This study examined this effect of credit risk management of non-performing loans of Deposit Money Banks in Nigeria. Credit risk management was measured with Capital adequacy, Loan and advance, Loan loss provision and Loan to total asset ratio while non-performing loan was measured with non-performing loan to total loan ratio. The study covered a period of 10 years spanning from 2013 to 2022 and all the 14 listed banks in Nigeria. As provided, the study used both cross sectional and time series data. Thus, the study adopted panel regression estimation techniques which comprises of OLS estimation, the Fixed effect model and Random Effect Model. It was discovered that CAA (Capital Adequacy Ratio) had a positive and significant effect on NPL/TLR (Non-Performing Loan to Total Loan Ratio). LLP (Loan Loss Provision) and LTAR (Loan to Total Asset Ratio) had a positive but insignificant effect on NPL/TLR. LA (Loan and Advances) had a negative and insignificant effect on NPL/TLR. From the analysis conducted it was concluded that that credit management components have the capacity to influence non-performing loan of commercial banks in Nigeria though at different significant levels. In-line with this, discovery, it was recommended that the management should consider different loan loss provisioning approaches for specific loan categories to minimize the adverse effect of loan loss provision.
| Published in | Journal of Finance and Accounting (Volume 11, Issue 6) |
| DOI | 10.11648/j.jfa.20231106.11 |
| Page(s) | 179-188 |
| Creative Commons |
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited. |
| Copyright |
Copyright © The Author(s), 2023. Published by Science Publishing Group |
Credit Risk Management, Capital Adequacy, Loan and Advance, Non-Performing Loan, Non-Performing Loan
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APA Style
Tomomewo, A. O., Falayi, I., Uhuaba, O. (2023). Credit Risk Management as a Determinant of Non-Performance Loan of Deposit Money Banks in Nigeria. Journal of Finance and Accounting, 11(6), 179-188. https://doi.org/10.11648/j.jfa.20231106.11
ACS Style
Tomomewo, A. O.; Falayi, I.; Uhuaba, O. Credit Risk Management as a Determinant of Non-Performance Loan of Deposit Money Banks in Nigeria. J. Finance Account. 2023, 11(6), 179-188. doi: 10.11648/j.jfa.20231106.11
AMA Style
Tomomewo AO, Falayi I, Uhuaba O. Credit Risk Management as a Determinant of Non-Performance Loan of Deposit Money Banks in Nigeria. J Finance Account. 2023;11(6):179-188. doi: 10.11648/j.jfa.20231106.11
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Download@article{10.11648/j.jfa.20231106.11,
author = {Amos Olafusi Tomomewo and Ibukun Falayi and Okezie Uhuaba},
title = {Credit Risk Management as a Determinant of Non-Performance Loan of Deposit Money Banks in Nigeria},
journal = {Journal of Finance and Accounting},
volume = {11},
number = {6},
pages = {179-188},
doi = {10.11648/j.jfa.20231106.11},
url = {https://doi.org/10.11648/j.jfa.20231106.11},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20231106.11},
abstract = {This study examined this effect of credit risk management of non-performing loans of Deposit Money Banks in Nigeria. Credit risk management was measured with Capital adequacy, Loan and advance, Loan loss provision and Loan to total asset ratio while non-performing loan was measured with non-performing loan to total loan ratio. The study covered a period of 10 years spanning from 2013 to 2022 and all the 14 listed banks in Nigeria. As provided, the study used both cross sectional and time series data. Thus, the study adopted panel regression estimation techniques which comprises of OLS estimation, the Fixed effect model and Random Effect Model. It was discovered that CAA (Capital Adequacy Ratio) had a positive and significant effect on NPL/TLR (Non-Performing Loan to Total Loan Ratio). LLP (Loan Loss Provision) and LTAR (Loan to Total Asset Ratio) had a positive but insignificant effect on NPL/TLR. LA (Loan and Advances) had a negative and insignificant effect on NPL/TLR. From the analysis conducted it was concluded that that credit management components have the capacity to influence non-performing loan of commercial banks in Nigeria though at different significant levels. In-line with this, discovery, it was recommended that the management should consider different loan loss provisioning approaches for specific loan categories to minimize the adverse effect of loan loss provision.
},
year = {2023}
}
TY - JOUR T1 - Credit Risk Management as a Determinant of Non-Performance Loan of Deposit Money Banks in Nigeria AU - Amos Olafusi Tomomewo AU - Ibukun Falayi AU - Okezie Uhuaba Y1 - 2023/11/11 PY - 2023 N1 - https://doi.org/10.11648/j.jfa.20231106.11 DO - 10.11648/j.jfa.20231106.11 T2 - Journal of Finance and Accounting JF - Journal of Finance and Accounting JO - Journal of Finance and Accounting SP - 179 EP - 188 PB - Science Publishing Group SN - 2330-7323 UR - https://doi.org/10.11648/j.jfa.20231106.11 AB - This study examined this effect of credit risk management of non-performing loans of Deposit Money Banks in Nigeria. Credit risk management was measured with Capital adequacy, Loan and advance, Loan loss provision and Loan to total asset ratio while non-performing loan was measured with non-performing loan to total loan ratio. The study covered a period of 10 years spanning from 2013 to 2022 and all the 14 listed banks in Nigeria. As provided, the study used both cross sectional and time series data. Thus, the study adopted panel regression estimation techniques which comprises of OLS estimation, the Fixed effect model and Random Effect Model. It was discovered that CAA (Capital Adequacy Ratio) had a positive and significant effect on NPL/TLR (Non-Performing Loan to Total Loan Ratio). LLP (Loan Loss Provision) and LTAR (Loan to Total Asset Ratio) had a positive but insignificant effect on NPL/TLR. LA (Loan and Advances) had a negative and insignificant effect on NPL/TLR. From the analysis conducted it was concluded that that credit management components have the capacity to influence non-performing loan of commercial banks in Nigeria though at different significant levels. In-line with this, discovery, it was recommended that the management should consider different loan loss provisioning approaches for specific loan categories to minimize the adverse effect of loan loss provision. VL - 11 IS - 6 ER -
Accounting Department, School of Management Sciences, Babcock University, Ilishan Remo, Nigeria
Accounting Department, School of Management Sciences, Babcock University, Ilishan Remo, Nigeria
Accounting Department, School of Management Sciences, Babcock University, Ilishan Remo, Nigeria
