Impact of Key Bank Risk Components on Banking System Performance in Nigeria: A Discriminant Analysis Technique

Abstract

Using discriminant analysis technique, this study evaluates the impact of key bank risk components on the banking system performance in Nigeria. The performance of the banking sector was evaluated to determine the extent to which each of the key risk components impacts on it. The findings revealed that credit risk, compliance risk and liquidity risk made outstanding contributions of 95.6 percent to the total discriminant score for the function, implying that successful performance of banking sector hinges mostly on the three risk factors. Credit risk