RISK MANAGEMENT AND FINANCIAL PERFORMANCE OF LISTED FINANCIAL SERVICE FIRMS IN NIGERIA

Abstract

This study assesses the impact of risk management on the financial performance of listed financial service firms in Nigeria. The study aimed to measure the relationship between credit risk, market risk, financial leverage risk management and financial performance of listed financial service firms in Nigeria, as measured by ROA and ROE. The study employed Secondary data, which collected from audited annual reports of 15 listed financial service firms in Nigeria, for the period 2013-2022. Descriptive statistics were used to analyze the data. The study revealed that credit risk management has a significant effect on both ROA and ROE, while market risk management has a significant effect on both ROA and ROE. Financial leverage risk management has a significant effect on ROA but a more significant effect on ROE. Effective Risk management has significant effect on ROA and ROE, and financial service firms should implement effective risk management strategies to maximize ROA and ROE. The study recommended that risk management practices should be taken into account when evaluating the financial performance of listed financial service firms. Financial service firms should also consider implementing comprehensive risk management strategies that address credit, market, and financial leverage risk. Investors should evaluate the risk management practices of financial service firms in addition to traditional financial performance measures such as ROA and ROE.