesis testing. The study use software, Stata version 13 for the analysis. The dependent variables in this study comprise of bank financial performance proxy by return on asset; operational efficiency; and net interest margin, while the independent variables consist of financial risk proxy by operational risk; credit risk; liquidity risk; and market risk. The controlled variables used in this study include bank size and GDP growth rate. Based on random effect analysis on the model, credit risk-1 (CR1) has a negative significant effect on return on asset (ROA) and net interest margin (NIM), suggesting that the lower credit risk-1, is the better the bank performance in terms of ROA and NIM. Credit risk-2 (CR2) and market risk also has a positive significant impact on NIM, suggesting that the lower credit risk-2 and market risk, is the better the bank performance in terms of NIM. The analysis also found that liquidity risk is not important determinant to the financial performance of commercial banking sector in Nigeria, as compared to operational risk. In fixed effect analysis, operational risk and market risk significantly affect operational efficiency (OE) positively, suggesting that the higher operational risk and market risk, the better the bank performance in term of OE. Hence, the findings recommend that commercial banks should adopt proactive approaches to improve risk management in order to maximize financial performance. The study contributes to the understanding of the relationship between financial risk and financial performance, evidently useful for policy makers and future researchers as referral. The study also suggests that future research might possibly examine the nexus between financial risks and financial performance with regards to other sectors of the economy and across countries comparison 2017 2022-10-26T01:13:00Z 2022-10-26T01:13:00Z Thesis http://dspace.unimap.edu.my:80/xmlui/handle/123456789/76630 en Universiti Malaysia Perlis (UniMAP) Universiti Malaysia Perlis (UniMAP) School of Business Innovation and Technopreneurship
institution Universiti Malaysia Perlis
building UniMAP Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Malaysia Perlis
content_source UniMAP Library Digital Repository
url_provider http://dspace.unimap.edu.my/
language English
topic Banks and banking
Banks and banking -- Nigeria
Financial risk
spellingShingle Banks and banking
Banks and banking -- Nigeria
Financial risk
Olalere Oluwaseyi, Ebenezer
The effects of financial risks on financial performance of commercial banks in Nigeria
description Master of Science in Finance
author2 Wan Ahmad, Wan Omar, Dr.
author_facet Wan Ahmad, Wan Omar, Dr.
Olalere Oluwaseyi, Ebenezer
format Thesis
author Olalere Oluwaseyi, Ebenezer
author_sort Olalere Oluwaseyi, Ebenezer
title The effects of financial risks on financial performance of commercial banks in Nigeria
title_short The effects of financial risks on financial performance of commercial banks in Nigeria
title_full The effects of financial risks on financial performance of commercial banks in Nigeria
title_fullStr The effects of financial risks on financial performance of commercial banks in Nigeria
title_full_unstemmed The effects of financial risks on financial performance of commercial banks in Nigeria
title_sort effects of financial risks on financial performance of commercial banks in nigeria
publisher Universiti Malaysia Perlis (UniMAP)
publishDate 2017
url http://dspace.unimap.edu.my:80/xmlui/handle/123456789/76630
_version_ 1751537952510443520
score 13.214268

Similar Items