| dc.description.abstract | The study assessed the relationship between "Risk Management and Financial Performance"; based at Ecobank (U) Limited. This was guided by the following specific objectives; to examine the relationship between risk identification and financial performance, to ascertain the relationship between risk analysis, mitigation and financial performance, and to investigate the relationship between risk monitoring and financial performance of Ecobank (U) Limited. The methodology adopted a case study research design. Data collected and used include both primary and secondary data which was collected by use of self-administered questionnaires and an interview guide. The findings of the study revealed there was a strong positive correlation between risk identification and financial performance. The study findings were that the risk management (Risk Identification, Risk analysis & mitigation and Risk Monitoring) had a positive effect on financial performance. Failure to adequately identify risks increased loan default which was found to be between (38%-51 %) in the period 2011 and 2013 of nonperforming loans and reduced growth rate to -0.97. Results based on the regression model the predictor variables of Risk Management explain 26.7% of variations in financial performance of Ecobank by 57.4%.
The study concludes that, There is Relationship between risk analysis, mitigation and financial performance (r=.0.303; p>0.035, <0.05). The study results therefore show that risk analysis and mitigation have a positive effect on Financial Performance. This is explained by the positive correlation co-efficient between the two variables (r = 0.303). Low levels of risk analysis and mitigation make financial performance difficult for the Ecobank. There is a strong relationship between Risk Monitoring and Financial performance of Ecobank (r=.052; p>0.73,
<0.05). The study recommends that, there is therefore the need for the bank to develop an integrated risk management system which ensures a systematic and comprehensive approach to managing risks across the bank. This makes the bank's business activities become more varied.
Management will therefore need a portfolio view of all the various risks and developing a strategy to manage them with the view of benefiting from diversification effects. Such an integrated approach can help senior management realize the relationships between the various risk exposures as well as their multidimensional effect on the bank. | en_US |
