FINANCIAL RISK AND PROFITABILITY OF LISTED DEPOSIT MONEY BANKS IN NIGERIA

Abstract

This study examines the impact of financial risk on the profitability of listed deposit money banks in Nigeria. The study used three banks as sample computed using Cochran sample size formula which scientifically suggested 2.6banks which was round up to three banks, hence the choice of the three banks, and the three year was used because the banks were among the old generation banks who have undergone risk mitigating strategies in in the early 2000 ,also  there are a lot of works between 2000 to 2021further is relatively calm economically as against our cut off date which faces harsh economic policy changes, and within our cutoff date there are dearth of studies, hence the choice of 2022-2024 period. Secondary data used were collected from banks financial statements. The data was analyzed using panel regression technique. The study found that there exist a positive and significant relation between financial risk and the profitability of deposit money banks in Nigeria. It is recommended that the deposit money banks in Nigeria should embark on efficient and effective risk management so as to enhance their profitability and thereby reduce the risk of losses. Deposit Money Banks also should evolve the enterprise risk management to mitigate and plan for DMBs risks by safeguarding, firm’s resources and functions. The study further recommends that proper attention and management should be given to financial risk to increase profitability of deposit money banks in Nigeria.