Risk Management and Performance of Deposit Money Banks in Nigeria

Abstract

This study examined the relationship between risk management and performance of deposit money banks in Nigeria as moderated by environmental turbulence. The study adopted the cross-sectional research survey design. Primary data was generated through structured questionnaire while the population of study was the 24 deposit money banks in Nigeria. The entire population of 24 deposit money banks were adopted as a census. However, the number of respondents/ participants in the study was one hundred and twenty senior level managers of the 24 Deposit Money Banks in Nigeria. The reliability of the instrument was achieved by the use of the Cronbach Alpha coefficient with all the items scoring above 0.70. The hypotheses were tested using the Spearman’s Rank Order Correlation Coefficient. The tests were carried out at a 0.05 significance level. Findings revealed that there is a significant relationship between risk management and performance of deposit money banks in Nigeria. Therefore, the study concludes that the adoption of risk management practice positively enhances the performance of deposit money banks in Nigeria. This implies that by adopting a proactive approach to risk management, deposit money banks can identify, assess, and mitigate potential risks that could adversely impact their operations. Hence, the study recommends that deposit money banks should conduct regular and thorough risk assessments to identify potential risks that could impact the bank's operations and performance. This includes assessing credit, market, liquidity, operational, and other relevant risks. Understanding the risk landscape is crucial for developing effective risk management strategies.