Effect Of Enterprise Risk Management On Sustainable Financial Performance Of Listed Deposit Money Banks In Nigeria

Abstract

The paper examined the effect of Enterprise Risk Management (ERM) on sustainable financial performance of listed deposit money banks in Nigeria. The specific objectives of the research are to determine the effect of ERM on earnings per share (EPS) and to ascertain the effect of ERM on Tobin Q. Descriptive research design was adopted for the study considering the total population of all the fifteen (15) listed deposit money banks in Nigeria. Data were gathered via secondary sources from five (5) public annual reports of the listed deposit money banks for six years, ranging from 2011-2016, and analyzed using percentages and ratios. Multiple regression was employed in data analysis and testing the hypotheses; in determining if Enterprise Risk Management has a significant effect on Earnings per Share and Tobin Q of listed deposit money banks in Nigeria. The study revealed a positive and significant relationship between ERM (firm size and leverage) and sustainable financial performance (TQ & EPS) of listed deposit money banks in Nigeria. Based on the findings, the study recommends that financial institutions in Nigeria should employ robust Enterprise Risk Management Practices as these are likely to influence their financial performance in one way or another and that the Central Bank of Nigeria and other regulators should endeavor to strengthen the enforcement of risk control mechanism to boost a robust bank performance.