Risk Committee Attributes and Bank Performance: A Camels-Based Analysis of Deposit Money Banks in Nigeria

Godwin Omoregbee, Yusuf Babatunde Rahman and Oluseyi Olanrewaju
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Godwin Omoregbee: Department of Accounting, Lagos State University, Ojo, Lagos, Nigeria
Yusuf Babatunde Rahman: Department of Accounting, Lagos State University, Ojo, Lagos, Nigeria
Oluseyi Olanrewaju: Department of Finance, James Hope University, Lekki, Lagos, Nigeria

International Journal of Research and Innovation in Social Science, 2025, vol. 9, issue 1, 594-619

Abstract: The banking industry is essential for maintaining financial stability and promoting economic development via efficient risk management and corporate governance. This study examines the influence of risk committee attributes such as size, independence, and diversity on the performance of Tier 1 and Tier 2 Deposit Money Banks (DMBs) listed on the Nigerian Exchange Ltd. This study employs the CAMELS framework and panel data from 10 Deposit Money Banks (DMBs) over 11 years (2012–2022) to assess performance using important metrics: Return on Equity (ROE), Capital Adequacy Ratio (CAR), and Liquidity Ratio (LR). The research findings indicates that the size of the risk committee adversely affects ROE and LR in Tier 1 banks, whereas diversity enhances CAR and LR in Tier 2 banks. The impact of committee independence is varied, markedly enhancing liquidity in Tier 2 banks while exerting little effects on other indicators. The research highlights the necessity for Tier 1 banks to refine committee size to boost decision-making and advocates for increased diversity in Tier 2 banks to bolster capital adequacy and liquidity management. These discoveries offer significant implications for policymakers, regulators, and bank executives in refining governance frameworks to improve financial performance.

Date: 2025
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