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9. IMPACT OF CREDIT RISK MANAGEMENT ON PROFITABILITY OF DEPOSIT MONEY BANKS IN NIGERIA by Ahmed U.I. Zakari Y. and Oboyi G.A. Volume 53 (November 2019 Issue)
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IMPACT OF CREDIT RISK MANAGEMENT ON PROFITABILITY OF DEPOSIT MONEY BANKS IN NIGERIA

Ahmed U.I. Zakari Y. and Oboyi G.A.

Department of Mathematics and Statistics, Kaduna Polytechnic, Kaduna, Nigeria.

Department of Statistics, Ahmadu Bello University, Zaria, Nigeria.

Abstract

This paper examined the nexus between credit management and profitability (ROA) of Deposit Money Banks (DMBs) in Nigerian context for the period of 2008 to 2017. Secondary data were sourced from Central Bank of Nigeria Statistical Bulletins and the Annual Reports of some selected DMBs. The study adopted the use of both descriptive statistics and econometric analysis using the regression analysis methodology. In the case of descriptive statistics, (mean, standard deviation, minimum and maximum) of the study, variables were calculated so as to gain insight for the variables description. While in the case of regression analysis, the study found that regression coefficient of Loan and Advances and Loan Loss Provisions are positively signed, indicating that they positively influence profitability, during the period studied. However, Non-Performing Loan of deposit money banks detrimental to the profitability of banking businesses. That is to say, the credit management of deposit money banks affect and increase their profitability. Therefore, it is recommended that DMBs should put in place sound credit management policies and practice. Issue recoverable loan and advances and provide for loan losses for desired credit risk exposure and increased profitability.

Keywords: Creadit risk management, banking profitability, indicators of profitability, indicators of management creadit risk.

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