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ABSTRACT
This study empirically examines the effect of credit risk analysis on the performance of deposit money banks in Nigeria. Fourteen (14) deposit money banks listed on the floor of the Nigerian exchange limited were chosen using the purposive sampling technique on annual time series data that covered the period 2005 – 2020. The empirical results show that Non-performing loans is negatively and significantly related to the financial performance of deposit money banks in Nigeria, while capital adequacy has a positive and significant effect on the performance of deposit money banks in Nigeria. Loans and advances has a positive and significant impact on deposit money banks ‘financial performance in Nigeria. Loans loss provision is positively related to the performance of deposit money in Nigeria, although the impact is weak. The study therefore recommends that increased policies, mechanisms and measures should be adopted by deposit money banks to significantly reduce the size of non-performing loans and consequently enhance their performance in Nigeria and adequacy and effectiveness in the provision of capital (total risk-weighted assets) should be made to enhance the performance of deposit money banks in Nigeria.
