EFFECT OF OPERATIONAL RISK MANAGEMENT ON PERFORMANCE OF DEPOSIT MONEY BANKS IN NIGERIA: THE ROLE OF OPERATING ENVIRONMENT
Abstract
Inefficient risk monitoring and inadequate financial management, among several other things, have recently highlighted the susceptibility of Nigerian banks to a crisis. As a result, the purpose of this research is to consider the effect of operational risk management on deposit money bank performance in Nigeria, as well as the moderating function of the operating environment. The participants in this study are all deposit money banks in Nigeria that are publicly traded on the Nigerian Stock Exchange. However, the study's sample size is limited to 12 banks to obtain comprehensive data. The study was carried out using STATA version 12.0 and a panel regression model. The findings of the study show that operational risk management has a positive and substantial impact on the financial performance of Nigeria's publicly traded deposit money institutions and that the operating environment moderates this impact. The research's outcomes led to the conclusion that a company's operational risk management is a competitive element for improving performance. According to the findings of this study, inflation might reduce the link between operational risk management and performance in the Nigerian banking industry. The research suggested forming a monitoring group with representatives delegated particular functions and a duty to report any operational risk to the risk manager. Deposit Money Banks (DMBs) should plan ahead of time to anticipate potential future problems and develop a proactive risk mitigation strategy. This study also suggests that banks and governments work together to keep inflation under control by boosting interest rates, which limit demand and serve to keep inflation in check.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2023 YAMTARA-WALA JOURNAL OF ARTS, MANAGEMENT AND SOCIAL SCIENCES (YaJAMSS)
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.