4
views
0
recommends
+1 Recommend
0 collections
    0
    shares
      • Record: found
      • Abstract: found
      • Article: found
      Is Open Access

      INFLUENCE OF RISK ASSETS IMPAIRMENT ON PERFORMANCE OF NIGERIAN LISTED DEPOSIT MONEY BANKS

      , ,
      International Journal of Accounting & Finance Review
      Centre for Research on Islamic Banking and Finance and Business

      Read this article at

      Bookmark
          There is no author summary for this article yet. Authors can add summaries to their articles on ScienceOpen to make them more accessible to a non-specialist audience.

          Abstract

          Profitability is critical to the survival of Nigerian deposit money banks which is consistently been eroded by the impaired risk assets. Hence, this study was conducted to examine influence of risk assets impairment on performance of Nigerian deposit money banks. The specific objectives of the study were to; (i) determine the effect of impairment loss on operating profit; (ii) analyze effect non-performing loans ratio affect return on assets of Nigerian deposit money banks. Secondary data were collected and analysed using fixed and random effect regression analysis methods from a sample of 14 listed Nigerian deposit money banks. The study revealed that impairment loss, have significant negative relationship with operating profit (β=2.294, p‹ 0.01) and non-performing loan ratio have significant positive relationship with return on assets (β=0.067, p‹ 0.1). However, other variables such as inflation, liquidity and gross domestic product per capital also have effect on banks performance. The study concluded that risk assets impairment has significant negative influence on performance and that inflation, liquidity and gross domestic product have negative impact on profitability, while bank size has positive impact on profitability. The study recommended that; bank directors should put effective risk assets impairment test in place to boost reported profitability; the bank management should ensure effective management of liquidity ratio to boost return on equity; government policymakers should ensure that banks are mandated to disclose their risk assets impairment and expand their size by extending banking services to the unbanked areas.

          Related collections

          Author and article information

          Journal
          International Journal of Accounting & Finance Review
          ijafr
          Centre for Research on Islamic Banking and Finance and Business
          2576-1293
          2576-1285
          October 13 2020
          October 19 2020
          : 5
          : 3
          : 41-63
          Article
          10.46281/ijafr.v5i3.822
          a5e295fb-749a-45fe-b70d-01f820f72e55
          © 2020

          http://creativecommons.org/licenses/by/4.0

          History

          Comments

          Comment on this article