EFFECT OF RISK MANAGEMENT ON PERFORMANCE OF DEPOSIT MONEY BANKS IN KADUNA STATE, NIGERIA

Abstract

This study investigated the effect of risk management on financial performance of deposit money
banks in Kaduna state. Data were collected from primary source through the administration of
questionnaire to the target respondents under study and the data were analyzed using SmartPLSSEM.
Risk management as the independent variable was proxy by credit risk, liquidity risk,
operating risk and interest rate risk while using performance as dependent variable. The findings
reveal that credit risk, liquidity risk and interest rate risk significantly and positively affected the
performance of the studied banks, while the operating risk has a negative and insignificant effect
on the performance of deposit money banks in Kaduna state. It is recommended that banks should
encourage an increase in the loans and advances given to customer as this will enhance bank
profitability and establish a mechanism to monitor market movement of interest rate, as any rise
in interest rates pose challenges to the banks.