The Effect of Regulatory Risk Management Strategies on the Financial Performance of Listed Deposit Money Banks in Nigeria

Falade Samuel Shola, Nyor Terzungwe, Yahaya Adabenege Onipe and Agbi Samuel Eniola
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Falade Samuel Shola: Internal Control Division, United Bank for Africa Kenya Limited, 2nd Floor, Imperial Courts, Westlands, Kenya.
Nyor Terzungwe: Faculty of Management Sciences, Nigeria Defence Academy, Kaduna, Nigeria
Yahaya Adabenege Onipe: Faculty of Management Sciences, Nigeria Defence Academy, Kaduna, Nigeria
Agbi Samuel Eniola: Faculty of Management Sciences, Nigeria Defence Academy, Kaduna, Nigeria

International Journal of Research and Innovation in Social Science, 2024, vol. 8, issue 9, 1428-1441

Abstract: Studies on risk management have gained increasing focus as several regulators and other related bodies such as the Basel accord, International financial reporting standard authorities and various country’s central banks had formulated several frameworks for effective regulation and management of risks by financial institutions across the world with the expectation of improvement in the performance of the financial institutions. This study focuses on the effect that regulatory risk management strategies, measured with independent variables of strategic, reputational, legal/regulatory and operational risk has on the financial performance of the Nigerian deposit money banks. This study used a population of fourteen (14) banks listed on the Nigeria exchange from which a sample of twelve (12)banks to extract data for a period of ten years and conducted a multivariate regression analysis using capital adequacy and market values as financial performance measurement in which it was observed that the regulatory risk management strategies have an overall positive and significant effect on both capital adequacy and market values of the banks and thus concludes that the adoption of effective regulatory risk management strategies would further lead to maintenance of stable and improved financial performance of the banks. Consequently, the study recommends the need for executive management of deposit money banks to pay attention to the level of compliance with these regulatory risk management codes to ensure the optimum financial performance of the banks.

Date: 2024
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