SYSTEMATIC RISK AND FINANCIAL PERFORMANCE OF LISTED DEPOSIT MONEY BANKS IN NIGERIA

Abstract

Banks in Nigeria experienced dwindling in financial performance as well as financial crisis within the period of the study. Therefore, this study examined the impact of systematic risk on financial performance of listed deposit money banks in Nigeria. Using a sample size of 13 banks for the period of 2007 – 2019, the effect of foreign exchange risk, inflation risk and financial crisis risk on financial performance proxy by return on equity was investigated. Secondary data is collected from the financial statements of the selected banks which was analysed using panel regression. The result of the analysis reveals that foreign exchange risk has positive insignificant relationship with financial performance of banks, inflation risk has positive significant relationship with banks financial performance and financial crisis risk has negative significant relationship on financial performance of Nigerian banks. The study therefore recommends that listed banks in Nigeria should be more cautious in their business operations during inflationary and financial crisis periods. They should also reduce their engagement in foreign exchange business.

Keywords

• Foreign Exchange
• Inflation Risk
• Financial Crisis Risk
• Financial Performance