ANALYSIS OF CREDIT RISK MANAGEMENT EFFICIENCY IN NIGERIA COMMERCIAL BANKING SECTOR,(2004-2009)

Onaolapo A. R. ()
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Onaolapo A. R.: Department of Management and Accounting, Faculty of Management Science, Ladoke Akintola University of Technology, O gbomoso, N igeria

Far East Journal of Marketing and Management, 2012, vol. 2 No 1 Paper 4 April, issue 4, 39-52

Abstract: Recent cases of bank failure across nations have been traced largely to rising toxic assets in commercial banks loan portfolio. This paper analyze relationship between efficiency of credit risk management and financial health in selected N igerian banks. Data collections are mainly secondary spanning a six - year period before and after consolidation programmme of the Nigerian banking sector. The study hypothesized negative relationship between Efficiency of Credit Risk Management (EC RM); bank performance and operational effectiveness. Collected data were regressed and unit root test was conducted to v erify order of integration for each time series data employed. Findings indicate minimal causation between Deposit Exposure (DE) (Surrogate of credit risk management) and performance but greater dependency on operational efficiency parameters. Test of stationary properties conducted using ADF ind icated all variables were non- stationary while the pair wise Granger causality suggested that Deposit Exposure performance influence does not hold for the N igerian Commercial banking sector. Policy recommendations were made on these findings.

Keywords: Credit Risk Management; Deposit Exposure; Operational Efficiency; bank credit portfolio; Earning Factors and Bank Asset Q uality (search for similar items in EconPapers)
JEL-codes: M1 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (1)

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