Risk Assets Management and Profitability of Deposit Money Banks in Nigeria.


  • Adeleke Hussein Bello
  • Rasaq Bamidele Amsat
  • Aliyu Rahaman


This study was conducted to assess risk assets management and its impact on the profitability of quoted deposit money banks in Nigeria. Seven quoted deposit money banks which has international authorization as at 2018 were used in the sample for a period of ten years (2009-2018). The data for the study were obtained from audited annual financial statements and various reports of Central Bank of Nigeria (CBN). Purposive sample method was adopted in selecting the banks, The SPSS was used to run OLS regression analysis. The study used three parameter of estimate, substandard, doubtful and loss risk assets under risk assets management. The suitability of the models and reliability of the result. Coefficient of determination showed that risk assets management variable explained. Results of the person correlation coefficient between substandard, doubtful and lost risk assets showed that P- value (sig. Value) is 0.899 which is greater than the level of significant 0.05 indicate that Risk Assets Management does not have significant effect on return on investment of DMBs in Nigeria. Furthermore, Substandard loan, doubtful loan and loss loan which has 0.968,0.956 and 0.771 P-Value (Sig. Value) respectively which are greater than the level of significant 0.05 meaning that substandard, doubtful and lost risk assets does not have effect on return on investment of Nigeria DMBs. The study concludes that the risk assets management (substandard, doubtful and lost assets loan) does not often translate a positive financial performance of banks. Although effective risk assets management in financial institutions reduce the occurrence of systematic and economic breakdown but this does not guarantee increase in the returns on investment. Finally, the study recommend that all banks should institute sound risks assets and liquidity management system that will guarantee the earnings qualities of their loans and advances, avoid non-performing loan and advances and enhance quality of their earnings which have positive effective dividends payout, retain earnings and growth in capital and assets of the banking institutions.