ABSTRACT
The
main objective of this study is to determine the effect offinancial risk
management on financial performance of deposit money banks in Nigeria over a
period oftwelve (12) years (2008-2018)forthefour(4) selected banks. This work
employed three (3)financialriskvariables for the independent variables such as:
debt-to-asset ratio (DR); debt-equity ratio (DER) and interest coverage ratio
(ICR) in determining their effect onfinancialperformance for Return on Assets
(ROA), Return on Equity and Return on investment (ROI) as dependent variables.
The expostfacto research design was usedfor this study. The secondary data were
obtainedfrom the financial statements (Comprehensive income statement and Statement
offinancial position) of the selected banks. Descriptive statistics, Panel
regressions were employed and usedfor this study. The results ofthe analysis
showed that Interest cover has significant positive effect on return on asset
of the sampled banks, while debt-equity ratio and debt-to-assets ratio have
insignificant negative effect on return on asset of the sampled banks, Interest
cover hassignificant positive effect on return on equity ofthe sampled banks,
debt-equity ratio hassignificant negative effect on return on equity while
debt-to-assets ratio has significant positive effect on return on equity ofthe
sampled banks, Interest cover has significantpositive effect on return on
investment ofthe sampled banks, debt-equity ratio has insignificant negative
effect on return on investment while debt-to-assets ratio has insignificant
positive effect on return on equity ofthe sampled banks. Based on the above
findings, the researchers now recommend that commercial banks’ management
should ensure that financial decisions made by them are in consonance with the
shareholders’ wealth maximization objectives which encompasses the profit
maximization , objective ofthefirm. The amount ofdebtfinance in the financial
mix ofthe firm should be at the optimal level so as to ensure adequate
utilization ofthe firms’ assets. The management should also monitor the
interest charged on debtfinancing to avoid liquidation ofthe company.
NWOGU, O (2024). Financial Risk Management and Performance of Deposit Money Banks in Nigeria:- , Nwogu Goodness O. Mouau.afribary.org: Retrieved Oct 30, 2024, from https://repository.mouau.edu.ng/work/view/financial-risk-management-and-performance-of-deposit-money-banks-in-nigeria-nwogu-goodness-o-7-2
OZIOMA, NWOGU. "Financial Risk Management and Performance of Deposit Money Banks in Nigeria:- , Nwogu Goodness O" Mouau.afribary.org. Mouau.afribary.org, 29 Jul. 2024, https://repository.mouau.edu.ng/work/view/financial-risk-management-and-performance-of-deposit-money-banks-in-nigeria-nwogu-goodness-o-7-2. Accessed 30 Oct. 2024.
OZIOMA, NWOGU. "Financial Risk Management and Performance of Deposit Money Banks in Nigeria:- , Nwogu Goodness O". Mouau.afribary.org, Mouau.afribary.org, 29 Jul. 2024. Web. 30 Oct. 2024. < https://repository.mouau.edu.ng/work/view/financial-risk-management-and-performance-of-deposit-money-banks-in-nigeria-nwogu-goodness-o-7-2 >.
OZIOMA, NWOGU. "Financial Risk Management and Performance of Deposit Money Banks in Nigeria:- , Nwogu Goodness O" Mouau.afribary.org (2024). Accessed 30 Oct. 2024. https://repository.mouau.edu.ng/work/view/financial-risk-management-and-performance-of-deposit-money-banks-in-nigeria-nwogu-goodness-o-7-2