RISK MANAGEMENT PRACTICES AND PROFITABILITY OF BANKS: CASE STUDY OF ECOBANK AND FIDELITY BANK

Abstract

The main objective of the study is to examine practices risk management and the profitability of banks using Ecobank and Fidelity as case study. The study employed a descriptive research design for analyzing the data. A non-probability convenience sampling method was used to select employees from Ecobank and Fidelity Bank. This method enabled the researchers to choose specifically respondents who are most relevant as far as the research problem is concerned. Questionnaires were administered to the respondents to elicit information related to the study. The study found out that risk management play a significant role in influencing profitability of banks. Risk identification can be said to be the key starting point of any risk management as banks cannot manage what is unknown. On the other hand, once identified, risks must be mitigated so that the impact on the firm is reduced. The study also revealed that all the five risk management practices which include; Risk identification, Risk Analysis and Evaluation, Risk Assessment and Risk monitoring significant in influencing profitability .Banks need to adopt a multifaceted approach in their risk management effort. It is recommended that the banks should asses their risk management practices to see if they are still practical in the face of a continuously changing operating environment.