Assets Management Corporation and Bank Stability in Nigeria

Abstract

In this study, the correlation between Assets Management Corporation of Nigeria (AMCON) and bank stability was examined. The study used panel data collected from annual reports of five Deposit Money Banks (DMBs) for the period 2011 to 2020. The auto regressive distributed lag model (ARDL) was used to analyse data collected. Findings from the study revealed that bank’s capital adequacy has positive and significant impact on DMBs’ performance in Nigeria. Additionally, non-performing loans and liquidity ratio have positive and significant effect on DMBs’performance in Nigeria. To decrease the occurrence of nonperforming loans, it is recommended that banks continuously assess and enhance their loan risk management practices. This can be achieved through the implementation of robust credit risk management systems and the use of credit scoring techniques. Also, banks should diversify their loan portfolios to reduce their exposure to single-borrower concentrations and sector-specific risks. Meanwhile, Banks should improve their internal controls and governance practices to enhance their overall risk management capabilities and ensure compliance with regulatory requirements..