Professional Documents
Culture Documents
Risk Management
Risk Management
financial performance
2. Banks that have robust credit risk assessment, monitoring, and mitigation
strategies tend to experience higher profitability, lower non-performing loan
ratios, and stronger capital adequacy.
Banks
2 Basel Accords
Nigeria has adopted the Basel Accords, an international set of
banking regulations, to govern credit risk management. This
includes requirements for credit risk assessment, provisioning,
and reporting.
3 Prudential Guidelines
The CBN's Prudential Guidelines provide detailed regulations
on credit risk management, including loan classification, loan
loss provisioning, and credit concentration limits for Nigerian
banks.
Credit Risk Management Practices in Commercial Banks
Macroeconom
Organization Regulatory Technological ic Conditions
al Culture Environment Capabilities
Changes in
The Strict banking Advanced data economic
organizational regulations and analytics and factors, such as
culture and oversight, such credit interest rates,
values within a as capital modeling tools inflation, and
bank can shape adequacy enable banks unemployment
its approach to requirements to better , can
credit risk and reporting assess, significantly
management, standards, monitor, and impact a
influencing compel banks mitigate credit bank's credit
policies, risk to adopt robust risks, risk profile,
appetite, and credit risk improving the necessitating
employee management effectiveness adjustments to
behaviors. practices. of their risk its risk
management management
practices.
Impact of Credit Risk Management on Financial Performance
Diversification
Diversify loan portfolios across sectors,
4 industries, and geographical regions to
reduce concentration risk.
Conclusion and Recommendations