IIARD International Institute of Academic Research and Development

Journal of Accounting and Financial Management (JAFM )

E-ISSN 2504-8856
P-ISSN 2695-2211
VOL. 11 NO. 4 2025
DOI: 10.56201/jafm.vol.11.no4.2025.pg154.173

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Financial Risks Management and Financial Performance of Deposit Money Banks in Nigeria

Dr Chibuike Camilus, Ugo, Dr Elee, Chidi

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Abstract

This study evaluates the relationship between financial risk management and financial performance of deposit money banks. The specific objectives are: evaluate the relationship between Market risk management and return on average Asset of Deposit money banks; evaluate the relationship between Liquidity risk management and return on average Asset of Deposit money banks. The study adopted an Ex-post Facto research design Secondary data was used, Pearson correlation coefficient and multiple regression analysis with the aid of Stata12 software was. The study found that, a significant relationship between Market Risk Management and Return on Average Asset of Deposit money banks; a significant relationship between Liquidity Risk Management and return on average Asset of Deposit money banks. The study generally concluded that the relationship between financial risk management and financial performance of Deposit money banks is positive and statistically significant for the period under review. The study recommended that the management of Deposit money banks should ensure that specific loan processing period to meet obligations whenever they fall due in order to maintains adequate liquidity for its day-to-day operations are maintained and to provides regular training before advancing the loans: The study recommended that the management of Deposit money banks should establish sound governance and risk management systems by developing strategies, policies for liquidity management that is well integrated into its risk management practices as well as establish a contingency funding plan to address any liquidity shortfall during periods of stress or emergency while ensuring that active monitoring liquidity funding needs to avert any liquidity challenge that could trigger crisis in the banks is promptly addressed

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