The Effect of Credit Risk Management and the Performance of Banks (A Case Study of Zenith Bank Kabuga Branch)

ABSTRACT

Credit risk management is an essential function of banks and bank management strive to satisfy the legitimate credit needs of the community it tends to serve. This study is aimed at analysing the effect of credit risk management on the performance of banks in Nigeria with particular reference to Zenith Bank Kabuga branch. The importance of credit in the economic growth and development of a country cannot be overemphasized. Despite the important role played by credit in the economy, it is associated with a catalogue of risks. The zenith bank  witnessed some failures prior to the consolidation era due to imprudent lending that finally led to bad debt and some ethical facts. The issue of non- performance of asset and declaring of ficticious project has become the order of the day in our banking system as a result of poor credit management leading to bank distress in the industry. Three hypotheses were formulated and tested through use of chi-square on questionnaires administered to various respondents. From the data collected and the tested hypothesis, results showed that: (i) to what extent does credit risk mangement affect the profitability,measured in terms of return on equity, with in commercial banks (ii) what is the effect of credit risk management on the performance of zenith bank and (iii) what expose banks to credit risk exposure and financial crisis. Amongst several recommendations were the following: (a) Banks should establish sound and competent credit management unit and recruit well motivated staffs (b) Banks should ensure that the chief executive avoid approval in principle in the credit management, and (c) Banks should have a monitoring and control unit or department to carry out a sort of post- modern exercise by way of controlling and monitoring credit facilities and also ensuring completeness of all conditions precedent to draw down.

TABLE OF CONTENT

TITLE PAGE-------I

DECLARATION-------II

CERTIFICATION-------III

DEDICATION-------IV

ACKNOWLEDGEMENT------V

ABSTRACT -------VI

CHAPTER ONE

1.0 Introduction-------1-1

1.1 Background of the study-----1-3

1.2 Statement Of Research Problems----3-3

1.3 Objective Of The Research----3-3

1.4 Research Question-----3-4

1.5 Significance Of The Study-----4-4

1.6 Scope And Limitation Of The Studies ---4-5

1.7 Definition Of Key terms-----5-6

CHAPTER TWO

2.0 Introduction-------7-7

2.1 Conceptual Framework-----7-31

Reference-------32-32

CHAPTER THREE

3.0 Introduction-------33-33

3.1 Research Design ------33-33

3.2 Population And Sampling Design----33-34

3.3 Sample Size And Sample Techinique---34-34

3.4 Instrument For Data Collection----34-34

3.5 Sources And Method Of Data Collection ---34-34

3.5.1 Primary Source ------34-34

3.5.2 Secondary Source------35-35

3.6 Method Of Data Analysis And Justification ---35-35

CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS 

4.0 Introduction-------36-36

4.1 Data Presentatin And Interpretation----36-50

4.2 Analysis Of Data------50-51

4.3 Answer To The Research Questions ----51-51

CHAPTER FIVE

SUMMARY CONCLUSION AND RECOMMENDATION

5.1 Introduction-------52-52

5.1 Summary Of Findings-----52-53

5.2 Conclusion-------53-54

5.3 Recommendation------54-55

Bibliography-------56-60

Appendix--------61-64