Analysis of Credit Risk Management and Commercial Banks’ Performance in Nigeria
This study examines the impact of credit risk management on Nigerian deposit money banks' profitability between 1993 and 2022. The rate of return on assets was used to assess credit risk management, with provisions for bad debt, loan losses, and non-viable loans acting as independent variables. One of the secondary sources consulted was the CBN's Bulletin (2022). The study measures electronic banking using point of sale (POS), automated teller machines (ATM), and electronic mobile payments (EMP), using GDP as a stand-in for the Nigerian economy. OLS (Ordinary Least Square) assists in developing and evaluating hypotheses. The study finds a negligible and adverse impact of loans and advances on the profitability banks. The impact of nonperforming loans on the profitability of commercial banks in Nigeria is, at most, marginally favourable. The provision for debt has a negative and little impact on banks in Nigeria. The research found that Nigeria's commercial banks' credit management strategies have little to no impact on how well they operate. When issuing credit, bank management—and credit officers in particular—have an obligation to use prudence and adhere to prudential norms. Banks should closely adhere to a Know Your Customer (KYC) system and establish comprehensive techniques for measuring and monitoring credit, and guaranteeing functional controls over credit risk. According to the study, deposit money institutions need to provide credit guarantees to shield their customers' funds against fraud. Small enterprises with little capital should refrain from granting certain forms of borrowing. The capital of a bank acts as a safeguard…