Description
Abstract
Banks today are the largest financial institutions around the world, with branches and subsidiaries throughout everyone’s life. However, commercial banks are facing risks when they are operating. Credit risk is one of the most significant risks that banks face, considering that granting credit is one of the main sources of income in commercial banks. Therefore, the management of the risk related to that credit affects the profitability of the banks. The main purpose of the research is to investigate if there is a relationship between credit risk indicators and return on equity in commercial banks in Nigeria. We also aim to investigate if the relationship exists between capital adequacy and return on investments in commercial banks in Nigeria. Research questions were formulated from the objective of the study. Simple percentage statistical tests are performed in order to test if the relationship exists. The findings reveal that risk management does have positive effects on a bank’s profitability.
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