Effect Of Risk Asset Management On Financial Performance Of Banks In Nigeria. (A Study Of First Bank Nigeria Plc)

ABSTRACT

Risk asset management can be seen as the control and direction of those assets owned by the bank or financial institutions whose value may fluctuate due to changes in interest rate (Investopedia). When financial institutions fail to understand and control asset risk, it may lead to a decrease in performance through profitability. Financial management crisis around the world has proven that risk asset management practices are indispensable for organization's that aim at sustaining customer and shareholder patronage. Before now, risk Asset management was not seen as a central component to the operations of most organizations in Nigeria; rather, it was relegated to an office space at the corporate headquarters. Sanusi (2012) expressed the fusion of risk Asset management and corporate governance flaws as a major factor responsible for the financial crisis in Nigeria. He further opined that: "The surge in capital put pressure on risk Asset management frameworks. This led to the recent experience with margin loans and other high risk investments. Consequently, when the capital market's bubble burst, the balance sheet of banks became eroded to the extent that some of them remained for some time on 'life support' from the CBN".