Ibrahim AGBEYINKA
Perinatal Journal - 2026;34(2):610-627
Deposit Money Banks (DMBs) play a crucial role in a nation's financial and economic stability. They work as intermediaries, procuring funds from many sources, especially savers and depositors, and allocating them to various sectors of the economy that necessitate financial support for their operations. The performance of the specified Deposit Money Banks in Nigeria is asymmetrical, reflecting the differing capacities of each bank to effectively navigate, manage, and align itself for profitability. Sequel to this, this study aims to evaluate the effects of credit management on financial performance of Deposit Money Banks (DMBs) in Nigeria. The population was 21 Deposit Money Banks as per Central Bank Statistical Bulletin of January 2018. Using purposive sampling technique, fourteen (14) banks were selected as the sample subjects. The validity and reliability were based on the statutory audit of their financial statement approved for use by CBN. The study adopted descriptive and inferential (regression) statistics in data analysis. The findings revealed that: credit management has significant effect on financial performance of Deposit Money Banks in Nigeria with (ROCE: Adjusted R2=0.4196; Wald(4)=241.2; p<0.05) but insignificant effect on DPRS (Adjusted R2=0.028 ; F(4,170)=2.26; p>0.05); credit management with controlling effect of bank size and total revenue has significant effect on financial performance of Deposit Money Banks in Nigeria (ROCE: Adjusted R2=0.4311; Wald(6)=321.95; p<0.05, DPRS: Adjusted R2=0.4178 ; F(4,170)=11.07; p<0.05); Specifically, the study revealed that nonperforming loan has significant negative effect on financial performance (ROCE: R2=0.059, beta=0.026, p<0.05; DPRS: R2=0.04, beta= -0.005, p<0.05); capital adequacy ratio has significant positive effect on financial performance (ROCE: R2=0.14, beta=0.063, p<0.05; DPRS: R2=0.022, beta=0.005, p<0.05); loan loss provision disclosed significant positive influence on ROCE (R2=0.25, beta=0.178, p<0.05), but insignificant positive effect on DPRS (R2=0.012, beta=0.008, p>0.05); loan to deposit ratio exerted insignificant positive effect on financial performance (ROCE: R2=0.0194, beta=0.026, p>0.05; DPRS: R2=0.01, beta=0.003, p >0.05). The study concluded that credit management influences the financial performance of Deposit Money Banks in Nigeria. The study recommended that the management of deposit money banks in Nigeria should formulate and uphold a comprehensive credit management strategy and framework, together with a rigorous credit policy, to reduce non-performing loans and default rates, thereby enhancing their performance levels.
