RISK TRANSFER MECHANISMS AND BANK’S PERFORMANCE IN NIGERIA: A DYNAMIC PANEL PERSPECTIVE

  • Yusuf Aina SOYEBO
  • Mathew. Adeolu Abata.
  • Godwin OMOREGBEE
  • Babatunde Sulaiman ADEYEMI
Keywords: Risk Transfer, Insurance Premium, Portfolio Investment, Pledged Asset, Financial Performance.

Abstract

This study examined the influence of risk transfer mechanisms on economic performance of selected Deposit Money Banks in Nigeria using measures such as insurance premium, portfolio investment and pledged asset while performance was captured using return on asset and investment. The study adopted an ex-post facto research design with a census of eight (8) commercial banks with international authorization license by the Central Bank of Nigeria based on their wide range of expertise and experience. The study gleaned the required data from the annual reports and account of these DMBs between 2012 and 2022. The obtained data were explored using the Fully Modified Ordinary Least Square regression technique after the stationarity test indicated a first difference stationarity. The panel FMOLS results showed that risk transfer mechanism such as portfolio investment and insurance premium have positive long run influence on the return on asset of DMBs while pledged asset has a negative influence on return on asset. Thus, the study recommended that risk transfer mechanism such as insurance and portfolio diversification should be explored.

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Published
2023-12-26