EFFECT OF FINANCIAL RISK ON FINANCIAL PERFORMANCE OF LISTED DEPOSIT MONEY BANKS IN NIGERIA: MODERATING ROLE OF BOARD GENDER DIVERSITY

Abstract

This study examined the effect of financial risk and financial performance of listed Deposit Money Banks (DMBs) in Nigeria: moderating role of board gender diversity. The research adopted ex-post facto research design by using audited annual reports of Listed DMBs for the period 2015 to 2024. The study used descriptive statistics and panel regression analysis. The study used Return on Assets (ROA) as the financial performance measure and financial risk into three components: credit risk, liquidity risk and operational risk. The study measures board gender diversity by calculating the proportion of female board members to total board members. Credit risk has a positive but statistically insignificant effect on financial performance (β = 0.003, p = 0.94), operational risk has a negative and statistically significant effect on ROA (β = −0.099, p = 0.03), while liquidity risk shows a positive and statistically significant relationship with financial performance (β = 0.167, p = 0.00). Board gender diversity has a negative but insignificant effect on financial performance (β = −0.034, p = 0.68). The research concluded that gender diverse boards produce better risk management which protects banks from negative financial consequences.