FINANCIAL RISK AND PROFITABILITY OF LISTED DEPOSIT MONEY BANKS IN NIGERIA: MODERATING ROLE OF BOARD DIVERSITY
Journal Title: Gusau Journal of Accounting and Finance - Year 2020, Vol 1, Issue 2
Abstract
The financial crises experience by banking sector in Nigeria as a result of 2009 global financial economic meltdown that have led to the challenges of liquidity problem and high operational cost to banks which have affected the operations of businesses and Banks thereby reduce their turnover and profitability. It is against this backdrop that this study examines the effect of financial risk and profitability with a moderating role of board diversity of listed Deposit Money Banks in Nigeria from the period 2010-2019. The census sampling technique was adopted for the study. Secondary data was extracted from the annual report and accounts of the sampled banks. Financial risk as the independent variable was proxied with liquidity risk, credit risk, operating risk while the profit before tax was used to proxy profitability. The hypotheses were stated in a null form and multiple regressions were used to analysis the data. The study adopted panel corrected standard errors (PCSEs) regression model. The findings of the study documented that the moderate role of gender diversity revealed a negative and significant role on the effect of credit risk and operation risk on profitability of listed deposit money banks in Nigeria. It is recommended among others that the banks should minimize the non-performing loan through proper implementation of risk management framework and minimized unnecessary operating expenses as it have been found empirically to reduce the quality of the bank’s profitability and CBN should encourage banks to appoint female director in the board composition.
Authors and Affiliations
James George Apochi, Isiaka Olalekan Lasisi, Joshua Okpanachi
Keywords
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