A Banker’S Perception Of The Relationship Between Treasury Risk Management And Financial Performance In Nigeria
THANKGOD NDALU
UNIVERSITY OF PORT HARCOURT, NIGERIA
Nwikpasi Nuka Nadum
Department of Accounting,Air Force Institute of Technology (AFIT) Nigerian Air Force Base, Kaduna, Nigeria
Igwe John Charly Ph.D FCA
Bursary Department, Nigeria Maritime University, Okerenkoko Delta State, Nigeria
Keywords: Treasury Risk Management, Operational Risk Management, Credit Risk Management, Financial Performance
Abstract
This study examined the opinions of bank staff on the relationship between treasury risk management and financial performance. The sample size for the study consisted of one hundred & fifty (150) staff of the selected deposit money banks. Primary data on treasury risk management and financial performance were collected from respondents using questionnaire instruments found to be reliable with Cronbach Alpha and was above 0.7 coefficients. While secondary data were collected from the bank’s annual reports and accounts through the Nigerian Stock Exchange. Data were analyzed using descriptive and Pearson Correlation Coefficient Statistical tools with the aid of Statistical Package for Social Sciences version 23.0. The findings indicates that operational risk management has a positive and strong relationship with return on asset (r = 0.626**) and strong relationship with earnings per share (r = 0.727**) and also credit risk management was found to have strong relationship with return on asset (r = 0.724**) and strong relationship with earnings per share (r = 0.740**). Based on the findings, the study concluded that treasury risk management significantly impact on financial performance. Therefore, the study recommends that there is need to have operational risk management strategies in place to ameliorate fraud and other financial irregularities. Adequate internal control system should be put in place to mitigate against operational risk. The deposit money banks should enforce proper credit risk management policy to a greater extent as it improves the financial performance of the banks. Finally, the banks should put credit appraisal checks in place to avoid booking loans that will be classified as nonperforming.