The Effect of Market Risk on the Performance of Commercial Banks in Nigeria

This study investigated the effect of market risk on the performance of deposit money banks in Nigeria for the period 1994 to 2019. The core measures of market risk adopted in the study are interest rate, exchange rate, stock price and inflation rate risks. Financial performance of banks was represented by return on assets ROA , return on equity ROE and yield on earning assets YEA . The data for analysis is from the NDIC Annual Reports and Accounts, and CBN Statistical Bulletins. The ARDL technique was employed for data analysis. The results showed that exchange rate risk has positive association with the three measures of bank performance, while interest rate risk relates negatively with return on assets and yield to earning assets but positively with return on equity and insignificant with the three proxies of bank performance. Also, inflation and stock price risks have positive and insignificant effect on bank performance. The Adjusted R2 revealed that market risk has a substantial effect on the performance of deposit money banks in Nigeria. Dr. Jessie Ijeoma Chukwunulu "The Effect of Market Risk on the Performance of Commercial Banks in Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-6 | Issue-4 , June 2022, URL: https://www.ijtsrd.com/papers/ijtsrd50123.pdf Paper URL: https://www.ijtsrd.com/management/accounting-and-finance/50123/the-effect-of-market-risk-on-the-performance-of-commercial-banks-in-nigeria/dr-jessie-ijeoma-chukwunulu