The Impact of Credit Risk Management on the Commercial Banks Performance in Nigeria

Idowu Abiola and Awoyemi Samuel Olausi

International Journal of Management and Sustainability, 2014, vol. 3, issue 5, 295-306

Abstract: Credit risk management in banks has become more important not only because of the financial crisis that the industry is experiencing currently, but also a crucial concept which determine banks’ survival, growth and profitability. The aim of this study is to investigate the impact of credit risk management on the performance of commercial banks in Nigeria. Financial reports of seven commercial banking firms were used to analyze for seven years (2005 – 2011). The panel regression model was employed for the estimation of the model. In the model, Return on Equity (ROE) and Return on Asset (ROA) were used as the performance indicators while Non-Performing Loans (NPL) and Capital Adequacy Ratio (CAR) as credit risk management indicators. The findings revealed that credit risk management has a significant impact on the profitability of commercial banks’ in Nigeria.

Keywords: Performance; Credit risk management; Profitability; Non-performing loan; Capital adequacy ratio (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:pkp:ijomas:v:3:y:2014:i:5:p:295-306:id:965

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